UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 2002

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________.

                         Commission file number 0-28152

                         Affinity Technology Group, Inc.
             (Exact name of registrant as specified in its charter)

                                    Delaware
         (State or other jurisdiction of incorporation or organization)

                                   57-0991269
                      (I.R.S. Employer Identification No.)

                          1122 Lady Street, Suite 1145
                               Columbia, SC 29201
                    (Address of principal executive offices)
                                   (Zip code)

                                 (803) 758-2511
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.0001 per share
                                (Title of class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]



                                       1
<PAGE>



     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is an accelerated filer. [ ]

     The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant was approximately $2,809,000 as of June 30,
2002. For purposes of such calculation, shares of Common Stock held by persons
who hold more than 10% of the outstanding shares of Common Stock and shares held
by directors and officers of the Registrant and certain of their immediate
family members have been included because such persons may be deemed to be
affiliates. This determination is not necessarily conclusive.

     There were 41,414,689 shares of the Registrant's Common Stock outstanding
as of March 20, 2003.


                       DOCUMENTS INCORPORATED BY REFERENCE

     Certain portions of the Registrant's proxy statement with respect to the
2003 Annual Meeting of Stockholders of the Registrant have been incorporated by
reference herein.



                                       2
<PAGE>

     Item 1 of this Form 10-K entitled "Business" and Item 7 of this Form 10-K
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are inherently uncertain and
actual results could differ materially from those expressed or implied by the
forward-looking statements. These forward-looking statements should be
considered in the context of the business risks set forth below in Item 1 of
this report under the caption "Business Risks."

Part I

Item 1.  Business


     Affinity Technology Group, Inc. (the "Company") was formed to develop and
market technologies that enable financial institutions and other businesses to
provide consumer financial services electronically with reduced or no human
intervention. Products and services previously offered by the Company include
its DeciSys/RT(R) loan processing system, which automated the processing and
consummation of consumer financial services transactions; the Affinity Automated
Loan Machine (the ALM(R)), which allowed an applicant to apply for and, if
approved, obtain a loan in as little as ten minutes; the Mortgage ALM, which
allowed an applicant to apply for a mortgage loan; e-xpertLender(R), which
permitted a financial institution to make automated lending decisions through
its call centers and branches; iDEAL, which permitted automobile lenders to make
automobile lending decisions for loan applications originated at automobile
dealers; and rtDS, which permitted lenders to deliver credit decisions to
applicants over the Internet. Due to capital constraints, the Company has
suspended all efforts to further develop, market and operate these products and
services. The Company's last processing contract terminated in late 2002, and
the Company has no plans in the near term to engage in further sales or other
activities related to its products or services, other than to license the
patents that it owns. Currently, the Company's business activities consist
exclusively of attempting to enter into license agreements with third parties to
license the Company's rights under its patents.


     In conjunction with its product development activities, the Company applied
for and obtained three patents. The Company has been granted two patents
covering its fully-automated loan processing systems (U. S. Patents No.
5,870,721 and 5,940,811). In August 2000, the U.S. Patent and Trademark Office
issued to the Company a patent covering the fully-automated establishment of a
financial account, including credit accounts (U.S. Patent No. 6,105,007). In
addition, in 1997 the Company acquired a patent that covers the automated
processing of an insurance binder through a kiosk (U. S. Patent No. 5,537,315).


     Both of the Company's patents covering fully automated loan processing
systems have been subject to reexamination by the U.S. Patent and Trademark
Office (the "PTO") due to challenges to such patents by third parties. On
January 28, 2003, the Company received a Reexamination Certificate (U. S. Patent
No. 5,870,721 C1) from the PTO which formally concluded the reexamination of U.
S. Patent No. 5,870,721. The reexamination of the Company's other loan
processing patent (U. S. Patent No. 5,940,811) is still ongoing. It is possible
that third parties may bring additional actions to contest all or some of the
Company's patents. The Company can make no assurances that it will not lose all
or some of the claims covered by its existing patents.

     To date, the Company has generated substantial operating losses, has
experienced an extremely lengthy sales cycle for its products and services and
has been required to use a substantial amount of cash resources to fund its
operations. The Company does not believe that existing cash and internally
generated funds will be sufficient to fund its operations through October 2003.
Accordingly, to remain viable the Company must raise additional capital and
generate revenue and working capital through its patent licensing business,
which is in its inception stage. If the Company is unable to raise additional
capital and generate working capital through the sale of patent licenses soon,
it will be forced to consider alternatives for winding down its business, which
may include filing for bankruptcy protection. To maintain the minimal resources
necessary to support its current operations and execute a patent licensing
strategy, the Company does not believe that substantial additional reductions in
its operating expenses are feasible. No assurances can be given that the Company
will be able to raise additional capital or generate working capital from its
patent licensing business in a manner that would allow it to continue its
operations.


                                       3
<PAGE>

     In June 2002, the Company issued convertible secured notes (the "notes") to
certain investors as part of its capital raising initiatives. The principal
amount of notes issued totaled $830,336 and included the issuance of a note in
the principal amount of $205,336 to AMRO International, S.A. ("AMRO") in
satisfaction of the principal and accrued interest outstanding under AMRO's
convertible debenture previously issued by the Company. The notes bear interest
at 8% and principal and accrued interest are due in June 2004. The notes are
secured by the stock of the Company's wholly-owned subsidiary, decisioning.com,
Inc. decisioning.com is the Company's patent licensing subsidiary and owns the
Company's patent portfolio. The notes are convertible into the Company's common
stock at a conversion rate of $.20 per share. The Company may prepay the notes
subject to a prepayment penalty of 8% and 4% if the prepayment occurs within the
first twelve months or thereafter, respectively. On March 14, 2003, the Company
issued an additional $200,000 principal amount of its convertible notes on terms
identical to the terms of the notes it issued in June 2002, except that the new
notes mature in March 2005.


     On January 22, 2003, decisioning.com, Inc. entered into a patent licensing
agent agreement with Information Ventures LLC d/b/a LPS Group ("LPS"), pursuant
to which decisioning.com appointed LPS as its exclusive representative for the
solicitation and negotiation of agreements to license decisioning.com's patent
rights. Under the agreement, LPS has agreed to promote, market, solicit and
negotiate the licensing of patents with third parties and to coordinate and
arrange for legal counsel to represent decisioning.com in connection with any
patent litigation. As compensation for its services under the agreement, LPS
will receive 25% of all revenues received by decisioning.com under any patent
agreements. The term of the agreement is for the life of the patents, subject to
either party's right to terminate the agreement for "cause," as specified in the
agreement, and without cause following the third anniversary of the agreement.
If the agreement is terminated by decisioning.com, LPS will be entitled to
continue to receive compensation attributable to patent agreements negotiated
prior to termination and, if such termination is without cause, compensation for
certain future patent agreements. The agreement prohibits decisioning.com from
selling its patents or merging or consolidating with another person unless the
acquirer assumes decisioning.com's obligations under the agreement.

     On February 12, 2001, the Company's stock was delisted from the Nasdaq
SmallCap Market. On February 13, 2001, shares of the Company's common stock
began trading on the OTC Bulletin Board under the symbol "AFFI."

     The Company formerly deployed its Mortgage ALM through a wholly-owned
subsidiary, Surety Mortgage, Inc., ("Surety"). Surety deployed Mortgage ALMs,
processed mortgage loan applications obtained through its Mortgage ALM network,
and processed mortgage loan applications under contracts with third parties. In
the second quarter of 2001, the Company issued a $1 million note to HomeGold
Financial, Inc., which was secured by the stock of Surety. The note matured on
December 31, 2001, at which time the Company tendered the stock of Surety in
full satisfaction of outstanding principal and accrued interest under the note
in accordance with the terms of the note. The Company had previously entered
into a contract with HomeGold under which it processed certain mortgage loan
applications originated by HomeGold. Such contract expired on December 31, 2001.

     The Company maintains an Internet site at http://www.affi.net, although the
contents of such web site are not incorporated into this report. During 2002,
the Company did not make its annual reports on Form 10-K, quarterly reports on
Form 10-Q, or current reports on Form 8-K, or any amendments to these reports,
available through its web site. However, these reports are available to the
public through the SEC's web site at http://www.sec.gov, and the Company's web
site contains a hyperlink to the SEC's web site. Due to capital constraints and
limited human resources, the Company has not modified its web site to permit the
public to access these reports directly. The Company will evaluate whether to do
so in the future. The Company will provide shareholders with a copy of any of
these reports free of charge upon request.

     The Company was incorporated as a Delaware corporation in 1994. Its
principal executive offices are located at 1122 Lady Street, Suite 1145,
Columbia, South Carolina 29201, and its telephone number is (803) 758-2511.



                                       4
<PAGE>


Sales and Marketing


     The Company does not maintain a dedicated sales staff. The Company has
engaged LPS as its exclusive patent licensing agent. As the Company's exclusive
patent licensing agent, LPS has agreed, among other things, to perform market
research, initiate the sales of patent license agreements and negotiate patent
license arrangements with third parties.

Competition

     The market for technologies that enable electronic commerce is highly
competitive and is subject to rapid innovation and technological change,
shifting consumer preferences, frequent new product introductions and
competition from traditional methods having all or some of the same features as
technologies enabling electronic commerce. Competitors in this market have
frequently taken different strategic approaches and have launched substantially
different products or services in order to exploit the same perceived market
opportunity. Until the market actually validates a strategy through widespread
acceptance of a product or service, it is difficult to identify all current or
potential market participants or gauge their relative competitive position.
There can be no assurance that the technologies covered by the Company's patents
will be competitive technologically or otherwise.

     Electronic commerce technologies in general, including the Company's
products, services and patents, compete with traditional methods for processing
financial transactions. The success of the Company's patent licensing efforts
will depend in part on consumer acceptance of electronic commerce and industry
use of systems that are covered by the Company's patents.

Intellectual Property


     The Company was issued two patents in 1999 covering systems and methods for
real-time loan processing over a computer network without human intervention
("System and Method for Real-time Loan Approval", U.S. Patent No. 5,870,721, and
"Closed-loop Financial Transaction Method and Apparatus," U.S. Patent No.
5,940,811). Both of the Company's patents covering fully automated loan
processing systems expire in 2013 and have been subject to reexamination by the
PTO due to requests by third parties who have challenged the validity of the
patents. On January 28, 2003, the Company received a Reexamination Certificate
relating to the completion of the PTO's reexamination of U. S. Patent No.
5,870,721. The reexamination of the Company's other loan processing patent (U.S.
Patent No. 5,940,811) is still ongoing. It is possible that third parties may
bring additional actions to contest all or some of the Company's patents. The
Company can make no assurances that it will not lose all or some of the claims
covered by its existing patents.


     In August 2000, the Company was issued a patent covering the automated
establishment of a financial account without human intervention ("Automatic
Financial Account Processing System", U.S. Patent No. 6,105,007). The patent
expires in 2013. The Company also holds a patent, which expires in 2014,
covering the issuance of insurance products automatically through a kiosk
("Method and Apparatus for Issuing Insurance from a Kiosk", U.S. Patent No.
5,537,315) and has engaged in a reissue proceeding with the PTO to expand the
scope of such patent. The reissue proceeding could result in a loss or
limitation of all or some of the claims of the issued patent.

     "Affinity", "ALM" "DeciSys/RT", and "e-xpertLender" are registered
trademarks of the Company and "Affinity Technologies," "iDEAL," "rtDS," and
"Affinity enabled" are registered service marks of the Company.

     The Company's success and ability to compete is heavily dependent upon its
ability to secure, protect and license its patents. The Company also relies on
trade secret, copyright law and employee, customer and business partner
confidentiality agreements to protect its intellectual property. There can be no
assurance that the Company will be able to protect its intellectual property.
Moreover, there can be no assurance that new technological innovations will not
be developed and widely accepted by the market which will render obsolete the
types of systems and methods over which the Company believes it has proprietary
intellectual property rights.


                                       5
<PAGE>


Research and Development


     During 2001, and 2000, the Company spent approximately $496,000 and
$684,000, respectively, on research and development activities, which
represented approximately 38.6% and 39.7%, respectively, of 2001 and 2000
revenues from continuing operations. The Company has eliminated its research and
development staff due to capital constraints.


Employees


     At December 31, 2002, the Company employed 3 full-time employees and 1
part-time employee, compared to 7 full-time and 2 part-time employees at
December 31, 2001. In connection with the Company's engagement of LPS to act as
the Company's exclusive patent licensing agent, effective April 1, 2003, Joseph
A. Boyle, President and Chief Executive Officer of the Company, will become
employed by the Company on a part-time basis. The Company has no collective
bargaining agreements.


Business Risks

     In addition to the other information in this report, readers should
carefully consider the following important factors, among others, that in some
cases have affected, and in the future could affect, the Company's actual
results and could cause the Company's future results to differ materially from
those expressed in any forward looking statements made by, or on behalf of, the
Company.

     Limited Capital Resources; Operating Losses


     The Company has generated net losses of $67,900,397 since its inception and
has financed its operations primarily through net proceeds from its initial
public offering in May 1996 and cash generated from operations and other
financing transactions. Net proceeds from the Company's initial public offering
were $60,088,516. At December 31, 2002, cash and liquid investments were
$156,780.

     To date, the Company has generated substantial operating losses, has
experienced an extremely lengthy sales cycle for its products and services and
has been required to use a substantial amount of cash resources to fund its
operations. The Company does not believe that existing cash and internally
generated funds will be sufficient to fund its operations through October 2003.
Accordingly, to remain viable the Company must raise additional capital and
generate revenue and working capital through its patent licensing business,
which is in its inception stage. If the Company is unable to raise additional
capital and generate working capital through the sale of patent licenses soon,
it will be forced to consider alternatives for winding down its business, which
may include filing for bankruptcy protection. To maintain the minimal resources
necessary to support its current operations and execute a patent licensing
strategy, the Company does not believe that substantial additional reductions in
its operating expenses are feasible. No assurances can be given that the Company
will be able to raise additional capital or generate working capital from its
patent licensing business in a manner that would allow it to continue its
operations.

     In order to fund its operations, the Company may need to raise additional
funds through the issuance of additional equity securities, in which case the
percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution, or such equity securities may
have rights, preferences or privileges senior to common stock. There can be no
assurance that additional financing will be available on terms acceptable to the
Company or at all. If adequate funds are not available or not available on
acceptable terms, the Company may be unable to continue operations.

     Significant Losses; Accumulated Deficit; Future Losses


     To date, the Company has incurred significant losses and has experienced
substantial negative cash flow from operations. The Company had an accumulated
deficit as of December 31, 2002 of approximately $67,900,000 with net losses of
approximately $14,873,000, $12,095,000, $9,203,000, $2,318,000, and $1,306,000
for the years ended December 31, 1998, 1999, 2000, 2001 and 2002, respectively.
The Company's prospects must be considered in light of the risks, expenses, and
difficulties frequently encountered by companies in their early stage of
development, particularly companies operating in unproven markets with unproven
products and companies whose prospects are heavily dependent upon the attempt to
exploit intellectual property rights. There can be no assurance that the Company
will ever achieve profitability or, if achieved, sustain such profitability.

                                       6
<PAGE>


     Dependence on Patent Licensing Program

     Due to capital constraints, the Company has suspended efforts to deploy its
loan processing products and services. The Company's business activities
currently consist exclusively of attempting to license certain of its patents.
The Company's prospects are heavily dependent on its ability to finance and
execute a sustainable patent licensing program. Even though the Company believes
there are companies that may be using systems, processes and methods covered by
the Company's patents, it is not known whether the Company will be able to enter
into any new licensing agreements. Moreover, initiating a substantive patent
licensing program represents a new strategy for the Company, and the Company may
not have the resources to finance or execute a substantive patent licensing
program, enforce its patent rights, or successfully negotiate patent licenses on
terms that will generate meaningful future revenues.

     The Company is further subject to the risk that negotiations to license its
patents may be lengthy and that it may be necessary for the Company to commence
litigation to assert and protect its intellectual property rights. Such
litigation would be costly and may not be possible unless the Company raises or
generates additional cash resources. Sustained patent litigation could have a
material adverse effect on the Company's business, operating results and
financial position.

     Challenges to Patents


     Both of the Company's patents covering fully-automated loan processing
systems have been subject to reexamination by the PTO due to requests by third
parties who have challenged the validity of the patents. On January 28, 2003,
the Company received a Reexamination Certificate relating to the completion of
the PTO's reexamination of U. S. Patent No. 5,870,721. The reexamination of the
Company's other loan processing patent (U.S. Patent No. 5,940,811) is still
ongoing. It is possible that third parties may bring additional actions to
contest all or some of the Company's patents. The Company can make no assurances
that it will not lose all or some of the claims covered by its existing patents.
The loss of all or some of its claims or a significant limitation of such claims
could have a material adverse effect on the Company's ability to execute a
successful patent licensing program. Moreover, if other parties request
reexaminations of or otherwise challenge the Company's patents in the future,
the Company is subject to the risk that such proceeding may not be resolved to
the Company's satisfaction on a timely basis, if at all. Any such proceeding may
have a material adverse effect on the Company's business, operating results and
financial position. Moreover, in the event a challenge to the Company's patents
results in a significant loss of some or all of its claims, the Company's only
remedy may be to initiate an appeal, which would likely be a lengthy process.
Due to the Company's limited capital resources, it is unlikely that the Company
could successfully sustain such an appeal unless it is able to generate
additional cash resources. Accordingly, a decision by the PTO to limit all or
some of the Company's patent claims would have a material adverse effect on the
Company's business, operating results and financial position.


     Lengthy Sales Cycle

     The Company believes that it may experience a lengthy sales cycle in
conjunction with its patent licensing program. The Company believes that the
time between initial contact with a potential licensee and the execution of a
final license agreement may take as much as six months or longer.

     Rapid Technological Changes

     The Company's patents are specific to the e-commerce businesses of the
financial services industry and generally cover the automated establishment of
loans, financial accounts and credit accounts using specific e-commerce related
systems, processes and methods. The market for products and services that enable
e-commerce is highly competitive, rapidly developing and subject to rapid change
and technological development, shifting consumer preferences, frequent new
product introductions and competition from traditional products and services
having all or some of the same features as products and services which enable
e-commerce. Moreover, competitors in the e-commerce market have frequently taken
different strategic approaches and have launched substantially different
products and services to exploit the same perceived market opportunities.


