SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                   FORM 10-KSB

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

                      For the fiscal year ended December 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
                               OF 1934
        For the transition period from ___________  to  ____________

        Commission File No. 1-1062

                                    Pamet Systems,Inc.
                       ____________________________________________

                      (Name of small business issuer in its charter)

       Massachusetts                                            04-2985838
______________________________				    _________________

(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

     1000 Main Street
     Acton,Massachusetts                                           01720
_______________________________________                     __________________
(Address of principal executive offices)                        (Zip Code)

Issuer's  telephone number   (978)_263-2060
                             ______________

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

Name of each exchange                                     Title of each class
                                                          on which registered

      none                                                        none
________________________                                  ___________________
                                                            (Title of Class)

Securities registered pursuant to Section 12(g) of the Exchange Act:


                         Common Stock $.01 par value
                           ____________________
                              (Title of Class)

Check whether the issuer (1) has 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   No X
                                                                   ___  ___

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.                              [ ]

The issuer's revenues for its most recent fiscal year were  $2,003,262
                                                             ---------
The aggregate market value of the registrant's common stock held by
non-affiliates of the Company, based upon the average of the closing bid and
asked prices on August 28, 2002 was $77,665.

The number of shares outstanding of the registrant's common stock, as of August
28, 2002 was 4,437,976 shares.


<PAGE>
PART I

Item 1.	Business

	This Form 10-KSB contains statements that are not historical facts.
These statements may constitute "forward-looking statements" within the meaning
of the Securities Act of 1933 and the Securities and Exchange Act of 1934 as
amended.  Certain, but not necessarily all, of such forward-looking statements
can be identified by the use of such words as "believes", "expects", "may",
"will", "should", or "anticipates" or the negative thereof or other variations
thereon of similar terminology, and/or which include, without limitation,
statements regarding the following: competition and consolidation in the public
safety marketplace; market acceptance of the Company's products; ability of the
Company's product to meet market needs; volatility in sales and cash flow;
growth potential in the year 2002; law enforcement trends; availability of grant
funding for customers; adequacy of funding and corporate infrastructure to
support operations; economic and competitive factors affecting the public safety
market; and discussions of strategies involving risk and uncertainties that
reflect management's current views. These statements are based on many
assumptions and factors and may involve risks and uncertainties.  The actual
results of the Company or industry results may be materially different from any
future results expressed or implied by such forward-looking statements because
of factors such as insufficient capital resources to operate the Company; the
ability of the Company to continue to enhance its products in 2002; the fact
that the public	 safety market place is positioned for growth; changes in the
marketplace including variations in the demand for public safety software; and
changes in the economic and competitive environment.  These factors and other
information contained in this Form 10-KSB could cause such views, assumptions
and factors and the Company's results of operations to be materially different.
We undertake no obligation to update publicly any forward-looking statements for
any reason even if new information becomes available or other events occur in
the future.
	Pamet Systems, Inc. (the "Company" or "Pamet Systems") develops, markets
and  supports computer software for organizations in the public safety and
criminal justice sectors.  The Company's products automate the acquisition,
storage, processing, retrieval and communication of information for these
organizations.  The Company's customers include law enforcement agencies, 911
dispatching facilities and fire fighting agencies.

	The Company's principal product for the law enforcement market is
PoliceServer(R), a fully integrated information management system that, in the
1990s, was built for the Digital Equipment Corporation VAX/VMS environment, but
was totally redesigned for the Microsoft Windows environment in 2000.  This
redesign changed the Company's entire suite of products, which includes the core
PoliceServer, FireServer(R) and CADServer(R) products.  Significant enhancements
continued to be made to the products throughout 2001 and will continue into
2002.


	PoliceServer provides law enforcement agencies with the full spectrum of
information -related functionality needed for agency operations and management.
Designed primarily to serve agencies with fewer than 500 officers (99.4% of US
police agencies), current users include both municipal agencies such as the
Worcester, Massachusetts Police Department and other agency types such as the
University of Massachusetts Police Department, the Metropolitan Atlanta Rapid
Transit Authority (MARTA) Police Department, and the McMinn County Tennessee
Sheriff's Office.  Capabilities of PoliceServer and its associated modules
include criminal records management, department management and advanced
reporting.  Designed to accommodate a wide diversity of agency types,
PoliceServer is both easy to learn and to use.  PoliceServer automates many of
the complex and time consuming department functions such as arrest booking,
crime analysis and reporting, and case management.  A number of interfaces are
provided to other data sources such as the E911 network, various state Criminal
Justice Information Systems, and the National Crime Information Center.  The
Company also provides interfaces with systems for digital imaging, mobile/remote
access and scanning and identification of fingerprints.

	FireServer provides equivalent functionality for fire fighting agencies.
An upgraded, Windows version was released during 2000.  The fire records
capability provides fire departments with data on structures, fire suppression
plans, inspections data and hazardous materials.

	CADServer (Computer Aided Dispatch) was designed with a "look and feel"
similar to that of the PoliceServer and FireServer.  The new CADServer went into
live operation during the fourth quarter of 1999 and is marketed as a separate
product, rather than offered as a component of the police or fire records
management system, as it was in earlier VAX/VMS versions.

The Company also offers several companion products.

* The Mobile Access module is a mobile terminal that allows fully integrated
communications with a department's internal system as well as other local, state
and federal databases.  Mobil improves officer efficiency, allowing the
departments to realize cost savings, increase officer safety and enhance
community-policing efforts.
* Imaging is a digital image capture, storage and printing system.
* The Advanced Reporting module facilitates the creation of both standard and
ad-hoc reports from data in the PoliceServer database.

	The Company believes that the level and quality of its customer support
is vital to continuing customer satisfaction and the long-term success of the
Company.  The Company has established a strong history of responsiveness to
customer requirements and a high level of support, which have resulted in a
loyal customer base.  The Company provides product enhancements and customer
support services under an annual maintenance program.  Annual maintenance fees
are based on a percentage of the price paid for the licensed software products.
Historical renewal rates for annual maintenance for the Company's products have
been in excess of 95%.

	The Company's primary customer support center is located at the
Company's headquarters in Acton, Massachusetts. The standard customer support
service provides access during business hours Monday through Friday and an
optional 24-hour, 7-day support service is available.

 	As of December 31, 2001, the Company has installed and provides support
for PoliceServer in 93 police departments, FireServer in 29 fire departments,
Imaging in 48 departments, Mobile in 51 departments, Advanced Reporting in 28
departments and the Mapping module in five departments.  These installations are
located in ten states in the Eastern, Midwestern and Southeastern U.S.

	In the 12 month period ended December 31, 2001 a portion of sales to
police departments was funded by federal grants under the Violent Crime Control
and Law Enforcement Act of 1994" (the 1994 Crime Bill) designed to provide
automation grants to law enforcement agencies. The remainder of the revenue was
support services for the installed base of products. In general, however, the
general economic climate and uncertainties of selling to the governmental sector
continue, and will continue to result in volatility in sales and cash flow, as
discussed in the Management Discussion and Analysis.  The Company continues to
evaluate mergers, acquisitions and other business combinations, as well as
capital raising alternatives to enhance its working capital.

	The Company was incorporated in Massachusetts on November 24, 1987.

	PoliceServer, FireServer, and CADServer are trademarks of the Company.

	The Company's principal executive offices are located at
	1000 Main Street, Acton, Massachussets 01720


Business of the Company

	Public safety agencies manage large amounts of information in their
day-to-day activities.  These agencies must collect, process, file and retrieve
such information quickly, conveniently and cost effectively.  Traditionally,
police and fire departments have performed these tasks manually, resulting in
significant resources and man-hours being spent processing and locating
documents in large, sometimes haphazardly maintained, filing systems.  Critical
information can be inadvertently lost or misfiled and can only be accessed by
one person at a time.  In an attempt to more efficiently manage information and
to improve personnel productivity and response time, many public safety agencies
have computerized certain aspects of their information systems.

	The Company believes that the market for the computer systems it
provides continues to be positioned for growth due to a number of major
factors. The first factor is the 1994 Crime Bill and follow-on programs which
have allocated more than $33.0 billion of grants for police and prison
agencies,  of which over $1.0 billion was targeted for the automation of
police agencies.  Although the majority of the funding from the 1994 Crime
Bill and follow-on programs has been earmarked for additional police presence
on the street, automation and computerization of police agencies is encouraged
if it can be demonstrated that this investment will allow additional police
resources to be "put back on the street".  During 2001 the Department of
Justice awarded grants for a total of $81M that was to be allocated
exclusively to technology. During 2001, the Company had designed and
implemented a series of seminars to provide departments with the information
necessary to demonstrate the cost effectiveness of the Company's products to
enable them to obtain grant monies.  The second factor is the trend for
regionalization of dispatch services as evidenced by the establishment of E911
systems around the country, which require 24-hour dispatch centers for police,
fire and EMS departments.  Some smaller communities cannot afford to staff a
dispatch center 24 hours a day which has resulted in the establishment of
regional dispatch centers capable of serving multiple communities
simultaneously.  Such global regionalization requires computer systems to
enable the regional dispatchers to have timely access to the information
needed to respond to varied situations in a diverse geography.  The Company's
products are designed and marketed with the option to be used in this type of
regional application.  Currently four regional dispatch centers in
Massachusetts, Georgia and Tennessee use the Company's product for this
application.  The last factor is the expected focus of many departments and
municipalities on modernization of their computer resources to standard
Windows based applications.  Given its existing product base and the completed
redevelopment of the PoliceServer and FireServer on the Windows platform, the
Company believes that it is well positioned to serve these needs with its
suite of new Windows based products.
	Although the economic environment is adversely impacting on purchasing
decisions, some additional factors include: the emphasis municipalities are
placing on crime prevention; the trend among public safety officials towards
increasing effectiveness of operations through computers; the pressures to
control personnel costs (a major portion of municipal budgets); the need to
achieve higher personnel productivity; and available computer hardware that does
not require special environmental systems and can  be used in remote locations
such as police cruisers.


 Products

	General:  In an effort to meet the demands of its market, which consists
of approximately 15,000 police departments and 5,000 fire departments
nationwide, the Company has developed not only proprietary software but has
developed and markets complete systems.  The Company provides the customer with
software, training, support, installation and initial maintenance for its
products for an all-inclusive price.

	The Company has developed and actively markets a series of integrated
software products: PoliceServer, a management information system for police
departments; FireServer, a management information system for fire departments;
CADServer, a real time automation product for Communication and Dispatch
Centers; Imaging, an image capture, storage and printing system; Mobile Access,
a mobile computer allowing fully integrated communications with the department's
internal system as well as other local, state and federal databases; a Mapping
system for crime analysis and the Advanced Reporting module for creating reports
with data in the PoliceServer and FireServer database. The Company owns the full
and exclusive rights to the PoliceServer, FireServer, CADServer, and Imaging
products.  The Mobile Access product incorporates technology licensed from
Aether Mobile Government.

	Before 1999 the Company's software was developed to run on the Digital
Equipment Corporation's Open VMS(R) operating system together with
character-based terminals and personal computers emulating character-based
terminals.  Due to customer demand for software utilizing Graphical User
Interface (GUI) displays and low cost servers, in 1997 the Company began
re-developing its software for Windows NT (R) and Windows 2000-based servers and
Windows 98(R), Windows NT(R), and Windows 2000 Professional(R) client Personal
computers. The Company delivered the first versions of its Windows based
PoliceServer and FireServer products in 1999.  The Imaging, Mobile Access,
Mapping system, Advanced Reporting products have always been Windows PC-based
products.  The Company has committed to support the existing VMS customers until
June 2003 to give them adequate time to budget and plan for the migration to the
Company's suite of Windows products.

	PoliceServer:  PoliceServer is part of a comprehensive suite of law
enforcement applications software that performs the clerical and record keeping
functions necessary for police department operation.  PoliceServer includes an
incident reporting function, which assists dispatchers in allocating and
controlling resources and logging and reporting incidents, and performs
automatic checks for outstanding arrest warrants and gun permits.  The system's
functions include an arrest booking system, which collects, stores and reports
data on arrests from the time of arrest through court appearances.  The system
also automatically produces and prints all reports, forms and other documents
needed in connection with a booking.  Other functions create and maintain
records with respect to arrest warrants, alarm systems, citations, licenses,
permits, property, equipment and vehicle maintenance.

	PoliceServer automatically cross-references and updates all appropriate
files in the database.  This feature eliminates the need for repetitive input,
saves people-hours, and ensures the timely and consistent updating of police
records.  The system provides multiple levels of security controls, which the
Company believes limit the likelihood of tampering with police records.

	An important feature of PoliceServer is ease of use.  Current customers
find the system easy to learn and operate.  PoliceServer is designed to be used
by any member of the department to expedite the handling of departmental
paperwork.  PoliceServer eliminates much of the manual process, replacing it
with a series of simple interactive entry screens.  Computerizing these
processes reduces paperwork, ensures more accurate data entry, and makes
information available more rapidly to other members of the police department.

	FireServer:  FireServer relies on the design approach taken with the
PoliceServer and performs a number of similar functions.  Like PoliceServer, the
FireServer system assists in the logging and reporting of incidents, as well as
providing access to the CAMEO (Computer Aided Management of Emergency
Operations) Hazardous Materials database.  In addition, FireServer permits a
dispatcher using CADServer to immediately print a fire suppression plan for use
by firefighters at the scene, including incident location information; orders
for first arriving units; emergency contact information; structure type, size
and usage data; identification of any permits, inspection violations or
hazardous material at the site; and identification of individuals with special
needs known to reside at the incident address. FireServer's other functions
create and maintain records with respect to hydrant location and history;
permits; inspections; violations; street box and building alarm systems;
personnel; property; equipment; and vehicle maintenance.

	CADServer:  CADServer, designed with a "look and feel" similar to that
of the PoliceServer and FireServer, was also first installed in 1999 to support
integrated E911 dispatch centers.  CADServer enables a dispatcher to immediately
access all pertinent information that is necessary to safely and efficiently
administer a call or incident.  The dispatcher has an overview of all incidents
that are current as well as the units in his or her control.  In addition, the
system will display the required units that should be dispatched to an incident
and continues to update the status as changes occur.

        Imaging: Imaging is an image capture, storage and printing system that
handles color or monochrome photo images (e.g., mug shots, crime scene etc.) and
document imaging.  The product is fully integrated with the PoliceServer,
FireServer and Mobile Access systems.  It supports unlimited numbers of images
connected to Master Name File entries.  Images can be captured using digital
cameras, video cameras and scanners.  Incident or accident related images are
stored as part of the PoliceServer or FireServer databases and are related to
incident reports, arrests or other investigations.  Images can include photo
images or document images.  Images can also be associated with property and
evidence and with department personnel files.  The system has been designed for
compatibility with new Federal standards (NIST), and will be evolved to maintain
such compatibility as specifications evolve.

	Mobile Access:  Mobile data terminals (MDT's) are fully integrated
companion products to the Company's other products.  Based on the private
branding agreement with Aether Technologies, the Company is able to offer a
mobile data product that has many of the "Best in Class" mobile data
capabilities.  The MDT is a laptop PC mounted in a patrol car or carried as a
notebook, together with wireless communications equipment.  The product allows
communications from car to dispatch and car to car, as well as access into the
files in the PoliceServer or FireServer databases and many government
information systems.  In addition all messages are fully encrypted and many
officer safety and alarm features are standard in the product.  This system
increases officer efficiency and minimizes the need for the officer to return to
the station.  This system has also served to increase the police presence on the
street, due to the fact that an officer, in the cruiser, has a link to the state
Criminal Justice Information System's (CJIS) information systems and full access
to all of the information in the entire PoliceServer system.


