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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K

|  |  |                                                                                           
|- |  | ------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934    
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13
	OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,
2001

Commission File No. 0-24205



---

Factual Data Corp.

(Exact name of Registrant as specified in its
charter)


|                                                                |  |                                      
|--------------------------------------------------------------- |  | -------------------------------------
|Colorado                                                        |  | 84-1449911                           
|(State or other jurisdiction of
	incorporation or organization) |  | (I.R.S. Employer
	Identification No.)

5200 Hahns Peak Drive, Loveland, Colorado
80538

(Address of principal executive offices) (Zip
code)


(970) 663-5700

(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, no par value

(Title of Classes)


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 þ          No o

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. þ

The aggregate market value of the voting stock
held by non-affiliates of the registrant on March 31, 2002,
was approximately $21 million based upon the reported
closing sale price of such shares on the Nasdaq National Market
for that date. As of March 31, 2002, there were
6,119,893 shares outstanding of which 2,650,650 were held
by non-affiliates.

DOCUMENTS INCORPORATED BY REFERENCE:

See Item 14(c) herein.


The exhibit index appears on page
E-1.



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TABLE OF CONTENTS



|                                                   |                                                                                               |  |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                   | Item 1. Description of Business                                                              
|SPECIAL CONSIDERATIONS                            
|                                                   | Item 2. Properties                                                                           
|                                                   | Item 3. Legal Proceedings                                                                    
|                                                   | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                   | Item 5. Market for Registrants Common Equity and Related Shareholder Matters                
|                                                   | Item 6. Selected Financial Data                                                              
|                                                   | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Item 7A. Quantitative and Qualitative Disclosure about Market Risk                           
|                                                   | Item 8. Financial Statements and Supplementary Data                                          
|                                                   | Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 
|                                                   | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                   | Item 11. Executive Compensation                                                              
|                                                   | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                   | Item 13. Certain Relationships and Related Transactions                                      
|                                                   | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES                                        
|REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
|INDEPENDENT AUDITORS REPORT                      
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY   
|FACTUAL DATA CORP.                                
|SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        
|REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
|INDEPENDENT AUDITORS REPORT                      
|FACTUAL DATA CORP.                                
|SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS  
|EX-10.11 Agreement for Service                    
|EX-10.12 Reseller Services Agreement - 11/17/98   
|EX-10.13 Reseller Services Agreement - 10/30/01   
|EX-10.14 Second Amendment to Credit Agreement     
|EX-10.18 Credit Reporting Company Agreement       
|EX-23.1 Consent of BDO Seidman LLP                
|EX-23.2 Consent of Ehrhardt Keefe Steiner Hoffman 



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FACTUAL DATA CORP.


2001 ANNUAL REPORT ON FORM 10-K


Table of Contents

|         |  |                                                                                        |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|Item     |  | Description                                                                            |  | Page
|         |  |                                                                                        |  |     
|Item 1.  |  | Description of Business                                                                |  |      | 1  | 
|Item 2.  |  | Properties                                                                             |  |      | 17 | 
|Item 3.  |  | Legal Proceedings                                                                      |  |      | 17 | 
|Item 4.  |  | Submission of Matters to a Vote of Security
	Holders                                   |  |      | 17 | 
|Item 5.  |  | Market for Registrants Common Equity and
	Related Shareholder Matters                 |  |      | 17 | 
|Item 6.  |  | Selected Financial Data                                                                |  |      | 18 | 
|Item 7.  |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |  |      | 20 | 
|Item 7A. |  | Quantitative and Qualitative Disclosure about
	Market Risk                             |  |      | 28 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                            |  |      | 29 | 
|Item 9.  |  | Changes In and Disagreements with Accountants on
	Accounting and Financial Disclosure  |  |      | 29 | 
|Item 10. |  | Directors and Executive Officers of the Registrant                                     |  |      | 29 | 
|Item 11. |  | Executive Compensation                                                                 |  |      | 32 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners
	and Management                        |  |      | 37 | 
|Item 13. |  | Certain Relationships and Related Transactions                                         |  |      | 38 | 
|Item 14. |  | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K                      |  |      | 38 | 




Item 1.     Description
of Business

Our Company

We provide a wide range of customized information
services to businesses across the United States that assist them
in making critical decisions, such as determining whether to
make a mortgage or other loan, offer employment, accept new
tenants, or enter into a business relationship. We specialize in
providing customized mortgage credit reports and other mortgage
related services, consumer credit reports, employment screening,
resident screening, and commercial credit reports. Our customers
include mortgage lenders and independent mortgage brokers,
consumer lenders, employers, property managers, and other
business customers desiring information regarding
creditworthiness and other matters. We believe we are an
industry leader in delivering our service offerings over the
Internet and in utilizing technology and focusing on customer
service to provide our services with the speed, reliability,
accuracy, and customization that industry participants
increasingly demand.

To date, mortgage services have been our primary
business and providing mortgage credit reports has generated the
majority of our revenue. We believe that we currently are the
second largest provider of mortgage credit reports in the United
States and the largest provider to independent mortgage brokers.
In addition, we are one of five approved information vendors for
Freddie Macs automated underwriting system and one of 12
approved direct vendors for Fannie Maes automated
underwriting system. We are also integrated with the top
mortgage loan origination software systems in the United States.

We believe our success in the mortgage services
industry results from our focus on developing and offering
industry-leading technology and providing industry-leading
customer service. This focus is based on our long-standing view
that technology and customer service are rapidly transforming
the highly fragmented and non-automated mortgage services
industry. This has transformed the preparation and delivery of
mortgage credit reports from a completely manual procedure with
a several day turnaround to a completely automated process with
turnaround time approaching a matter of seconds for many of our
services.