                                       7
<PAGE>

     The Company's patents cover specific systems, processes and methods to
establish certain accounts associated with the financial services industry. It
is possible that new products may be developed that may render obsolete the
systems, processes and methods over which the Company believes it has
intellectual property rights. Moreover, the delivery of products and services
through e-commerce channels is not fully developed, and competition from
traditional channels to deliver these same products and services is intense. Any
wide-scale rejection of e-commerce channels by consumers will have a material
adverse effect on the Company's business, operating results and financial
position.

     Dependence on Third Parties


     Patent licensing is a highly technical and specialized business, which will
require the Company to rely on the services of third parties. In January 2003
the Company appointed LPS Group ("LPS") as its exclusive patent licensing agent.
Under the terms of the agreement, LPS has agreed, among other things, to perform
market research, initiate the sales of patent license agreements, and negotiate
patent licensing arrangements with third parties. Accordingly, the Company is
dependent on LPS to successfully execute its patent licensing program.
Additionally, the agreement requires LPS to coordinate the engagement of legal
counsel, on terms satisfactory to the Company, if litigation becomes necessary
to enforce the Company's patent rights. The success of the Company's patent
licensing program and enforcement of its patents may depend on the satisfactory
retention of and efforts of legal counsel. Moreover, legal professionals
frequently request and charge significant contingent fees, which would reduce
the revenues generated by the Company from its patent licensing program.


     Potential for Fluctuation in Quarterly Results

     Since its inception, the Company's quarterly results have fluctuated and
have not been susceptible to meaningful period-to-period comparisons. The
Company believes that it may continue to experience significant fluctuations in
its quarterly operating results in the foreseeable future. The Company
anticipates that its period-to-period revenue and operating results will depend
on numerous factors, including the ability of the Company to successfully
negotiate and enter into patent licensing agreements and the timing, terms and
the pricing attributes of any such agreements.

     The Company believes that period-to-period comparisons of its operating
results are not meaningful and should not be relied upon as an indication of
future performance. The uncertainty regarding the extent and timing of revenues
coupled with the risk of substantial fluctuations in its quarterly operating
results have had a material adverse effect, and may continue to have a material
adverse effect, on the price of the Company's Common Stock.

     Dependence on Key Employees


     The Company is highly dependent on the services of its Chairman, President
and Chief Executive Officer, Joseph A. Boyle, notwithstanding the fact that he
will significantly reduce his time commitment to the Company effective April 1,
2003. The Company does not have an employment agreement with Mr. Boyle or "key
man" insurance on his life. The complete loss of the services of Mr. Boyle could
have a material adverse effect upon the Company's business, operating results
and financial condition. In addition, the Company's financial condition would
likely adversely affect the Company's ability to retain or recruit employees and
executives.


                                       8
<PAGE>

     Risk of Substantial Dilution

     The Company also has issued convertible notes that are convertible into
common stock at $0.20 per share, which could be substantially less than the
market price of the common stock at the time of conversion. The issuance of
stock at a price that is less than the market price could have an immediate
adverse effect on the market price of the Company's common stock. In addition,
the Company has issued options and warrants to acquire shares of its common
stock, and the Company may issue additional warrants in connection with its
financing arrangements and may grant additional stock options under its stock
option plan that may further dilute the Company's common stock. The exercise of
such warrants and options would have a dilutive effect on the Company's common
stock. Also, to the extent that persons who acquire shares under all the
foregoing agreements sell those shares in the market, the price of the Company's
shares may decrease due to additional shares in the market.

     Volatility of Stock Price and Risk of Litigation

     The Company's common stock price has been volatile and has experienced
substantial and sudden fluctuations in response to a number of events and
factors. In addition, the stock market has experienced significant price and
volume fluctuations that have especially affected the market prices of equity
securities of many companies directly and indirectly involved in the high
technology industry, and that often have been unrelated to the operating
performance of such companies. These broad market fluctuations have adversely
affected and may continue to adversely affect the market price of the Company's
common stock. In the past, following periods of volatility in the market price
of a company's securities, securities class action litigation has often been
instituted against such a company. Such litigation could result in substantial
costs and a diversion of management's attention and resources, which would have
a material adverse effect on the Company's business, operating results and
financial condition.

     Anti-Takeover Provisions

     Certain provisions of Delaware law and the Company's Certificate of
Incorporation and bylaws could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from attempting to
acquire, control of the Company. Such provisions could limit the price that
certain investors might be willing to pay in the future for shares of the
Company's common stock. These provisions of Delaware law and the Company's
Certificate of Incorporation and bylaws may also have the effect of discouraging
or preventing certain types of transactions involving an actual or threatened
change of control of the Company (including unsolicited takeover attempts), even
though such a transaction may offer the Company's stockholders the opportunity
to sell their stock at a price above the prevailing market price. Certain of
these provisions allow the Company to issue preferred stock with rights senior
to those of the common stock and other rights that could adversely affect the
interests of holders of common stock without any further vote or action by the
stockholders. The issuance of preferred stock, for example, could decrease the
amount of earnings or assets available for distribution to the holders of common
stock or could adversely affect the rights and powers, including voting rights,
of the holders of the common stock. In certain circumstances, such issuance
could have the effect of decreasing the market price of the common stock, as
well as having the anti-takeover effects discussed above.

Item 2.  Properties

     The Company's principal executive offices are located at 1122 Lady Street
in Columbia, South Carolina. Such office space encompasses approximately 2000
square feet and is currently under a short-term lease which expires in 2003. The
Company also leases warehouse space located in Columbia, South Carolina, which
encompasses approximately 4000 square feet. Such space is under a month-to-month
lease. The Company also leases approximately 1800 square feet of space in which
it maintains its data processing center. Such space is under a month-to-month
lease and is located at 1201 Main Street in Columbia, South Carolina.

Item 3.  Legal Proceedings

     Since early 2001, the Company and Citibank N.A. have been engaged in a
dispute involving amounts the Company claims it is owed by Citibank under a
contract that the Company and Citibank entered into in 1997 related to the
development of a system to process automobile loans. This contract was


                                       9
<PAGE>

transferred by Citibank to The Dime Savings Bank of New York in connection with
the sale of Citibank's automobile loan business to The Dime Savings Bank. On two
occasions, Citibank has filed a lawsuit in federal court in New York seeking a
declaratory judgment releasing Citibank from any obligation to the Company for
amounts the Company has billed Citibank under the contract. The first such
action was filed by Citibank in March 2001, and such action was dismissed in
January 2002 because the court determined that the parties had not complied with
the dispute resolutions provisions of the contract. The second such action was
filed in May 2002, and such action was subsequently transferred to the United
States District Court in Columbia, South Carolina, on March 11, 2003, for
consolidation with the Company's pending lawsuit against Citibank. On two
occasions, the Company has filed actions in federal court in South Carolina
seeking to collect amounts it believes it is owed from Citibank. The first such
action, filed in July 2001, was dismissed by the court in April 2002 because the
court determined that the parties had not complied with the dispute resolution
provisions of the contract. The second such action was filed in May 2002, and is
pending.

     The Company is subject to a lawsuit related to a claim filed by a plaintiff
who has alleged certain rights, damages and interests incidental to the
Company's formation and development. The lawsuit initially resulted in a jury
verdict of $68,000 in favor of the plaintiff, and the plaintiff subsequently
requested, and was granted, a new trial. The Company is appealing the grant of a
new trial. The Company intends to vigorously contest such action and, in the
opinion of management, the Company has meritorious defenses.

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

         Not applicable.

                      Executive Officers of the Registrant

  Name                       Age        Position with the Company

  Joseph A. Boyle            49         Chairman, President, Chief Executive
                                        Officer, and Chief Financial Officer

  S. Sean Douglas            34         Executive Vice President and Chief
                                        Operating Officer

Joseph A. Boyle became President and Chief Executive Officer of the Company in
January 2000 and Chairman in March 2001. Mr. Boyle has also served as Chief
Financial Officer of the Company since September 1996. Mr. Boyle also held the
title of Senior Vice President from September 1996 to January 2000 and Treasurer
from May 1997. From May 1997 to July 1998, Mr. Boyle also served as Secretary of
the Company. In connection with the Company's engagement of LPS to act as the
Company's exclusive patent licensing agent, effective April 1, 2003, Mr. Boyle
will significantly reduce his time commitment to the Company, although he will
continue to serve in his current offices. Prior to joining the Company, Mr.
Boyle served as Price Waterhouse, LLP's engagement partner for most of its
Kansas City, Missouri, financial services clients and was a member of the firm's
Mortgage Banking Group. Mr. Boyle was employed by Price Waterhouse, LLP from
June 1982 to August 1996.

S. Sean Douglas became Executive Vice President and Chief Operating Officer of
the Company in March 2003. Mr. Douglas also held the title of Senior Vice
President of Finance, Operations and Administration of the Company from March
2002 to March 2003. From January 2000 to March 2002, Mr. Douglas held the title
of Vice President and Controller of the Company. From November 1995 to January
2000 Mr. Douglas was the Company's accounting manager.


                                       10
<PAGE>



Part II

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

(a)  Effective February 12, 2001, the Company's common stock was delisted from
     the Nasdaq Smallcap Market and began trading on the OTC Bulletin Board
     under the symbol "AFFI." The Company's common stock traded on the Nasdaq
     SmallCap Market from March 27, 2000, to February 12, 2001. Prior to March
     27, 2000, the Company's common stock was traded on the Nasdaq National
     Market. The following table presents the high and low sales prices of the
     Company's Common Stock for the periods indicated during 2002 and 2001 as
     reported by the OTC Bulletin Board. As of March 20, 2003, there were 383
     stockholders of record of the Common Stock.


                                                       Sales Price Per Share
                                                       High              Low

2002
First Quarter                                           0.13              0.06
Second Quarter                                          0.11              0.06
Third Quarter                                           0.10              0.06
Fourth Quarter                                          0.23              0.05

2001
First Quarter                                           0.41              0.06
Second Quarter                                          0.10              0.05
Third Quarter                                           0.11              0.05
Fourth Quarter                                          0.10              0.05


     The Company has never paid dividends on its capital stock. The Company
     intends to retain earnings, if any, for use in its business and does not
     anticipate paying any cash dividends in the foreseeable future.

(b)  Not applicable.



                                       11
<PAGE>



Item 6.  Selected Financial Data

     The following table presents selected financial data of the Company for the
periods indicated. The following financial data should be read in conjunction
with the information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Company's Consolidated
Financial Statements and Notes thereto and other information included elsewhere
in this report.
<TABLE>
<CAPTION>

                                                           Year ended December 31,
                                   2002               2001                2000                1999               1998
                          ---------------- ------------------- -------------------- ------------------- --------------------
<S>                              <C>             <C>                     <C>               <C>                  <C>
Statements of
 Operations Data:
Revenues                        $ 185,960         $ 1,285,944          $ 1,723,075         $ 2,477,877          $ 2,202,602
Costs and expenses:
Cost of revenues                   16,846              63,751              344,931           2,068,229            1,451,927
Research and development                -             496,441              683,600           1,870,509            2,559,600
Impairment loss                         -             448,945            2,608,773                   -                    -
Selling, general and
 administrative expenses        1,406,841           3,847,807            6,791,767          10,548,539           13,842,344
                          ---------------- ------------------- -------------------- ------------------- --------------------
Total costs and expenses        1,423,687           4,856,944           10,429,071          14,487,277           17,853,871
                          ---------------- ------------------- -------------------- ------------------- --------------------
Operating loss                 (1,237,727)         (3,571,000)          (8,705,996)        (12,009,400)         (15,651,269)
Interest income                     1,643              10,101               64,155             305,362            1,010,213
Interest expense                  (70,334)           (115,557)             (26,277)                  -              (10,923)
                          ---------------- ------------------- -------------------- ------------------- --------------------
Loss from
 continuing operations         (1,306,418)         (3,676,456)          (8,668,118)        (11,704,038)         (14,651,979)
Income (loss) from
 operations of
 discontinued subsidiary                -             467,188             (534,978)           (390,598)            (221,022)
Gain on
 disposal of subsidiary                 -             891,569                    -                   -                    -
                          ---------------- ------------------- -------------------- ------------------- --------------------
Net loss                      $(1,306,418)       $ (2,317,699)        $ (9,203,096)      $ (12,094,636)       $ (14,873,001)
                          ================ =================== ==================== =================== ====================
Loss per share
 - basic and diluted:
   Continuing operations      $     (0.03)       $      (0.10)        $      (0.29)      $       (0.39)        $      (0.49)
                          ================ =================== ==================== =================== ====================
  Net loss per share          $     (0.03)       $      (0.06)        $      (0.30)      $       (0.41)        $      (0.50)
                          ================ =================== ==================== =================== ====================
Shares used in computing
 net loss per share            40,707,108          38,004,089           30,242,054          29,738,459           29,755,034
                          ================ =================== ==================== =================== ====================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                                                                  December 31,
                                           2002                2001               2000                1999               1998
                                      -------------- ------------------ ------------------ ------------------- ------------------
<S>                                    <C>                  <C>                <C>              <C>                <C>
Balance Sheet Data:
Cash and cash equivalents              $  156,780          $  27,720          $ 646,198         $ 2,116,016        $ 2,026,932
Short-term investments                          -                  -                  -           1,474,949          8,068,310
Working capital                           (82,512)           117,477          2,216,854           4,637,238         13,543,782
Net investment in sales-type
   leases, less current portion                 -                  -                  -             249,830            574,347
Total assets                              234,848            927,657          5,638,453          13,129,528         24,196,875
Convertible debenture                           -            225,090(1)         951,456                   -                  -
Convertible notes                         830,336                  -                  -                   -                  -
Capital stock of subsidiary held
   by minority investor                         -                  -             22,668                   -                  -
Stockholders' equity (deficiency)        (908,230)           343,438          2,326,314          10,670,980         22,556,201
</TABLE>

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

(1)  Amounts outstanding under the convertible debenture as of December 31,
     2001, were classified as a current liability and, accordingly, are included
     in the working capital of the Company at December 31, 2001, set forth
     above.


                                       12
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Overview

     The Company was formed in 1994 to develop and market technologies that
enable financial institutions and other businesses to provide consumer financial
services electronically with reduced or no human intervention. Due to capital
constraints, the Company has suspended efforts to deploy products and services
that use its loan processing system, DeciSys/RT, in order to focus its efforts
exclusively on licensing its patents.


     To date, the Company has generated substantial operating losses, has
experienced an extremely lengthy sales cycle for its products and services and
has been required to use a substantial amount of cash resources to fund its
operations. The Company does not believe that existing cash and internally
generated funds will be sufficient to fund its operations through October 2003.
Accordingly, to remain viable the Company must raise additional capital and
generate revenue and working capital through its patent licensing business,
which is in its inception stage. If the Company is unable to raise additional
capital and generate working capital through the sale of patent licenses soon,
it will be forced to consider alternatives for winding down its business, which
may include filing for bankruptcy protection. To maintain the minimal resources
necessary to support its current operations and execute a patent licensing
strategy, the Company does not believe that substantial additional reductions in
its operating expenses are feasible. No assurances can be given that the Company
will be able to raise additional capital or generate working capital from its
patent licensing business in a manner that would allow it to continue its
operations.


Critical Accounting Policies

     The Company applies certain accounting policies, which are critical in
understanding the Company's results of operations and the information presented
in the consolidated financial statements. We consider critical accounting
policies to be those that require more significant judgments and estimates in
the preparation of our financial statements and include the following: (1)
inventories; (2) valuation of long-lived assets; and, (3) valuation reserve on
net deferred tax assets.

     Inventories

     The Company records inventory at actual costs on a first-in, first-out
basis. The Company periodically evaluates the necessity of recording an
allowance for inventory obsolescence and records estimates to properly adjust
the carrying value of its inventory. Such estimates are based on management's
evaluation of inventory on hand, its plans to sell or lease its inventory and
its available strategies to realize the recorded values of its inventory.

     Valuation of Long-Lived Assets

     The Company annually evaluates the carrying value of long-lived assets,
including property and equipment and goodwill. Goodwill results from business
acquisitions and is initially recorded at the excess of the purchase price over
the fair value of net identifiable assets acquired, and the Company has
historically amortized goodwill over ten years. Management must make certain
judgments when estimating and recording impairment charges. Such judgments are
typically based on their plans to utilize or sell long-lived assets, the current
market value of such assets, and in the case of goodwill, management's plans and
strategies to continue business lines the Company previously acquired. To the
extent that the carrying value of long-lived assets is greater than the
Company's estimates of the undiscounted cash flows associated with the asset,
the Company records an impairment charge equal to the excess of carrying value
over the asset's fair value.


                                       13
<PAGE>

     Valuation Reserve on Net Deferred Tax Assets

     The Company records a valuation allowance to reduce its deferred tax assets
to the amount that it estimates is more likely than not to be realized. As of
December 31, 2002, the Company recorded a valuation allowance that reduced its
deferred tax assets to equal its deferred tax liability.

Results of Operations

     Revenues. The Company's revenues from continuing operations were $185,960,
$1,285,944, and $1,723,075 for the years ended December 31, 2002, 2001, and
2000, respectively. The types of revenue recognized by the Company in the years
ended December 31, 2002, 2001, and 2000 are as follows:
<TABLE>
<CAPTION>

                                                               Years ended December 31,
                                     2002                                2001                                2000
                           -----------------------------     --------------------------------    -------------------------------
                                                 % of                                % of                                % of
                                 Amount          Total             Amount             Total            Amount            Total
                           ---------------     ---------     -----------------     ----------    -----------------     ---------
<S>                             <C>                <C>               <C>               <C>              <C>               <C>
Transaction fees                $ 104,878          56.4             $ 265,666           20.7            $ 544,168          31.6
Sales and rental fees                   -             -                     -              -                3,000           0.2
Professional services fees              -             -               249,871           19.4              319,503          18.5
Patent license revenue             25,000          13.4                20,000            1.6              510,000          29.6
Other income                       56,082          30.2               750,407           58.3              346,404          20.1
                           ---------------     ---------     -----------------     ----------    -----------------     ---------
                                $ 185,960         100.0            $1,285,944          100.0          $ 1,723,075         100.0
                           ===============     =========     =================     ==========    =================     =========
</TABLE>

     Transaction fees. During 2002 and 2001 the Company provided transaction
processing services to one customer that used the Company's e-xpertLender
system. The contract with the customer terminated in October 2002. The decrease
in transaction fees in 2002 compared to 2001 is attributable to the customer's
migration to another system during 2002 and the termination of the contract in
October 2002. The decrease in transaction fees in 2001 compared to 2000 is
attributable to the discontinuance of the use of the Company's indirect
automobile loan processing system ("iDEAL") by its only iDEAL customer in early
2001. Such customer significantly curtailed its operations in late 2000 and
completely exited the market in early 2001.