	Advanced Reporting: The Advanced Reporting module allows analysts to run
a fully integrated report writer, Crystal Reports from Seagate Software, against
the PoliceServer, FireServer or CADServer databases.  This can be used to create
standard reports or run ad hoc queries using the tremendous volume of
operational data captured during the day-to-day operations of a department.

	Product Pricing:  Complete systems (including software, training, one
year's hardware maintenance provided by the hardware vendor when hardware is
provided, and six months of software support and update service, including a
warranty against defects in the software), have sold for between $20,000 and
$300,000, with most sales falling within the $50,000 - $100,000 range.  Pricing
of the FireServer base product is priced at slightly less than the PoliceServer
package for an entry-level system.  The majority of FireServer or the VMS
FireServer systems in operation utilize the same computer as the PoliceServer or
VMS PoliceServer systems in that municipality.

       In addition to revenues generated by sales of the PoliceServer,
FireServer, CADServer, Imaging, Mapping, Advanced Reporting, Mobile Access and
software support fees, the Company generates operating revenues from the sale
of services such as system performance evaluation and tuning and consulting on
system design.  Additional revenues come from sales of miscellaneous supplies,
accessories and training.


Marketing

	The Company's marketing strategy is designed to attract potential
customers primarily from law enforcement agencies and fire agencies.  The
Company utilizes live demonstrations of its products, conducted in a way that
emphasizes the operational features of the products rather than the underlying
technology.  Seminars are held at various facilities selected to allow potential
customer representatives to see the products in a relaxed, neutral environment.
The 1994 Crime Bill and follow-on bills also provided another marketing avenue
as the Company conducted seminars to assist public safety agencies obtain
grants, which brought agencies together and provided an opportunity to
demonstrate the Company's capabilities and products.

	The Company generally concentrates its marketing efforts on the police
departments using the integrated PoliceServer, CADServer, Imaging, Mapping,
Advanced Reporting and Mobile Access systems, with approach to the fire
department following success with the municipality's police department.  In
locations where the police and fire departments are incorporated in a single
Department of Public Safety, the Company's strategy is to sell the entire suite
of products.  The expanded use of E911 has added greater focus to the latter
strategy

	The Company customizes its software by state, so that each state's
prescribed reporting forms can be printed in accordance with such state's
requirements.  In addition, the Company's software allows users to customize
their reporting forms to their particular specifications.

	Encouraged by the Company, active, independent user groups have
developed consisting of the police departments using PoliceServer and fire
departments using FireServer.  Any department participating in the Company's
annual support and update service may attend its group's monthly meetings.
Since each department uses identical software, the users are able to effectively
discuss the application and development of the system, to support each other in
identifying training techniques and new applications and to discuss concerns
encountered in using the system.  The groups have also served as a source of
referrals of potential customers and as a source of satisfied customers willing
to recommend the Company's products to prospective customers.  The Company
relies on the groups to determine the direction and development of updates or
enhancements to be made to the software.

	The Company's strategy is to continue to expand its current distribution
approach by focusing in those states where the Company has established reference
sites within the region. The strategy is structured so as to permit the
techniques and strategies developed in the New England area to be extended to
those states covered by dedicated sales teams.  The Company depends on its Vice
President of Sales and Marketing to lead these efforts.

	The Company believes that the initial sale of its products in a state is
critical to its marketing efforts and that subsequent sales within the same
state will be easier due to the already-achieved acceptance of its products and
the ability to use the first installation as a reference and for
demonstrations. As of July 2002, the Company has customers in Connecticut,
Georgia, Indiana, Ohio, Massachusetts, Missouri, NewYork, Rhode Island,
Tennessee and Wisconsin.

	The Company markets its products in the New England, the Midwest and the
Southeast. Marketing for the Midwest and Southeast is now being coordinated
through the Company's headquarters in Massachusetts.


Competition

	The public safety software business is highly competitive.  There are a
large number of small local and regional vendors across the country that offer
competing products on personal computers to agencies in the Company's target
markets.  There are also some medium sized companies that have a national
marketing presence.  The Company's management believes, that although it will
not be the only supplier, it will be one of a small group of vendors providing
an internally developed integrated Windows based suite of public safety
products.

	The Company expects to encounter future competition from established
companies that are developing new products and from new companies that may
develop comparable products.

	The principal competitive factors that exist in the public safety
software business are price, ease of use, and reputation relative to support and
design sophistication. Management believes the competitive advantages of the
Company's products include sophisticated capabilities and relative ease of use
within a fully integrated software suite, a complete native Windows designed set
of products, and its consistent high level of customer satisfaction.


Principal Suppliers

	The Company acquires it mobile data software from Aether Mobile
Government.  Aether Mobile Government sells the products to the Company at a
discount and the Company resells them at the Aether Mobile Government list
price.  Products similar to the Aether products are available from a number of
other suppliers.  Pamet does not usually supply hardware for new or existing
systems.

Customers

	The Company's target market consists of police and fire departments
serving populations under 250,000, campus police departments and other
non-municipal public safety agencies such as transit authority police, state
police and county sheriff departments.  The Company estimates that this target
market nationally is comprised of approximately 15,000 police departments and
5,000 fire departments.  Currently, however, the Company is marketing its
products to police and fire departments only in New England, the Midwest and the
Southeast, and the largest portion of its sales to date have been in New
England, particularly Massachusetts.  The Company has installed six systems in
the Midwest Region, which is comprised of the states of Indiana, Missouri, Ohio,
and Wisconsin and has installed ten systems in the Southeast Region, which is
comprised of Georgia and Tennessee.

	In any given fiscal period, sales to any one purchaser of the Company's
products may account for 10% or more of the Company's revenues for that fiscal
period.  Because such sales usually involve a one-time purchase for the
customer, the existence of such purchase is not indicative of future sales or
the Company's dependence on any one customer.  During 2001 the sales to one
customer, the Milwaukee County Sheriffs Department, accounted for 10.6% of
annual sales.



Licensing and Support

	The purchase price for the software system includes a perpetual license
to use the software.  The Company typically enters into a software license
agreement with its customers.

	Support and update service for the original VMS products was priced at
14% of the cost of the software package per year after the initial six-month
warranty period. The rate for the support of the VMS product was changed to 19%
for support billing that was sent out subsequent to the end of the period in
July of 2002.  The support and update service for the Windows based products is
priced at 19% of list price after a six-month warranty period.  Current VMS
customers who convert to the Windows product will receive the Windows software
at no charge but will be charged 19% of the current list price of the Windows
product for support commencing on the date of conversion.  The software
necessary for the migration of customers from the existing product to the
Windows product is being provided at no cost to the customer to protect the
customer's investment in Pamet Systems.  Pamet Systems will charge the migrating
customers a fee that will range from $7,500 to as high as $80,000 for a
migration service that includes data conversion and training.  Currently twenty
six (26) former VMS customers have completed the migration to the Windows base
product and thirty eight (38) have started the migration process.  The payment
of the annual support and update service fee automatically extends the Company's
warranty against software defects for an additional year and entitles the
licensee to receive all software upgrades and enhancements and to participate in
the appropriate user group. In addition to providing licensees with updates and
enhancements, the Company's annual fee also includes telephone support for all
applications.  Currently all customers subscribe to this service, primarily to
receive software updates and enhancements which average a minimum of one update
per year.  Maintenance charges on the hardware are not included in the Company's
annual fee and are currently billed and collected directly by hardware
maintenance suppliers.

	The Company generally relies upon contract, trademark, trade secret and
copyright laws to protect its products.  The license agreement under which a
customer uses the Company's products restricts the customer's use to its own
operations and prohibits disclosure to third persons.  Notwithstanding these
restrictions, it may be possible for other persons to obtain copies of the
Company's products.  The Company believes that such copies would have limited
utility without access to the product's source code, which the Company keeps
highly confidential. The Company's products are encoded to run only on
designated types and sizes of computers. The Company incorporates certain
technological defenses into its products.  The Company believes that because of
the rapid pace of technological change in the computer industry, copyright and
patent protection is of less significance than factors such as the knowledge and
experience of the Company's personnel and their ability to develop, enhance,
market and acquire new products. The Company also requires all of its employees
to execute agreements requiring them to maintain the confidentiality of the
Company's proprietary information.


Research and Development

	The Company made significant research and development expenditures in
2001 in several areas totaling over $800,000 (including personnel costs).  The
majority of the 2001 expenditure, as well as a significant portion of 1997,
1998, 1999 and 2000 research and development spending of over $4,200,000, was
focused on the Windows product development of PoliceServer, CADServer and
FireServer.   Other expenditures included the purchase of Mapping software; and
some further enhancements of the Aether interface.  The Company used a
combination of outside resources and internal staff to design, develop and test
these products minimizing the long -term financial commitments of the Company.
Windows product development will continue into the second half of 2002 until all
functionality of the PoliceServer and FireServer have been completed on the
Windows platform.  Once that has been achieved, the Company intends to continue
to enhance and modify the product to meet the demands of its market.


Employees

	As of December 31, 2001, the Company had 17 full-time employees and five
part-time employees, of whom nine were engaged in computer programming, seven
were engaged in documentation, training and software support and six were
engaged in sales, marketing and administration.  The Company considers its
employee relations to be satisfactory

Item 2.	Properties

	The Company's operations are located in Acton, Massachusetts, where the
Company leases a 12,000 square foot office building.  This facility contains
office, training, conference, development, and shipping space.  The original
acquisition and renovation of the building had been financed from the Company's
working capital.  In April 1992 the Company mortgaged the facility through a
local lending institution with a $560,000 mortgage on the improved facility. In
August of 1999 the Company sold the building and entered into a seven-year lease
with the buyer.  The final sales price was $1,150,000.

Item 3.	Legal Proceedings

	Not Applicable

Item 4.	Submission of Matters to a Vote of Security Holders

	Not Applicable

<PAGE>
PART II

Item 5.	Market for the Company's Common Equity and Related Stockholder Matters.

        Shares of the Company's common stock, par value $0.01 per share
(Common Stock) were available for trading on the NASDAQ Stock Market
over-the-counter exchange from Nov 1997 until April 2002.  Subsequent to
April 2002 the stock has been trading via the "pink sheets".  The Common
Stock is quoted under the symbol PAMT.PK.

The following table sets forth the high and low bid prices of the Common Stock
as quoted on the OTC Bulletin Board.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
DECEMBER 31		COMMON STOCK
			 	High      Low
<S>    <S>                     <S>       <S>
2000
	First Quarter	        $5.13	  $3.50
	Second Quarter		 4.06	   1.91
	Third Quarter	         2.69	   1.94
	Fourth Quarter		 3.01	   1.75

2001
	First Quarter		$2.00     $1.06
	Second Quarter		 1.03	    .50
	Third Quarter		  .50	    .21
	Fourth Quarter		  .36	    .21
</TABLE>
	There were 88 holders of record of Common Stock on August 13, 2002.  The
Company has not paid any dividends to date.  For the foreseeable future, it is
anticipated that earnings, if any, will be used to finance the growth of the
Company and that cash dividends will not be paid to stockholders.

Sales of Securities

	On February 21, 2001, the Company sold 80,500 shares of Common Stock at
a price of $1.25 per share and warrants to purchase 28,175 shares of Common
Stock at the exercise price of $2.50 for a total of $100,625 to one entity,
which is an accredited investor as defined in Rule 501(a) under the Securities
Act of 1933, as amended (the "Act").  The issuance was exempt from registration
requirements of the Act pursuant to Section 4(2) thereof.

	On April 20, 2001, the Company sold 83,333 shares of Common Stock at a
price of $.60 per share and warrants to purchase 29,167 shares of Common Stock
at the exercise price of $1.50 for a total of $50,000 to one entity, which is an
accredited investor as defined in Rule 501(a) under the Act of 1933.  The
issuance was exempt from registration requirements of the Act pursuant to
Section 4(2) thereof.

	On May 14, 2001, the Company sold 83,333 shares of Common Stock at a
price of $.60 per share and warrants to purchase 29,167 shares of Common Stock
at the exercise price of $1.50 for a total of $50,000 to one entity, which is an
accredited investor as defined in Rule 501(a) under the Act.  The issuance was
exempt from registration requirements of the Act pursuant to Section 4(2)
thereof.

<PAGE>


Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Overview

Pamet Systems, Inc. (the "Company" or "Pamet Systems"), founded in 1987, designs
and implements broad-based information technology solutions for public safety
and criminal justice agencies enabling them to realize cost efficiencies and
provide better service to the public.  The foundation of the Company's
integrated suite of products is composed of three core components: PoliceServer,
FireServer, and CADServer.  The Company also offers several companion products
including Imaging, Mobile Access, Advanced Reporting, JailServer, Investigator's
Tool Kit and Mapping that are integrated with the police and fire records
management and computer-aided dispatch modules.  Pamet Systems total systems
approach to public safety software allows the agency to enter information once
and have it available throughout the product suite.  The Company's revenues
consist primarily of sales of these software applications, the associated
hardware and systems integration, and support and update service fees.

The Company's revenues for the 12-month period ended December 31, 2001 (the 2001
period) decreased 2.1% to $2,003,262 from $2,046,007 for the 12-month period
ended December 31, 2000 (the 2000 period).  The effects of the economic downturn
that the Company began to experience in the latter half of 2000 continued
throughout 2001, although the increased availability of municipal funds in the
Northeast and the beginning of the 2001 COPSMore federal grant awards during the
third and fourth quarters of the 2001 period resulted in annual revenues on
track with the prior year. However, management believes that the continued weak
economy and the tragic terrorist attacks of September 11 conspired to depress
sales in the 2001 period.

Although the Company's redesigned Windows product line was initially released
late in the 1999 period and revenues began to shift back to sales of the core
products (PoliceServer, CADServer, and FireServer), the first release failed to
generate a strong market reception.  Although the Company's core products had
been completely rebuilt using modern design tools and databases and the entire
suite utilizes the Windows 32 bit technology and a GUI interface (graphical user
interface), the lack of robust functionality in initial release of the
Windows-based product precipitated a lukewarm reception by the public safety
marketplace in the 2000 period during a time of economic instability.  The
economic conditions and the reduced functionality when compared to the Company's
VMS products also slowed the migration of the Company's customer base from the
older VMS-based products to the Windows products.  During early 2001, the
Company released major product enhancements and extensions based, in part, on
feedback from our Windows and VMS customers. These releases improved the
product's ease of use and substantially extend its capabilities.  As a result,
the Company has received certification from three states for our police records
system's incident-based reporting (NIBRS) reporting capabilities and
certification from the Massachusetts Fire Marshall for the fire records system's
advanced national reporting (NIFRS 5.0) capabilities.  The Company has also
developed utilities to convert customer data files from older systems, which
will ease the transition for agencies.  The Company's continuing efforts to add
functionality and robustness to the core products resulted in the Windows
products now being more competitive in the marketplace.