In order to capitalize on our competitive
advantages in the mortgage credit reporting industry, we began
an aggressive expansion plan in 1998. Since that time, we have
acquired 37 mortgage service businesses. Prior

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to our acquisition of these businesses, they had
increasingly found it difficult to make the managerial and
capital commitments necessary to achieve required customer
service levels and upgrade technology and systems, particularly
with market demands for increased speed, accuracy, and
cost-effectiveness. We slowed our acquisition program
significantly in 2000 as a result of several factors, including
a lack of capital.


In an effort to leverage the core competencies
and infrastructure that we developed in becoming a leader in the
mortgage credit reporting industry, we initiated a
diversification strategy into other related information service
businesses. We developed our employment screening, resident
screening, and commercial credit information businesses
internally. We expanded into the consumer credit industry by
entering into three lease agreements with Experian Information
Solutions, Inc. beginning in mid-2000. Through these leases we
sell Experian consumer credit reports to retail banks, retail
merchants, automotive dealerships, credit unions, and other
businesses in three states. Under these arrangements, we also
provide pre-screened promotional lists and account-monitoring
programs to financial service providers, such as credit card
issuers and home equity line of credit lenders.

Our Services

We specialize in gathering data from a wide range
of sources, adding value by analyzing that information, and
electronically delivering and presenting it in the manner that
best suits each customers decision-making process. The
following tables set forth certain information relating to our
services.

Mortgage Information Services

|                                                             |  |                                                                                                                                             |  |                                                                
|------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------
|Service                                                      |  | Description                                                                                                                                 |  | Purpose                                                        
|                                                             |  |                                                                                                                                             |  |                                                                
|Merged credit report                                         |  | Financial history is obtained from one to three
	credit repositories; duplicate information is removed; and data
	is merged and reformatted |  | Assists lending decisions                                      
|Credit scores                                                |  | Credit scores are obtained from one to three
	credit repositories                                                                           |  | Assists lending decisions                                      
|Credit score update                                          |  | Updates financial history from the data source                                                                                              |  | Updates credit scores for re- evaluation of loan
	decision     
|Identity authentication                                      |  | Finds identity theft, fraud, and
	misrepresentation upon application                                                                        |  | Helps prevent loan losses                                      
|Fannie Mae Desktop Originator/ Desktop
	Underwriter Services |  | Provider of merged credit reports to Desktop
	Underwriter                                                                                   |  | Assists lenders in automated underwriting
	decisions           
|Freddie Mac Loan Prospector Services                         |  | Direct credit provider of merged credit reports
	to Loan Prospector                                                                         |  | Assists lenders in automated underwriting
	decisions           
|Information updates  online customer
	service               |  | Verifies and updates current status and loan
	balance                                                                                       |  | Assists lenders in evaluating loan decisions with
	updated data
|Flood determination certificates                             |  | Flood zone determinations                                                                                                                   |  | Assists lenders in loan closings                               
|Automated property valuation                                 |  | Online property valuations                                                                                                                  |  | Assists lenders in collateral value determinations             
|Third-party originator due diligence review                  |  | Investigates the credentials of third-party loan
	originators                                                                               |  | Reduces fraudulent loan submissions                            
|Portfolio loan review                                        |  | Provides current credit scores, automated
	property valuations, or other loan portfolio data                                                |  | Determines quality of loan portfolio                           
|Tax return verifications                                     |  | Accesses IRS tax record information                                                                                                         |  | Verifies tax information to reduce fraud                       

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Consumer and Commercial Information
Services

|                                |  |                                                                 |  |                                                     
|------------------------------- |  | --------------------------------------------------------------- |  | ----------------------------------------------------
|Service                         |  | Description                                                     |  | Purpose                                             
|                                |  |                                                                 |  |                                                     
|Consumer credit reports         |  | Provides financial and credit history information               |  | Assists in lending decisions                        
|Risk score                      |  | Provides Fair Isaac Credit (FICO) scores                        |  | Assists in lending decisions                        
|Consumer credit segment reports |  | Provides miscellaneous historical data                          |  | Provides collection aids and employment
	evaluations
|Pre-screen products             |  | Provides pre-approved mail and telemarketing
	promotional lists |  | Assists in identifying new accounts                 
|Account management services     |  | Reviews existing account portfolio                              |  | Monitors account portfolios                         
|Commercial credit reports       |  | Provides commercial, financial, and credit
	history information |  | Assists in lending decisions                        

Resident Screening Services

|                         |  |                                                                                                                                             |  |                                                 
|------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------
|Service                  |  | Description                                                                                                                                 |  | Purpose                                         
|                         |  |                                                                                                                                             |  |                                                 
|Resident qualifier score |  | Assigns score weighting                                                                                                                     |  | Fair Housing compliance and applicant evaluation
|Eviction data search     |  | Searches eviction databases for unlawful detainer
	and monetary judgments                                                                   |  | Reduces credit risk                             
|Criminal record search   |  | Searches state and county criminal record history                                                                                           |  | Assures safe housing environment                
|Residence history search |  | Investigates previous residence history                                                                                                     |  | Decreases customers bad debt expense           
|Public record search     |  | Searches for tax liens, judgments, and bankruptcy
	history                                                                                  |  | Reduces credit risk                             
|Merged credit report     |  | Financial history is obtained from one to three
	credit repositories; duplicate information is removed; and data
	is merged and reformatted |  | Assists with renting decisions                  
|Fraud search             |  | Finds fraud, misrepresentation, and
	inconsistencies upon application                                                                       |  | Reduces fraudulent resident applications        