     Sales and rental fees. The Company recognized no revenues associated with
the sales and rentals of its Automated Loan Machines ("ALMs") in 2002 and 2001.
During 2000, all remaining ALM operating leases expired, and the Company
recognized $3,000 of rental payments associated with its final operating lease.

     Professional services fees. Previously, when the Company agreed to provide
professional services to customize its core technology to conform to a specific
customer request, the Company generally entered into a contract with the
customer for the performance of these services which typically defined
deliverables, specific delivery and acceptance dates and specified fees for such
services. Upon completion and acceptance of the specific deliverables by the
customer, the Company recognized the corresponding revenue as professional
services revenue. Because the Company has suspended efforts to deploy its loan
processing systems, it performed no professional services in 2002, and
accordingly, recognized no revenue associated with such activities. Moreover, it
does not anticipate that it will earn professional service fees any time in the
foreseeable future. In 2001, the Company recognized $249,871 of professional
services fees, which were primarily associated with services rendered under one
contract. Most of the services were performed during 2000 and the associated
revenue was deferred until 2001 and recognized upon termination of the contract.
In 2000, the Company recognized $309,503 of professional services revenue
associated with final enhancements to its e-xpertLender system for one customer.

     Patent license revenue. The Company was granted two patents in 1999
covering automated loan processing and one patent in 2000 covering the automated
establishment of financial accounts. Both of the Company's loan processing
patents have been the subject of reexaminations by the U. S. Patent and
Trademark Office ("PTO"). The PTO's reexamination and capital constraints have
adversely affected the Company's ability to sustain an effective patent
licensing program to date. In 2002 and 2001, the Company recognized patent
licensing revenue associated with the annual fee from one patent license
agreement executed in 1999. Patent license revenue in 2000 related to the
execution of five patent license agreements, of which three licenses were
granted under a sub-licensing agreement with one customer. The sub-licensing
agreement was terminated in January 2001. In addition, 91% of the Company's 2000
patent license revenue was associated with the sub-licensing arrangement.


                                       14
<PAGE>

     Other income. Other income consists primarily of non-recurring
miscellaneous income items and certain insignificant recurring income items such
as fees charged for the routine maintenance of the systems the Company has sold.
The decrease in other income in 2002 compared to 2001 is primarily attributable
to an overall reduction in the Company's business activities in 2002 compared
with 2001 and the settlement of a lawsuit in 2001. The increase in other income
in 2001 compared to 2000 is primarily attributable to the settlement of a
lawsuit in the first quarter of 2001. The overall increase was offset by a
reduction in other miscellaneous income items due to the suspension of efforts
to deploy the Company's loan processing systems.

Costs and Expenses

     Costs of Revenues. Costs of revenues from continuing operations for the
years ended December 31, 2002, 2001, and 2000 were $16,846, $63,751, and
$344,931, respectively. Cost of revenues includes the direct costs associated
with the generation of specific types of revenue and the allocation of certain
indirect costs when such costs are specifically identifiable and allocable to
revenue producing activities. During the three years ended December 31, 2002,
the nature and amounts of costs, as well as gross profit margins, associated
with certain revenue producing activities varied significantly due to changes in
the nature of the services offered by the Company and due to different pricing
structures offered to certain customers.

     Costs of revenues and the percentage of the costs of revenues to total
costs of revenues for the years ended December 31, 2002, 2001, and 2000 are as
follows:
<TABLE>
<CAPTION>

                                                            Year ended December 31,

                                   2002                                2001                                  2000
                      -------------------------------     -------------------------------    --------------------------------------
                                              % of                                % of                                   % of
                           Amount            Total             Amount            Total             Amount               Total
                      -----------------     ---------     -----------------     ---------     -----------------     ---------------
<S>                           <C>               <C>               <C>               <C>              <C>                  <C>
Transaction fees              $ 14,346          85.2              $ 41,862          65.7             $ 108,193            31.4
Sales and rental fees                -             -                 4,485           7.0                52,240            15.1
Professional
 services fees                       -             -                15,404          24.2               133,498            38.7
Patent license revenue           2,500          14.8                 2,000           3.1                51,000            14.8
                      -----------------     ---------     -----------------     ---------     -----------------     ---------------
                              $ 16,846         100.0              $ 63,751         100.0             $ 344,931           100.0
                      =================     =========     =================     =========     =================     ===============
</TABLE>

     Costs of transaction fees. The cost of transaction fees consists primarily
of the direct costs incurred by the Company to process loan applications through
its systems. Such direct costs are associated with services provided by third
parties and includes the cost of credit reports, fraud reports and
communications networks used by the Company. During 2002 and 2001, the Company
provided transaction processing services to one customer that used the Company's
e-xpertLender system. The contract with the customer terminated in October 2002.
The decrease in the cost of transaction fees in 2002 compared to 2001 is
attributable to the customer's migration to another system during 2002 and the
termination of the contract in October 2002. The decrease in the costs of
transaction fees in 2001 compared to 2000 is due to the termination of the
Company's only iDEAL processing contract in early 2001.

     Costs of sales and rental fees. Costs of sales and rental fees are related
to the cost of ALM hardware components associated with ALMs deployed under
sales-type leases, maintenance of installed ALMs, amortization associated with
capitalized ALMs and related systems development costs, and depreciation
associated with ALMs deployed under operating leases. The Company recognized no
sales and rental revenue in 2002 and 2001; however, in 2001 the Company
recognized certain costs, primarily maintenance, associated with certain ALMs
deployed under sales-type leases. All such ALM contracts expired in 2001. In
2000, costs of sales and rental fees consisted of depreciation and other costs
incidental to the removal of the remaining ALMs under operating leases and
maintenance associated with remaining ALMs originally deployed under sales-type
lease arrangements.


                                       15
<PAGE>

     Costs of professional services fees. The costs of professional services
fees consist of the costs of the direct labor and the allocation of certain
indirect costs associated with performing software and system customization
services for customers. The costs of providing professional services vary
depending upon the nature of professional services rendered, the level of
developers assigned to specific projects and the duration of the project.
Accordingly, the margins recognized by the Company vary significantly depending
upon the nature of the project. In 2002, the Company provided no professional
services. The costs of providing professional services decreased in 2001
compared to 2000 as a result of the decrease in the level of projects requiring
professional services.

     Costs of patent license revenue. Costs of patent license revenue recognized
in 2002, 2001 and 2000 consist of commissions paid to the Company's former
patent licensing agent and are associated with such agent's commissions for
patent licenses granted by the Company.

     Research and Development. The Company accounts for research and development
costs as operating costs and expenses such costs in the period incurred. In
accordance with Statement of Financial Accounting Standards No. 86 ("SFAS 86"),
"Computer Software to be Sold, Leased or Otherwise Marketed," the Company
capitalizes software costs incurred in the development of a software application
after the technological feasibility of the application has been established.
Technological feasibility is established when an application design and a
working model of the application have been completed and the completeness of the
working model and its consistency with the application design have been
confirmed by testing. From the time technological feasibility is established
until the time the relevant application is available for general release to
customers, software development costs incurred are capitalized at the lower of
cost or net realizable value. Thereafter, costs related to the application are
again expensed as incurred. Capitalized software development costs are amortized
using the greater of the revenue curve or straight-line method over the
estimated economic life of the application. Software costs capitalized include
direct labor, other costs directly associated with the development of the
related application and an allocation of indirect costs, primarily facility
costs and other costs associated with the Company's software development staff.
The Company bases such allocation on the percentage of the Company's total labor
costs represented by the software development labor costs.

     In conjunction with the Company's suspension of its efforts to further
develop and market its software products and services, the Company suspended all
research and development activities. Accordingly, the Company recognized no
expenses associated with research and development activities in 2002. Research
and development expenses for the year ended December 31, 2001, were $496,441,
compared to $683,600 for 2000. The decrease in research and development expense
in 2001 compared to 2000 is due to a decrease in the number of employees
involved in development activities due to the continued reduction in the
Company's research and development activities over the past three years. The
Company capitalized no costs associated with software development in 2001 and
2000.

     Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses related to continuing operations for the year
ended December 31, 2002, were $1,406,841, compared to $3,847,807 and $6,791,767
for the years ended December 31, 2001 and 2000, respectively.

     SG&A expenses during 2002 consisted primarily of personnel expense of
approximately $434,000; professional fees of approximately $303,000;
depreciation and amortization expense of approximately $138,000; rent expense of
approximately $101,000; and, insurance and taxes of approximately $159,000.

     SG&A expenses during 2001 consisted primarily of personnel expense of
approximately $787,000; professional fees of approximately $470,000;
depreciation and amortization expense of approximately $570,000; and, rent
expense of approximately $312,000.

     SG&A expenses during 2000 consisted primarily of personnel expense of
approximately $1,649,000; professional fees of approximately $754,000;
depreciation and amortization expense of approximately $1,621,000; rent expense
of approximately $476,000; and, writedown of deferred software development costs
of approximately $518,000.


                                       16
<PAGE>

     The decrease in SG&A in 2002 compared to 2001 and 2001 compared to 2000 is
due the continued reduction of the Company's workforce over the past three
years. SG&A expenses were lower in all material categories in 2002 compared to
2001 and in 2001 compared to 2000.

     Impairment Loss. The Company periodically evaluates the carrying value of
long-lived assets to be held and used, including property and equipment and
goodwill. In accordance with its evaluation, the Company recorded an impairment
loss of $448,945 and $2,608,773 in 2001 and 2000, respectively. In 2001, the
impairment loss was primarily associated with goodwill the Company had
previously recorded in conjunction with the acquisition of an insurance-related
business which included rights to a patent. In 2001, the Company was
unsuccessful in obtaining expanded rights associated with the insurance patent
and accordingly wrote off all amounts previously recorded as goodwill. The
impairment loss in 2000 was primarily attributable to certain assets used or
associated with its software and consumer loan processing business, which the
Company has significantly curtailed. Impairment losses included charges taken by
the Company to reduce the carrying value of property and equipment and goodwill.
The Company did not record any impairment losses in 2002.

Interest Income

     Interest income associated with continuing operations was $1,643, $10,101,
and $64,155 during 2002, 2001, and 2000, respectively, and primarily reflects
interest income attributable to short-term investments and the amortization of
deferred interest income attributable to ALM sales-type leases. The decrease in
interest income in 2002 compared to 2001 is primarily attributed to the decrease
in average cash balances maintained during the year. The decrease in interest
income in 2001 compared to 2000 is attributable to the continued decrease in
average cash and cash equivalents and investment balances and ALMs deployed
under sales-type leases.

Interest Expense

     Interest expense associated with continuing operations was $70,334,
$115,557 and $26,277 in 2002, 2001, and 2000, respectively. Interest expense is
primarily associated with the issuance of a $1 million convertible debenture in
November 2000, the issuance of a $1 million note in July 2001, and the issuance
of $830,336 principal amount of convertible notes in June 2002. The decrease in
interest expense in 2002 compared with 2001 is attributable to the liquidation
in December 2001 of the $1 million note issued in July 2001 and a reduction of
amounts outstanding under the $1 million convertible debenture. The decrease was
offset by interest expense associated with the issuance of $830,336 principal
amount of convertible notes in June 2002. The increase in interest expense in
2001 compared to 2000 is attributable to the issuance of the convertible
debenture in November 2000 and the $1 million note issued in July 2001.

Income (Loss) from Operations of Discontinued Subsidiary and Gain on Disposal of
Subsidiary

     In July 2001 the Company issued a $1 million note to HomeGold Financial,
Inc., which note was collateralized by the stock of Surety Mortgage, Inc., the
Company's wholly-owned mortgage banking subsidiary. On December 31, 2001, in
accordance with the terms of the note, the Company tendered the stock of Surety
to HomeGold in full satisfaction of the $1 million note and accrued interest of
$25,511. The Company accounted for the transaction as the disposal of a segment
of a business and has reported the operations of Surety as a separate component
of loss for 2001 and 2000. Similarly, the gain of $891,569 which the Company
recognized is also reported as a separate component of net loss in 2001.


The components of Surety's operations for 2001 and 2000 are as follows:

                               Year ended December 31,
                               2001           2000
                          -------------- --------------
Mortgage revenue            $ 2,851,720     $  432,438
Costs of revenue              1,008,266        212,397
S G & A                       1,378,366        812,711
                          -------------- --------------
Total costs and expenses      2,386,632      1,025,108
                          -------------- --------------
                                465,088       (592,670)
Net interest income               2,100         57,692
                          -------------- ---------------
Net income (loss)            $  467,188     $ (534,978)
                          ============== ===============

                                       17
<PAGE>


     Surety was formed to deploy and test the Company's automated mortgage loan
application system ("Mortgage ALM"), and engaged in mortgage brokerage
activities which involved originating, processing and selling mortgage loans to
outside investors. Surety originated and processed mortgage loans directly with
consumers or on behalf of correspondents, and immediately sold such loans to
institutions that sponsor the loan programs offered by Surety. Surety only
offered loans that would be acquired by such institutions under such programs.
Upon making the loan commitment to the borrower, Surety immediately received a
commitment from an institution to acquire the loan upon closing. Mortgage
revenue included gains on sales of mortgage loans to institutions, loan fees
received for originating and processing the loan and fees charged to third
parties for processing services pursuant to certain contracts Surety entered
during 2000 and 2001. Loan origination fees and all other direct costs
associated with originating loans were recognized at the time the loans were
sold.

     Surety's mortgage revenues and costs and expenses increased in 2001
compared to 2000 as a result of a one-year processing contract that was entered
into in December 2000, which required the Company to expand Surety's employee
base. As a result of the processing contract, Surety recognized mortgage
revenues of approximately $1,842,000 in 2001. The contract expired on December
31, 2001.

Income Taxes

     The Company has recorded a valuation allowance for the full amount of its
net deferred income tax assets as of December 31, 2002, 2001, and 2000, based on
management's evaluation of the recognition criteria as set forth in Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."

Liquidity and Capital Resources

     The Company has generated net losses of $67,900,397 since its inception and
has financed its operations primarily through net proceeds from its initial
public offering in May 1996 and cash generated from operations and other
financing transactions. Net proceeds from the Company's initial public offering
were $60,088,516.


     To date, the Company has generated substantial operating losses, has
experienced an extremely lengthy sales cycle for its products and services and
has been required to use a substantial amount of cash resources to fund its
operations. The Company does not believe that existing cash and internally
generated funds will be sufficient to fund its operations through October 2003.
Accordingly, to remain viable the Company must raise additional capital and
generate revenue and working capital through its patent licensing business,
which is in its inception stage. If the Company is unable to raise additional
capital and generate working capital through the sale of patent licenses soon,
it will be forced to consider alternatives for winding down its business, which
may include filing for bankruptcy protection. To maintain the minimal resources
necessary to support its current operations and execute a patent licensing
strategy, the Company does not believe that substantial additional reductions in
its operating expenses are feasible. No assurances can be given that the Company
will be able to raise additional capital or generate working capital from its
patent licensing business in a manner that would allow it to continue its
operations.


     In June 2002, the Company issued convertible secured notes (the "notes") to
certain investors as part of its capital raising initiatives. The principal
amount of notes issued totaled $830,336 and included the issuance of a note in
the principal amount of $205,336 to AMRO International, S.A. ("AMRO") in
satisfaction of the principal and accrued interest outstanding under a
convertible debenture previously acquired by AMRO. The notes bear interest at 8%
and principal and accrued interest are due in June 2004. The notes are secured
by the stock of the Company's wholly-owned subsidiary, decisioning.com.
decisioning.com is the Company's patent licensing subsidiary and owns the
Company's patent portfolio. The notes are convertible into the Company's common
stock at a conversion rate of $.20 per share. The Company may prepay the notes
subject to a prepayment penalty of 8% and 4% if the prepayment occurs within the
first twelve months or thereafter, respectively. In March 2003, the Company
issued an additional $200,000 principal amount of its convertible notes on terms
identical to the terms of the notes it issued in June 2002, except that the new
notes mature in March 2005.


                                       18
<PAGE>

     In the second quarter of 2001, the Company issued a $1 million note to
HomeGold Financial, Inc., which was secured by the stock of its wholly-owned
mortgage subsidiary, Surety Mortgage, Inc. The note matured on December 31,
2001, at which time the Company tendered the stock of Surety in full
satisfaction of outstanding principal and accrued interest under the note in
accordance with the terms of the note. The Company had previously entered into a
contract with HomeGold under which it processed certain mortgage loan
applications originated by HomeGold. Such contract expired on December 31, 2001.

     In June 2000, the Company entered into an agreement with Redmond Fund, Inc.
("Redmond") under which Redmond acquired, for $500,000, 484,848 shares of the
Company's common stock and a warrant to acquire an additional 484,848 shares for
$1.37 per share.

     On September 22, 2000, the Company entered into a convertible debenture and
warrants purchase agreement with AMRO. The agreement was amended in August 2001
as described below. Under the original agreement on November 22, 2000, the
Company issued to AMRO an 8% convertible debenture in the principal amount of
$1,000,000. The debenture was convertible, at the option of AMRO, into shares of
the Company's common stock at a price equal to the lesser of $1.00 per share or
65% of the average of the three lowest closing prices of the Company's stock
during the month prior to conversion. Under the original agreement, the
debenture matured on May 22, 2002, subject to earlier conversion and certain
provisions regarding acceleration upon default and prepayment. Under the
original agreement on November 22, 2000, the Company also issued to AMRO a
three-year warrant to acquire 200,000 shares of the Company's common stock. The
warrant exercise price was originally $0.3542 per share. AMRO exercised a
portion of the debenture into an aggregate of 6,214,665 shares of the Company's
stock.