In September of the 2001 period, the Company was awarded a major contract to
provide its PoliceServer records management system to the Milwaukee County
Sheriff's Department.  This system must support over 800 deputies and additional
support staff, as well as a broad range of public safety activities including
airport security, county jail, expressway control, SWAT team, process service,
warrants, drug enforcement, park patrol and criminal investigations. Pamet
Systems products were selected by Milwaukee County from a field of 14 software
development companies.  Also during the 2001 period, St. Peters Police
Department in Missouri returned to using the Pamet Systems VMS records
management and dispatch software after attempting to move to an industry
leader's Windows-based product because Pamet Systems had not released its
Windows version.  Disappointed with both the competitor's system and
implementation process, St. Peters chose initially to resume using Pamet's VMS
products and has since migrated to the Company's Windows products and added
Mobile Access to its system.  In addition, other local Massachusetts agencies
have been making procurement decisions to purchase the Company's products after
seeing successful implementations by neighboring departments.  The Lincoln, MA
Police and Fire Departments culminated a seven-year search in 2001 by choosing
the Pamet records management and dispatch software.  North Andover Police
Department moved away from a struggling competitor in the 2001 period by
purchasing Pamet's core products for both police and fire departments. Despite
the Company's success in many competitive bidding processes, Pamet has also
experienced some VMS customers moving to other vendors Windows applications
after being frustrated by the initial releases of Pamet's Windows products.

From 1998 to 2001, the Company focused a significant amount of resources on the
creation of its Windows-based suite of products and a smaller amount of
resources on sales and marketing. After its initial release in late 1999, the
Windows-based products still required substantial increases in functionality and
robustness to be competitive.  The Company focused a great deal of resources on
these issues in 2000 and 2001.  In 2002 the product suite has fundamentally
realized its original promise and additional resources in sales and marketing
are called for. While the product suite continues to be enhanced and maintained,
the resources required to do so are far less than those needed to create the
product initially.  In keeping with this general shift from product creation to
product enhancement, sales and marketing, the Company's Board of Directors
decided in 2002 to bring in a new CEO experienced in growing small technology
companies.  In particular, the new CEO's background is in product development,
sales and marketing.  In addition, Pamet has brought in a new National Sales
Director with 18 years experience in public safety related business.  Management
continues to believe that public safety agencies are being forced to defer
decisions to replace aging technology infrastructure and application software
until economic conditions turnaround and clear leadership emerges in the
industry.

Management believes that the magnitude of the expense of developing new public
safety software applications using state of the art technologies will trigger a
consolidation in the public safety marketplace, which is dominated by small,
privately held companies that will have difficulty affording the development
costs.  Pamet System's Windows product development effort during the past four
years positions the Company to be a significant player in the marketplace.
Significant market opportunities exist for its suite of Windows-based products
based on the following factors.  First, major federal grant programs continue to
be announced that will allow agencies to update their computer systems.  In
early 2001, the federal government announced COPSMore 2001, an $81M grant
program earmarked solely for public safety technology. Pamet Systems held free
grant seminars in the Northeast and Midwest to aid agencies in understanding the
complex grant application process and assisted approximately 200 agencies in
preparing their applications, which is estimated to be about 10% of the
applications the Justice Department will receive.  In the third quarter of 2001,
grant awards began to be announced.  Second, the tragic terrorist attacks of
September 11, 2001 on the World Trade Center and the Pentagon raised public
awareness of the need for automated public safety systems and the importance of
sharing data between agencies.  The resulting Homeland Security focus is likely
to provide first-responders with more financial resources, which may translate
into increased sales for the Company.  Also, the continuing growth in the number
of E911 centers, heightened emphasis on crime prevention in many communities and
the awareness by municipalities that computer systems can improve the efficiency
and effectiveness of their public safety resources support the belief that the
market for the Company's products will continue to grow. The Company has also
seen increased emphasis on the coordination of public safety systems between
neighboring town, county, and state police organizations.  The Company's
products are designed and marketed with the option to be used in this type of
regional application.

The primary challenges that the Company focused on during the 2001 and the first
half of 2002 are to capitalize on the design efforts that have resulted in an
integrated suite of Windows-based products and to acquire adequate financing to
fund immediate working capital needs and future growth.  The Company launched a
major financing program in 2001 with the goal of raising $10M to $15M.  The
program is composed of a $1.5M private placement to meet immediate cash needs
with the remainder planned in a secondary offering.  During the 2001 period, the
Company secured $1,080,625 of working capital from its private placement
offering and converted $475,000 plus accrued interest of $44,149 from related
party lines of credit to long-term convertible promissory notes.  The Company
has secured an additional $245,000 of long-term convertible debt funding in
early 2002.  Also in early 2002, the Company entered into a commercial services
contract with a vendor under which eight of the Company's employees became
employees of the vendor and are leased back to the Company.  This vendor will
invoice the Company quarterly for the cost of the employees who are working on
projects exclusively for the Company.  The amounts due to the vendor will be
settled in Pamet stock or in cash, as management deems appropriate.  Although
the Company's cost structure has been reduced during the first two quarters of
2002, the continued economic sluggishness in 2002 continues to affect revenues
adversely making profitability elusive.  Despite additional funding, the
commercial services contract, and cost cutting measures in early 2002, the
Company is continuing to face a shortage of working capital.  There are no
assurances that the Company will be successful in its future fundraising
program, in light of, among other things, the state of the financial markets and
the Company's historical financial performance.

Despite what the Company believes are numerous growth opportunities, the Company
remains hampered by under capitalization and the fact that its primary market is
the government sector, which is characterized by long lead times.


Results of Operations

Year Ended December 31, 2001 vs. Year Ended December 31, 2000.

The Company's net sales decreased 2.1% or $42,745 to $2,003,262 for the 2001
period from $2,046,007 in the 2000 period.  Total revenue decreased slightly
during the 2001 period as a result of what the Company believes is a reaction to
economic uncertainty and public safety marketplace turmoil.  A 19.8% increase in
support revenues was not sufficient to offset a 17.1% decrease in net hardware
and software sales.  The increase in support revenues can be attributed to
growth in the customer base and the increased support rates charged on the
Windows-based products.  Support on the Windows-based products is charged at 19%
of current list price, whereas 2001 support on the VMS products was charged at
14% of the price originally paid for the software.  Support revenues accounted
for 49.8% of total sales in the 2001 period as compared to 40.7% of total sales
in the 2000 period.  Although system software revenue increased 63.6% from the
2000 period to the 2001 period, decreases across the board in companion product
revenues more than offset the gains in the core product sales.  Revenues
generated by the migration of current customers to the Windows products were
approximately $175,000 in both 2001 and 2000.  The increases in system software
sales can be attributed to the Company's success in enhancing the Windows-based
products functionality and robustness during the 2001 period.  The market
perception of the products' competitiveness has increased substantially during
the 2001 period and has resulted sales to Milwaukee County Sheriff's Department
and the Lincoln, MA and North Andover, MA Police and Fire Departments.  In
addition, the complete system installed in 2000 in the Utica, NY Police
Department was part of the Central New York Law Enforcement Network
Demonstration Project that was funded by the Department of Justice. This project
serves as a model of current law enforcement technology for mid-sized
departments. The National Law Enforcement Corrections Technology Center (NLECTC)
in Rome, NY manages the New York project.  The successful implementation in
Utica, NY generated interest from several other agencies in the area.  Hudson,
NY purchased the Company's RMS product in early 2002 and the Company expects
that additional sales will be closed in 2002.

Cost of sales decreased $81,698 or 20.1% to $323,920 for the 2001 period from
$405,618 for the 2000 period reflecting both reduced sales and the improved
margins on many of the Company's products.  The Company experienced an
improvement in gross margin from 80.2% in the 2000 period to 83.8% in the 2001
period.  Changes in the revenue mix are the most important factor in these
gains.  The increases in core product revenues, which carried a 96.7% gross
margin in the 2001 period, were accompanied by decreases in mobile revenues,
which generated 56.5% margins.  The gains in the new systems margin can be
attributed to the trend of customers to provide their own system hardware, which
is less profitable than the software component of sales. However, this practice
has a negative impact on total revenues.  The migration revenues are generated
from installation, customer training, and data conversion.  This process is
facilitated by current engineering and support personnel and generates no
incremental costs to the Company. Software support and update service revenues
delivered traditionally high margins that decreased slightly from 84.3% in the
2000 period to 83.2% in the 2001 period.

The Company's operating expenses decreased $689,494 or 18.6% to $3,018,471 for
the 2001 period from $3,707,965 for the 2000 period.  The Company's commitment
to bringing the Windows product successfully to market generated significant
increases in personnel costs and research and development spending in both the
1999 and 2000 periods.  In the 2000 period, in particular, internal resources
supplemented external research and development work.  By the 2001 period when
major portions of the Windows development effort had been completed and the
Company focused on adding product functionality and robustness, both the
internal and external spending decreased.  The spending on external development
decreased 66.9% from $423,467 in 2000 to $140,319 in 2001.  Total
Windows-related personnel expenditures decreased to $706,423 in the 2001 period
from $814,851 in the 2000 period.  No development costs were capitalized during
the 1999, 2000, and 2001 periods.  The capitalized development costs from 1998
of $195,665 were fully amortized at the end of 2001.  The Company used outside
development resources sparingly in 2001 and focused on developing internal
engineering and support organizations that will maintain, upgrade and support
the Windows product suite over the long term.

Personnel costs decreased 15.8% or $342,754 to $1,832,286 for the 2001 period
from $2,175,040 for the 2000 period.  This decrease can be attributed to the
retirement of one employee and the reversal of accrued bonuses for 2000.  In
addition, the Company continues to backfill positions on a selective basis in
order to manage costs.  As the main effort to rewrite the Company's VMS product
into Windows winds down, the Company has refocused engineering and support
resources on ongoing enhancements and refinements, testing, documentation, and
forms development for the Windows product line.  As the products are installed
in additional states and further product enhancements are released, it is
essential that the documentation and state-related forms be produced in a timely
manner to ensure smooth customer transitions.  Other personnel related costs
that showed significant decreases were health insurance, employer 401(k)
contributions and commissions.

Rent, utilities and telephone decreased by 11.7% or $25,996 to $195,525 for the
2001 period from $221,521 for the 2000 period.  This decrease can be attributed
to moving the Maitland, Florida office to smaller quarters and the reduction in
telephone expense due to lower rates. Travel and entertainment expenses
decreased $10,698 or 9.0% to $108,508 for the 2001 period from $119,206 for the
2000 period.  These decreases affect most areas of travel expense, except
airfares, and reflect the Company's efforts to control expenses in the face of
flat revenues. Airfares increased slightly due to installations in Milwaukee,
Wisconsin and St. Peters, Missouri.  Spending on professional fees increased
$153,871 or 106.9% to $297,815 for the 2001 period from $143,944 for the 2000
period.  The increase can be attributed to consulting expenses resulting from
hiring professional assistance with the Company's business plan and a financial
consultant to evaluate capital funding alternatives.  However, both legal and
accounting fees decreased due to reduced legal services required in support of
the Company's debt and equity fundraising activities and joint ventures and
fewer hours required by an outside accountant. Depreciation and amortization
expense decreased 8.0% or $9,984 to $114,056 for the 2001 period from $124,040
for the 2000 period reflecting the reduction in depreciation on internal
computer equipment and software as it ages.

Other operating expenses decreased 34.1% or $170,785 to $329,962 for the 2001
period from $500,747 for the 2000 period.  The decrease is attributable to a
reduction in the expense associated with the reserve for un-collectible accounts
as outstanding balances are collected and lower spending on marketing collateral
material, annual report expense, and employee training.  Offsetting these
decreases was an increase in tax penalties.

Net interest expense increased to $272,048 for the 2001 period compared to the
net interest expense of $99,459 for the 2000 period.  Interest expense in the
2000 period was reduced by the reversal of accrued interest costs on the
convertible promissory notes issued to outside investors as part of the
Company's capital raising program when these notes were converted to equity.
There were no debt conversions to equity in the 2001 period. Also during the
2001 period, the Company secured $880,000 in new outside funding in the form of
convertible debt that accrues interest at 7%.  In addition, the Company recorded
a discount on long-term debt outstanding related to the value of the detachable
warrants which is amortized as interest expense over the life of the note.  This
adjustment was not recorded in prior years because it was deemed immaterial by
our certified public accountants.

The loss for the 2001 period was $(1,608,775) or $(.37) per share compared to a
loss of $(2,167,035) or $(.57) per share for the 2000 period.  The reduced
operating expenses in the 2001 resulting from cost controls implemented due to
the shortage of working capital and the increased shares outstanding due to new
equity funding contributed to the decrease in loss per share.



Liquidity and Capital Resources

The Company had a working capital deficit of $(3,054,556) at December 31, 2001
compared to $(2,817,468) at December 31, 2000.  The most significant reasons for
this deterioration are increases in accrued interest on long-term debt, accounts
payable and accrued expenses.  The increases in these liabilities are partially
offset by an increase in accounts receivable.

During the 2001 period, the Company secured $200,625 of additional equity
financing and $880,000 of new long-term debt financing.  In addition, The
Company converted $475,000 of notes payable to related parties and the
associated accrued interest of $44,149 to long-term convertible promissory note
during the second quarter of 2001.  At December 31, 2001, $2,234,149 of
convertible promissory notes and $293,123 of related interest remained
outstanding as liabilities.  These amounts on the balance sheet are reported net
of discounts on long-term debt issued with detachable warrants of $66,744.  In
general, the $835,000 of the outstanding convertible debt funding accrues
interest at 11%; has a two year term; carries the option of conversion of the
principal to common stock by the debt holder at conversion prices ranging from
$2.19 to $2.50 per share, or repayment of principal and accrued interest by the
Company; and has 100% warrant coverage attached that allows for the purchase of
additional shares of common stock at exercise prices ranging from $2.19 to $2.50
per share.  The remaining $1,399,149 of outstanding convertible debt funding
accrues interest at 7%; has a two year term; carries the option of conversion of
the principal to common stock by the debt holder at conversion prices ranging
from $.20 to $.6825 per share, or repayment of principal and accrued interest by
the Company; and has 100% warrant coverage attached that allows for the purchase
of additional shares of common stock at exercise price of $1.50 per share.  The
Company's ability to repay the outstanding convertible promissory notes with
accrued interest on due dates is at risk, especially the $835,000 due in 2002.
Subsequent to the year-end, the Company secured an additional $245,000 of new
long-term debt financing.  The new debt accrues interest at 7%; has a two year
term; carries the option of conversion of the principal to common stock by the
debt holder at a conversion price of $.20 per share, or repayment of principal
and accrued interest by the Company; and has 100% warrant coverage attached that
allows for the purchase of additional shares of common stock at exercise price
of $1.50 per share.  As of August 2002, $760,000 of the debt has matured but has
not yet been called in by the note holders.

Cash increased to $3,537 at December 31, 2001 from $1,507 December 31, 2000.
Accounts receivable increased to $442,803 at December 31, 2001 from $224,191 at
December 31, 2000 due to a corresponding increase in sales during the third and
fourth quarters of 2001 as compared to the same period in 2000.  The resources
necessary to fund enhancements in functionality to the Windows products and
provide working capital for operations continue to be a major concern for the
Company.  As discussed above, the Company received $1,080,625 of debt and equity
funding in 2001 and an additional $245,000 in debt funding in the first half of
2002.  In addition, the Company has been able to reduce current cash outflows by
entering into a Commercial Services Contract with Sumaria Systems, Inc. that
will be repaid with Pamet Systems, Inc. stock or cash, as management deems
appropriate.  However, a shortage of working capital is perpetuated by the
continued sluggishness in sales.  The continuing slowdown in the general
economic conditions and in the public safety marketplace that began in the
second half of 2000 has adversely affected the Company.  Despite the need for
additional sales and support resources to move Pamet from a development focus to
a sales and marketing one, the Company is continuing to strictly control
expenses and seek new debt and/or equity funding.  Nevertheless, the Company
continues to be hampered by insufficient cash resources.  As noted in the
Auditor's Report, there can be no assurances that the Company will be able to
generate adequate cash either through operations or additional financing to
continue as a going concern.  There can be no assurance about the Company's
ability to repay the its indebtedness or other obligations as they become due.
If the Company's financial difficulties continue it could have a material
adverse effect on the Company, its creditors and its stockholders. Backlog at
August 6, 2002 was approximately $541,000.