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Employment Screening Services

|                                 |  |                                                 |  |                                                                         
|-------------------------------- |  | ----------------------------------------------- |  | ------------------------------------------------------------------------
|Service                          |  | Description                                     |  | Purpose                                                                 
|                                 |  |                                                 |  |                                                                         
|Identification verification      |  | Compares database information with application  |  | Verifies applicants identity, former
	residence, and employment history
|Residence verifications          |  | Provides history of past residency              |  | Compares application information                                        
|Financial history verification   |  | Provides summary of applicants credit
	history |  | Assists in hiring decisions                                             
|Criminal history searches        |  | Provides felony and misdemeanor history         |  | Verifies applicants criminal history                                   
|Motor vehicle reports            |  | Provides history of applicants driving
	record |  | Provides applicants driving history                                    
|Employment history verifications |  | Provides information from previous employers    |  | Validates application information and work history                      
|Substance abuse testing          |  | Detects substance abuse                         |  | Assures work place safety                                               
|Education verification           |  | Provides information from educational records   |  | Validates education information on resume or
	application               

Our Acquisition Program

We have acquired 37 information service
businesses since 1998, 14 of which were system affiliates. The
total purchase price for these acquisitions was approximately
$36.5 million. Approximately $20.4 million of this
amount was paid in cash, most of which we generated through our
initial public offering in 1998 and our private placement in
early 1999; $13.8 million was paid with promissory notes or
bank debt; and $2.3 million was paid with shares of our
common stock. In virtually all of these acquisitions, we were
able to bolster the margins of the acquired businesses
significantly. We accomplished this by quickly converting the
businesses onto our low-cost, efficient technology platform and
by eliminating most of their overhead.

Due to the fragmented nature of the industry, the
large number of smaller companies, and various industry trends,
the opportunity to acquire information service businesses is
abundant. Many of these businesses have increasingly found it
difficult to make the managerial and capital commitments
necessary to achieve required customer service levels and
upgrade technology and systems, particularly with market demands
for increased speed, accuracy, and cost-effectiveness.

We believe our company is regarded as an
attractive acquirer by information service companies because of
the following factors:



| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our historical growth and performance;                                                                                                                                                 
|
| |  | the reputation of our management team;                                                                                                                                                 
|
| |  | the ability of management and employees of
	acquired companies to participate in our growth and expansion
	through potential stock ownership and career advancement
	opportunities; and
|
| |  | our ability to offer liquidity to the owners of
	acquired companies.                                                                                                                   

We focus our acquisition efforts on information
service businesses. Likely acquisition candidates are companies
that would meet the following characteristics:



| |   |                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------
| |  | be accretive to earnings;                                                                                               
|
| |  | increase our customer and revenue base;                                                                                 
|
| |  | offer significant economies of scale through
	consolidation of facilities, marketing, and administrative
	functions; and

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| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | need to associate with a technologically
	sophisticated information service provider in order to remain
	competitive.

Customer Service and Support

We devote considerable effort to customer service
and support. Each staff member within our company is certified
to understand the Fair Credit Reporting Act, the laws that
govern our business and the rights of consumers. Our customer
service representatives are available 12 hours per day
during the business week.

Data obtained from the three national
repositories frequently contains errors and inconsistencies,
which may take up to 30 days to correct. Because of this
industry problem, customers request that we verify, update, and
otherwise correct the information we receive from the credit
repositories on approximately 20% of the reports we issue. Our
4 Hours or Its Free guarantee demonstrates our
commitment to provide what we believe to be the fastest
turnaround time in the industry. We are able to take customer
service requests online and immediately begin processing the
request. We continually monitor the quality of our
customer-support services and enhance our performance guidelines
to provide the highest quality service.

We train our technical support staff in all
aspects of our software, all loan origination systems with which
we are integrated, and the most common Internet browsers. Our
technical support department is available 12 hours per day
during the business week. Our goal is to assure that each
technical support representative is able to solve a
customers problem within five minutes. If this is not
possible, our senior technical support representatives work with
the customer until the problem is solved. With their knowledge
of customer requirements and the demands made on our software,
our technical support department is an integral part of our
attention to servicing customer needs in a timely and friendly
manner.

Our Technology

Our advanced proprietary software and web-based
applications enable us to deliver thorough, accurate reports
that meet our customers formatting specifications. Our
technological efforts are designed to enhance our technological
leadership, expand our ability to service additional volume
without a commensurate increase in costs, and enhance the speed,
reliability, customization, and user-friendliness of our service
offerings. We have invested significant management attention,
personnel, and more than $5.5 million on proprietary
computer software, state-of-the-art hardware, and communications
systems. We employ 44 technical personnel, including 18 software
programmers, to continue to expand our electronic capabilities
and develop new applications and service offerings. Our
information, processing, and telecommunications systems can
access up to 18,000 files per hour and have a capacity exceeding
30,000 calls per day. In addition, our systems are scalable,
enabling us to grow our customer base and portfolio of services
without degrading efficiency or expending substantial funds.

We are one of five approved information vendors
for Freddie Macs automated underwriting system and one of
12 approved direct vendors for Fannie Maes automated
underwriting system. As the two largest sources of capital for
the mortgage industry, Freddie Mac and Fannie Mae have developed
numerous programs to simplify the underwriting process and lower
the overall cost for both borrowers and lenders. To protect the
integrity of their automated underwriting systems, both entities
limit the number of directly approved service providers. We
believe our technology has allowed us to establish relationships
with Freddie Mac and Fannie Mae, which have provided us with
expertise, expanded market position, and enhanced industry
credibility.