     In August 2001, the Company and AMRO amended the convertible debenture and
warrants purchase agreement. Under the terms of the amendment, the Company
agreed to repay the debenture in full in a series of monthly payments through
June 2002, and AMRO agreed not to convert the debenture into any additional
shares of the Company's common stock. In addition, the Company agreed to reduce
the exercise price of the warrant issued to AMRO from $0.3542 per share to $0.05
per share, and to reduce the exercise price of a warrant to acquire 720,000
shares issued to the investor under the Company's previous equity line agreement
from $0.8554 per share to $0.05 per share.

     In June 2002, the Company issued to AMRO an 8% convertible secured note in
the principal amount of $205,336 in full satisfaction of amounts outstanding
under its convertible debenture. The terms of the 8% convertible secured notes
are discussed above.

     Net cash used during the year ended December 31, 2002, to fund operations
was approximately $457,000, compared to approximately $2,062,000 and $5,291,000
for 2001 and 2000, respectively. At December 31, 2002, 2001, and 2000, cash and
liquid investments were $156,780, $27,720, and $646,198, respectively, and
working capital was ($82,512), $117,477, and $2,216,854, respectively.

     Item 7(a). Quantitative and Qualitative Disclosures about Market Risk

Not applicable.



                                       19
<PAGE>


     Item 8. Financial Statements and Supplemental Data

     The report of independent auditors and consolidated financial statements
are set forth below (see item 14(a) for list of financial statements and
financial statement schedules):

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
Affinity Technology Group, Inc.

     We have audited the accompanying consolidated balance sheets of Affinity
Technology Group, Inc. and subsidiaries (collectively, the "Company"), as of
December 31, 2002 and 2001, and the related consolidated statements of
operations, changes in stockholders' equity (deficiency), and cash flows for the
years then ended. The Company's audit also included the financial statement
schedule listed in the Index at Item 15(a)(2). These financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
the Company as of December 31, 2002 and 2001, and the consolidated results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred recurring operating losses and
has an accumulated deficit. These matters raise substantial doubt about the
ability of the Company to continue as a going concern. Management's plans in
regard to these matters are also discussed in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


                                                /s/ SCOTT McELVEEN LLP


Columbia, South Carolina
March 18, 2002



                                       20
<PAGE>



REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
Affinity Technology Group, Inc.

     We have audited the accompanying consolidated statements of operations,
stockholders' equity (deficiency) and cash flows of Affinity Technology Group,
Inc. and subsidiaries for the year ended December 31, 2000. The Company's audit
also included the financial statement schedule listed in the Index at Item 15(a)
(2). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash flows
of Affinity Technology Group, Inc. and subsidiaries for the year ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States. (Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.)

     The accompanying financial statements have been prepared assuming that
Affinity Technology Group, Inc. will continue as a going concern. As more fully
described in Note 1, the Company has incurred recurring operating losses and has
an accumulated deficit. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
reflect any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.

                                                         /s/ ERNST & YOUNG LLP

Greenville, South Carolina
March 30, 2001



                                       21
<PAGE>


<TABLE>
<CAPTION>

                Affinity Technology Group, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                                                                                               December 31,
                                                                                      2002                     2001
                                                                             ----------------------- -------------------------
<S>                                                                                     <C>                      <C>
Assets
Current assets:
  Cash and cash equivalents                                                  $          156,780      $           27,720
  Receivables, less allowance for doubtful accounts
    of $10,601 at December 31, 2001                                                       5,666                 459,107
  Inventories                                                                                 -                 100,379
  Other current assets                                                                   42,784                 114,490
                                                                             ----------------------- -------------------------
Total current assets                                                                    205,230                 701,696
Property and equipment, net                                                              27,600                 182,918
Software development costs, less accumulated
  amortization of $670,858 at December  31, 2001                                              -                  40,114
Other assets                                                                              2,018                   2,929
                                                                             ----------------------- -------------------------
Total assets                                                                 $          234,848      $          927,657
                                                                             ======================= =========================





Liabilities and stockholders' equity (deficiency)
Current liabilities:
  Accounts payable                                                              $        20,741       $         139,758
  Accrued expenses                                                                      194,631                 126,272
  Accrued compensation and related benefits                                              47,370                  93,099
  Convertible debenture                                                                       -                 225,090
  Current portion of deferred revenue                                                    25,000                       -
                                                                             ----------------------- -------------------------
Total current liabilities                                                               287,742                 584,219
Convertible notes                                                                       830,336                       -
Deferred revenue                                                                         25,000                       -
Commitments and contingent liabilities
 Stockholders' equity (deficiency):
  Common stock, par value $0.0001; authorized 60,000,000 shares, issued
   43,049,363 shares in 2002 and 42,399,363
    shares in 2001                                                                        4,305                   4,240
  Additional paid-in capital                                                         70,441,149              70,386,464
  Common stock warrants                                                                  52,000                  52,000
  Treasury stock, at cost (2,168,008 shares at
     December 31, 2002 and 2001)                                                     (3,505,287)             (3,505,287)
  Accumulated deficit                                                               (67,900,397)            (66,593,979)
                                                                             ----------------------- -------------------------
Total stockholders' equity (deficiency)                                                (908,230)                343,438
                                                                             ----------------------- -------------------------
Total liabilities and stockholders' equity (deficiency)                      $          234,848         $       927,657
                                                                             ======================= =========================
</TABLE>

See accompanying notes.



                                       22
<PAGE>


<TABLE>
<CAPTION>

                Affinity Technology Group, Inc. and Subsidiaries

                      Consolidated Statements of Operations

                                                                     Years ended December 31,
                                                    2002                       2001                       2000
                                          -------------------------- -------------------------- -------------------------
<S>                                                   <C>                        <C>                       <C>
Revenues:
   Transactions                           $            104,878       $            265,666          $         544,168
   Sales and rental                                          -                          -                      3,000
   Professional services                                     -                    249,871                    319,503
   Patent license revenue                               25,000                     20,000                    510,000
   Other income                                         56,082                    750,407                    346,404
                                          -------------------------- -------------------------- -------------------------
                                                       185,960                  1,285,944                  1,723,075
                                          -------------------------- -------------------------- -------------------------
Costs and expenses:
   Cost of revenues                                     16,846                     63,751                    344,931
   Research and development                                  -                    496,441                    683,600
   Selling, general and
    administrative expenses                          1,406,841                  3,847,807                  6,791,767
   Impairment loss                                           -                    448,945                  2,608,773
                                          -------------------------- -------------------------- -------------------------
                                                     1,423,687                  4,856,944                 10,429,071
                                          -------------------------- -------------------------- -------------------------
Operating loss
 from continuing operations                         (1,237,727)                (3,571,000)                (8,705,996)
Interest income                                          1,643                     10,101                     64,155
Interest expense                                       (70,334)                  (115,557)                   (26,277)
                                          -------------------------- -------------------------- -------------------------
Loss from continuing operations           $         (1,306,418)        $       (3,676,456)      $         (8,668,118)
Income (loss) from operations
 of discontinued subsidiary                                  -                    467,188                   (534,978)
Gain on disposal of subsidiary                               -                    891,569                          -
                                          -------------------------- -------------------------- -------------------------
Net loss                                            (1,306,418)        $       (2,317,699)      $         (9,203,096)
                                          ========================== ========================== =========================
Loss per share - basic and diluted:
Continuing operations                     $              (0.03)        $            (0.10)      $              (0.29)
                                          ========================== ========================== =========================
Net loss per share                        $              (0.03)        $            (0.06)      $              (0.30)
                                          ========================== ========================== =========================
Shares used in
 computing net loss per share                       40,707,108                 38,004,089                 30,242,054
                                          ========================== ========================== =========================

</TABLE>

See accompanying notes.



                                       23
<PAGE>

<TABLE>
<CAPTION>


                                                            Affinity Technology Group, Inc. and Subsidiaries

                                                      Consolidated Statements of Stockholders' Equity (Deficiency)



                                                                                                                     Total
                                        Additional     Common                                                        Stockholders'
                                        Paid-in        Stock       Deferred        Treasury         Accumulated      Equity
                       Common Stock     Capital        Warrants    Compensation    Stock            Deficit          (Deficiency)
                       ------------ ----------------- ---------- ----------------- -------------------------------- ---------------
<S>                        <C>          <C>             <C>           <C>               <C>         <C>              <C>
Balance at
 December 31, 1999        $  3,196      $ 69,394,954          -        $ (163,167) $(3,490,819)    $ (55,073,184)    $ 10,670,980
Exercise
 of stock options               23           189,733          -                 -      (14,468)                -          175,288
Forfeiture
 of stock options                -           (28,980)         -            28,980            -                 -                -
Amortization of
 deferred compensation           -                 -          -           102,383            -                 -          102,383
Issuance of common
 stock in
 private placement              48           499,952          -                 -            -                 -          500,000
Issuance of common
 stock as finder's fee           4            28,755          -                 -            -                 -           28,759
Issuance of
 common stock warrants           -                 -     52,000                 -            -                 -           52,000
Net loss                         -                 -          -                 -            -        (9,203,096)      (9,203,096)
                       ------------ ----------------- ---------- ----------------- -------------------------------- ---------------
Balance at
 December 31, 2000           3,271        70,084,414     52,000           (31,804)  (3,505,287)      (64,276,280)       2,326,314
Exercise of warrant            347                 -          -                 -            -                 -              347
Debenture conversion
 to common stock               622           302,050          -                 -            -                 -          302,672
Amortization of
 deferred compensation           -                 -          -            31,804            -                 -           31,804
Net loss                         -                 -          -                 -            -        (2,317,699)      (2,317,699)
                       ------------ ----------------- ---------- ----------------- ----------- -------------- ---------------------
Balance at
 December 31, 2001           4,240        70,386,464     52,000                 -   (3,505,287)      (66,593,979)         343,438
Issuance of common
 stock as
 executive compensation         50            44,950          -                 -            -                 -           45,000
Issuance of common
 stock as finders fees          15             9,735          -                 -            -                 -            9,750
Net loss                         -                 -          -                 -            -        (1,306,418)      (1,306,418)
                       ------------ ----------------- ---------- ----------------- ------------------------------- ----------------
Balance at
 December 31, 2002        $  4,305      $ 70,441,149  $  52,000           $     -  $(3,505,287)    $ (67,900,397)      $ (908,230)
                       ============ ================= ========== ================= ================================ ===============

</TABLE>



                                       24
<PAGE>


<TABLE>
<CAPTION>


                Affinity Technology Group, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                                                          Years ended December 31,
                                                               2002                  2001                 2000
                                                          ------------------------------------------------------------
<S>                                                           <C>                <C>                 <C>
Operating activities
Net loss                                                      $(1,306,418)        $(2,317,699)        $(9,203,096)
Adjustments to reconcile net loss to net cash used in
  operating activities:
    Depreciation and amortization                                 137,557             841,258           1,921,528
    Amortization of deferred compensation                               -              31,804             102,383
    Gain on disposal of subsidiary                                      -            (891,569)                  -
    Impairment loss                                                     -             448,945           2,608,773
    Writedown of software development costs                           656                   -             517,903
    Provision for doubtful accounts                                 7,519              22,909              60,000
    Inventory valuation allowance                                 100,379             865,000             120,000
    Deferred revenue                                               50,000            (568,942)            (97,603)
    Other                                                         127,830             114,254              21,926
    Changes in current assets and liabilities:
       Accounts receivable                                        445,921            (668,569)         (1,176,847)
       Net investment in sales-type leases                              -             157,139             417,176
       Inventories                                                      -              11,895             127,258
       Other assets                                                71,707             179,429             234,981
       Accounts payable                                          (119,017)            (16,898)             36,143
       Accrued expenses                                            72,867            (248,184)           (338,050)
       Accrued compensation and related benefits                  (45,730)            (22,705)           (643,568)
                                                          ------------------------------------------------------------
Net cash used in operating activities                            (456,729)         (2,061,933)         (5,291,093)
Investing activities
Purchases of property and equipment                                (9,284)           (129,351)           (342,403)
Proceeds from sale of property and equipment                        8,810              14,781              65,895
Sales of short-term investments                                         -                   -           1,474,949
                                                          ------------------------------------------------------------
Net cash (used in) provided by investing activities                  (474)           (114,570)          1,198,441
Financing activities
Proceeds from convertible notes and debenture                     625,000                   -           1,000,000
Proceeds from notes payable to third parties                            -          28,241,861          11,531,712
Payments on notes payable to third parties                        (38,737)        (26,684,183)        (10,609,166)
Proceeds from sale of common stock                                      -                   -             500,000
Proceeds from sale of minority interest in subsidiary                   -                   -              25,000
Exercise of options                                                     -                   -             175,288
Exercise of warrants                                                    -                 347                   -
                                                          ------------------------------------------------------------
Net cash provided by financing activities                         586,263           1,558,025           2,622,834
                                                          ------------------------------------------------------------
Net increase (decrease) in cash                                   129,060            (618,478)         (1,469,818)
Cash and cash equivalents at beginning of year                     27,720             646,198           2,116,016
                                                          ------------------------------------------------------------
Cash and cash equivalents at end of year                        $ 156,780            $ 27,720           $ 646,198
                                                          ============================================================

Supplemental cash flow information:
   Income taxes paid                                            $       -            $      -           $       -
                                                          ===================== ======================================
   Interest paid                                                $  14,630            $ 49,042           $       -
                                                          ===================== ======================================

</TABLE>



See accompanying notes.



                                       25
<PAGE>




                Affinity Technology Group, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                                December 31, 2002

 1.         Going Concern


     To date, the Company has generated substantial operating losses, has
experienced an extremely lengthy sales cycle for its products and services and
has been required to use a substantial amount of cash resources to fund its
operations. The Company does not believe that existing cash and internally
generated funds will be sufficient to fund its operations through October 2003.
Accordingly, to remain viable the Company must raise additional capital and
generate revenue and working capital through its patent licensing business,
which is in its inception stage. If the Company is unable to raise additional
capital and generate working capital through the sale of patent licenses soon,
it will be forced to consider alternatives for winding down its business, which
may include filing for bankruptcy protection. To maintain the minimal resources
necessary to support its current operations and execute a patent licensing
strategy, the Company does not believe that substantial additional reductions in
its operating expenses are feasible. No assurances can be given that the Company
will be able to raise additional capital or generate working capital from its
patent licensing business in a manner that would allow it to continue its
operations.


     The Company is evaluating alternatives to secure sufficient additional
working capital to continue its business activities through 2003 and beyond.
Such alternatives include the placement of additional debt and/or equity
securities.

     There is substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or amounts and classification of liabilities that may result from this
uncertainty. However, management believes that any adjustments to reflect the
possible future effects on the recoverability and classification of assets and
amounts of liabilities would not be material to the Company's financial
position.


2.         The Company


     The Company was formed to develop and market technologies that enable
financial institutions and other businesses to provide consumer financial
services electronically with reduced or no human intervention. Products and
services previously offered by the Company included its DeciSys/RT(R) loan
processing system, which automated the processing and consummation of consumer
financial services transactions; the Affinity Automated Loan Machine (the
ALM(R)), which allowed an applicant to apply for, and if approved, obtain a loan
in as little as ten minutes; the Mortgage ALM, which allowed an applicant to
apply for a mortgage loan; e-xpertLender(R), which permitted a financial
institution to make automated lending decisions through its call centers and
branches; iDEAL, which permitted automobile lenders to make automobile lending
decisions for loan applications originated at automobile dealers; and, rtDS,
which permitted lenders to deliver credit decisions to applicants over the
Internet. Due to capital constraints, the Company has suspended all efforts to
further develop, market and operate these products and services. The Company's
last processing contract terminated in late 2002, and the Company has no plans
in the near term to engage in further sales or other activities related to its
products or services, other than to license the patents that it owns.


     Through a wholly-owned subsidiary, Surety Mortgage, Inc. ("Surety"), the
Company formerly deployed its Mortgage ALM product in locations where consumers
are likely to apply for a mortgage loan. Surety deployed Mortgage ALMs,
processed mortgage loan applications obtained through its Mortgage ALM network
and processed mortgage loan applications under contracts with third parties. As
further discussed in Note 12, the Company disposed of Surety on December 31,
2001.


                                       26
<PAGE>

     The Company owns certain patents generally covering the automated
establishment of loans and other financial accounts. The principal future
activities of the Company will involve the pursuit of a patent licensing
program.

3.         Summary of Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the accounts of Affinity
Technology Group, Inc. (the "Company" or "ATG") and its subsidiaries, Affinity
Bank Technology Corporation, Affinity Clearinghouse Corporation, Affinity Credit
Corporation, Affinity Processing Corporation ("APC"), Affinity Mortgage
Technology, Inc., decisioning.com, Inc. ("decisioning.com"), and Multi Financial
Services, Inc. All significant inter-company balances and transactions have been
eliminated in consolidation.

Cash and Cash Equivalents

     The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

Investments

     The Company classifies its investments as held to maturity or available for
sale. At December 31, 2002 and 2001, the Company had no investments. All
mortgage loans originated and processed by Surety were sold to permanent
investors. The Company had no unrealized holding gains or losses associated with
investments classified as available for sale during the years ended December 31,
2002, 2001, and 2000.

Fair Value of Financial Instruments

     The carrying amounts reported in the balance sheet for cash and cash
equivalents, investments, accounts receivable, net investment in sales-type
leases, accounts payable and notes payable approximate their fair values. Fair
values of investments are based on quoted market prices.

Inventories

     Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out ("FIFO") cost flow assumption.

Other Current Assets

     At December 31, 2002, other current assets consisted of prepaid expenses of
$42,784. Other current assets at December 31, 2001 consisted of prepaid expenses
of $114,490.