As of December 31, 2001, the Company had accumulated $12,685,000 of federal net
operating loss carryforwards that expire beginning in the year 2005.  In
addition, the Company has state net operating losses to carry forward of
$8,964,000 which expire between the years 2002 and 2006. Under the Internal
Revenue Code of 1986, as amended, the rate at which a corporation may utilize
its net operating losses to offset income for federal tax purposes is subject to
specified limitations during periods after the corporation has undergone an
"ownership change".  It has been determined that an ownership change did take
place at the time of the Company's initial public offering in 1990.  However,
the limitations on the loss carryforward exceed the accumulated loss at the time
of the "ownership change".  Thus there is no restriction on its use.

Seasonality

The majority of the Company's installed base has a fiscal year that commences on
July 1 and, therefore, the Company bills its customers for their annual software
support and update service on July 1 of each year.  Consequently, cash flow
representing software support revenues has tended to be higher in the second
half of the Company's fiscal year, although software support revenues are
recognized ratably throughout the fiscal year.

Revenue Recognition

Revenues from software license fees are recognized when a contract has been
executed, the product has been delivered, all significant contractual
obligations have been satisfied and collection of the related receivable is
probable.  Maintenance revenues, including those bundled with the initial
license fee, are deferred and recognized ratably over the service period.
Consulting and training service revenues are recognized as the services are
performed.

Inflation

Inflation has not had a significant impact on the Company's operations to date.

<PAGE>

Item 7.  Financial Statements and Supplementary Data.
_____________________________________________________





                              PAMET SYSTEMS, INC.

                         INDEX TO FINANCIAL STATEMENTS

                                                        Page

Report of Independent Auditors  .....................   F-2

Financial Statements:

   Balance Sheet - December 31, 2001 .................  F-3

   Statements of Operations -
     Years Ended December 31, 2001 and 2000 ..........  F-4

   Statements of Stockholders' Deficit -
     Years Ended December 31, 2001 and 2000 ..........  F-5

   Statements of Cash Flows -
     Years Ended December 31, 2001 and 2000  .........  F-6

Notes to Financial Statements   ......................  F-8

 All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS


Board of Directors and Stockholders
Pamet Systems, Inc.


We have audited the accompanying balance sheet of Pamet Systems, Inc. as of
December 31, 2001, and the related statements of operations, stockholders'
deficit and cash flows for each of the two years in the period ended December
31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pamet Systems, Inc. as of
December 31, 2001, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As disclosed in the financial
statements, the Company has an accumulated deficit at December 31, 2001 and has
suffered substantial net losses in each of the last two years, which raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are disclosed in Note A.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


Worcester, Massachusetts August 6, 2002

<PAGE>

<TABLE>
<CAPTION>
BALANCE SHEET
PAMET SYSTEMS, INC.

                                                                  December 31,
                                                                          2001
                                                                  ------------
<S>				                                   <S>
ASSETS
-------
CURRENT ASSETS
        Cash                                                      $      3,537
        Accounts receivable, trade, net of
        allowance for doubtful accounts of
        $170,000 and factored receivables of
        $33,500                                                        442,803
        Accounts receivable, factored                                    6,700
        Inventory, net of reserve of $10,662                             4,079
        Prepaid expenses and other current assets                      128,438
                                                                       -------
                 TOTAL CURRENT ASSETS                                  585,557

PROPERTY AND EQUIPMENT, NET                                             61,602
DEPOSITS                                                                82,145
                                                                        ------
                         TOTAL ASSETS                                $ 729,304
                                                                        ======
LIABILITIES AND STOCKHOLDERS' DEFICIT
--------------------------------------
CURRENT LIABILITIES
        Current portion of long-term debt, net of discount           $ 823,242
        Note payable to related party                                   25,000
        Accounts payable, trade                                        922,042
        Accounts payable, related parties                               41,915
        Current portion of accrued interest payable on long-term debt  235,388
        Current portion of deferred gain on sale of land and building   42,614
        Accrued expenses                                               872,884
        Deferred software maintenance revenue and unearned revenue     677,028
                                                                       -------
                 TOTAL CURRENT LIABILITIES                           3,640,113

ACCRUED INTEREST payable on long-term debt, net of current portion      57,735
DEFERRED GAIN on sale of land and building, net of current portion     153,274
LONG TERM DEBT, net of current portion and discount                  1,344,163
                                                                       -------
                         TOTAL LIABILITIES                           5,195,285
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
        Preferred stock, $.01 par value, 1,000,000
           shares authorized, none issued                                   --
        Common stock, $.01 par value, 30,000,000 shares
           authorized, 4,437,976 shares
           issued and outstanding                                       44,380
        Additional paid-in capital                                   8,673,496
        Accumulated deficit                                        (13,183,857)
                                                                    ----------
                TOTAL STOCKHOLDERS'DEFICIT                          (4,465,981)
                                                                    ----------
           TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT            $    729,304
                                                                    ==========
</TABLE>

See independent auditor's report and accompanying notes to financial statements

<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
PAMET SYSTEMS, INC.

                       					Year Ended December 31,
                                                        -----------------------
                                                              2001         2000
                                                              ----	   ----
<S>                                                    <S>           <S>
Net hardware and software sales                         $1,005,325   $1,213,038
Support revenues                                           997,937      832,969
                                                         ---------    ---------
                TOTAL REVENUES                           2,003,262    2,046,007

Cost of sales                                              323,920      405,618
                                                         ---------    ---------
                GROSS PROFIT                             1,679,342    1,640,389

Operating expenses
        Personnel costs                                  1,832,286    2,175,040
        Rent, utilities and telephone                      195,525      221,521
        Travel and entertainment                           108,508      119,206
        Professional fees               		   297,815      143,944
        Depreciation and amortization                      114,056      124,040
        Research and development                           140,319      423,467
        Other operating expenses                           329,962      500,747
                                                         ---------    ---------
                TOTAL OPERATING EXPENSES                 3,018,471    3,707,965

Loss from operations                                    (1,339,129)  (2,067,576)
Interest expense, net                                     (272,048)     (99,459)
Gain on sale of property and equipment                       2,402           -
                                                         ---------    ---------
                NET LOSS                               $(1,608,775) $(2,167,035)

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

Loss per common share                                        $(.37)      $(.57)
                                                              ====        ====

</TABLE>

See independent auditor's report and accompanying notes to financial
statements

<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDERS' DEFICIT
PAMET SYSTEMS, INC.


                        Common Stock    Additional                       Total
                       -------------    Paid-In      Accumulated  Stockholders'
                       Shares Amount   Capital           Deficit        Deficit
                       ------ ------   -------           -------        -------
<S>                 <S>       <S>     <S>          <S>            <S>
BALANCE AT
JANUARY 1, 2000
                    3,285,238 $32,852 $6,688,504    $(9,408,047)   $(2,686,691)

NET LOSS                                             (2,167,035)    (2,167,035)

CONVERSION OF
STOCK OPTIONS          38,875     389     37,704             --         38,093

CONVERSION OF
PROMISSORY NOTES
TO STOCK              392,414   3,924    796,076             --        800,000

CONVERSION OF
WARRANTS TO STOCK      52,416     524     89,476             --         90,000

PRIVATE PLACE-
MENT OF STOCK         316,667   3,167    746,833             --        750,000
                    ---------  ------  ---------     ----------      ---------
BALANCE AT
DECEMBER 31, 2000   4,085,610 $40,856 $8,358,593   $(11,575,082)   $(3,175,633)
                    =========  ======  =========    ===========     ==========
NET LOSS                                             (1,608,775)    (1,608,775)

CONVERSION OF
STOCK OPTIONS         105,200   1,052      1,052             --          2,104

ISSUANCE OF WARRANTS
WITH LONG-TERM
DEBT                       --      --    115,698             --        115,698

PRIVATE PLACE-
MENT OF STOCK         247,166   2,472    198,153             --        200,625
                      -------  ------  ---------     ----------     ----------
BALANCE AT
DECEMBER 31, 2001   4,437,976 $44,380 $8,673,496   $(13,183,857)   $(4,465,981)
                    =========  ======  =========     ==========      =========
</TABLE>

See independent auditor's report and accompanying notes to financial
statements

<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
PAMET SYSTEMS, INC.

                                                        Year Ended December 31,
                                                        -----------------------
                                                            2001         2000
                                                            ----         ----
<S>                                                   <S>           <S>
OPERATING ACTIVITIES

     Net loss                                          $(1,608,775) $(2,167,035)
     Adjustments  to reconcile net loss to net cash
        used for operating activities:
        Gain on sale of property and equipmen               (2,402)          --
        Deferred gain on sale of land and building         (42,614)     (42,614)
        Depreciation and amortization                      114,056      124,040
        Amortization of discount on long-term debt          48,954           --
        Provision for losses on accounts receivable,
                          trade                             (5,000)      65,000

     Changes in operating assets and liabilities:
        Accounts receivable, trade                        (213,612)     329,875
        Accounts receivable, factored                        8,070       39,161
        Inventory                                            6,072        1,594
        Prepaid expenses and other current assets           18,694      (52,889)
        Due to factor                                      (36,199)     (21,297)
        Accounts payable, trade                            147,037      106,934
        Accounts payable, related parties                    1,749      (12,296)
        Accrued expenses                                   150,841      329,567
        Accrued interest payable on long-term debt         149,585        2,133
        Deferred software maintenance revenue and
                  unearned revenue                          75,523      217,575
                                                         ---------    ---------
             Net cash used for operating activities     (1,188,021)  (1,080,252)
                                                         ---------    ---------
INVESTING ACTIVITIES

     Expenditures for property
        and equipment                                      (13,583)    (46,541)
     Security deposit returned                               2,045          --
     Proceeds from sale of property and equipment            3,860          --
                                                            ------      ------
          Net cash used for investing activities            (7,678)    (46,541)

</TABLE>

                                (Continued)
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS - CONTINUED
PAMET SYSTEMS, INC.

                                                        Year Ended December 3l,
                                                           2001         2000
                                                           ----         ----
<S>                                                    <S>          <S>
FINANCING ACTIVITIES

        Proceeds from long-term debt-convertible
        promissory notes                               $  880,000    $   --
        Proceeds from related party notes                 145,000     210,000
        Payment of related party notes                    (30,000)       --
        Issuance of common stock                          202,729     878,093
                                                          -------     -------
          Net cash provided by financing activities     1,197,729   1,088,093

                     NET INCREASE (DECREASE) IN CASH        2,030     (38,700)
     Cash at beginning of period                            1,507      40,207
                                                        ---------   ---------
                      CASH AT END OF PERIOD            $    3,537   $   1,507
                                                        =========   =========


     SUPPLEMENTAL DISCLOSURES OF CASH
     FLOWS INFORMATION

     Cash paid for interest                            $   79,194   $  78,639
                                                        =========   =========

     SUMMARY OF NON-CASH FINANCING ACTIVITIES

        Note payable-related parties converted to
         long-term debt-convertible promissory notes   $  475,000   $  --

        Accrued interest-related parties converted from
         accrued expenses to long-term debt-convertible
         promissory notes                              $   44,149   $  --

        Discount recorded on long-term debt issued with
         detachable warrants                           $  115,698   $  --

        Conversion of long-term debt-convertible
         promissory notes to common stock              $       --   $ 800,000

</TABLE>

See independent auditor's report and accompanying notes to financial
statements

<PAGE>

NOTES TO FINANCIAL STATEMENTS
PAMET SYSTEMS, INC.

NOTE A--NATURE OF OPERATIONS

Pamet Systems, Inc. (the Company), a Massachusetts corporation, was formed in
November 1987 to engage in the business of designing, developing, installing and
servicing computer software systems for the municipal market throughout the
United States, principally in the area of public safety. Credit is granted to
certain customers, most of which are municipalities. The Company generally does
not require collateral.

The Company's backlog at August 6, 2002 was approximately $541,336 (unaudited).
Management believes that this level of backlog and its anticipated sales, as
well as the funding described below, are adequate to sustain operations through
the end of fiscal year 2002.

However, the ultimate success of the Company is still dependent upon its ability
to secure financing adequate to meet its working capital and ongoing product
development needs. In addition, in order for the Company's operations to be
maintained and/or expanded, the Company will need to successfully market its
Microsoft Windows NT computing platform applications. Subsequent to year-end,
the Company received $245,000 through the issuance of long-term convertible
promissory notes to three investors with an interest rate of 7%.  If additional
funds are required, the current Board members are willing to seek additional
equity financing, as needed. Management is seeking to have the long-term debt
that is due in 2002 either converted to equity or renewed.  Management believes
the Company's current sources of liquidity and funding are adequate to sustain
operations. Management is also seeking to enhance the Company's financial
position by obtaining additional permanent financing. There can be no assurance,
however, that the Company's operations will be sustained or be profitable in the
future, that adequate sources of financing will be available at all, when needed
or on commercially acceptable terms, or that the Company's product development
and marketing efforts will be successful.

The Company's board of directors hired a new chief executive officer (CEO)
subsequent to December 31, 2001, whose strong organizational, managerial and
sales skills are expected to strengthen the Company.  The former CEO remains
with the Company in a quality assurance function.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

Property and equipment:  Property and equipment are stated at cost and are
depreciated on the straight line or accelerated methods over their estimated
useful lives.

Inventory:  Inventory consists primarily of computer-related supplies and is
stated at the lower of cost (first-in, first-out) or market value.

<PAGE>

NOTES TO FINANCIAL STATEMENTS--CONTINUED PAMET SYSTEMS, INC.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES (continued)

Long-lived assets:  The Company records impairment losses on long-lived assets
used in operations, including intangible assets, when events and circumstances
indicate that the assets might be impaired and the undiscounted cash flows
estimated to be generated by those assets are less than the carrying amounts of
those assets.

Accounts receivable, factored:  The Company factors part of its accounts
receivable with recourse, which means that the Company bears the risk of
uncollectible accounts over 120 days old. Accounts receivable, factored, in the
accompanying balance sheet represents the portion of each account held back by
the factor. The balance will be remitted to the Company when the respective
accounts have been collected.

Due to factor:  The balance represents the Company's estimated liability for its
factored accounts that will become greater than 120 days old or uncollectible,
based on historical collections.

Deferred software maintenance revenue and unearned revenue:  Deferred software
maintenance revenue and unearned support revenue represent revenue relating to
software support, updates and warranties which the Company has not yet earned.
Software maintenance fees are recognized ratably over the period of the service
contract. The portion of the maintenance fee associated with the sale of a first
time system or software that relates to the initial maintenance period is also
recognized ratably over the period of the extended service.

Deferred gain on sale of land and building:  The balance represents a deferred
gain on the sale of real estate, accounted for as a sale-leaseback transaction.
The gain is being amortized and shows as a reduction of rent expense over the
term of the lease on a straight-line basis.