We collect, integrate, analyze, and deliver
information from our technology centers in Loveland and Denver,
Colorado. In the event of an interruption of service at either
of our centers, the other center can be used to supplement or
replace the services as needed. We rely on load balancing and
fail-over services from Sprint, as well as redundant routing
services within our own network, to ensure that all work is
handled expeditiously.

We believe our systems have sufficient back-up
and disaster recovery capability. Because of those precautions,
we have experienced little downtime. Nevertheless, our business
depends on our ability to protect

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the technology centers against damage from fire,
power loss, telecommunications failure, natural disasters, and
similar occurrences. Despite our precautionary backup power and
duplicate telecommunication facilities, we could experience a
natural disaster, hardware or software malfunction, or other
interruption of technology center operations. Extended
interruptions in our services could be significantly
detrimental, and our insurance may not be adequate to compensate
us for all resulting losses.


Privacy and Security Concerns

Privacy and consumer advocates and federal
regulators have become increasingly concerned about how personal
information is collected, used, shared, and maintained. For most
of our services, we are regulated as a consumer reporting
agency under the Fair Credit Report Act, or FCRA. We also
must comply with the laws of all 50 states. Finally, there
is increasing pressure from regulators, legislators, and the
private sector for firms engaged in providing information
services to restrict the type of information they collect, to
adopt controls on how they use and share information, and to
ensure that their databases of sensitive information are secure.

We expend significant effort to assure the
security of information that we receive and reports that we
generate. We believe we are the only information services
provider that requires every employee to be certified under the
FCRA. Our staff members receive FCRA training and must pass the
certification exam administered by the Consumer Data Industry
Association, an international trade association representing
consumer credit, mortgage credit reporting, collection service,
resident screening, and employment reporting companies. If we
acquire a business whose employees are not certified, we require
them to complete the FCRA training and certification.

Additionally, our technology center, website, and
computer systems are tested by an independent security firm at
least four times each year. These voluntary audits help to
reduce our exposure to computer viruses, hackers, common theft,
and system failure.

Competition

We operate in a highly competitive and fragmented
industry with a large number of companies in each of our service
offerings. While a significant number of these companies are
small and operate solely on a local or regional basis, several
large companies, including Equifax Credit Information Services,
Inc. and The First American Corporation, have substantially
greater financial, marketing, and other resources and much
greater name recognition than we do.

The primary competitive factors in the
information services industry include the following:



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | responsiveness and reliability of customer
	service personnel,           
|
| |  | accuracy and completeness of reports,                                    
|
| |  | user-friendliness and customization of reports,                          
|
| |  | technological sophistication and integration with
	customers technology,
|
| |  | speed of delivery,                                                       
|
| |  | fraud detection capabilities,                                            
|
| |  | price,                                                                   
|
| |  | brand recognition, and                                                   
|
| |  | security.                                                                

Our primary competitors in the mortgage services
industry include The First American Corporation, CBC Companies,
Inc., Fidelity National Financial, Inc., and Equifax Credit
Information Services, Inc. In addition, we estimate that there
are approximately 1,100 providers of mortgage credit reports, a
significant number of which are companies that are small and
operate on a local or regional basis.

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In the consumer credit industry, our primary
competitors are TransUnion LLC and Equifax Credit Information
Services, Inc., both of which are also credit repositories that
maintain large databases of credit information. We are a
significant customer of both companies.

We compete in the resident screening services
industry, primarily with Resident Data, Inc., Rent Grow, Inc.,
and The First American Corporation.

Some of our competitors in the employment
screening industry include ChoicePoint, Inc., Avert, Inc. (a
division of Automatic Data Processing, Inc.), and TransUnion LLC.

Government Regulation

Fair Credit Reporting Act.The FCRA governs consumer reporting
agencies and the methods they use to produce and sell consumer
reports. For example, the FCRA prohibits disclosure of
obsolete information, which is generally consumer
information that is more than seven years old.

The primary goal of the FCRA is to ensure that
consumer information is not made available to persons or
businesses not authorized to receive such information. The
statute permits consumer reporting agencies to furnish a
consumer report only when requested or authorized by the subject
consumer, or when requested by a person or business that the
agency believes intends to use the information for legitimate
business purposes, including the following:



| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | to make decisions about new transactions, to
	monitor risk, and to comply with the terms of existing credit
	relationships; and
|
| |  | to make hiring or promotion decisions.                                                                                         

The FCRA permits consumers to hold a consumer
reporting agency liable if the agency willfully or negligently
fails to comply with the statute. Officers and directors of
consumer reporting agencies that knowingly and willfully
disclose consumer information to unauthorized persons or
businesses may suffer criminal penalties.

State laws.Many
states have at least one unique statute or regulation that
affects the information services industry, including the
following:



| |   |                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a number of states have laws similar, but not
	identical, to the FCRA;                                                                                                                
|
| |  | some states require businesses engaged in
	investigative reporting (a term that includes some of the
	techniques used to generate certain types of consumer reports),
	to be licensed;
|
| |  | numerous states regulate the type of information
	that can be made available to the public or impose conditions on
	the release of certain information;                               
|
| |  | certain states prohibit access to workers
	compensation histories; and                                                                                                               
|
| |  | some states require a signed release from the
	subject of the report before personal information may be
	released.                                                                    

Customers

Our customers include some of the nations
largest mortgage originators, real estate investment trusts,
government sponsored enterprises, and employers. Our customer
base consists primarily of independent mortgage brokers, but
also includes property management firms, a variety of banks and
credit unions, automobile dealers, collection agencies, and
employers of all types. No customer accounted for more than 10%
of our revenue during fiscal 2001.