Property and Equipment

     Property and equipment are recorded at cost. Depreciation and amortization
are computed using the straight-line method over the estimated useful lives of
the assets. Estimated useful lives range from five to ten years for office
furniture and fixtures and three to five years for all other depreciable assets.
Depreciation expense (including amortization of equipment leased under capital
leases) was approximately $97,000, $417,000, and $1,238,000, during 2002, 2001,
and 2000, respectively.


                                       27
<PAGE>

Software Development Costs

     Costs incurred in the development of software, which is incorporated as
part of the Company's products or sold separately, are capitalized after a
product's technological feasibility has been established. Capitalization of such
costs is discontinued when a product is available for general release to
customers. Software development costs are capitalized at the lower of cost or
net realizable value and amortized using the greater of the revenue curve method
or the straight-line method over the estimated economic life of the related
product. Amortization begins when a product is ready for general release to
customers. The net realizable value of unamortized capitalized costs is
periodically evaluated and, to the extent such costs exceed the net realizable
value, unamortized amounts are reduced to net realizable value. In 2002 and
2000, the Company recorded charges of approximately $1,000 and $518,000,
respectively, to reduce recorded balances of unamortized capitalized software
costs to their net realizable value.

     Amortization of capitalized software development was approximately $41,000,
$259,000, and $382,000 during 2002, 2001, and 2000, respectively.

Valuation of Long-Lived Assets

     The Company periodically evaluates the carrying value of long-lived assets
to be held and used, including property and equipment and goodwill, when events
and circumstances warrant such a review. The carrying value of a long-lived
asset is considered impaired when the anticipated undiscounted cash flow from
such asset is separately identifiable and is less than its carrying value. In
the event of such, a loss is recognized based on the amount by which the
carrying value exceeds the fair market value of the long-lived asset. Fair
market value is determined primarily using the anticipated cash flows discounted
at a rate commensurate with the risk involved. In 2001 and 2000, the Company
recorded certain impairment charges related to certain of its long-lived assets.
In 2001, the Company recorded impairment charges of approximately $449,000,
$399,000 of which is related to goodwill. Impairment charges recorded by the
Company in 2000 were approximately as follows: property and equipment,
$1,103,000; goodwill, $1,453,000 (see "Intangible Assets" below); and other
non-current assets of $53,000.

Intangible Assets

     Intangible assets arising from the excess of cost over acquired assets are
amortized by the straight-line method over their estimated useful life of ten
years. Intangible assets, primarily goodwill, consisted of approximately
$1,470,000 which was recorded in conjunction with the acquisition of Buy
America, Inc. and Project Freedom, Inc. (see Note 9), and approximately
$1,400,000 which was recorded in conjunction with the exchange of APC common
stock for the Company's common stock. See "Minority Investor" below. Accumulated
amortization associated with these intangible assets approximated $528,000 at
December 31, 2000. In accordance with its evaluation of its long-lived assets,
the Company recorded an impairment charge related to goodwill in the amount of
$399,000 and $1,453,000 in 2001 and 2000, respectively. Such charges eliminated
in 2000 the recorded balance of goodwill associated with the exchange of APC
common stock for the Company's common stock and eliminated in 2001 the
unamortized balance of goodwill associated with the acquisition of Buy America
and Project Freedom.

Minority Investor

     An unrelated third party exchanged 240,570 shares of APC common stock for
666,667 shares of the Company's common stock on May 21, 1997. The exchange was
accounted for as a purchase of minority interest in a majority owned subsidiary.
The fair market value of the Company's common stock at the time of the exchange
was approximately $1,600,000. The unrelated third party had previously acquired
the shares of APC common stock for aggregate consideration of $125,000, and
90,988 shares of APC convertible preferred stock, which was acquired for
aggregate consideration of $75,000. These holdings represented a 24.9% minority
interest in APC at the date of exchange.

Software Revenue Recognition

     The Company has adopted the American Institute of Certified Public
Accountants ("AICPA") Statement of Position 97-2 "Software Revenue Recognition"
("SOP 97-2"), as amended, effective for transactions entered into in fiscal
years beginning after December 15, 1997. SOP 97-2 provides guidance on software
revenue recognition associated with the licensing and selling of computer
software. The Company did not recognize any revenue during 2002, 2001 or 2000
associated with contracts subject to SOP 97-2 guidance.


                                       28
<PAGE>




Revenue Recognition

Transaction fees - Transaction fee revenue is recognized as the related
transactions are processed. Transaction processing fees revenue represented
approximately 56.4%, 20.7%, and 31.6% of total revenue from continuing
operations during 2002, 2001, and 2000, respectively.

Mortgage processing services - Surety engaged in mortgage brokerage activities,
which generally involved originating, processing, and selling mortgage loan
products to outside investors. Surety originated and/or processed mortgage loans
directly with consumers or on behalf of correspondents and immediately sold such
loans to investors that sponsored the loan programs offered by Surety. Surety
only offered loans that would be acquired by the investors under such programs.
Upon making the loan commitment to the borrower, Surety immediately received a
commitment from an investor to acquire the loan upon closing. Loan origination
fees include gains on sales of mortgage loans to investors and loan origination
fees received for originating and processing the loan. Loan origination fees and
all direct costs associated with originating loans are recognized at the time
the loans are sold. On December 31, 2001, the Company tendered the stock of
Surety in full satisfaction of a $1 million note and accrued interest (see Note
12).

Sales and rental - Revenue and costs related to leases of ALM equipment are
recognized in accordance with Statement of Financial Accounting Standards No.
13, "Accounting for Leases". Revenue from sales-type leases is generally
recognized when the equipment is installed and accepted by the customer.
Operating lease revenue is recognized ratably over the lease term.

Professional services - In conjunction with the installation of the Company's
technology, periodically additional customer specific technology development is
performed by the Company in the form of professional services. The Company
generally enters into a contract with the customer for the performance of these
services. Upon completion and acceptance of professional services by the
customer, the Company recognizes the corresponding revenue.

Patent licensing - The Company recognizes revenue from patent licensing
activities pursuant to the provisions of each license agreement which specify
the periods to which the related license and corresponding revenue applies.

Software licensing - The Company recognizes revenue from sales of software
licenses upon delivery of the software product to a customer, unless the Company
has significant related obligations remaining. When significant obligations
remain after the software product has been delivered, revenue is not recognized
until such obligations have been completed or are no longer significant. The
costs of any remaining insignificant obligations are accrued when the related
revenue is recognized.

Deferred revenues - Deferred revenues relate to unearned revenue on ALM leases
and certain other amounts billed to customers for which acceptance of the
underlying product or service is not fully complete.

Cost of Revenues

     Cost of revenues consists of costs associated with initial set-up,
transaction fees, sales and rental revenues, professional services and mortgage
processing services. Additionally, contract loss provisions are charged to cost
of revenues. Costs associated with initial set-up fees include labor, other
direct costs and an allocation of related indirect costs. The Company did not
deploy any ALMs during 2002, 2001 and 2000. No costs were incurred in 2002,
2001, and 2000 in association with initial set-up revenue recognized. Costs
associated with transaction fees include the direct costs incurred by the
Company related to transactions it processes for its customers. Costs of
transaction fees approximated $14,000, $42,000, and $108,000 in 2002, 2001, and
2000, respectively. Costs associated with sales and rental revenues include the
cost of the leased ALM hardware, other direct costs and an allocation of related
indirect costs. Costs of ALM hardware sold under sales-type leases, depreciation
expense for hardware leased to customers under operating leases and other direct
costs associated with sales and rental revenues totaled approximately $5,000 and
$52,000 for the years ended December 31, 2001 and 2000, respectively. Costs
associated with professional services include labor, other direct costs and an
allocation of related indirect costs. Labor and other direct and allocation of
indirect costs associated with professional services totaled approximately
$15,000 and $133,000 for the years ended December 31, 2001 and 2000
respectively. Costs of patent license revenues consist of commissions paid or
accrued by the Company to its previous patent licensing agent and totaled
$2,500, $2,000 and $51,000 for the years ended December 31, 2002, 2001 and 2000,
respectively.


                                       29
<PAGE>

Stock Based Compensation

     The Company accounts for stock options in accordance with APB Opinion
No.25, "Accounting for Stock Issued to Employees" ("APB 25"). Under APB 25, no
compensation expense is recognized for stock or stock options issued at fair
value. For stock options granted at exercise prices below the estimated fair
value, the Company records deferred compensation expense for the difference
between the exercise price of the shares and the estimated fair value. The
deferred compensation expense is amortized ratably over the vesting period of
the individual options. For performance based stock options, the Company records
compensation expense related to these options over the performance period.

     Statement of Financial Accounting Standards No. 123, "Accounting for Stock
Based Compensation" ("SFAS 123" as amended by FASB Statements No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure" ("SFAS
148")), provides an alternative to APB 25 in accounting for stock based
compensation issued to employees. SFAS 123 provides for a fair value based
method of accounting for employee stock options and similar equity instruments.
However, for companies that continue to account for stock based compensation
arrangements under APB 25, SFAS 123 requires disclosure of the pro forma effect
on net income and earnings per share as if the fair value based method
prescribed by SFAS 123 had been applied. The pro forma effect on net income and
earnings per share was not material for the year ended December 31, 2000. The
Company intends to continue to account for stock based compensation arrangements
under APB No. 25 and has adopted the pro forma disclosure requirements of SFAS
123.

     Had compensation cost for options granted under the Company's stock-based
compensation plans been determined based on the fair value at the grant dates
consistent with SFAS 123, the Company's net income and earnings per share would
have changed to the pro forma amounts listed below:
<TABLE>
<CAPTION>

                                                                             2002                       2001
                                                                     ----------------------     ----------------------

           <S>                                                        <C>    <C>               <C>       <C>
            Net loss:
            As reported                                              $        (1,306,418)       $        (2,317,699)
            Add:  stock-based compensation expense
                  included in reported net income                                      -                     31,804
            Deduct: stock-based compensation expense
                determined under the fair value based method
                for all awards                                                  (113,180)                  (233,749)
                                                                     ----------------------     ---------------------
            Pro forma net loss                                       $        (1,419,598)       $        (2,519,644)
                                                                     ======================     =====================
            Net loss per common share:
                As reported:
                   Basic and diluted                                 $             (0.03)       $             (0.06)
                Pro forma:
                   Basic and diluted                                 $             (0.03)       $             (0.07)
</TABLE>

     See Note 7 for more information regarding the Company's stock compensation
plans and the assumptions used to prepare the pro forma information presented
above.

Advertising Expense

     The cost of advertising is expensed as incurred. Advertising and marketing
expense was approximately $8,000 and $33,000 in 2001 and 2000, respectively.




                                       30
<PAGE>




Net Loss Per Share of Common Stock

     All net loss per share of Common Stock amounts presented have been computed
based on the weighted average number of shares of Common Stock outstanding in
accordance with SFAS 128. Stock warrants and stock options are not included in
the calculation of dilutive loss per common share because the Company has
experienced operating losses in all periods presented and, therefore, the effect
would be antidilutive.

New Accounting Standards

     In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." FAS No. 143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-lived assets
that result from the acquisition, construction, development, and/or normal use
of the assets. The Company also records a corresponding asset that is
depreciated over the life of the asset. Subsequent to the initial measurement of
the asset retirement obligation, the obligation will be adjusted at the end of
each period to reflect the passage of time and changes in the estimated future
cash flows underlying the obligation. The Company was required to adopt SFAS No.
143 on January 1, 2003. The adoption of SFAS No. 143 is not expected to have a
material effect on the Company's financial statements.

     In June 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement addresses the accounting for
costs associated with disposal activities covered by SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets," and with exit
(restructuring) activities previously covered by Emerging Issues Task Force
(EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity." This Statement nullifies EITF
Issue No. 94-3 in its entirety and requires that a liability for all costs be
recognized when the liability is incurred. Generally, the ability to accrue for
the cost of a workforce reduction plan at the communication date will be
limited. The cost of the plan will be recognized over the future service period
of the employees. The Statement will be applied prospectively to exit or
disposal activities initiated after December 31, 2002.

     In November 2002, the FASB issued Interpretation No. 45 "Guarantor's
Accounting and Disclosure Requirements for Guarantees Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34." This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of the
Interpretation are applicable to guarantees issued or modified after December
31, 2002 and are not expected to have a material effect on the Company's
financial statements. The disclosure requirements are effective for financial
statements of interim and annual periods ending after December 15, 2002.

     In January 2003, The FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51." This
interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January 31, 2003, and to variable interests in variable interest entities
obtained after January 31, 2003. The application of this Interpretation is not
expected to have a material effect on the Company's financial statements. The
Interpretation requires certain disclosures in financial statements issued after
January 31, 2003 if it is reasonably possible that the Company will consolidate
or disclose information about variable interest entities when the Interpretation
becomes effective.

Income Taxes

     Deferred income taxes are calculated using the liability method prescribed
by Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109").



                                       31
<PAGE>




Concentrations of Credit Risk

     The Company markets its products and services to financial institutions
throughout the United States. The Company performs ongoing credit evaluations of
customers.

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 amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.


Reclassification

     Certain amounts in 2000 and 2001 have been reclassified to conform to 2002
presentations for comparability. These reclassifications have no effect on
previously reported stockholders' equity (deficiency) or net loss.

4.         Inventories

Inventories at December 31, 2001, consisted of the following:

                                                      December 31,
                                                         2001
                                                   -----------------
Electronic parts and other components              $    312,164
Work in process                                          28,784
Finished goods                                          744,324
                                                   -----------------
                                                      1,085,272
Reserve for obsolescence                               (984,893)
                                                   -----------------
                                                      $ 100,379
                                                   =================


5.         Property and Equipment

Property and equipment consists of the following:

                                             December 31,
                                       2002              2001
                                   -----------      -------------
Data processing equipment          $   381,812      $  2,137,414
Demonstration equipment                      -           113,106
Office furniture and fixtures           44,136           355,441
Automobiles                             72,003            72,003
Purchased software                       3,770         1,962,273
                                   -----------      -------------
                                       501,721         4,640,237
Less accumulated
 depreciation and amortization        (474,121)       (4,457,319)
                                   ------------     -------------
                                   $    27,600      $    182,918
                                   ============     =============

                                       32
<PAGE>

6.         Convertible Debenture and Notes

     In June 2002, the Company issued convertible secured notes (the "notes") to
certain investors as part of its capital raising initiatives. The principal
amount of notes issued totaled $830,336 and included the issuance of a note in
the principal amount of $205,336 to AMRO International, S.A. ("AMRO") in
satisfaction of the principal and accrued interest outstanding under AMRO's
convertible debenture previously acquired by AMRO. The notes bear interest at 8%
and principal and accrued interest are due in June 2004. The notes are
collateralized by the stock of the Company's wholly-owned subsidiary,
decisioning.com. decisioning.com is the Company's patent licensing subsidiary
and owns the Company's patent portfolio. The notes are convertible into the
Company's common stock at a conversion rate of $.20 per share. The Company may
prepay the notes subject to a prepayment penalty of 8% and 4% if the prepayment
occurs within the first twelve months or thereafter, respectively.

     On September 22, 2000, the Company entered into a convertible debenture and
warrants purchase agreement with AMRO. The agreement was amended in August 2001
as described below. Under the original agreement on November 22, 2000, the
Company issued to AMRO an 8% convertible debenture in the principal amount of
$1,000,000. The debenture was convertible, at the option of AMRO, into shares of
the Company's common stock at a price equal to the lesser of $1.00 per share or
65% of the average of the three lowest closing prices of the Company's stock
during the month prior to conversion. Under the original agreement, the
debenture matured on May 22, 2002, subject to earlier conversion and certain
provisions regarding acceleration upon default and prepayment. Under the
original agreement, on November 22, 2000, the Company also issued to AMRO a
three-year warrant to acquire 200,000 shares of the Company's common stock. The
warrant exercise price was originally $0.3542 per share. AMRO exercised a
portion of the debenture into an aggregate of 6,214,665 shares of the Company's
stock.

     In August 2001, the Company and AMRO amended the convertible debenture and
warrants purchase agreement. Under the terms of the amendment, the Company
agreed to repay the debenture in full in a series of monthly payments through
June 2002, and AMRO agreed not to convert the debenture into any additional
shares of the Company's common stock. In addition, the Company agreed to reduce
the exercise price of the warrant issued to AMRO from $0.3542 per share to $0.05
per share, and to reduce the exercise price of a warrant to acquire 720,000
shares issued to the investor under the Company's previous equity line agreement
from $0.8554 per share to $0.05 per share.

     In June 2002, the Company issued to AMRO an 8% convertible secured note in
the principal amount of $205,336 in full satisfaction of remaining amounts
outstanding under its convertible debenture. The terms of the 8% convertible
secured notes are discussed above.

7.         Stockholders' Equity (Deficiency)

Preferred Stock

     Pursuant to the Company's Certificate of Incorporation, the Board of
Directors has the authority, without further action by the stockholders, to
issue up to 5,000,000 shares of preferred stock in one or more series and to fix
the designations, powers, preferences, privileges, and relative participating,
optional or special rights and the qualifications, limitations, or restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be greater than
the rights of the Common Stock. At December 31, 2002 and 2001 there are no
shares of preferred stock issued or outstanding.

Stock Option Plans

     During 1995, the Company adopted the 1995 Option Plan under which incentive
stock options and nonqualified stock options may be granted to employees,
directors, consultants or independent contractors. At December 31, 2002,
approximately 18,000 options were exercisable under the 1995 Option Plan. At
December 31, 2002, the weighted average exercise price was $0.44 and the
weighted average remaining contractual life was 2.4 years. This plan closed
during April 1996.

     In April 1996, the Company adopted the 1996 Incentive Stock Option Plan.
Under the terms of the plan, incentive options may be issued at an exercise
price not less than the estimated fair market value on the date of grant.
Generally, options granted vest ratably over a 60 month term.


                                       33
<PAGE>

     In addition, the 1996 Stock Option Plan was amended and restated effective
May 28, 1999, to increase the number of shares of common stock available for
issuance from 1,900,000 to 2,900,000 and to permit non-employee directors to
participate in the 1996 Stock Option Plan. Under the Company's director
compensation program in effect from April 1999 to March 2002, non-employee
directors received options under the 1996 Stock Option Plan to purchase 5,000
shares of Common Stock of the Company on the 5th business day after each annual
shareholder meeting. In March 2002, the Company adopted a new director
compensation program under which all non-employee directors received a one-time
grant of options to purchase 100,000 shares of the Company's stock at the
closing sales price of the Company's Common Stock on the business day
immediately prior to the date of grant. Such options vest ratably over a
two-year period. Under the program, all non-employee directors on the Board were
granted options to purchase 100,000 shares on March 20, 2002. Any new
non-employee directors appointed to the Board will be granted options to
purchase 100,000 shares at the time of his or her election to the Board.