Revenue recognition:  The Company generally recognizes product revenue upon
shipment. Revenues for products with extensive installation requirements under
contractual agreements are recognized upon customer acceptance.

Loss per common share:  In 2001 and 2000, loss per common share is computed
using the weighted average number of shares of common stock outstanding during
the period. Diluted per share computations are not presented since the effect
would be antidilutive.

Stock-based compensation:  The Company measures compensation expense relative to
employee stock-based compensation plans using the intrinsic value-based method
of accounting as prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". However, the Company will disclose
the pro forma amounts of net income and earnings per share as though the fair
value-based method of accounting prescribed by Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation", had been applied.
See the Stockholders' Equity Note for these disclosures.

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED PAMET SYSTEMS, INC.

NOTE B-SIGNIFICANT ACCOUNTING POLICIES (continued)

Capitalized software development costs:  Pursuant to Statement of Financial
Accounting Standards No. 86, "Accounting for the Costs of Computer Software to
be Sold, Leased or Otherwise   Marketed," the Company capitalizes certain
software development costs once technological feasibility of the related
products, as defined in the statement, has been achieved. The establishment of
technological feasibility and the ongoing assessment of recoverability of
capitalized software development costs require considerable judgment by
management with respect to certain external factors, including anticipated
future gross revenues, estimated economic life and changes in software and
hardware technology. Software development costs incurred prior to achieving
technological feasibility as well as certain licensing and other research and
development costs are charged to research and development expense as incurred.

Capitalized software development costs are reported at the lower of unamortized
cost or net realizable value. Net realizable value is determined by periodically
reviewing net capitalized software development costs for impairment based upon
current and anticipated product revenue and other changes in circumstances that
indicate the carrying amount of the capitalized software development costs may
not be fully recoverable. Commencing with the initial product release, these
costs are amortized on the straight-line method over the estimated life of the
product, generally three to five years. Since 1998, the period between achieving
technological feasibility and the general availability of such software has been
short; therefore, software development costs qualifying for capitalization have
been immaterial.  Accordingly, the Company has not capitalized any software
development costs since 1998 and has charged all such costs to research and
development expense.

Use of 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 date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

Income taxes:  The Company accounts for income taxes according to the liability
method. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and income tax bases of assets
and liabilities and are measured using enacted tax rates and tax laws that will
be in effect when the differences are expected to reverse.  The primary
component of the Company's deferred tax asset as of December 31, 2001, which is
fully reserved, is net operating loss carryforwards.

NOTE C--RELATED-PARTY TRANSACTIONS

Compensation:  The Company expensed approximately $15,200 in 2001 and $22,000 in
2000 relating to a stockholder for financial accounting consulting services. In
addition, the Company expensed approximately $-0- in 2001 and $157,000 in 2000
relating to a Company in which an employee is a principal, for research and
development expenses.

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED PAMET SYSTEMS, INC.

NOTE C-RELATED-PARTY TRANSACTIONS (continued)

Note payable to related party represents short-term, interest free, unsecured
advances from an officer of the Company.

In addition, during 2001 two Stockholders and Directors of the Company converted
$475,000 of short-term promissory notes which were being utilized as a credit
facility, and $44,149 of accrued interest associated with this credit facility,
to long-term debt-convertible promissory notes.

Accounts payable, related parties represent non-interest bearing amounts owed to
employees and directors for services performed or expense reimbursements.

NOTE D--PROPERTY AND EQUIPMENT AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
Property and equipment at December 31, 2001 is as follows:

                                Balance at                         Balance at
                                 Beginning   Additions                 End of
Classification                   of Period     at Cost Retirements     Period
--------------                   ----------   --------  -----------   ---------
<S>                               <S>         <S>       <S>           <S>
     Furniture and fixtures        $141,184    $ 2,904   $       --    $144,088
     Computer equipment             521,211     10,679      104,935     426,955
     Automobiles                     24,894         --       16,594       8,300
                                    -------     ------      -------    --------
             TOTALS                $687,289   $ 13,583    $ 121,529    $579,343
                                    =======     ======      =======    ========
</TABLE>
<TABLE>
<CAPTION>
Accumulated depreciation at December 31, 2001 is as follows:

                                Balance at   Additions             Balance at
                                 Beginning     Charged                 End of
Classification                   of Period  to Expense Retirements     Period
--------------                   ----------   --------  ----------- -----------
<S>                               <S>        <S>        <S>           <S>
     Furniture and fixtures        $131,507   $  4,449   $       --    $135,956
     Computer equipment             435,400     43,020      104,935     373,485
     Automobiles                     22,070      1,366       15,136       8,300
                                    -------     ------      -------     -------
             TOTALS                $588,977   $ 48,835    $ 120,071    $517,741
                                   ========    =======      =======     =======
     Net property and equipment    $ 98,312                            $ 61,602
                                   ========                             =======
</TABLE>

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE E--ACCRUED EXPENSES

<TABLE>
<CAPTION>
Accrued expenses consist of the following at December 31, 2001:

<S>                                                      <S>
Accrued payroll, bonuses and vacation                     $472,439
Accrued and withheld payroll taxes
  and 401(k) contributions                                 348,749
Other                                                       51,696
                                                           -------
                                                          $872,884
                                                           =======
</TABLE>

<CAPTION>
NOTE F--LONG-TERM DEBT


Long-term debt represents convertible promissory notes with five
year detachable warrants. The promissory notes may be converted
to common stock no more frequently than four times per year at an
amount of not less than $25,000 or $50,000. No interest shall be
deemed to have accrued or be payable on any portion of a note
converted prior to maturity. The conversion price, maturity
dates and the warrants available on each note are as follows:

Convertible promissory note with five year detachable warrants
which allow the noteholder to purchase up to 14,000 shares of
common stock at $2.50 per share. No warrants have been exercised at
December 31, 2001. The principal amount of the note may be
converted to common stock at $2.50 per share, at the noteholder's
option as described above. No principal has been converted to
common stock at December 31, 2001. The interest rate on the note
is 11% per yearand interest expense in fiscal year 2001 was $3,850.
Total interest accrued on the note at December 31, 2001 was $10,189.
Both the principal balance of the note and unpaid accrued interest
were due on May 9, 2002.                                            $ 35,000

Convertible promissory note with five year detachable warrants
which allow the noteholder to purchase up to 150,000 shares of
common stock at $2.50 per share. No warrants have been exercised
at December 31, 2001. The principal amount of the note may be
converted to common stock at $2.50 per share, at the noteholder's
option as described above. No principal has been converted to
common stock at December 31, 2001. The interest rate on the note
is 11% per year and interest expense in fiscal year 2001 was
$41,250. Total interest accrued on the note at December 31, 2001
was $108,719. Both the principal balance of the note and unpaid
accrued interest were due on May 13, 2002.                           375,000



<PAGE>


<CAPTION>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE F--LONG-TERM DEBT (continued)

Convertible promissory note to a vendor with five year detachable
warrants which allow the noteholder to purchase up to 140,000
shares of common stock at $2.50 per share. No warrants have been
exercised at December 31, 2001. The principal amount of the note
may be converted to common stock at $2.50 per share, at the
noteholder's option as described above. No principal has been
converted to common stock at December 31, 2001. The interest rate
on the note is 11% per year and interest expense in fiscal year
2001 was $38,500. Total interest accrued on the note at December
31, 2001 was $99,573. Both the principal balance of the
note and unpaid accrued interest were due on May 31, 2002.           $350,000

Convertible promissory note to a vendor with five year detachable
warrants which allow the noteholder to purchase up to 7,500 shares
of common stock at $2.19 per share. No warrants have been exercised
at December 31, 2001. The principal amount of the note may be
converted to common stock at $2.19 per share, at the noteholder's
option as described above. No principal has been converted to common
stock at December 31, 2001. The interest rate on the note is 11% per
year and interest expense in fiscal year 2001 was $8,250. Total
interest accrued on the note at December 31, 2001 was $16,907 and
unlike the notes above is to be paid quarterly. However, at
December 31, 2001 no interest has been paid on this note and thus
the Company is in default of the original note agreement.  Both
the principal balance of the note and unpaid accrued interest are
due on December 13, 2002.                                              75,000

Convertible promissory note with five year detachable warrants,
which allow the noteholder to purchase up to 933,333 shares of the
common stock at $1.50 per share.  No warrants have been exercised at
December 31, 2001.  The principal amount of the note may be converted
to common stock at $0.375 per share at the noteholder's option as
described above.  No principal has been converted to common stock at
December 31, 2001.  The interest on the notes is 7% per year and
interest expense in fiscal year 2001 was $17,563.  Total interest
accrued on the note at December 31, 2001 was $17,653.  Both the
principal balance of the note and unpaid accrued interest are
due April 12, 2003.                                                   350,000

Convertible promissory note with five year detachable warrants,
which allow the noteholder to purchase up to 266,667 shares of the
common stock at $1.50 per share.  No warrants have been exercised at
December 31, 2001.  The principal amount of the note may be converted
to common stock at $0.375 per share at the noteholder's option as
described above.  No principal has been converted to common stock at
December 31, 2001.  The interest on the notes is 7% per year and
interest expense in fiscal year 2001 was $5,044.  Total interest
accrued on the note at December 31, 2001 was $5,044.  Both the
principal balance of the note and unpaid accrued interest are
due April 12, 2003.                                                   100,000


<PAGE>


<CAPTION>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE F--LONG-TERM DEBT (continued)


Convertible promissory note with five year detachable warrants,
which allow the noteholder to purchase up to 346,667 shares of
the common stock at $1.50 per share.  No warrants have been
exercised at December 31, 2001.  The principal amount of the
note may be converted to common stock at $0.375 per share at the
noteholder's option as described above.  No principal has been
converted to common stock at December 31, 2001.  The interest on
the notes is 7% per year and interest expense in fiscal year 2001
was $3,092.  Total interest accrued on the note at December
31, 2001 was $3,092.  Both the principal balance of the note
and unpaid accrued interest are due August 29, 2003.                  130,000

Convertible promissory note to a board member with five year
detachable warrants, which allow the noteholder to purchase up to
431,674 shares of the common stock at $1.50 per share.  No warrants
have been exercised at December 31, 2001.  The principal amount of
the note may be converted to common stock at $0.6825 per share at the
noteholder's option as described above.  No principal has been
converted to common stock at December 31, 2001.  The interest on the
notes is 7% per year and interest expense in fiscal year 2001 was
$14,691. Total interest accrued on the note at December 31, 2001 was
$14,691.  Both the principal balance of the note and unpaid accrued
interest are due April 15, 2003.                                      294,617

Convertible promissory note to a board member with five year
detachable warrants, which allow the noteholder to purchase up to
328,985 shares of the common stock at $1.50 per share.  No warrants
have been exercised at December 31, 2001.  The principal amount of
the note may be converted to common stock at $0.6825 per share at the
noteholder's option as described above.  No principal has been
converted to common stock at December 31, 2001.  The interest on the
notes is 7% per year and interest expense in fiscal year 2001
was $11,196. Total interest accrued on the note at December 31, 2001
was $11,196.  Both the principal balance of the note and unpaid
accrued interest are due April 15, 2003.                              224,532

Convertible promissory note with five year detachable warrants,
which allow the noteholder to purchase up to 266,667 shares of the
common stock at $1.50 per share.  No warrants have been exercised at
December 31, 2001.  The principal amount of the note may be converted
to common stock at $0.375 per share at the noteholder's option as
described above.  No principal has been converted to common stock at
December 31, 2001.  The interest on the notes is 7% per year and
interest expense in fiscal year 2001 was $3,682.  Total interest
accrued on the note at December 31, 2001 was $3,682.  Both the
principal balance of the note and unpaid accrued interest
are due June 22, 2003.                                                100,000


<PAGE>


<CAPTION>
NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE F--LONG-TERM DEBT (continued)


Convertible promissory note with five year detachable warrants,
which allow the noteholder to purchase up to 1,000,000 shares of
the common stock at $1.50 per share.  No warrants have been
exercised at December 31, 2001.  The principal amount of the note
may be converted to common stock at $0.20 per share at the
noteholder's option as described above.  No principal has been
converted to common stock at December 31, 2001.  The interest on
the notes is 7% per year and interest expense in fiscal year 2001
was $2,377.  Total interest accrued on the note at December 31,
2001 was $2,377.  Both the principal balance of the note and
unpaid accrued interest are due October 30, 2003.                    200,000
                                                                     -------
                                                                   2,234,149
         Less discount related to the issuance
           of detachable warrants                                     66,744
                                                                     -------
                                                                   2,167,405
         Less current portion of long-term debt,
           net of discount                                           823,242
                                                                   ---------
                                                                  $1,344,163
                                                                   =========


<CAPTION>

Annual principal maturities of long-term debt are as follows:
     Year ending  December 31, 2002, net of discount of $11,758   $  823,242
                  December 31, 2003, net of discount of $54,986    1,344,163
                                                                   =========
                                                                  $2,167,405


Discount on long-term debt represents the value of 5 year detachable warrants
issued with the debt as described above.  The total value of warrants issued or
extended in 2001 amounted to $115,698 and is included in additional paid-in
capital.  Amortization of the discount, charged to interest expense during 2001,
amounted to $48,954.  The unamortized discount at December 31, 2001 consists of
$11,758 related to the current portion of long-term debt and $54,986 related to
long-term debt, net of current portion.


<TABLE>
<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY

Stock-based compensation expense under the fair value-based method of accounting
would have resulted in pro forma net loss and loss per common share
approximating the following amounts:
                              2001                              2000
                    --------------------------       ---------------------------
                    As Reported      Pro Forma       As Reported     Pro Forma
                    -----------     ----------       -----------     -----------
                   <S>             <S>             <S>             <S>
Net loss            $(1,608,775)    $(2,001,123)    $(2,167,035)    $(2,719,342)
                      =========       =========       ==========      ==========
Loss per common share    $(0.37)         $(0.46)         $(0.57)         $(0.72)

</TABLE>
<PAGE>



NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY (continued)

The fair value of each option granted during 2001 and 2000, reflecting the basis
for the above pro forma disclosures, was determined on the date of grant using
the Black-Scholes option-pricing model.  The following assumptions were used in
determining fair value through the model:

<TABLE>
                                 2001                            2000
                                 ----                            ----
<S>                        <S>                             <S>
Expected Life                5-8 years*                      5-8 years*
Risk-free interest rate    4.81%-5.17%*                    5.92%-6.76%*
Expected Volatility                107%                            110%

</TABLE>
*Amounts vary due to graded vesting for options granted to employees and
differences between options granted to employees and options granted to
directors.

The Company recognizes forfeitures as they occur.

The application of fair value-based accounting in arriving at the pro forma
disclosures above is not an indication of future income statement effects.  The
pro forma disclosures do not reflect the effect of fair-value accounting on
stock-based compensation awards granted prior to 1995, if any.

Stock Option Plans:  In 1990, the Company adopted a Stock Option Plan under
which the Board of Directors may grant incentive or non-qualified stock options
to employees, directors and consultants of the Company. The maximum number of
shares of stock subject to issuance under the 1990 Stock Option Plan is 400,000
shares. These options, of which a total of 253,700 had been exercised at
December 31, 2001, are exercisable within a ten-year period from the date of the
grant, and are generally fully exercisable when issued to directors and
exercisable 20% per year and continuing over five years for employees (based on
continual employment) and consultants. The options are not transferable except
by will or domestic relations order. The option price per share under the Plan
is not less than the fair market value of the shares on the date of grant.