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Sales and Marketing

We maintain an active sales and marketing program
to expand our market share throughout the United States. Key
aspects of our sales and marketing program include the following:



| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | face-to-face marketing efforts with prospective
	customers by 16 national account representatives and 46 sales
	representatives managed by seven regional managers;
|
| |  | in-house telemarketing to existing and
	prospective customers that have indicated interest in purchasing
	our services;                                            
|
| |  | public relations efforts;                                                                                                                                          
|
| |  | participating in trade shows and seminars;                                                                                                                         
|
| |  | advertising in trade publications;                                                                                                                                 
|
| |  | utilizing our website; and                                                                                                                                         
|
| |  | mailing quarterly news releases to existing and
	prospective customers.                                                                                            

Certain Strategic Relationships

We have a number of strategic relationships that
are critical to our business.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Reseller Agreements with Equifax, Experian,
	and TransUnion.On October 8
	and November 17, 1998, and October 20, 2001, we
	entered into reseller services agreements with Equifax,
	Experian, and TransUnion, respectively, which are the three
	preeminent national credit repositories in the United States.
	Under these agreements, we purchase consumer credit information,
	on a nonexclusive basis, for resale to our customers.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Each agreement enables us to resell the
	information and reports for use solely in connection with credit
	granting, mortgage processing, employment screening, and
	resident screening. Under each agreement, we may also disclose
	the credit information to a consumer who requests disclosure. In
	addition, the Equifax and TransUnion agreements permit the use
	of the information in connection with a legitimate business
	transaction, involving consumers.                                                                                                         
|
| | The Equifax agreement will remain in effect until
	terminated by either party upon at least one years notice.
	Under the Experian agreement, Experian will continue to renew
	the agreement for successive one-year periods as long as we are
	in compliance under the agreement and Experian continues to
	provide services to other resellers. The TransUnion agreement
	will remain in effect until terminated upon at least
	60 days prior notice by either party. Each agreement
	also provides for termination in the event of our breach,
	bankruptcy, or insolvency.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Affiliate Services Agreements with Experian.Effective April 28 and
	December 1, 2000 and February 1, 2001, we entered into
	three agreements with Experian for credit reporting on consumers
	who reside in Colorado, the southern portion of Texas, and
	Wyoming, respectively. Under each of these agreements, Experian
	has agreed to allow us, on a non-exclusive basis, to access all
	credit and other information in its database associated with
	consumers living in these geographical areas. In addition,
	Experian assigned to us certain subscriber agreements for
	certain of its customers located within these areas. We also
	receive fees from Experian when it sells information to its
	customers regarding consumers who live in the geographical areas
	covered by the agreement.



| |                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The agreements for Wyoming and portions of south
	Texas allow Experian to impose marketing and sales performance
	requirements on us. Each of these two agreements also restricts
	us from entering into any similar agreement with any other
	consumer reporting agency during the term of the agreement.
|
| | Each agreement has an initial term of ten years
	and continues for successive one-year periods unless either
	party delivers to the other party a written notice of intent not
	to renew the agreement at least six                                                                                       

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | months before the end of the initial ten-year
	term or any one-year renewal period. In addition, either party
	may terminate the agreement upon the insolvency or bankruptcy of
	the other party or following the other partys breach of
	the agreement. Experian may also terminate the agreement if we
	were to enter into a transaction without Experians
	approval that results in a change in our control, ownership, or
	management.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Credit Report Transmission and Access
	Marketing Agreement with Fannie Mae and Credit Reporting Company
	Agreement with Freddie Mac.On
	November 11, 1998 and January 1, 2000, we entered into
	agreements with Fannie Mae and Freddie Mac, respectively,
	granting us the right to access technology and information and
	processing capabilities available through these
	organizations automated underwriting systems and
	databases, for use in processing consumer mortgage loan
	applications. Under the Fannie Mae agreement, we provide these
	services to our customers for which we pay fees to Fannie Mae.
	Under the Freddie Mac agreement, we provide these services to
	its customers for which Freddie Mac pays us a fee.



| |                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Fannie Mae agreement will remain in effect
	for successive 12-month periods until terminated by either party
	upon 30 days notice. However, Fannie Mae may terminate the
	agreement at any time for any reason upon 60 days advance
	notice. Fannie Mae also may terminate the agreement upon our
	insolvency, bankruptcy, or breach of the agreement.
|
| | Freddie Mac has the right to terminate the
	agreement for any reason in its sole discretion on
	30 days advance notice. Freddie Mac would also have
	the right to terminate the agreement if it had concerns
	regarding our financial condition or if we failed to perform
	adequately under the agreement.                                              

System Affiliates

From 1989 to 1993, we franchised our mortgage
credit reporting system to companies we call system affiliates.
Franchisees pay us fees to use our name and our methods to
generate reports. In 1993, we terminated our franchise program
in favor of licensing agreements that permit licensees to use
our systems to service their own customers in return for a
percentage of their gross billings. We stopped executing license
agreements in 1995. We will honor our existing contractual
obligations, but we do not intend to offer new franchises or
licenses in the future. In 2001, system affiliates provided 2.5%
of our gross revenue compared to 3.8% in 2000. We expect revenue
from system affiliates will decline over time since the number
of system affiliates will likely decline.