     In 1996, the Company also adopted the Non-employee Directors' Stock Option
Plan of Affinity Technology Group, Inc. (the "Directors' Option Plan"), under
which directors who are not employees of the Company or any of its subsidiaries
were entitled to receive an initial award ("Initial Awards") in the form of an
option to purchase shares of Common Stock having an aggregate fair market value
of $50,000 and a subsequent award ("Annual Awards") in each year in the form of
an option to purchase shares of Common Stock having an aggregate fair market
value of $15,000. The Directors' Option Plan authorized the issuance of no more
than 100,000 shares of Common Stock. During 1997, each of the Company's
non-employee directors was granted an Initial Award consisting of an option to
purchase 12,903 shares of Common Stock of the Company at $3.88 per share. During
1998, each of the Company's non-employee directors was granted an Annual Award
consisting of an option to purchase 12,097 shares of Common Stock of the Company
at $1.22 per share. In 1999, the Board of Directors suspended any further grants
under the Directors' Option Plan. At December 31, 2002, there were options to
purchase 24,194 shares of the Common Stock of the Company outstanding under the
Directors' Option Plan. None of the options to purchase the Company's Common
Stock under the Directors' Option Plan have been exercised.



                                       34
<PAGE>


A summary of activity under the 1996 and 1995 Option Plans is as follows:
<TABLE>
<CAPTION>

                                                                                           Options Outstanding
                                                                              ------------------------ ---------------------
                                                              Shares                                     Weighted Average
                                                             Available                Number                  Price
                                                             for Grant               of Shares              Per Share
                                                       ---------------------- ------------------------ ---------------------
        <S>                                                              <C>               <C>               <C>
       1995 Stock Option Plan
       Balance at December 31, 1999                                       -                245,814            $0.44
       Options canceled/forfeited                                         -                 (9,434)           $0.44
       Options exercised                                                  -                (53,000)           $0.44
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2000                                       -                183,380            $0.44
       Options canceled/forfeited                                         -                (22,260)           $0.44
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2001                                       -                161,120            $0.44
       Options canceled/forfeited                                         -               (143,100)           $0.44
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2002                                       -                 18,020            $0.44
                                                       ====================== ======================== =====================


       1996 Stock Option Plan
       Balance at December 31, 1999                               1,357,460              1,540,540            $1.63
       Options granted                                           (1,067,500)             1,067,500            $1.15
       Options canceled/forfeited                                   693,970               (693,970)           $1.16
       Options exercised                                                  -               (169,930)           $0.98
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2000                                 983,930              1,744,140            $1.59
       Options granted                                             (300,000)               300,000            $0.09
       Options canceled/forfeited                                   925,470               (925,470)           $1.66
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2001                               1,609,400              1,118,670            $1.13
       Options granted                                           (1,250,000)             1,250,000            $0.09
       Options cancelled/forfeited                                  324,665               (324,665)           $0.93
                                                       ---------------------- ------------------------ ---------------------
       Balance at December 31, 2002                                 684,065              2,044,005            $0.53
                                                       ====================== ======================== =====================

</TABLE>


     A summary of stock options exercisable and stock options outstanding under
the 1996 Option Plan is as follows:
<TABLE>
<CAPTION>

                                                        1996 Stock Option Plan
----------------------------------------------------------- ----------------------------------------------------------------------
                         Options Exercisable                                         Options Outstanding
                        at December 31, 2002                                        At December 31, 2002
                =========================================== ======================================================================
   <S>                   <C>               <C>                           <C>                <C>                    <C>
                                                                                                                   Weighted
                                           Weighted                                         Weighted                Average
   Range of                                Average                                           Average               Remaining
   Exercise        Number                   Price                   Number                    Price               Contractual
    Prices       Exercisable              Per Share               Outstanding               Per Share            Life (years)
----------------------------------- ----------------------- ------------------------ ------------------------ --------------------
 $0.09 - $0.94           1,055,775          $0.21                         1,620,400           $0.19                   8.6
 $1.06 - $3.75             218,221          $2.16                           423,405           $1.80                   6.7
 $6.75 - $7.38                 200          $6.75                               200           $6.75                   4.0
                ------------------- ----------------------- -----------------------  ------------------------ --------------------
 $0.09 - $7.38           1,274,196          $0.55                         2,044,005           $0.53                   8.2
                =================== ======================= ======================== ======================== ====================

</TABLE>



                                       35
<PAGE>


     The Company has recorded in 1996 and 1995 deferred compensation expense
totaling approximately $5,492,000 for the difference between the grant price and
the deemed fair value of certain of the Company's common stock options granted
under the 1995 Plan. During 1997, the Company adjusted the deferred compensation
expense to reflect actual compensation expense earned by terminated employees.
The Company amortized the deferred compensation associated with individuals
employed by the Company over the vesting period of the individual's options.
Amounts recorded as deferred compensation were fully amortized in 2001. The
vesting period for other options is generally 60 months. Amortization of
deferred compensation in 2001 and 2000 totaled approximately $32,000 and
$102,000, respectively.


     The Company recognized no expense related to stock-based compensation in
2002. For the year ended December 31, 2001 and 2000, the Company recognized
expense related to stock-based compensation of $31,804 and $102,383,
respectively.

     The pro forma disclosures required by SFAS 123 regarding net loss and net
loss per share are stated as if the Company had accounted for stock options
using fair values. Using the Black-Scholes option-pricing model the fair value
at the date of grant for these options was estimated using the following
assumptions:
<TABLE>
<CAPTION>

                                                              2002                        2001
                                                    -------------------------     ----------------------
<S>                                                           <C>                          <C>
Dividend yield                                                 --                           --
Expected volatility                                           136%                         142%
Risk-free rate of return                                  2.39%-4.32%                  4.43%-4.53%
Expected option life, years                                     3                            3
</TABLE>


     The weighted average fair value for options granted under the Option Plans
during 2002 and 2001 was $0.07.

     The Black-Scholes and other option pricing models were developed for use in
estimating fair value of traded options, which have no vesting restrictions and
are fully transferable. In addition, option-pricing models require the input of
highly subjective assumptions. The Company's employee stock options have
characteristics significantly different than those of traded options, and
changes in the subjective assumptions can materially affect the fair value
estimate. Accordingly, in management's opinion, these existing models may not
necessarily provide a reliable single measure of the fair value of employee
stock options.

     During July 1998, independent of the 1995 and 1996 Incentive Stock Option
Plans and in connection with the employment of the former President and Chief
Executive Officer of the Company, the Company issued an option to purchase
250,000 shares of Common Stock of the Company at an exercise price of $0.94 per
share. The exercise price equaled the estimated fair market value on the date of
grant and the vesting of this option was ratable over a 60 month term. The
former President and Chief Executive Officer resigned on January 10, 2000 and
the option was terminated. Also in conjunction with the former President and
Chief Executive Officer's resignation and the termination of his option to
purchase 250,000 shares of Common Stock of the Company, the Company's Board of
Directors voted to accelerate the vesting of options granted under the 1996
Stock Option Plan to purchase 50,000 shares of the Common Stock of the Company.
All vested options granted to the previous President and Chief Executive Officer
were exercised in 2000.

Stock Warrants

     In 1995, the Company formalized an agreement with a related party,
resulting from certain financing arrangements preceding the Initial Public
Offering, for the issuance of a stock warrant under which the party had the
right to purchase up to an aggregate of 6,666,340 shares of common stock at a
purchase price of approximately $.0001 per share. The agreement also specified
that the warrant could be exercised in whole or in part at any time prior to
December 31, 2015 only if, absent prior written regulatory approval, after
giving effect of such exercise, the party beneficially owns less than five
percent of the outstanding shares of the Company's common stock. During 1997 the
party obtained written regulatory approval to exercise the warrant in its
entirety. On December 31, 1997 and December 28, 1995, the party exercised
portions of the warrant and acquired 2,400,000 and 795,000 shares of Common
Stock, respectively. In March 2001, the party exercised the remainder of the
warrant and acquired 3,471,340 shares of the Company's common stock.

                                       36
<PAGE>


8.         Employee Benefit Plans

     The Company has an employee savings plan (the Savings Plan) that qualifies
as a deferred salary arrangement under Section 401(k) of the Internal Revenue
Code. Under the Savings Plan, participating employees may defer a portion of
their pretax earnings, up to the Internal Revenue Service annual contribution
limit.

9.         Acquisition

     On May 7, 1997 the Company acquired the assets of Buy American, Inc. and
Project Freedom, Inc., two related companies, for aggregate consideration
consisting of $300,000 in cash and issuance of 259,460 shares of restricted
common stock. The acquisition was accounted for as a purchase. The results of
operations of Buy American, Inc. and Project Freedom, Inc. are included in the
consolidated financial statements from the date of acquisition.

     The restricted common stock issued in association with the acquisition was
subject to a call option by the Company and put option by the sellers. The
Company had a single option to repurchase any or all shares of restricted common
stock at a price of $5.78 per share. The sellers of Buy American, Inc. and
Project Freedom, Inc. had a single option to sell any or all the shares of
restricted common stock to the Company at a price of $3.47 per share. In April
1999, the Company and sellers of Buy American, Inc. and Project Freedom, Inc.
cancelled the call and put options.

10.        Leases

     The Company has noncancelable operating leases for the rental of its
offices and warehouse. Future minimum lease payments under these leases at
December 31, 2002 are approximately $16,000, all of which is payable in 2003.

     In 2002, 2001 and 2000, the Company incurred rent expense, including rent
associated with cancelable rental agreements, of approximately $92,000,
$372,000, and $519,000, respectively.


                                       37
<PAGE>



11.        Income Taxes

     As of December 31, 2002, the Company had federal and state net operating
loss carryforwards of approximately $65,940,000. The net operating loss
carryforwards will begin to expire in 2009, if not utilized.

     Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>

                                                                                    December 31,
                                                                           2002                     2001
                                                                 ------------------------- -----------------------
                 <S>                                                        <C>                       <C>
                  Deferred tax assets:
                     Net operating loss carryforwards                        $ 24,580,000            $ 24,022,000
                     Intangible assets                                                  -                  41,000
                     Inventory valuation reserve                                        -                 367,000
                     Accrued expenses                                              15,000                       -
                     Depreciation                                                   9,000                       -
                     Other                                                          6,000                 111,000
                                                                 ------------------------- -----------------------
                  Total deferred tax assets                                    24,610,000              24,541,000
                                                                 ------------------------- -----------------------
                  Deferred tax liabilities:
                     Capitalized software costs                                         -                 (15,000)
                     Other                                                         (1,000)                (34,000)
                                                                 ------------------------- -----------------------
                  Total deferred tax liabilities                                   (1,000)                (49,000)
                                                                 ------------------------- -----------------------
                  Less:  Valuation allowance                                  (24,609,000)            (24,492,000)
                                                                 ------------------------- -----------------------
                  Total net deferred taxes                       $                      -   $                   -
                                                                 ========================= =======================
</TABLE>

     The Company has recorded a valuation allowance for the full amount of its
net deferred tax assets as of December 31, 2002 and 2001, based on management's
evaluation of the evidential recognition requirements under the criteria of SFAS
109. The main component of the evidential recognition requirements was the
Company's cumulative pretax losses since inception. The provision for income
taxes at the Company's effective rate did not differ from the provision for
income taxes at the statutory rate for 2002, 2001, and 2000.

12. Income (Loss) from Operations of Discontinued Subsidiary and Gain on
Disposal of Subsidiary

     In July 2001 the Company issued a $1 million note to HomeGold Financial,
Inc. ("HomeGold"), which note was collateralized by the stock of Surety, the
Company's wholly-owned mortgage banking subsidiary. On December 31, 2001, the
Company tendered the stock of Surety to HomeGold in full satisfaction of the $1
million note and accrued interest of $25,511. Except for net receivables of
$429,767 due from HomeGold associated with the transaction, all of the assets
and liabilities of Surety have been removed from the Company's balance sheet as
of December 31, 2001. The Company accounted for the transaction as the disposal
of a segment of a business and has reported the operations of Surety as a
separate component of loss for 2001 and 2000. Similarly, the gain of $891,569
which the Company recognized is also reported as a separate component of results
of operations in 2001 and the effect on the Company's net loss per share of
$0.06 was $0.023.



                                       38
<PAGE>

     The components of Surety's operations for 2001 and 2000 are as follows:

                                      Year ended December 31,
                                     2001              2000
                             ----------------- ---------------
Mortgage revenue                  $ 2,851,720      $  432,438
Costs of revenue                    1,008,266         212,397
S G & A                             1,378,366         812,711
                             ----------------- ---------------
Total costs and expenses            2,386,632       1,025,108
                             ----------------- ---------------
                                      465,088        (592,670)
Net interest income                     2,100          57,692
                             ----------------- ---------------
Net income (loss)                 $   467,188      $ (534,978)
                             ================= ===============

     Surety's operating results are included in the determination of the
Company's net loss for the years ended December 31, 2001 and 2000 and are
reported as "Income (loss) from operations of discontinued subsidiary." The
effect of Surety's operating results on net loss per share is $0.012 and
$(0.018) in the years ended December 31, 2001 and 2000, respectively.

13.        Segment Information

     The Company conducts its business within one industry segment - financial
services technology. To date, all revenues generated have been from transactions
with North American customers. One customer accounted for 87%, 76% and 45% of
revenues in 2002, 2001 and 2000, respectively. All other segment disclosures
required by SFAS 131 are included in the consolidated financial statements or in
the notes to the consolidated financial statements.

14.        Relation Party Transactions

     In June 2002, the Company issued a convertible secured note to its
Chairman, President and Chief Executive Officer in the principal amount of
$125,000. The note bears interest at 8%, and principal and accrued interest are
due in June 2004.

     In June 2002, the Company issued 50,000 shares of Company stock to a member
of its Board of Directors as a finder's fee for capital raising services.

15.        Commitments and Contingent Liabilities

     The Company is subject to legal actions which from time to time have arisen
in the ordinary course of business. In addition, a claim was filed by a
plaintiff who claimed certain rights, damages and interests incidental to the
Company's formation and development. The claim resulted in a jury verdict of
$68,000 in favor of the plaintiff and the plaintiff subsequently requested, and
was granted, a new trial. The Company is appealing the grant of a new trial. The
Company intends to vigorously contest such actions and, in the opinion of
management, the Company has meritorious defenses and the resolution of such
actions will not materially affect the financial position of the Company.



                                       39
<PAGE>
<TABLE>
<CAPTION>


16.        Quarterly Results of Operations (Unaudited)

                                           First                Second                  Third                  Fourth
                                          Quarter              Quarter                 Quarter                Quarter
                                   ----------------- ----------------------- ----------------------- ---------------------
   <S>                                     <C>                      <C>                    <C>                     <C>
   Year ended December 31, 2002
   Revenue                                $  69,261               $  39,292               $  47,407                30,000
   Gross profit                              61,299                  34,642                  45,700                27,473
   Loss from continuing
   operations                              (401,579)               (367,637)               (234,606)             (302,596)
   Net loss                                (401,579)               (367,637)               (234,606)             (302,596)
   Loss per share - basic and
   diluted
   Continuing operations                      (0.01)                  (0.01)                  (0.01)                (0.01)
   Net loss                                   (0.01)                  (0.01)                  (0.01)                (0.01)
                                   ----------------- ----------------------- ----------------------- ---------------------

   Year ended December 31, 2001
   Revenue                                $ 776,606               $ 114,897               $ 307,264             $  87,177
   Gross profit                             760,717                 103,942                 280,975                76,559
   Loss from continuing
   operations                              (749,088)               (717,125)               (452,954)           (1,757,289)
   Net loss                                (729,407)               (690,197)               (375,150)             (522,945)
   Loss per share - basic and
   diluted
   Continuing operations                      (0.02)                  (0.02)                  (0.01)                (0.04)
   Net loss                                   (0.02)                  (0.02)                  (0.01)                (0.01)
</TABLE>

     The sum of certain net loss per share amounts differs from the annual
reported total due to rounding. As more fully explained in Note 12, the Company
disposed of a subsidiary on December 31, 2001, and recorded a gain of $891,569,
or $0.02 per share. In conjunction with such disposal, the quarterly information
has been adjusted to reflect revenue, gross profit and loss from continuing
operations.

17.        Subsequent Event

     On March 14, 2003, the Company issued an additional $200,000 principal
amount of its convertible notes. The notes bear interest at 8%, and principal
and accrued interest are due in March 2005.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

     Not applicable.

Part III

Item 10. Directors and Officers of the Registrant

     Information required by this Item will be contained in the Registrant's
definitive proxy statement relating to its Annual Meeting of Stockholders to be
held on May 29, 2003 under the captions "Board of Directors--Nominees for
Director" and "Section 16(a) Beneficial Ownership Reporting Compliance," which
are incorporated by reference herein.