<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<TABLE>
<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY (continued)

Stock option activity for the 1990 Stock Option Plan for the two year period
ended December 31, 2001 is as follows:
<S>                 <S>        <S>             <S>      <S>        <S>
                                                    Weighted Average
                                               -----------------------------
                        Number Exercise Price  Exercise  Fair Value  Remain-
                    Of Options      Per Share     Price    at Grant ing Life
                    ---------- --------------  --------  ---------- --------
Outstanding at
January 1, 2000        273,250     $.02-$5.50     $1.30                 1.78
                                                                       years
Cancelled               (6,000)         $3.50     $3.50
Exercised              (21,750)    $.02-$1.44      $.35
                       -------      ---------
Outstanding at
December 31, 2000      245,500     $.02-$5.50     $1.34                 0.93
                                                                       years
Cancelled              (12,500)   $3.50-$5.50     $5.10
Exercised             (105,200)    $.02  $.02
                      --------     ----------
Outstanding at
December 31, 2000      127,800     $.50-$3.50     $2.05                 1.38
                                                                       years
                       =======      =========     =====
Exercisable at
December 31, 2001      127,800     $.50-$3.50     $2.05
                       =======      =========     =====
Exercisable at
December 31, 2000      236,800     $.02-$5.50     $1.26
                       =======      =========     =====
Available for Grant
At December 31, 2001    18,500
                       =======
Available for Grant
At December 31, 2000     6,000
                       =======

</TABLE>

In 1998, the Company adopted a Stock Option Plan under which the Board of
Directors may grant incentive or non-qualified stock options to employees,
directors and consultants of the Company. The maximum number of shares of stock
subject to issuance under the 1998 Stock Option Plan is 250,000 shares. These
options, of which a total of 17,375 had been exercised at December 31, 2001, are
exercisable within a ten-year period from the date of the grant, and are
generally fully exercisable when issued to directors and exercisable 25% per
year and continuing over four years for employees (based on continual
employment) and consultants. The options are not transferable except by will or
domestic relations order. The option price per share under the Plan is not less
than the fair market value of the shares on the date of grant.


                                                (continued)
<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<TABLE>
<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY (continued)

Stock option activity for the 1998 Stock Option Plan for the two year period
ended December 31, 2001 is as follows:
                                                          Weighted Average
                                                         ---------------------
                         Number Exercise Price  Exercise   Fair Value  Remain-
                     Of Options      Per Share     Price     at Grant ing Life
                     ---------- --------------  --------   ---------- --------
<S>                  <S>        <S>             <S>        <S>        <S>
Outstanding at
January 1, 2000         246,750    $1.37-$1.87     $1.87                  5.12
                                                                         years
Exercised               (14,125)   $1.50-$2.50     $1.58
Cancelled               (27,375)   $1.50-$2.50     $1.83
                        -------     ----------
Outstanding at
December 31, 2000       205,250    $1.37-$3.19     $1.89                  4.91
                                                                         years
Cancelled               (11,250)   $1.50-$2.50     $1.95
                        -------     ----------
Outstanding at
December 31, 2001       194,000     $1.37-$3.19    $1.88                  3.93
                        =======      ==========     ====                 years

Exercisable at
December 31, 2001       171,000     $1.37-$3.19    $1.87
                        =======     ===========     ====
Exercisable at
December 31, 2000       140,500     $1.37-$3.19    $1.86
                        =======      ==========     ====
Available for Grant at
December 31, 2001       38,625
                        =======
Available for Grant at
December 31, 2000       23,625
                        =======

</TABLE>

During 2000 and 2001 the Company issued stock options to directors outside of
any formalized plan. The maximum number of shares of stock subject to issuance
under this arrangement is 250,000 shares.  These options, of which none had been
exercised at December 31, 2001, are exercisable within a ten-year period from
the date of the grant, and are generally fully exercisable when issued. The
options are not transferable except by will or domestic relations order. The
option price per share is not less than the fair market value of the shares on
the date of the grant.





                                        Continued --

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<TABLE>
<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY (continued)

Stock option activity for the directors outside of any formalized plan for the
two year period ended December 31, 2001 is as follows:

                                                      Weighted Average
                                                -------------------------------
                          Number Exercise Price  Exercise   Fair Value  Remain-
                      Of Options      per Share     Price     at Grant ing Life
                      ---------- --------------  --------   ---------- --------
<S>                  <S>        <S>             <S>        <S>         <S>
Outstanding at
January 1, 2000           53,000    $1.37-$2.50     $1.43               5 years
Granted to Directors      30,000    $2.00-$3.88     $2.38  $1.62-$3.15
                          ------     ----------

Outstanding at
December 31, 2000         83,000    $1.37-$3.88     $1.77                  3.82
                                                                          years
Granted to Directors       2,000          $1.87     $1.87        $1.49
                          ------     ----------      ----
Outstanding at
December 31, 2001         85,000    $1.37-$3.88     $1.78                  2.87
                                                                          years
                          ======     ==========
Exercisable at
December 31, 2001         85,000    $1.37-$3.88     $1.78
                          ======     ==========
Exercisable at
December 31, 2000         83,000    $1.37-$3.88     $1.77
                          ======     ==========
Available For Grant at
December 31, 2001        165,000
                         =======
Available For Grant at
December 31, 2000        167,000
                         =======

</TABLE>

                                            (continued)
<PAGE>


NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE G--STOCKHOLDERS' EQUITY (continued)

The Company issued additional stock options and warrants outside of any
formalized plan. The stock options are exercisable within a ten-year period from
the date of grant and are generally fully exercisable when issued to directors
and exercisable 25% per year and continuing over four years for employees (for
options based on continual employment) and consultants. The warrants are
exercisable within a five year period from the date of grant and are generally
fully exercisable when issued. The options and warrants are not transferable
except by will or domestic relations order. The option or warrant price per
share is not less than the fair market value of the shares on the date of grant.

Stock option and warrant activity for stock options and warrants issued outside
a formalized plan for the two year period ended December 31, 2001 is as follows:

<TABLE>

                                                            Weighted Average
                                                         -----------------------
                         Number of Exercise Price Exercise  Fair Value   Remain-
                  Options/Warrants      Per Share    Price    at Grant  ing Life
                  ---------------- -------------  --------  ----------  --------
<S>              <S>              <S>            <S>       <S>          <S>
Outstanding at
January 1,2000           1,780,909   $0.68-$4.75     $2.52                  4.34
                                                                           years
Options Granted to
  Officer                   25,000         $3.88     $3.88       $3.15
Warrants Granted of
  Officers                   6,250         $3.00     $3.00       $2.43
Warrants Granted to
  Directors                 46,875         $3.00     $3.00       $2.43
Warrants Granted to
  Stockholders for new
  equity financing         316,666   $2.50-$3.50     $2.50 $2.03-$2.84

Options Exercised           (3,000)        $2.75     $2.75
Warrants Exercised         (52,416)  $0.80-$2.50     $2.10
Warrants Cancelled          (2,584)        $0.80     $0.80
Options Cancelled          (10,000)  $2.75-$3.25     $3.00
                           -------    ----------      ----
Outstanding at
December 31, 2000        2,107,700   $2.19-$3.19     $2.61                  3.79
                                                                           years

                                                        (continued)

</TABLE>
<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<CAPTION>
<TABLE>
NOTE G--STOCKHOLDERS' EQUITY (continued)

                                                            Weighted Average
                                                         -----------------------
                         Number of Exercise Price Exercise  Fair Value   Remain-
                  Options/Warrants      Per Share    Price    at Grant  ing Life
                  ---------------- -------------- --------  ----------  --------
<S>              <S>              <S>            <S>       <S>          <S>
Warrants granted to
  Stockholders for new
  equity financing          86,509   $1.50-$2.50     $1.83 $1.19-$1.99
Warrants granted
  to convertible
  debt holders           3,573,993   $1.00-$1.50     $1.36
Options transferred
from 2000 option plan      100,000         $2.00     $2.00
Options cancelled           (2,000)        $2.75     $2.75
                           -------          ----      ----
Outstanding at
December 31, 2001        5,866,202   $0.68-$4.75     $1.83                  4.12
                                                                           years
                         =========    ==========      ====                 =====
Exercisable at
December 31, 2001        5,839,952   $0.68-$4.75     $1.82
                         =========    ==========      ====
Exercisable at
December 31, 2000        1,704,304   $0.68-$4.75     $2.53
                         =========    ==========      ====
</TABLE>

In 2000, the Company adopted a Stock Option Plan under which the Board of
Directors may grant incentive or non-qualified stock options to employees,
directors and consultants of the Company. The maximum number of shares of stock
subject to issuance under the 2000 Stock Option Plan is 1,300,000 shares. These
options, of which none had been exercised at December 31, 2001, are exercisable
within a ten-year period from the date of the grant, and are generally fully
exercisable when issued to directors and exercisable 25% per year and continuing
over four years for employees (based on continual employment) and consultants.
The options are not transferable except by will or domestic relations order. The
option price per share under the Plan is not less than the fair market value of
the shares on the date of grant.



                                         (continued)

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<TABLE>
<CAPTION>
NOTE G--STOCKHOLDERS' EQUITY (continued)

                                                      Weighted Average
                                                -------------------------------
                          Number Exercise Price  Exercise   Fair Value  Remain-
                      Of Options      per Share     Price     at Grant ing Life
                      ---------- --------------  --------   ---------- --------
<S>                  <S>        <S>             <S>        <S>         <S>

Outstanding at
January 1, 2000               --             --        --
Options granted
  to Officers            165,000    $2.00-$2.12     $2.02  $1.62-$1.72
Options granted
  to Employees           372,625    $2.00-$4.13     $2.07  $1.62-$3.35
                         -------     ----------      ----   ----------

Options Outstanding
  at December 31, 2000   537,625    $2.00-$4.13     $2.05                   6.39
                                                                           years

Options granted
  to Officers            200,000          $0.68     $0.68        $0.54
Options granted
  to Employees           325,000          $0.68     $0.68        $0.54
Options transferred
  to another plan       (100,000)         $2.00     $2.00
Options cancelled        (18,000)   $2.00-$2.12     $2.05
                         -------     ----------     -----
Outstanding at
December 31, 2001        944,625    $0.68-$3.12     $1.29                   4.85
                                                                           years
                         =======     ==========      ====
Exercisable at
December 31, 2001        349,500    $0.68-$3.12     $1.54
                         =======     ==========      ====
Exercisable at
December 31, 2000        138,625    $2.00-$4.13     $2.05
                         =======     ==========      ====
Available for grant at
December 31, 2001        355,375
                         =======
Available for grant at
December 31, 2000        762,375
                         =======

</TABLE>

Subsequent to December 31, 2001, options representing 25,000 shares were granted
to an employee at an exercise price of $.02.

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

<TABLE>
<CAPTION>
NOTE H-EARNINGS PER SHARE DISCLOSURE

Earnings per share disclosures for the two year period ended December 31, 2001
are as follows:

                                           For the Year Ended December 31, 2001
                                           ------------------------------------
                                                        Weighted-     Per Share
                                         Income    Average Shares        Amount
                                         ------    --------------     ---------
<S>                               <S>            <S>                <S>

Basic loss per common share
        Income available to common
        stockholders               $(1,608,775)    4,303,950             $(0.37)
                                     ==========    =========              ======

                                            For the Year Ended December 31, 2000
                                            ------------------------------------
                                                        Weighted-      Per Share
                                         Income    Average Shares         Amount
                                         ------    --------------      ---------
Basic loss per common share
        Income available to common
        stockholders               $(2,167,035)         3,778,437        $(0.57)
                                     ==========         =========          ====
</TABLE>
NOTE I-INCOME TAXES

During 2001, the Company recorded deferred tax assets for the benefit of net
operating losses in the amount of $393,000. The cumulative amount of these
assets, which is $2,627,000 at December 31, 2001 is fully reserved. Due to the
Company's history of operating losses, management has concluded that realization
of the benefit is not likely.

At December 31, 2001, the Company has federal net operating loss carryforwards
of $12,685,000 that expire beginning in the year 2005. Additionally, the Company
has Massachusetts net operating losses to carry forward, which expire as
follows:

<TABLE>
<CAPTION>
                      <S>                      <S>
                       Year Ending
                       December 31,             Amount
                       -----------              ------
                          2002                  $   980,000
                          2003                    1,752,000
                          2004                    2,632,000
                          2005                    2,000,000
                          2006                    1,600,000
                                                  ---------
                                                 $8,964,000
                                                  =========

</TABLE>
<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.

NOTE J-COMMITMENTS AND CONTINGENCIES

Lease

During 1999, the Company entered into a real estate transaction in which it sold
its main operating facility and land to an unaffiliated third party and leased
back the property. The lease is being accounted for as an operating lease. The
transaction resulted in a gain of approximately $298,000 that the Company has
deferred and will recognize as a reduction of rent expense over the term of the
lease. The lease agreement is for 7 years through August 2006 with a 5 year
renewal option available. The monthly base rent for the first three years is
$12,997. For years four through seven the monthly base rent increases to
$14,564. For the second through seventh year, rent may be further increased by
multiplying the base rent for the preceding year by the percentage increase in
the Consumer Price Index for Urban Wage Earners and Clerical Workers, up to a
maximum increase of three percent per annum.

Future minimum lease payments are as follows:

<TABLE>
<CAPTION>
                    <S>                       <S>
                     Year ending
                     December 31,                Amount
                     -----------                -------
                        2002                   $ 165,348
                        2003                     174,765
                        2004                     174,765
                        2005                     174,765
                        2006                     104,291
                                                 -------
                                               $ 793,934
                                                 =======
</TABLE>

Employment Contracts

The Company had employment agreements with two key management employees through
May 2002 that totaled $273,500 per year.

As of December 31, 2001, the Company had not paid federal and state payroll
withholding and employer taxes totaling approximately $126,000 and $36,000,
respectively, which relate to the third and fourth quarters of 2001.  In
addition, the Company has booked penalties totaling $46,000 in accounts payable
trade, related to these past due amounts.  The Company has a verbal agreement
with the IRS which requires the Company to have paid all past due amounts by
September 2002.

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.


NOTE K-SIGNIFICANT CUSTOMERS

Amounts due from three customers represented approximately 40% of total accounts
receivable, trade outstanding at December 31, 2001.

Sales to one customer represented approximately 10.6% of total revenues for the
year ended December 31, 2000.

NOTE L-MAJOR SUPPLIER

The Company obtained approximately 80% of its merchandise and support services
from one supplier in 2001. Management believes that if this supplier ceased
providing software, the Company could find alternative suppliers, although there
would be a short interruption of this line of business as the new software was
integrated with the Company's products.

NOTE M--PROFIT SHARING PLAN

The Company has a qualified contributory profit sharing 401(k) plan. The plan
covers all employees meeting certain age and service requirements. Employee
contributions are voluntary, based on specific percentages of compensation. The
plan also provides for contributions by the Company upon approval of the Board
of Directors. During 2001, the Board elected to make no matching contribution.
During 2000, the Board elected to make contributions equal to 15% of employee
contributions totaling $12,164. The employees' and employer's contributions may
not exceed maximum amounts established by the Internal Revenue Code.

NOTE N-RESEARCH AND DEVELOPMENT

Research and development costs in the current year represent costs associated
with refining the Microsoft Windows NT computing platform for the Company's
current computer applications as well as developing accompanying software
support applications for the NT system.