Intellectual Property

We rely on a combination of trademark,
servicemark, copyright, trade secret and contract
protection (like licenses) to establish and protect our
proprietary rights in our services and technology. We currently
maintain 146 registered trademarks, servicemarks, and
copyrights. We are not aware of any infringement of our
proprietary rights.

Insurance

We maintain commercial general liability and
property insurance. This policy provides for a general liability
aggregate limit of $2 million, and $5 million annual
aggregate umbrella coverage. We also carry an errors and
omissions policy covering our various service offerings. This
policy provides $2 million coverage for each of our seven
processing centers.

Employees

As of April 15, 2002, we employed 235 people
on a full-time and 14 people on a part-time basis. Of our
full-time employees, 21 are involved in administration, 20 in
finance and accounting, 75 in sales and marketing, 40 in
technology and systems, and 79 in operations. There are no union
or collective bargaining agreements between us and our
employees. We consider our relationship with our employees to be
good.

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Other Information

Factual Data was incorporated in the State of
Colorado in 1985. Our principal office is located at 5200 Hahns
Peak Drive, Loveland, Colorado 80538, and our telephone number
is (970) 663-5700.




SPECIAL CONSIDERATIONS

To inform shareholders of our future plans and
business strategies, this report contains statements concerning
our future performance, intentions, objectives, plans and
expectations that are or may be deemed to be
forward-looking statements. Our ability to do this
has been fostered by the Private Securities Litigation Reform
Act of 1995, which provides a safe harbor for
forward-looking statements to encourage companies to provide
prospective information so long as those statements are
accompanied by meaningful cautionary statements identifying
important factors that could cause actual results to differ
materially from those discussed in the statement. Such factors
affecting us include, but are not limited to, the following:



| |                                                                                     
| | ------------------------------------------------------------------------------------
| | A decrease in demand for mortgage credit
	reports will likely decrease our earnings.

Our primary service is the preparation of our
mortgage credit reports. The demand for this service depends
primarily upon the level of home mortgage originations and
refinancings and, to a lesser extent, the efforts of lenders to
develop new, and monitor existing, credit relationships.
Consumer demand for mortgage credit tends to vary as a result of
interest rate fluctuations and general economic conditions, with
demand tending to decrease during periods of economic
contraction or rising interest rates. As a result of our lack of
diversification and dependence on mortgage market activity, a
downturn in the demand for mortgage credit reports would
adversely affect our business, operating results, and financial
condition, particularly if we were unable to control our costs,
including repository, labor, and communication charges, during a
period of reduced demand.



| |                                                  
| | -------------------------------------------------
| | Our diversification efforts may be
	unsuccessful.

We plan to diversify our business and reduce our
reliance on the mortgage industry through acquisitions of
non-mortgage information service businesses and the introduction
of new services developed internally. Each of these strategies
involves substantial risks and uncertainties, and we cannot
provide assurance that our acquisition program or new service
offerings will be successful.

Historically, the majority of the businesses we
have acquired have been mortgage-related. We believe our
acquisition program has allowed us to rapidly grow our business.
To the extent that we are able to continue to acquire attractive
mortgage-related businesses, we intend to do so. Accordingly,
our dependence on the mortgage industry may increase.



| |                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our acquisition strategy involves
	significant risks, including a drain on our resources,
	unforeseen expenses, increased competition for acquisitions,
	additional debt, shareholder dilution, and a lower stock
	price.

During 1998, we implemented a consolidation
strategy to acquire businesses that we believe have the
potential to complement or expand our business. Our growth
strategy of acquiring additional businesses involves significant
risks, including the following:

Drain on resources.The acquisition process requires a
substantial commitment of management time and resources in
considering various potential acquisition candidates, including
the exchange of confidential information, conducting due
diligence, negotiating acquisition terms, and completing the
acquisition. As a result of these and other factors, a number of
potential acquisitions that from time to time appear likely to
occur are not consummated.

Unforeseen expenses.Acquisitions may entail reorganizing
acquired business operations, corporate infrastructure and
systems, and financial controls. Unforeseen expenses,
difficulties, and delays frequently

10



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encountered in connection with rapid expansion
through acquisitions could inhibit our growth and negatively
impact our profitability.


Competition for acquisitions may negatively
affect our investment returns.We may
be unable to identify suitable acquisition candidates or to
complete the acquisition of candidates that we identify.
Competition for acquisition candidates may increase purchase
prices for acquisitions to levels beyond our financial
capability or to levels that would not result in the returns
required by our acquisition criteria. We may not be able to
identify suitable acquisition candidates at economical prices,
and we may not be able to compete for available acquisition
opportunities.

We may incur debt or dilute our shareholders.We may issue common or preferred stock
and incur substantial indebtedness in acquiring additional
businesses. Issuances of common stock in future acquisitions may
dilute shareholders. We may also issue preferred stock with
terms and preferences that exceed the rights of common
shareholders. We may incur indebtedness in connection with
acquisitions, and we cannot assure you that the operations and
cash flow of the acquired entity will be sufficient to repay the
debt. Finally, we may not be able to borrow funds at economical
terms or issue common stock with a sufficient market price to
complete the acquisitions.

The market price of our common stock may be
negatively affected due to timing and integration
concerns.The size, timing, and
integration cost of any future acquisitions may cause
substantial fluctuations in our operating results from quarter
to quarter. Consequently, operating results for any quarter may
not be indicative of the results that may be achieved for any
subsequent quarter or for a full fiscal year. These fluctuations
could adversely affect the market price of our common stock.



| |                                                            
| | -----------------------------------------------------------
| | Our internal growth and operating
	strategies involve risk.