                                       40
<PAGE>

Item 11.  Executive Compensation

     Information required by this Item will be contained in the Registrant's
definitive proxy statement relating to its Annual Meeting of Stockholders to be
held on May 29, 2003 under the captions "Executive Compensation" and "Board of
Directors--Compensation of Directors", which are incorporated by reference
herein.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

     Certain information required by this Item will be contained in the
Registrant's definitive proxy statement relating to its Annual Meeting of
Stockholders to be held on May 29, 2003 under the caption "Security Ownership of
Management and Certain Beneficial Owners," which is incorporated by reference
herein.
<TABLE>
<CAPTION>

                                   Equity Compensation Plan Information
----------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                             <C>                                   <C>
Plan Category              Number of securities to be     Weighted-average exercise price    Number of securities remaining
                           issued upon exercise of        of outstanding options,            available for future issuance
                           outstanding options,           warrants and rights                under equity compensation plans
                           warrants and rights                                               (excluding securities reflected
                                                                                             in column (a))
-------------------------------------------------------- --------------------------------- ---------------------------------
                                    (a)                             (b)                                  (c)
-------------------------------------------------------- --------------------------------- ---------------------------------
Equity compensation
plans approved
by security holders               2,116,219                           $0.54                            684,065
-------------------------------------------------------- --------------------------------- ---------------------------------
Equity compensation
plans not approved
by security holders                 955,000                           $0.07                                  -
-------------------------------------------------------- --------------------------------- ---------------------------------

Total                             3,071,219                           $0.39                            684,065
-------------------------------------------------------- --------------------------------- ---------------------------------
</TABLE>

     Information reflected in "Equity compensation plans not approved by
security holders" relates to warrants issued in connection with certain
financing arrangements. In September 2000, the Company entered into a
convertible debenture and warrants purchase agreement with an investor and, in
connection therewith, issued to the investor a three-year warrant to acquire
200,000 shares of the Company's common stock at an exercise price that is
currently $0.05 per share. In connection with this transaction, the Company also
issued to a broker representing the investor in this transaction a five-year
warrant to acquire 35,000 shares of the Company's common stock at $0.47 per
share. In addition, in September 2000, the Company entered into a common stock
purchase agreement with an investor and, in connection therewith, issued to the
investor a three-year warrant to acquire 720,000 shares of the Company's common
stock at an exercise price that is currently $0.05 per share.

     The table set forth above does not include any information with respect to
shares of common stock that may be issued upon the conversion of convertible
notes that have been issued by the Company. At December 31, 2002, the Company
had issued an aggregate of $830,336 principal amount of its convertible notes,
which are convertible into an aggregate of 4,151,680 shares of the Company's
common stock at a conversion price of $0.20 per share. In March 2003, the
Company issued an additional $200,000 principal amount of its convertible notes
that are convertible into an additional 1,000,000 shares of the Company's common
stock at a conversion price of $0.20 per share.



                                       41
<PAGE>

Item 13.     Certain Relationships and Related Transactions

     If applicable, information required by this Item will be contained in the
Registrant's definitive proxy statement relating to its Annual Meeting of
Stockholders to be held on May 29, 2003 under the caption "Certain
Transactions," which is incorporated by reference herein.

Item 14.  Controls and Procedures

     Within the 90-day period prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as defined in Rule 13a-14 of the Securities Exchange Act of 1934
(the "Exchange Act"). Based upon that evaluation, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective in recording, processing, summarizing and
reporting information required to be disclosed by the Company (including
consolidated subsidiaries) in the Company's Exchange Act filings.

     There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date we carried out our evaluation.



                                       42
<PAGE>

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  (1)  The following consolidated financial statements of Affinity Technology
          Group, Inc. and subsidiaries included in this Annual Report on Form
          10-K are included in Item 8.
     i.   Consolidated Balance Sheets as of December 31, 2002 and 2001.
     ii.  Consolidated Statement of Operations for the years ended December 31,
          2002, 2001, and 2000.
     iii. Consolidated Statements of Stockholders' Equity (Deficiency) for the
          years ended December 31, 2002, 2001, and 2000.
     iv.  Consolidated Statements of Cash Flows for the years ended December 31,
          2002, 2001, and 2000.
     v.   Notes to the Consolidated Financial Statements for the years ended
          December 31, 2002, 2001, and 2000.

    (2)   Schedule II - Valuation and Qualifying Accounts

          No other financial statement schedules are to be filed with this
Annual Report on Form 10-K due to the absence of the conditions under which they
are required or because the required information is included within the
consolidated financial statements or the notes thereto included herein.

   (3) Exhibits:
<TABLE>
<CAPTION>


     Exhibit Number       Description
------------------ ----------------------------------------------------------------------------------------------------------------
          <S>              <C>
          3.1             Certificate of Incorporation of Affinity Technology Group, Inc., which is hereby incorporated
                            by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Affinity Technology
                            Group, Inc. (File No. 333-1170).
          3.2             Bylaws of Affinity Technology Group, Inc., which is hereby incorporated by reference to
                            Exhibit 3.2 to the Registration Statement on Form S-1 of Affinity Technology Group, Inc.
                            (File No. 333-1170).
          4.1             Specimen Certificate of Common Stock which is hereby incorporated by reference to Exhibit
                            4.1 to the Registration Statement on Form S-1 of Affinity Technology Group, Inc. (File No.
                            333-1170).
          4.2             Sections 4, 7 and 8 of the Certificate of Incorporation of Affinity Technology Group, Inc., as
                            amended, and Article II, Sections 3, 9 and 10 of the Bylaws of Affinity Technology Group,
                            Inc., as amended, which are incorporated by reference to Exhibits 3.1 and 3.2, respectively, to
                            the Registration Statement on Form S-1 of Affinity Technology Group, Inc. (File No. 333-
                            1170).
          4.3             Form of Convertible Note Purchase Agreement dated June 3, 2003, between Affinity
                            Technology Group, Inc., and certain investors, which is incorporated by reference to Exhibit
                            4.1 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
         10.1*            Form of Stock Option Agreement (1996 Stock Option Plan), which is hereby incorporated by
                            reference to Exhibit 107 to the Registration Statement on Form S-1 of Affinity Technology
                            Group, Inc. (File No. 333-1170).
         10.2*            Form of Stock Option Agreement (Directors' Stock Option Plan), which is hereby incorporated
                            by reference to Exhibit 10.8 to the Registration Statement on Form S-1 of Affinity Technology
                            Group, Inc. (File No. 333-1170).
         10.3*            Form of Stock Option Agreement (Directors' Stock Option Plan), which is hereby incorporated
                            by reference to Exhibit 10.9 to the Registration Statement on Form S-1 of Affinity Technology
                            Group, Inc. (File No. 333-1170).
         10.4*            1995 Stock Option Plan of Affinity Technology Group, Inc., which is hereby incorporated by
                            reference to Exhibit 10.10 to the Registration Statement on Form S-1 of Affinity Technology
                            Group, Inc. (File No. 333-1170).
         10.5*            Amended and Restated 1996 Stock Option Plan of Affinity Technology Group, Inc., which is
                            hereby incorporated by reference to Exhibit 10 to
                            the Quarterly Report on Form 10-Q for the quarter
                            ended September 30, 1999.
</TABLE>


                                       43
<PAGE>
<TABLE>
<CAPTION>
         <S>               <C>
         10.6*            Non-Employee Directors' Stock Option Plan of Affinity Technology Group, Inc., which is
                            hereby incorporated by reference to Exhibit 10.12 to the Registration Statement on Form S-1
                            of Affinity Technology Group, Inc. (File No. 333-1170).
          10.7            Stock Rights Agreement, dated October 20, 1995, between Affinity Technology Group, Inc.,
                            and certain investors, which is hereby incorporated by reference to Exhibit 10.15 to the
                            Registration Statement on Form S-1 of Affinity Technology Group, Inc. (File No. 333-1170).
         10.8*            Declaration of First Amendment to 1996 Stock Option Plan of Affinity Technology Group,
                            Inc., and 1995 Stock Option Plan of Affinity Technology Group, Inc., which is incorporated
                            by reference to Exhibit 10.10 to the Company's 1998 Annual Report on Form 10-K which was
                            filed on March 31, 1999.
         10.9*            Form of Restricted Stock Agreement between Affinity Technology Group, Inc., and Joseph A.
                            Boyle, which is incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form
                            10-Q for the quarter ended June 30, 2002.
         10.10*           Form of Stock Agreement between Affinity Technology Group, Inc., and Wade H. Britt, III,
                            which is incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q
                            for the quarter ended June 30, 2002.
         10.11*           Form of Stock Award Agreement between Affinity Technology Group, Inc., and Robert H.
                            Price.
         10.12*           Form of Stock Award Agreement between Affinity Technology Group, Inc., and Peter R.
                            Wilson.
         10.13            Patent Licensing Agreement, dated as of January 22, 2003, between decisioning.com, Inc.
                            and Information Ventures LLC, d/b/a LPS Group.
           21             Subsidiaries of Affinity Technology Group, Inc.
          23.1            Consent of Scott McElveen, LLP.
          23.2            Consent of Ernst & Young, LLP.
          99.1            Certification Pursuant to 18 U. S. C. Section 1350, As Adopted Pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002, executed by the Chief Executive Officer and Chief Financial Officer of the
                          Registrant.
</TABLE>


* Denotes a management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K filed in the 4th quarter of 2002:

     The Registrant did not file any Current Reports on Form 8-K during the last
fiscal quarter of the period covered by this report.

(c)  Exhibits

     The exhibits required by Item 601 of Regulation S-K are filed herewith and
incorporated by reference herein. The response to this portion of Item 15 is
submitted under Item 15(a) (3).

(d)  Financial Statement Schedules.

     The response to this portion of Item 15 is submitted under Item 15(a)(2).



                                       44
<PAGE>



Signatures

           Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                      Affinity Technology Group, Inc.

Date:      March 31, 2003             By: /s/  Joseph A. Boyle
                                          -----------------------------------
                                          Joseph A. Boyle
                                          President and Chief Executive Officer

     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.
<TABLE>
<CAPTION>


Signatures                                          Title                                                        Date
------------------------------------------ ------------------------------------------------------------ -------------------------
     <S>                                           <C>                                                          <C>

    /s/ Joseph A. Boyle                                                                                     March 31, 2003
    ------------------------------------------
    Joseph A. Boyle                            Chairman, President, Chief Executive Officer and Chief
                                               Financial Officer and Director
                                               (principal executive and financial officer)


    /s/ Wade H. Britt, III                                                                                  March 31, 2003
    ------------------------------------------
    Wade H. Britt, III                         Director


    /s/  Robert M. Price, Jr.                                                                               March 31, 2003
    ------------------------------------------
    Robert M. Price, Jr.                       Director


    /s/  Peter R. Wilson, Ph.D.                                                                             March 31, 2003
    ------------------------------------------
    Peter R. Wilson, Ph.D.                     Director


    /s/  S. Sean Douglas                                                                                    March 31, 2003
    ------------------------------------------
    S. Sean Douglas                            Executive Vice
                                               President and Chief Operating
                                               Officer (principal accounting officer)
</TABLE>





                                       45
<PAGE>


                                 CERTIFICATIONS

     I, Joseph A. Boyle, certify that:

     1.   I have reviewed this annual report on Form 10-K of Affinity Technology
          Group, 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, 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 have:

          a)   Designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly 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 (the "Evaluation Date"); 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 (or persons
          performing the equivalent functions):

          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 any material
               weaknesses 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 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.




/s/ Joseph A. Boyle                                             March 31, 2003
--------------------------
Joseph A. Boyle          Chairman, President, Chief Executive Officer and
                         Chief Financial Officer
                         (principal executive and financial officer)




                                       46
<PAGE>
<TABLE>
<CAPTION>





1.         Schedule II - Valuation and Qualifying Accounts

-------------------------------- -------------- ---------------------------------------- --------------------- --------------------
      COL. A                     COL. B                         COL. C                          COL. D                COL. E
-------------------------------- -------------- ---------------------------------------- ---------------------  -------------------
                                                               Additions
                                                ----------------------------------------
                                 Balance at     Charged to Costs  Charged to Other
                                 Beginning of   and Expenses      Accounts - Describe    Deductions-Describe    Balance at End of
   Description                   Period                                                                          Period
-------------------------------- -------------- ------------------- -------------------- --------------------- --------------------
<S>                               <C>               <C>             <C>                    <C>                     <C>
YEAR ENDED DECEMBER 31, 2002
Reserves and allowances
 deducted from asset accounts:
Allowance for doubtful
   accounts                     $    10,601      $   7,519        $     -                $      18,120 (1)     $          -
Reserve for inventory
   obsolescence                     984,893        100,379              -                    1,085,272 (2)                -

YEAR ENDED DECEMBER 31, 2001
Reserves and allowances
 deducted from asset accounts:
Allowance for
 doubtful accounts              $     9,467     $   22,909        $     -               $       21,775 (1)     $     10,601
Reserve for
 inventory obsolescence           1,227,928        865,000                                   1,108,035 (2)          984,893
                                                                        -

YEAR ENDED DECEMBER 31, 2000
Reserves and allowances
 deducted from asset accounts:
Allowance for
 doubtful accounts                $ 105,076     $   60,000        $     -               $      155,609 (1)          $ 9,467
Reserve for
 inventory obsolescence           1,713,986        120,000              -                      606,058 (2)        1,227,928

</TABLE>

(1)  Uncollectible accounts written off, net of recoveries. (2) Obsolete parts
     written off.


                                       47
<PAGE>




Exhibit Index


Exhibit
Number   Description
------ -----------------------------------------------------------------------

10.13 Patent Licensing Agreement, dated as of January 22, 2003, between
      decisioning.com, Inc. and Information Ventures LLC, d/b/a LPS Group
21    Subsidiaries of Affinity Technology Group, Inc.
23.1  Consent of Scott McElveen LLP
23.2  Consent of Ernst & Young LLP
99.1  Certification Pursuant to 18 U. S. C. Section 1350, As Adopted Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Chief
      Executive Officer and Chief Financial Officer of the Registrant



                                       48
<PAGE>



                                                                Exhibit 10.13

                        PATENT LICENSING AGENT AGREEMENT

     THIS AGREEMENT (the "Agreement") is made and entered into this _____day of
January, 2003, by and between decisioning.com, Inc., a Delaware corporation
located at 1122 Lady Street, Suite 1145, Columbia, South Carolina 29201 (the
"Company"), and Information Ventures LLC d/b/a LPS Group, a Delaware limited
liability company located at 2777 Summer Street, Stamford, Connecticut 06905
(the "Agent").

                                   WITNESSETH:

     WHEREAS, all the issued and outstanding capital stock of the Company
currently is owned by Affinity Technology Group, Inc., a Delaware corporation;
and

     WHEREAS, the Company desires to engage the Agent to license patents owned
by the Company; and

     WHEREAS, the Company and the Agent mutually desire to set forth in this
Agreement the terms and conditions applicable to such engagement;

     NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:

                                    SECTION I

                                   DEFINITIONS

     1.1 "Patents" shall mean the U.S. patents listed in Appendix A and their
corresponding non-U.S. counterparts, and all reissuances, continuations and
divisions thereof, if any.

     1.2 "Patent Agreement" shall mean an agreement entered into after the date
hereof under which the Company grants a license to all or a subset of the
Patents to any third party, whether with or without patent litigation; provided,
however, that the term Patent Agreement shall not mean (a) any agreement between
the Company and any of the parties identified on Appendix B with whom the
Company currently has an existing licensing agreement and (b) any agreement
entered into after the date hereof with any prospective licensee identified on
Appendix B, provided such agreement is entered into on or prior to January 31,
2003.

                                   SECTION II

                            APPOINTMENT OF THE AGENT

     2.1 The Company hereby appoints the Agent as the Company's exclusive
representative for the solicitation and negotiation of Patent Agreements with
third parties. The Agent hereby represents and warrants to the Company that the
primary employee of the Agent responsible for the Agent's duties and obligations
under this Agreement shall be Dooyong Lee.

     2.2 Nothing contained in this Agreement shall be construed as granting or
conveying to the Agent any rights to use the Patents, by implication or
otherwise. The Agent hereby acknowledges the Company's proprietary interest in
the Patents and all materials related thereto, and the Agent hereby agrees not
to take, or authorize the taking of, any action that would compromise, damage or
dilute the interest of the Company in the Patents or any related materials. The
Agent hereby agrees that it shall not challenge or otherwise take any action to
impair the Company's rights in the Patents.



                                       49
<PAGE>




                                   SECTION III

                               DUTIES OF THE AGENT

     3.1 The Agent hereby agrees to use its best efforts to promote, market,
solicit and negotiate the licensing of the Patents with third parties, including
without limitation to:

                     A.        Identify prospective licensees based on market
                               analysis; B. Contact such prospective licensees
                               and discuss possible Patent licenses; C.
                               Negotiate and obtain a definitive Patent
                               Agreement with each such prospective licensee;
                               and
                     D.        If requested by the Company, coordinate and
                               arrange for legal counsel to represent the
                               Company in connection with any patent litigation
                               commenced by the Company during the term of this
                               Agreement; provided, however, that the Company
                               shall be entitled to approve such counsel and the
                               terms and conditions of its engagement, such
                               approval not to be unreasonably withheld.

     3.2 The Agent shall have the authority to solicit and negotiate (subject to
Section 3.3 below) Patent Agreements with third parties.

     3.3 Notwithstanding anything in this Agreement to the contrary, all Patent
Agreements shall be in such form and have such terms and conditions, including
pricing terms, as are reasonably established and approved by the Company from
time to time.

     3.4 The Agent, at its sole cost and expense, may engage persons to help the
Agent perform its duties hereunder; provided, however, that (a) Dooyong Lee
shall directly supervise the activities of any such persons and (b) the Agent
shall notify the Company prior to engaging any such persons, and, if requested
by the Company, the Agent shall cause such persons to enter into a
non-disclosure agreement with the Company on terms and conditions reasonably
acceptable to the Company.

                                   SECTION IV

                            COVENANTS OF THE COMPANY

     4.1 If :

                     (a) the Agent identifies a prospective licensee that, in
           the Agent's reasonable opinion, infringes all or a subset of the
           Patents; and

                     (b) after reasonable time and effort by the Agent, such
           prospective licensee refuses to enter into a Patent Agreement,

then, upon the Agent's reasonable request, the Company promptly shall commence a
legal action against such prospective licensee for Patent infringement.
Notwithstanding the foregoing, the Company's obligation to commence any such
litigation shall be subject to the following conditions:

                     (i) The Agent shall first have arranged with legal counsel
           to the Company in such action that such counsel's fees shall be paid
           by the Company on a contingency basis upon successful completion of
           such litigation and that such counsel's expenses either be deferred
           or advanced by the Agent, subject to the Company's obligation to
           reimburse the Agent (or such counsel) for such expenses from any
           Revenues generated by any Patent Agreements, as provided in Section
           5.4 below; and


                                       50
<PAGE>

                     (ii) The Company shall have the right to approve such legal
           counsel and the terms and conditions of its engagement, provided that
           such approval shall not be unreasonably withheld.