Included in personnel costs is approximately $706,000 relating to personnel who
have worked exclusively on the development of the Company's NT computing
platform and supporting applications during fiscal year 2001.

<PAGE>

NOTES TO FINANCIAL STATEMENTS-CONTINUED
PAMET SYSTEMS, INC.


NOTE O - SUBSEQUENT EVENT

Subsequent to December 31, 2001, the Company entered into a commercial services
contract (the agreement) with a vendor, under which eight of the Company's
employees became employees of the vendor and were leased back to the Company.
At December 31, 2001, the Company had a $350,000 convertible promissory note
outstanding with this vendor and also owed the vendor trade accounts payable of
approximately $201,000.  The vendor will bill the Company quarterly for the
employees who are working exclusively on projects for the Company.  In
accordance with the agreement, the Company can pay the vendor in cash or in the
equivalent value of the Company's common stock. At August 6, 2002, the amount
owed to the vendor under this agreement is approximately $195,000.  The
agreement expires December 31, 2002.



<PAGE>


Item 8.	Changes in and Disagreements with Accountants on Accounting
	and Financial Disclosure.

	Not applicable.

PART III



Item 9.    Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act.


           INFORMATION AS TO DIRECTORS AND EXECUTIVE OFFICERS

       The following table sets forth information as to the ages and principal
occupations of the members of the Board of Directors and executive officers and
has been furnished to the Registrant by such directors and executive officers.

                                Class I (Term expires at the 2003
                                Annual meeting of Stockholders)
                                                                     Has been
                                                                   A Director
Director Name           Age     Principal Occupation                    Since

Richard C. Becker       56      Mr. Becker has been Vice President        1991
                                Finance and Administration since June
                                1997, Assistant Clerk since February
                                1991 and Treasurer since May
                                1991. He was Vice President and Chief
                                Operating officer from June 1993 through
                                May 1997.

Bruce J. Rogow          56      Mr. Rogow has been Chairman of the Board  1997
                                since June 1999. He has served as
                                a Gartner Group Fellow since 1992 and
                                executive principal of Rogow Opportunity
                                Capital since 1997.


                                (Class II) (Term expires at the 2004
                                 Annual meeting of Stockholders)

Dr. Stanley J. Robboy   60      Since January 1998, Dr. Robboy has been   1990
                                Vice Chairman of the Department of
                                Pathology at Duke University Medical
                                Center which is in addition to the
                                positions he has held since 1992 as
                                Professor of Pathology, Professor of
                                Obstetrics and Gynecology and Head of
                                the Division of Gynecologic Pathology.
<PAGE>

David T. McKay          59      Mr. McKay is managing the Quality         1997
                                assurance program for the Company, He
                                was President and Chief Executive Officer
                                of the Company from June 1997 through
                                March 2002. Previously Mr. McKay served
                                as the Global Systems Manager for Mobil Oil,
                                an oil production company from 1996 to 1997.
                                From 1994 to 1996 he was the Vice President
                                of Information Systems at Moore Corporation,
                                a business supply company.

                               (Class III) (Term expires at the 2005
                                Annual meeting of Stockholders)


Dr. Davinder Sethi      68      Dr. Sethi has been an independent advisor 1998
                                since 1996 and served as a Senior Advisor
                                to Barclays de Zoete Wedd, an investment
                                banking firm, from 1990 until 1996.

Kirke S. Curtis         44      Mr. Curtis is President and CEO since     2002
                                April 2002. Previously Mr. Curtis was
                                a management Consultant from Nov 2001
                                to March 2002. Mr. Curtis was President
                                and COO of Media Map Corporation an
                                information technology company
                                in the public relations market from
                                Jan 1999 to October 2002. From 1994 to
                                Oct 2001 Mr. Curtis was Chief Operating
                                Officer.





                          Beneficial Ownership Reporting Compliance

         The Company's executive officers and directors and persons who
beneficially own more than 10% of a registered class of the Company's equity
securities are required under Section 16(a) of the Securities Exchange Act of
1934, as amended, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Copies of those reports must also be
furnished to the Company. Based solely on the Company's review of the copies of
such reports it has received, the Company believes that all of its other
executive officers and directors, and greater than ten percent beneficial owners
complied with all filing requirements applicable to them except that: David T.
McKay was late in filing one Form 4; Bruce J. Rogow was late in filing one Form
4; Richard C. Becker was late in filing 2 Form 4's (each such filing related to
one transaction); and Stanley J. Robboy was late in filing two Form 4's.

Item 10  Executive Compensation

<TABLE>

                           SUMMARY COMPENSATION TABLE
	                           Annual Compensation	           Long Term
		                                                   Compensation
<PAGE>
	                                                Securities    Under-
Name and Principal      	Year	Salary	             Bonus    lying
                                                                      Options
Position		                $	           $          #
<S>                            <S>     <S>                <S>        <S>

David T. McKay	                2001	160,000	            - -       150,000
President and Chief	        2000	160,000	           16,600     100,000
Executive Officer	        1999	160,000	           20,000      76,500
		                1998	160,000	            9,334      50,000

</TABLE>

                            EMPLOYMENT AGREEMENTS


	The Company entered into an Employment Agreement dated September 1997
employing David T. McKay as President and Chief Executive Officer of the Company
for a two year term. The employment agreement automatically extends for an
additional two years provided that neither party gives the other notice of its
intent not to renew at least 180 days prior to the expiration date of the
initial term or any extensions thereof. Mr. McKay is entitled to receive a base
salary of $160,000 per annum, bonus compensation, including grants of stock
options or other equity of the Company, at the discretion of the Board of
Directors of the Company, and certain other fringe benefits during the term of
the agreement. An amendment to the contract was signed on May 31, 2001 extending
the contract to May 31, 2002. Pursuant to the amendment Mr. McKay's base salary
was increased to $180,000 per year and was granted a guarantee equal to 50% of
his salary as a bonus.  The increase in salary as well as the bonus amounts for
the 2000 and 2001 periods have not be paid to-date. Under the agreement Mr.
McKay was granted options to purchase 150,000 shares of Common Stock under the
Company's 2000 Stock Option Plan.

	If Mr. McKay's employment is terminated as the result of constructive
termination (as defined in the employment agreement) or by the Company without
cause (as defined in the employment agreement), in addition to compensation and
benefits accrued through the date of such termination, he will be entitled to
receive his base salary and all fringe benefits and additional bonus amounts for
an additional (a) three month period or (b) six month period, respectively. Mr.
McKay's employment agreement also includes a non-competitive, confidentiality,
and indemnification provisions.

	Mr. McKay gave notice of non renewal of his employment agreement in
February of 2002. He remains on the Company's Board of Directors and is
currently working within the company and is responsible for quality assurance.

<TABLE>
                     Stock Options Grants in Last Fiscal Year

	                                                      Potential Realized
		  Number of	 % of Total	                Value at Assumed
<PAGE>
		 Securities         Options	                 Annual Rates of
		 Underlying	 Granted to	                     Stock Price
		    Options    Employees in  Exercise  Expir-	    Appreciation
		    Granted	Fiscal year	Price	ation	 for Option Term
Name	               (#)	     (%)       ($/sh)	 Date	 5%	  10%(1)

<S>              <S>            <S>           <S>      <S>    <S>      <S>
David T. McKay	  150,000	 28.6%	        .68    4/25/11 $125,780 $318,740
</TABLE>

(1)	Potential realizable values are based on the fair market value per share
as determined by the Company on the date of the grant and represent hypothetical
gains that could be achieved for the respective options if exercised at the end
of the option term. The dollar amounts set forth in these columns are the
results of calculations at the five percent and ten percent rates set by the
Securities and Exchange Commission, and are not intended to forecast
future appreciation, if any, of the Company's Common Stock price. There can be
no assurance that such potential realizable values will not be more or less than
that indicated in the table above.

Director Compensation

	Directors who are not officers of the Company who were nominated and
elected prior to November 1998 are entitled to receive an annual stipend of
$1,000 for serving on the Board of Directors and its committees and
reimbursement for out-of-pocket expenses in connection with their attendance at
directors' meetings. Additionally, under the 1990 Stock Option Plan each
non-employee director who was a director of the Company on the last day of a
calendar year or has ceased to be a director during the calendar year due to his
or her death or attainment of an age greater than 65 was automatically granted a
non-qualified stock option to purchase 2,000 shares of Common Stock on January 1
of the succeeding calendar year at the fair market value per share on the date
of grant.

	In November 1998, the Company implemented a new compensation program for
non-employee directors. Under the new system directors who are not officers of
the Company who were nominated and elected after November 1998 will be granted a
non-qualified stock option to purchase 45,000 shares of Common Stock.  The
vesting of the grant is over three years.  In addition these directors are
entitled to receive an annual stipend of $6,000 for serving on the Board of
Directors and its committees and reimbursement for out of pocket expenses in
connection with their attendance at directors meetings. It is expected that
directors will be able to elect to receive their annual cash stipend in the form
of the Common Stock.

	In April 2000, the Company adopted the 2000 Non-Employee Directors'
Stock Option Plan (the "Plan").  Under the Plan, upon each election to the Board
of Directors by the stockholders (generally every three years), each
non-employee director who is not a beneficial owner (as defined pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of more than 3% of the outstanding shares will be granted a non-qualified
stock option to purchase 45,000 shares of Common Stock.  Newly nominated
non-employee directors who do not own more than 3% of the outstanding shares and
who have not yet been elected by the stockholders will be granted a
non-qualified stock option to purchase 15,000 shares of Common Stock upon each
annual meeting until first elected by the stockholders as provided above.  If
the non-employee director is the beneficial owner of more than 3% of the
outstanding shares, upon election to the Board of Directors by the stockholders,
each such non-employee director will be granted a non-qualified stock option to
purchase 24,000 shares of Common Stock. Newly nominated non-employee directors
who own more than 3% of the outstanding shares and who have not yet been elected
by the stockholders will be granted a non-qualified stock option to purchase
8,000 shares of Common Stock upon each annual meeting until elected by the
stockholders as provided above. The vesting of each grant is three years.  In
addition, non-employee directors are entitled to receive an annual stipend of
$6,000 for serving on the Board of Directors and its committees and
reimbursement for out of pocket expenses in connection with their attendance at
meetings.



Item 11. Security Ownership of Certain Beneficial Owners and Management

       The following table provides information regarding beneficial ownership
as of August 13, 2002 of the Company's Common Stock as to (i) each director of
the Company, (ii) each of the Executive Officers, (iii) each person who is known
to the Company to be the beneficial owner of more than 5% of the Common Stock
and (iv) all directors and executive officers as a group.  The information set
forth below as to nominees, directors, and officers has been furnished to the
Company by such nominee, officer or director.
<TABLE>
		                                             Percent of Common
Name and Address of                  Amount and Nature of    Stock (if over 1%)
Beneficial Owner                     Beneficial Ownership   Owned Beneficially
<S>                                       <S>                   <S>
Bruce J. Rogow                               1,618,491(1)        29.7%
Winnie R. Rogow
220 Ocean Avenue
Marblehead, MA 01945

David T. McKay                                 456,500(2)         9.3%
1000 Main Street
Acton, MA  01720

Richard C. Becker                              247,625(3)         5.4%

Dr. Stanley J. Robboy                        1,707,985(4)        29.2%
104 Donegal Drive
Chapel Hill, NC  27517

Dr. Davinder Sethi                              48,208(5)         1.1%

BSI SA                                       1,116,668(6)        20.2%
Via Magatti 2
6900 Lugano
Switzerland

William J. Bell 1993 Trust                     544,826(7)        11.6%
10539 Bellagio Road
Los Angeles, CA  90077

West Country Partners                        7,721,336(8)        65.1%
1917 Brittany Park
Camarillo, CA  93012


All directors and executive                  3,892,807(9)        51.6%
officers as a group (5 people)

</TABLE>


 (1) As reported on an Amendment No.3 to the Schedule 13D filed with the
Securities and Exchange Commission on January 6, 1999, filed by Bruce J. Rogow
and Winnie R. Rogow relating to the beneficial ownership of (i) 5,000 shares of
Common Stock held by Mr. Rogow's 401(k) account, (ii) 20,000 shares held by Mr.
Rogow's retirement money purchase account, (iii) 62,000 shares of Common Stock
held jointly, (iv) 325,000 shares of Common Stock held by Rogow Opportunity
Capital, LLC, a Massachusetts limited liability company ("Rogow Opportunity")of
which Mr. and Mrs. Rogow are the sole members,  (v) warrants held by Rogow
Opportunity exercisable at any time or from time to time prior to March 2, 2003,
to purchase up to 31,250 shares of Common Stock at an exercise price of $4.25
per share, (vi) warrants exercisable prior to November 5, 2003,  to purchase
120,000 shares of Common Stock at an exercise price of $2.50 per share, (vii)
warrants exercisable prior to July 13, 2009, to purchase 68,000 shares of Common
Stock at an exercise price of $2.50 per share, and (viii) warrants exercisable
prior to September 28, 2009, to purchase 10,000 shares of Common Stock at an
exercise price of $3.19 per share, (ix) warrants exercisable prior to June 12,
2010, to purchase 34,375 shares of Common Stock at an exercise price of $3.00
per share, (x)warrants exercisable prior to July 9, 2010, to purchase 24,000
shares of Common Stock at an exercise price of $2.00 per share, (xi) 4,000
shares issuable upon the exercise of 2 grants of currently exercisable director
options at prices ranging $1.56 to $3.88, (xii)328,985 Shares of Common Stock
issuable upon the conversion of a $224,532 note convertible until April 16, 2003
at a conversion price of $.6825 per share, (xiii) 328,985 shares issuable upon
the exercise of warrants exercisable prior to April 15, 2006 at an exercise
price of $1.50 per share, (xiv) 25,000 Shares of Common Stock issuable upon the
conversion of a $5,000 note convertible until March 31, 2004 at a conversion
price of $.20 per share, (xv) 25,000 shares issuable upon the exercise of
warrants exercisable prior to March 31, 2007 at an exercise price of $1.00 per
share.

(2) Includes 451,500  shares issuable upon the exercise of currently exercisable
options.

(3) Includes 183,625 shares issuable upon the exercise of currently exercisable
options.

(4) As reported on the Schedule 13G filed with the Securities and Exchange
Commission on February 15, 2000 and updated based on Company records filed by
Stanley J. Robboy relating to the beneficial ownership of (i) 444,637 shares of
which 307,591 were shares of Common Stock held by Mr. Robboy and 151,546 were
shares issuable upon the exercise of currently exercisable options, (ii) 12,000
exercisable options gifted on May 1, 2000 to his children, Elizabeth and
Caroline Robboy, (iii) 12,500 shares issuable upon the exercise of options prior
to June 13, 2000 at a conversion price of $3.00 per share, (iv) 2,000 shares
issuable upon the exercise of options prior to December 31, 2011 at a conversion
price of $1.87 per share, (v) 431,673 shares of Common Stock issuable upon the
conversion of a $294,617 note convertible until April 16, 2003 at a conversion
price of$.6825 per share, (vi) 431,673 shares issuable upon the exercise of
warrants exercisable prior to April 15; 2000 at an exercise price of $1.50
per share, (vii) 100,000 shares of Common Stock issuable upon the conversion of
a $20,000 note convertible until March. 31, 2004 at a conversion price of $.20
per share, (viii) 100,000 shares issuable upon the exercise of warrants
exercisable prior to March 30,2007 at an exercise price of.$ 1.00 per share.
(ix) 100,000 shares of Common Stock issuable upon the conversion of a $20,000
note convertible until April 10, 2004 at a conversion price of $.20 per share,
(x) 100,000 shares issuable upon the exercise of warrants exercisable prior to
April 10, 2007 at an exercise price of $1.00 per share.