In addition to pursuing growth by acquisitions,
we intend to continue to pursue a strategy of growth by
introducing new services in our existing and new markets.
Accomplishing these expansion goals will depend upon a number of
factors, including the following:



| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | our ability to identify new markets in which we
	can sell our existing or additional services;
|
| |  | our ability to hire, train, and retain qualified
	personnel;                                  
|
| |  | the timely integration of new services with
	existing operations;                             
|
| |  | our ability to achieve adequate market
	penetration at favorable operating margins; and       
|
| |  | our financial resources.                                                                      

We may not be able to introduce new services on a
timely or profitable basis. Moreover, the costs associated with
introducing new services may adversely affect our profitability.

As a result of these growth strategies, we expect
to expend significant time and effort in introducing new
services. Our systems, procedures, controls, and financial
resources may not be adequate to support our expanding
operations. The inability to manage our growth effectively could
have a material adverse effect on our business, financial
condition, and results of operations.

Our planned growth also will impose significant
added responsibilities on members of senior management and
require us to identify, recruit, and integrate additional senior
level managers. We may not be able to identify, hire, or train
suitable additions to management.



| |                                                          
| | ---------------------------------------------------------
| | We must integrate the operations of
	acquired businesses.

Our success depends, in part, on our ability to
integrate the operations of the acquired businesses and other
businesses we acquire in the future, including centralizing
certain functions to achieve cost savings, pursuing programs and
processes that promote cooperation and the sharing of
opportunities and resources, developing sales and marketing
programs, and retaining acquired customers. We may not be able
to oversee the combined entity efficiently or to implement
effectively our growth and operating strategies. To the extent

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that we successfully implement our acquisition
strategy, our resulting growth will place significant additional
demands on our management and infrastructure. Our failure to
implement successfully our strategies or operate effectively the
combined entity could have a material adverse effect on our
business, financial condition, and results of operations. These
effects could include lower revenue; higher cost of sales;
increased selling, general, and administrative expenses; and
reduced margins.




| |                                                                       
| | ----------------------------------------------------------------------
| | We may require significant additional
	capital to expand our business.

Our growth strategy will require us to secure
significant additional capital. Our future capital requirements
will depend upon the size, timing, and structure of future
acquisitions and our working capital and general corporate
needs. If we finance future acquisitions in whole or in part
through the issuance of common stock or securities convertible
into or exercisable for common stock, existing shareholders will
experience dilution in the voting power of their common stock
and earnings per share could be negatively impacted. The extent
to which we will be able or willing to use our common stock for
acquisitions will depend on the market value of our common stock
from time to time and the willingness of potential sellers to
accept our common stock as full or partial consideration. Our
inability to use our common stock as consideration, to generate
cash from operations, or to obtain funding through debt or
equity financings in order to pursue our acquisition program
could materially limit our growth.

As of March 31, 2002, we had approximately
$3.4 million in cash and cash equivalents, and
$4.3 million available on our operating line of credit. Any
borrowings made to finance future acquisitions or for operations
could make us more vulnerable to a downturn in our operating
results, a downturn in economic conditions, or increases in
interest rates on borrowings that are subject to interest rate
fluctuations. If our cash flow from operations is insufficient
to meet our debt service requirements, we could be required to
sell additional equity securities, refinance our obligations, or
dispose of assets in order to meet our debt service
requirements. In addition, our credit arrangements contain
financial and operational covenants and other restrictions with
which we must comply, including the maintenance of various
financial ratios, limitations on capital expenditures, and the
incurrence of additional indebtedness. Adequate financing may
not be available if and when we need it or may not be available
on terms acceptable to us. The failure to obtain sufficient
financing on favorable terms and conditions could have a
material adverse effect on our growth prospects and our
business, financial condition, and results of operations.



| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | We may not be successful in implementing
	our business strategy due to the significant competition we
	face.

We operate in a highly competitive environment
with a large number of companies competing with each of our
service offerings. For example, there are approximately 1,100
providers of mortgage credit reports. While a significant number
of these companies are small and operate solely on a local or
regional basis, several large companies with which we compete,
including The First American Corporation, CBC Companies, Inc.,
Equifax Credit Information Services, Inc., Fidelity National
Financial, Inc., and Experian Information Solutions, Inc., have
substantially greater financial, marketing, and other resources
and much greater name recognition than we do.



| |                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our agreements with the three preeminent
	credit repositories have limited scope, can be cancelled on
	short notice, allow for unspecified future price increases, and
	expose us to claims and liabilities from the use of inaccurate
	information.

We do not maintain our own databases. To obtain
consumer credit data, we rely on agreements with the three
preeminent national credit repositories: Equifax Credit
Information Services, Inc., Experian Information Solutions,
Inc., and TransUnion, LLC. Substantial portions of our business
depend on our ability to access consumer credit data from these
credit repositories and to do so at a cost that is comparable
with our competitors.

Under each agreement, we may resell the
information and reports for use solely in connection with credit
granting, mortgage processing, employment screening, and
resident screening, but not for insurance underwrit-

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ing, collections, or governmental licensing
transactions. Under each agreement, we may also disclose the
credit information to a consumer who is denied a benefit and
requests disclosure. In addition, the Experian and TransUnion
agreements permit the use of the information in connection with
a legitimate business transaction involving the consumer.


The agreements do not guarantee the accuracy or
correctness of the information contained in the databases
maintained by credit repositories, but require us to hold the
repositories harmless and indemnify them from claims or
liabilities arising from the use of inaccurate information
contained in the databases.