     4.2 The Company shall promptly advise the Agent regarding all inquiries
received by the Company relating to the licensing of any or all of the Patents.

     4.3 In consideration of the Agent's services hereunder, the Company shall
pay to the Agent the amounts established pursuant to Sections 5.1 and 5.4 below.

     4.4 The Company shall provide the Agent with a copy of the prosecution file
history for each Patent as soon as reasonably practicable after the execution of
this Agreement.

     4.5 The Company shall not: (a) sell, transfer, assign or otherwise dispose
of (other than by granting a license) any of the Patents or any Patent
Agreements, (b) sell all or substantially all of its assets to a third party or
(c) enter into a merger or consolidation in which the Company is not the
surviving entity unless the party(ies) acquiring the Patents, the Patent
Agreements or all or substantially all of the Company's assets, as the case may
be, or party to any such merger or consolidation, shall expressly agree in
writing to assume this Agreement and the Company's obligations hereunder.


                                    SECTION V

                                  COMPENSATION


     5.1 (a) As compensation for its services hereunder, the Agent shall be
entitled to receive an amount equal to twenty-five percent (25%) of all revenues
received by the Company under any Patent Agreements with any third parties with
whom the Agent has concluded licensing discussions, with whom the Agent has
negotiated a term sheet, or against whom the Agent has arranged for the
commencement of litigation ("Revenues"). Such compensation shall be payable by
the Company to the Agent within thirty (30) days after the Company has received
such Revenues. Notwithstanding the foregoing, the Agent shall not be entitled to
receive any compensation with respect to revenues generated (a) under any
agreement between the Company and any of the parties identified on Appendix B
with whom the Company currently has an existing licensing agreement and (b)
under any agreement entered into after the date hereof with any prospective
licensee identified on Appendix B, provided such agreement is entered into on or
prior to January 31, 2003.

     (b) In addition to the foregoing, if the Company shall sell the Patents to
a third party (the "Purchaser") whose business or operations prior to the sale
shall, in the Company's reasonable opinion, infringe upon all or a subset of the
Patents (the Patents upon which the Purchaser's business or operations infringe
being referred to herein as the "Applicable Patents"), then in connection with
such transaction, the Company shall be required to pay the Agent additional
compensation equal to 25% of the then-prevailing market rate for a license of
the Applicable Patents, all as jointly determined in good faith by the Company
and the Agent. Such compensation shall be payable by the Company to the Agent
within thirty (30) days after the Company has received the purchase price from
the Purchaser for the Patents (the "Lump-Sum Payment"), and the Lump-Sum Payment
shall consist of the same proportionate cash and non-cash consideration as paid
by the Purchaser to the Company for the Patents; provided, however, that if:

          (i) the Purchaser shall issue equity securities to the Company in full
     or partial payment of the purchase price of the Patents and (A) such
     transaction is not registered under the Securities Act of 1933, as amended
     (the "Securities Act"), or (B) the Agent's ability to resell such
     securities would be subject to substantial restrictions; and

          (ii) the Company shall have sufficient cash resources to pay in cash
     the compensation payable by the Company to the Agent pursuant to this
     Section 5.1(b),

                                       51
<PAGE>

then the Agent shall be entitled to elect to receive such compensation in cash
payable by the Company in equal annual installments over the remaining life of
the last to expire of the Applicable Patents (the "Cash Installment Payments").
Such election shall be made by written notice from the Agent to the Company
delivered no later than five (5) business days after the Agent shall have been
notified of a transaction subject to this paragraph.

     5.2 The Agent shall bear all of its own expenses in connection with its
services hereunder.

     5.3 The Agent may, at its cost and expense, audit the Company's and/or its
parent's books and records for the purpose of determining the amount of Revenues
received by the Company from the Patent Agreements. Any such audit shall be no
more frequent than once each calendar year.

     5.4 Notwithstanding any other provisions of this Agreement, if during the
term of this Agreement the Company determines to commence a legal action against
a prospective licensee for Patent infringement, then the Agent shall be
responsible for coordinating and arranging for legal counsel to represent the
Company in connection with such litigation, subject to the Company's right to
approve such counsel and the terms and conditions of its engagement, such
approval not to be unreasonably withheld. Without limiting the effect of the
immediately preceding sentence, the Agent shall arrange for the fees of such
legal counsel to be paid by the Company on a contingency basis upon successful
completion of such litigation and for such counsel's expenses to either be
deferred or advanced by the Agent, subject to the Company's obligation to
reimburse the Agent (or such legal counsel) for any such expenses from any
Revenues generated by any Patent Agreements.

                                   SECTION VI

                              TERM AND TERMINATION

     6.1 The term of this Agreement shall commence upon the date of this
Agreement and shall continue until the last to expire of the Patents, unless
earlier terminated by any party in accordance herewith. Following the third
anniversary of this Agreement, either party may terminate this Agreement for any
reason, with or without cause, by providing the other party with no less than 30
days' advance notice, and subject to the foregoing, this Agreement shall
terminate at such time as set forth in such notice. In addition, either party
may terminate this Agreement for cause (as specified below) at any time by
delivering notice to the other party, and this Agreement shall thereupon
terminate immediately.

     6.2 The Company may terminate this Agreement at any time for cause. With
respect to any such termination, "cause" shall mean (i) the Agent shall have
materially breached any term of this Agreement or any other agreement between
the Company or any of its affiliates and the Agent and, if such breach can be
cured, the Agent shall have failed to cure such breach within 30 days after
receiving notice from the Company of such breach; provided, however, that the
Company shall not be required to give notice of any specific type of breach more
than once; (ii) the employment of Dooyong Lee with the Agent shall terminate, or
the Agent shall re-assign, without the Company's prior written consent, primary
responsibility for the Agent's obligations under this Agreement to any person
other than Dooyong Lee; (iii) the Agent shall have committed an act of financial
dishonesty against the Company; (iv) the Agent shall have committed an act
involving a felony or involving moral turpitude that brings the Company or any
of its affiliates into public disrepute; or (v) the Agent shall have
demonstrated repeated inattentiveness with respect to its obligations under this
Agreement as evidenced by, without limitation, failure by the Agent to devote
the time and attention required to fulfill its obligations under this Agreement,
repeated failure by the Agent to return telephone calls from the Company,
repeated failure by the Agent to participate in any meetings reasonable arranged
by the Company, or any other acts or failures to act that evidence the Agent's
repeated inattentiveness.

     6.3 The Agent may terminate this Agreement at any time for cause. With
respect to any such termination, "cause" shall mean (i) the Company shall have
materially breached any term of this Agreement or any other agreement between
the Company and the Agent and, if such breach can be cured, the Company shall
have failed to cure such breach within 30 days after receiving notice from the
Agent of such breach; provided, however, that the Agent shall not be required to
give notice of any specific type of breach more than once; (ii) the Company
shall have committed an act of financial dishonesty against the Agent; (iii) the
Company shall have committed an act involving a felony or involving moral
turpitude that brings the Agent or any of its affiliates into public disrepute;
or (iv) the Company shall have demonstrated repeated inattentiveness with
respect to its obligations under this Agreement as evidenced by, without
limitation, failure by the Company to devote the time and attention required to
perform its obligations under this Agreement, repeated failure by the Company to
return telephone calls from the Agent, repeated failure by the Company to
participate in any meetings reasonably arranged by the Agent, or any other acts
or failures to act that evidence the Company's repeated inattentiveness.


                                       52
<PAGE>

6.4  If this Agreement is terminated, the Agent shall be entitled to receive the
     following payments:

     (a)  If the Company or the Agent terminates this Agreement for "cause," the
          Agent shall be entitled to receive: (i) twenty-five percent (25%) of
          the Revenues thereafter received by the Company attributable to any
          Patent Agreements entered into prior to such termination; (ii) any
          Lump-Sum Payment payable by the Company to the Agent at the time of
          termination pursuant to Section 5.1(b), which shall be paid by the
          Company to the Agent as provided by Section 5.1(b); and (iii) any
          remaining Cash Installment Payments for which the Company was
          obligated to pay the Agent at the time of termination pursuant to
          Section 5.1(b), which shall be paid by the Company to the Agent over
          the life of the last to expire of the Applicable Patents as provided
          under Section 5.1(b).

     (b)  If this Agreement is terminated by the Company without cause, the
          Agent shall be entitled to receive: (i) twenty-five percent (25%) of
          the Revenues thereafter received by the Company attributable to (A)
          any Patent Agreements entered into prior to such termination and (B)
          any Patent Agreements entered into after such termination with any
          licensee with whom the Agent was engaged in substantive negotiations
          at the time of termination or against whom the Agent arranged for the
          commencement of litigation prior to the time of termination; (ii)
          twelve and one-half percent (12.5%) of Revenues thereafter received by
          the Company during the first half of the then-remaining life of the
          last to expire of the Patents attributable to any Patent Agreements
          entered into subsequent to such termination (to the extent not covered
          by clause (i) above); (iii) any Lump-Sum Payment payable by the
          Company to the Agent at the time of termination pursuant to Section
          5.1(b), which shall be paid by the Company to the Agent as provided by
          Section 5.1(b); and (iv) any remaining Cash Installment Payments for
          which the Company was obligated to pay the Agent at the time of
          termination pursuant to Section 5.1(b), which shall be paid by the
          Company to the Agent over the life of the last to expire of the
          Applicable Patents as provided under Section 5.1(b).

     (c)  If this Agreement is terminated by the Agent without cause, the
          Company shall not be obligated to make any further payments to the
          Agent.

     (d)  In addition to the payments set forth above, if this Agreement is
          terminated by any party, the Company shall remain obligated to
          reimburse the Agent for legal fees and expenses advanced by the Agent
          pursuant to Sections 4.1 and 5.4 hereof from Revenues received by the
          Company under any Patent Agreements following such termination.

     (e)  The payments required to be made by the Company to the Agent pursuant
          to this Section 6.4 shall be the only payments that the Company shall
          be obligated to make to the Agent following the termination of this
          Agreement.

6.5  The provisions of Sections 5.2, 5.3, VI, VII and VIII shall survive the
     termination of this Agreement.


                                       53
<PAGE>

                                   SECTION VII

                             LIMITATION OF LIABILITY

     7.1 In no event shall either party be entitled to special, indirect or
consequential damages, including lost profits, for breach of this Agreement by
the other party.

                                  SECTION VIII

                                   INDEMNITIES

     8.1 The Company hereby agrees to indemnify the Agent from and against any
loss, liability, claim, damage or expense (including reasonable attorneys' fees
and expenses), whether or not involving a third-party claim, arising out of any
material breach by the Company of any of the terms of this Agreement or any
Patent Agreement.

     8.2 The Agent hereby agrees to indemnify the Company from and against any
loss, liability, claim, damage or expense (including reasonable attorneys' fees
and expenses), whether or not involving a third-party claim, arising out of any
material breach by the Agent of any of the terms of this Agreement or any claim,
demand or action made against the Company by any party to a Patent Agreement
relating to representations or statements made by the Agent that are
inconsistent with or in addition to the terms and conditions of such Patent
Agreement.

     8.3 Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party, notify the indemnifying
party in writing of the commencement thereof, but the failure to give such
notice shall not relieve the indemnifying party from its obligations hereunder
except to the extent that the indemnifying party demonstrates that the defense
of such claim or demand is materially prejudiced by the failure to give such
notice. In case any such action shall be brought by a third party against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party, and, after notice from the
indemnifying party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party for any
attorneys' fees and expenses subsequently incurred by the indemnified party. In
any such action, each party hereby agrees to cooperate with the other party in
the defense thereof.

                                   SECTION IX

                         REPRESENTATIONS AND WARRANTIES

     9.1 The Company hereby represents and warrants that it is the sole owner of
the Patents and has the right to grant licenses under the Patents to third
parties, and that set forth on Appendix B are (a) all parties with whom the
Company has entered into an agreement to license all or a subset of the Patents
and (b) all parties with whom the Company is currently engaged in discussions
with respect to the licensing of all or a subset of the Patents.

                                    SECTION X

                                     NOTICES

     10. All notices, demands, or other communications required or permitted by
this Agreement shall be in writing and shall be sent or given to the following
address:

                               If to the Company, to:

                                          decisioning.com, Inc.
                                          1122 Lady Street
                                          Suite 1145
                                          Columbia, South Carolina  29201
                                          Telecopy: (803) 758-2560
                                          Attention:  President




                                       54
<PAGE>



                               If to the Agent, to:

                                          LPS Group
                                          345 Park Avenue South, 10th Floor
                                          New York, New York  10010
                                          Telecopy: (212) 845-4011
                                          Attention:  President

Such notice shall be deemed to have been duly sent or given when (i) delivered
by hand, (ii) sent by facsimile transmission (with written confirmation of
receipt), provided a copy is mailed by registered mail, return receipt
requested, or (iii) mailed by registered or certified mail, postage prepaid
(return receipt requested), or nationally recognized overnight delivery service.
Either party may change its address or telecopy number for purposes of notices
hereunder upon notice to the other party, provided that such change shall be
effective only upon receipt thereof by the other party.


                                   SECTION XI

                          CHOICE OF LAW AND ARBITRATION

     11.1 This Agreement shall be governed and construed in accordance with the
laws of the State of New York without regard to conflict of laws principles.

11.2 Any controversy, dispute or question arising out of, or in connection with,
or in relation to this Agreement or its interpretation, performance or
non-performance or any breach thereof shall be determined by arbitration
conducted in accordance with then-existing rules of the American Arbitration
Association. Each party to such dispute shall select one arbitrator and the two
arbitrators shall select a third with substantially similar qualifications. Any
decision rendered shall be binding upon the parties thereto and may be enforced
in any jurisdiction. However, the arbitrators shall have no authority to grant
any relief that is inconsistent with the Agreement. The expense of arbitration
shall be borne equally by the parties thereto.

                                   SECTION XII

                           ASSIGNMENT AND SEVERABILITY

     12.1 This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by the Agent without the prior
written consent of the Company, and any such attempted assignment shall be null
and void. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Company without the prior written consent of
the Agent, and any such attempted assignment shall be null and void; provided,
however, that the Company may assign this Agreement and its rights and
obligations hereunder, without the consent of the Agent, to any person who
acquires the Patents, any Patent Agreements or all or substantially all of the
Company's assets, or enters into a merger or consolidation with the Company in
which the Company is not the surviving entity, if the Company shall have
complied with the provisions of Section 4.5 of this Agreement and the Company
notifies the Agent of such assignment on a timely basis.

     12.2 The parties intend that this Agreement shall be a valid legal
instrument, and no provision of this Agreement which is later deemed invalid or
unenforceable shall in any way invalidate any other provisions of this
Agreement. In such case, this Agreement shall be reformed to the minimum extent
necessary to correct any invalidity or unenforceability.


                                       55
<PAGE>

                                  SECTION XIII

                               COMPLETE AGREEMENT

     13.1 The Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. No amendment, waiver or discharge
hereof shall be valid unless it is in writing and executed by the party against
whom such amendment, waiver or discharge is sought to be enforced.

     13.2 The parties agree that this Agreement is the complete and exclusive
statement thereof between the parties with respect to the subject matter hereof
and that it supercedes and merges all prior proposals and understandings and all
other agreements, whether written or oral, between the parties relating to the
subject matter hereof. This Agreement may not be modified or altered except by a
written instrument duly executed by the parties hereof.





                                       56
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as set forth below.

INFORMATION VENTURES LLC                         DECISIONING.COM, INC.
(d/b/a LPS Group)

Signature:                                  Signature:

Name:  Dooyong Lee                               Name:  Joseph A. Boyle
Title: President                                Title:  President

Date:                                            Date:



                                       57
<PAGE>



                                   APPENDIX A

                                     Patents

U.S. Patent No. 6,105,007
U.S. Patent No. 5,870,721
U.S. Patent No. 5,940,811
U.S. Patent No. 5,537,315




                                       58
<PAGE>

<TABLE>
<CAPTION>


 Exhibit 21 - Subsidiaries of Affinity Technology Group, Inc.

           Name                              Jurisdiction of Incorporation         Percent Owned

<S>                                                <C>                                  <C>
Affinity Bank Technology Corporation                Delaware, USA                        100%

Affinity Clearinghouse Corporation                  Delaware, USA                        100%

Affinity Credit Corporation                         Delaware, USA                        100%

Affinity Processing Corporation                     Delaware, USA                        100%

Affinity Mortgage Technology Corporation            Delaware, USA                        100%

decisioning.com, inc.                               Delaware, USA                        100%

Multi Financial Services, Inc.                      Delaware, USA                        100%
</TABLE>




                                       59
<PAGE>




Exhibit 23.1 - Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-10435) pertaining to the Affinity Technology Group, Inc. 1995 Stock
Option Plan, 1996 Stock Option and the Non-Employee Directors' Stock Option
Plan, of our report dated March 18, 2003, with respect to the consolidated
financial statements and schedule of Affinity Technology Group, Inc. included in
the Annual Report (Form 10-K) for the year ended December 31, 2002.





                                                      /s/  SCOTT McELVEEN LLP


Columbia, South Carolina
March 18, 2003



                                       60
<PAGE>



Exhibit 23.2 - Consent of Independent Auditors


     We consent to incorporation by reference in the Registration Statement
(Form S-8 No. 333-10435) pertaining to the Affinity Technology Group, Inc., 1995
Stock Option Plan, 1996 Stock Option and the Non-Employee Directors' Stock
Option Plan, of our report dated March 30, 2001, with respect to the
consolidated financial statements and schedule of Affinity Technology Group,
Inc., for the year ended December 31, 2000, included in the Annual Report (Form
10-K) for the year ended December 31, 2002.




                                                      /s/ ERNST & YOUNG LLP


Greenville, South Carolina
March 31, 2003



                                       61
<PAGE>


                                                                 Exhibit 99.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report of Affinity Technology Group, Inc.
(the "Company") on Form 10-K for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Joseph A. Boyle, President, Chief Executive Officer and Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Company.



/s/ Joseph A. Boyle
----------------------------------
Joseph A. Boyle
President, Chief Executive Officer
and Chief Financial Officer
March 31, 2003


                                       62
<PAGE>