(5) Includes 45,000 share issuable upon the exercise of currently exercisable
options.

(6) Includes (i)150,000 shares of Common Stock issuable upon conversion of a
$375,000 note convertible until May 14, 2001 at a conversion price of $2.50 per
share, (ii)150,000 shares issuable upon the exercise of warrants exercisable
prior to May 15, 2004 at an exercise price of $2.50 per share, (iii)175,000
shares issuable upon the exercise of warrants exercisable prior to December 3,
2004 at an exercise price of $2.50 per share, (iv)66,667 shares issuable upon
the exercise of warrants exercisable prior to April 11, 2005 at an exercise
price of $3.50 per share, (v)266,667 shares of Common Stock issuable upon
conversion of a $100,000 note convertible until March 30, 2003 at a conversion
price of $.375 per share, and (vi)266,667 shares issuable upon the exercise of
warrants exercisable prior to March 30, 2006 at an exercise price of $1.50 per
share.

(7) Includes (i)172,413 shares issuable upon the exercise of warrants
exercisable prior to November 12, 2003 at an exercise price of $1.45 per share,
and (ii) 100,000 shares issuable upon the exercise of warrants exercisable prior
to February 4, 2004 at an exercise price of $2.50 per share.

(8) Includes (i)14,000 shares of Common Stock issuable upon conversion of a
$35,000 note convertible until May 15, 2001 at a conversion price of $2.50 per
share, (ii) 14,000 shares issuable upon the exercise of warrants exercisable
prior to May 15, 2004 at an exercise price of $2.50 per share, (iii)50,000
shares issuable upon the exercise of warrants exercisable prior to November 18,
2004 at an exercise price of $2.50 per share, (iv)50,000 shares issuable upon
the exercise of warrants exercisable prior to March 29, 2005 at an exercise
price of $3.50 per share, (v)100,000 shares issuable upon the exercise of
warrants exercisable prior to August 30, 2005 at an exercise price of $2.50 per
share, (vi)100,000 shares issuable upon the exercise of warrants exercisable
prior to November 5, 2005 at an exercise price of $2.50 per share, (vii) 666,667
shares of Common Stock issuable upon conversion of a $250,000 note convertible
until March 25, 2003 at a conversion price of $.375 per share, (viii) 666,667
shares issuable upon the exercise of warrants exercisable prior to March 25,
2006 at an exercise price of $1.50 per share. (ix) 266,667 shares of Common
Stock issuable upon conversion of a $100,000 note convertible until April 13,
2003 at a conversion price of $.375 per share, (x) 266,667 shares issuable upon
the exercise of warrants exercisable prior to April 13, 2006 at an exercise
price of $1.50 per share. (xi) 266,667 shares of Common Stock issuable upon
conversion of a $100,000 note convertible until June 23, 2003 at a conversion
price of $.375 per share, (xii) 266,667 shares issuable upon the exercise of
warrants exercisable prior to June 23, 2006 at an exercise price of $1.50 per
share. (xiii) 346,667 shares of Common Stock issuable upon conversion of a
$130,000 note convertible until September 1, 2003 at a conversion price of $.375
per share, (xiv) 346,667 shares issuable upon the exercise of warrants
exercisable prior to September 1, 2006 at an exercise price of $1.50 per share.
(xv) 1,000,000 shares of Common Stock issuable upon conversion of a $200,000
note convertible until October 30, 2003 at a conversion price of $.20 per share,
(xvi) 1,000,000 shares issuable upon the exercise of warrants exercisable prior
to October 30, 2006 at an exercise price of $1.00 per share. (xvii) 1,000,000
shares of Common Stock issuable upon conversion of a $200,000 note convertible
until April 15, 2004 at a conversion price of $.20 per share, (xviii) 1,000,000
shares issuable upon the exercise of warrants exercisable prior to April 15,
2007 at an exercise price of $1.00 per share.


(9) Includes 3,107,112 shares issuable upon the exercise of currently
exercisable options and warrants held by all directors and officers of the
Company as a group.



                                  CERTAIN TRANSACTIONS


 	On May 14, 1999, the Company entered into an agreement with BSI SA, a
financial institution in Lugano Switzerland pursuant to which on March 31, 2001,
BSI SA loaned the Company $100,000 and was given a convertible promissory note.
The note is convertible until March 30, 2003 into 266,667 shares of Common Stock
at a price of $.375 per share.  In connection with the note, BSI SA was granted
a five year warrant to purchase 266,667 shares of Common Stock at a price of
$1.50 per share.

	On May 16, 1999, the Company entered into an agreement with West Country
Partners, a California limited partnership of which James S. Schmitt is the
General Partner pursuant to which on March 26, 2001 West Country Partners loaned
the Company $250,000 and was given a convertible promissory note. The note is
convertible until March 25, 2003 into 666,667 shares of Common Stock at a price
of $.375 per share.  In connection with the note, West Country Partners was
granted a five year warrant to purchase 666,667 shares of Common Stock at a
price of $1.50 per share. On April 13, 2001 West Country Partners loaned the
Company $100,000 and was given a convertible promissory note. The note is
convertible until April 13, 2003 into 266,667 shares of Common Stock at a price
of $.375 per share.  In connection with the note, West Country Partners was
granted a five year warrant to purchase 266,667 shares of Common Stock at a
price of $1.50 per share. On June 23, 2001 West Country Partners loaned the
Company $100,000 and was given a convertible promissory note. The note is
convertible until June 23, 2003 into 266,667 shares of Common Stock at a price
of $.375 per share.  In connection with the note, West Country Partners was
granted a five year warrant to purchase 266,667 shares of Common Stock at a
price of $1.50 per share. On September 1, 2001 West Country Partners loaned the
Company $130,000 and was given a convertible promissory note. The note is
convertible until September 1, 2003 into 346,667 shares of Common Stock at a
price of $.375 per share.  In connection with the note, West Country Partners
was granted a five year warrant to purchase 346,667 shares of Common Stock at a
price of $1.50 per share. On October 31, 2001 West Country Partners loaned the
Company $200,000 and was given a convertible promissory note. The note is
convertible until October 31, 2003 into 1,000,000 shares of Common Stock at a
price of $.20 per share.  In connection with the note, West Country Partners was
granted a five year warrant to purchase 1,000,000 shares of Common Stock at a
price of $1.00 per share.

	On April 13, 2001, Dr Stanley J. Robboy converted his line of credit
into a convertible Promissory Note.   The convertible note was for $294,617.18.
The note is convertible into 431,674 shares on Common Stock at a price of $.6825
per share. In connection with the note, Dr. Robboy was granted a five year
warrant to purchase 431,674 shares of Common Stock at a price of $1.50 per
share.

	On April 13, 2001, Rogow Opportunity Capital converted its line of
credit into a convertible Promissory Note.   The convertible note was for
$224,532.19.  The note is convertible into 328,985 shares on Common Stock at a
price of $.6825 per share. In connection with the note, Rogow Opportunity
Capital was granted a five year warrant to purchase 328,985 shares of Common
Stock at a price of $1.50 per share.
<PAGE>






Item 13.	Exhibits. Financial Statement Schedules, and Reports on Form 8-K

(a)	Exhibits

3.1.1 Restated and Amended Articles of Organization (filed by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990).
3.2 By-Laws, as amended (filed by reference to Exhibit 3.2 to Registration
Statement No. 33-36989).
4.1 Specimen Common Stock Certificate (filed by reference to Exhibit 4.2 to
Registration Statement No. 33-36989).
4.2 Warrant issued to Rogow Opportunity Capital dated March 2, 1998 (filed by
reference to Exhibit 4.3 to the Company's Quarterly Report of Form 10-QSB for
the Quarter Ended March 31, 1998).
4.3 Convertible Note issued to Rogow Opportunity Capital LLC dated November 6,
1998.
4.4 Warrant issued to Rogow Opportunity Capital LLC dated November 6, 1998.
4.5 Convertible Note issued to Robboy Associates LLC dated November 6, 1998.
4.6 Warrant issued to Robboy Associates LLC dated November 6, 1998.
4.7 Convertible Note issued to William James Bell 1993 Trust dated November 13,
1998.
4.8 Warrant issued to William James Bell 1993 Trust dated November 13, 1998.
4.9 Convertible Note issued to Gene Raphalean dated December 8, 1998.
4.10 Warrant issued to Gene Raphalean dated December 8, 1998.
4.11 Convertible Note issued to Donald M. Liddell, Jr. dated December 10, 1998.
4.12 Warrant issued to Donald M. Liddell, Jr. dated December 10, 1998.
4.13 Convertible Note issued to Joseph Terrence Waters dated December 14, 1998.
4.14 Warrant issued to Joseph Terrence Waters dated December 14, 1998.
4.15 Convertible Note issued to William James Bell 1993 Trust dated February 8,
1999.
4.16 Warrant issued to William James Bell 1993 Trust dated February 8, 1999.
4.17 Convertible Note issued to Stephen Wilder dated January 22, 1999.
4.18 Warrant issued to Stephen Wilder dated January 22, 1999.
4.19 Convertible Note issued to West Country Partners dated May 10, 1999.
4.20 Warrant issued to West Country Partners dated May 10, 1999.
4.21 Convertible Note issued to BSI SA dated May 14, 1999.
4.22 Warrant issued to BSI SA dated May 14, 1999.
4.23 Warrant issued to West Country Partners dated November 19, 1999.
4.24 Warrant issued to BSI SA dated November 29, 1999.
4.25 Warrant issued to Leonardo Capital fund dated December 14, 1999.
4.26 Warrant issued to West Country Partners dated March 29, 2000
4.27 Warrant issued to BSI SA dated April 11, 2000
4.28 Warrant issued to West  Country Partners dated August 31, 2000
4.29 Warrant issued to West County Partners dated November 6, 2000
10.1 Stock Option Plan (filed by reference to Exhibit 10.3 to Registration
Statement No. 33-36989).
10.2 Form of License Agreement (filed by reference to Exhibit 10.5 to
Registration Statement No. 33-42819).
10.3 Form of Employment agreement between the Registrant and David T. McKay
(Filed by reference to Exhibit 10.14 to the Company's Annual Report of Form
10-KSB for the Fiscal Year Ended December 31, 1997).
10.4 Form of Employment agreement between the Registrant and Richard C. Becker
(Filed by reference to Exhibit 10.15 to the Company's Annual Report of Form
10-KSB for the Fiscal Year Ended December 31, 1997).
10.5 1998 Stock Option Plan (Filed by reference in the 1998 Proxy Statement
dated May 14, 1998).
10.6 2000 Stock Option Plan  (Filed by reference in the 2000 Proxy Statement
dated June 13, 2000).
10.12 Silicon Valley Financial Services Accounts Receivable Purchase Agreement
dated April 14, 1998 (Filed by reference to Exhibit 10 to the Company's
Quarterly Report of Form 10-QSB for the Quarter Ended June 30, 1998).
23    Consent of Carlin, Charron & Rosen LLP
99.1  CEO Certification
99.2  CFO Certification


(b) Reports on Form 8-K
	none

<PAGE>

                                SIGNATURES

	In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


		                 PAMET SYSTEMS, INC.
		                 (Registrant)

		              By BRUCE J. ROGOW
		              Name:    Bruce J. Rogow
 		              Title:      Chairman


Date September 20, 2002

	Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

       Name 	            Title	                        Date

BRUCE J. ROGOW              ________________________
Bruce J. Rogow              Chairman of the Board           September 20, 2002

KIRKE S. CURTIS             ________________________
Kirke S. Curtis             President and Chief Executive   September 20, 2002
                            Officer

DAVID T. MCKAY              ________________________
David T. McKay              Director                        September 20, 2002


RICHARD C. BECKER           ________________________
Richard C. Becker           Vice President, Finance         September 20, 2002
                            And Administration,
                            Treasurer, and Director
                           (Principal Financial and
                            Accounting Officer)

STANLEY J. ROBBOY, M.D.     ________________________
Stanley J. Robboy, M.D.     Director                        September 20, 2002


DAVINDER SETHI              ________________________
Davinder Sethi              Director                        September 20, 2002

<PAGE>

Exhibit 23



Consent of Independent Auditors



We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-41029) pertaining to the Pamet Systems, Inc. 1990 Stock
Option Plan of our report dated August 6, 2002, with respect to the financial
statements of Pamet Systems, Inc. included in its Annual Report (Form 10-KSB)
for the year ended December 31, 2001, filed with Securities and Exchange
Commission.




	Carlin, Charron & Rosen LLP



Worcester, Massachusetts
August 6, 2002

<PAGE>
Exhibit 99.1  CEO Certification




                                             December 17, 2002



I, Kirke S. Curtis as President and CEO of Pamet Systems, Inc. , certify that

1. I have reviewed this Annual report on Form 10-KSB of Pamet Systems, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and  cash flows of the
registrant as of December 31, 2002, and for, the periods presented in this
annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a. designed such disclosure controls and procedures to ensure that material
   information relating to the registrant is made known to us by others during
   the period in which this annual report is being prepared
   b. evaluated the effectiveness of the registrant's disclosure controls and
   procedures as of a date within 90 days prior to the filing date of this
   annual report; and
   c. presented in this annual report our conclusions about the effectiveness
   of the disclosure controls and procedures based on our evaluation as of the
   Evaluation Date

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the  registrant's auditors and the audit committee of
registrant's board of directors;

   a. all significant deficiencies in the design or operation of internal
   controls which could adversely affect the registrant's ability to record,
   process, summarize and report financial data and have identified for the
   registrant's auditors an material weakness in internal controls; and
   b. any fraud, whether or not material, that involves mangement or other
   employees who have a significant role in the registrant's internal controls;
   and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there  were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


December 17, 2002
KIRKE S. CURTIS
President and CEO


Pamet Systems, Inc   1000 Main Street    Acton, MA  01720      978-263-2060

<PAGE>
Exhibit 99.2  CFO Certification




                                             December 17, 2002



I, Richard C. Becker as member of the Board of Directors of Pamet Systems and
as the former Vice President of Pamet Systems, Inc., certify that:

1. I have reviewed this Annual report on Form 10-KSB of Pamet Systems, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this  annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of December 31, 2002, and for, the periods presented in this
annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a. designed such disclosure controls and procedures to ensure that material
   information relating to the registrant is made known to us by others
   during the period in which this annual report is being prepared
   b. evaluated the effectiveness of the registrant's disclosure controls and
   procedures as of a date within 90 days prior to the filing date of this
   annual report; and
   c. presented in this annual report our conclusions about the effectiveness
   of the disclosure controls and procedures based on our evaluation as of the
   Evaluation Date

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the  registrant's auditors and the audit
committee of registrant's board of directors;

   a. all significant deficiencies in the design or operation of internal
   controls which could adversely affect the registrant's ability to record,
   process, summarize and report financial data and have identified for the
   registrant's auditors an material weakness in internal controls; and
   b. any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal controls;
   and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

December 17, 2002
RICHARD C. BECKER
BOD Member and Former Vice President


Pamet Systems, Inc   1000 Main Street    Acton, MA  01720      978-263-2060