Equifax and TransUnion have the right to
terminate upon one year and 60 days advance notice,
respectively. Experian can terminate in the event of a breach by
us.

We also have service agreements with Experian
covering Colorado, Wyoming, and the southern portion of Texas.
Experian could terminate any of the agreements on at least six
months notice before the end of the initial 10-year term
or before the end of any succeeding one-year term.

In view of our dependence on these three credit
repositories for our consumer credit data, substantial harm to
our business would result if any of these three repositories,
for whatever reason, were to terminate any of these agreements
and we were unable to enter into an acceptable replacement
agreement. In addition, any substantial increase in the prices
we pay these repositories for consumer credit data that we
cannot pass through to our customers could have a material
adverse impact on our results of operations and our ability to
compete.



| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Our indebtedness could adversely affect our
	financial position and limit our ability to expand our
	business.

As of March 31, 2002, we had outstanding
approximately $18.0 million of indebtedness, including
approximately $1.7 million under our operating line of
credit, $10.3 million under capital lease obligations, and
approximately $6.0 million under notes payable from
acquisitions. We may incur additional indebtedness in the future
to finance acquisitions, expand our service offerings, or make
capital expenditures. Our current credit facilities contain, and
any additional credit facilities can be expected to contain,
restrictive financial, operational, and other covenants.

Our level of debt could have a number of negative
consequences, including the following:



| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | requiring us to dedicate a substantial portion of
	our cash flow from operations to repayment of debt, thereby
	limiting the availability of cash for other purposes;                                    
|
| |  | increasing our vulnerability to adverse economic
	conditions or worsening operating results by making it more
	difficult to borrow additional funds to maintain our operations;                          
|
| |  | hindering our flexibility in planning for or
	reacting to changes in our business and industry by preventing
	us from borrowing money to expand our business or upgrade our
	equipment or facilities; and
|
| |  | limiting or impairing our ability to obtain
	financing in the future for working capital, capital
	expenditures, acquisitions, or general corporate purposes.                                            



| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | Our business is subject to governmental
	regulation, increasing concern about privacy issues, and legal
	considerations.

Concerns about individual privacy and the
collection, distribution, and use of information about
individuals have led to substantial governmental regulation of
the credit reporting industry. The credit reporting industry is
regulated under the federal Fair Credit Reporting Act, or FCRA,
and by legislation in many states. The credit reporting industry
has been subject to increased legislative attention. Bills are
pending in various state legislatures that are generally
intended to regulate how personal information is used. While we
do not believe that any of the proposed state bills, if passed
as currently drafted, would have a material adverse effect on
us, there can be no assurance that pending or additional federal
or state consumer-oriented legislation will not significantly
limit demand for, or increase the costs of, certain of our
services. Under general legal

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concepts and, in some instances, under specific
federal and state statutes, we could be held liable to customers
or to the subjects of credit reports prepared by us for
inaccurate information or misuse of information. We maintain
internal policies designed to help assure that credit
information retrieved by us is accurate and complies with
provisions of the FCRA. We may not be able to defend
successfully any claims made against us, and insurance may not
cover any such claims. Uninsured losses from such claims might
arise that could adversely impact our operations and financial
condition.




| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to meet the automated
	level of performance required by some of our larger customers
	and strategic relationships, and the agreements we have with
	Fannie Mae and Freddie Mac can be cancelled on short
	notice.

Mortgage originators and secondary mortgage
market participants, including Fannie Mae and Freddie Mac,
require that any mortgage originated or purchased be supported
by a credit report on the mortgagee that is prepared by an
independent entity, such as us. A number of the larger mortgage
originators and purchasers are increasingly using automated
credit reporting techniques that require credit report providers
to render almost instantaneous responses, often within 60
seconds or less. We may not be able to continue to provide the
level of performance required by these or other large
institutions. Additionally, we may not be able to match the
level of technological service provided, or developed in the
future, by competitors. We also recently introduced a program
under which we guarantee to complete line item verifications and
updates on our mortgage credit reports within four hours of a
request, or the service is free of charge. Our inability to meet
the guaranty could adversely affect our revenue and harm our
reputation in the industry.

In order to provide mortgage credit reports to a
growing number of our customers, we rely on access to the
automated underwriting systems owned and maintained by Fannie
Mae and Freddie Mac, which are the two largest participants in
the secondary mortgage market. We receive this access through
agreements with Fannie Mae and Freddie Mac. As a result of these
agreements, we depend to a great extent on the success of the
Fannie Mae and Freddie Mac automated underwriting systems, which
currently constitute a relatively small but growing portion of
all conforming mortgage originations. There can be no assurance
that Fannie Mae and Freddie Mac will continue or expand these
programs, maintain current cost structures, or determine not to
impose additional procedures or requirements.

Fannie Mae has the right to terminate the
agreement at any time for any reason upon 60 days
notice. Fannie Mae also may terminate the agreement in the event
of our bankruptcy, insolvency, or breach. Freddie Mac has the
right to terminate the agreement in its sole discretion upon
30 days notice. The termination of either agreement,
and the denial of our access to Fannie Maes and Freddie
Macs systems, would have a major detrimental impact on our
ability to provide automated mortgage credit reports.



| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Any hardware or software malfunction, loss
	of telecommunications capabilities, or other operational
	interruptions at either of our data centers for more than a
	short period of time could adversely affect our ability to
	service our customers.

Any hardware or software malfunction, loss of
telecommunications capabilities, or other operational
interruptions at either of our data centers for more than a
short period of time could adversely affect our ability to
service our customers. Although we maintain redundant systems
and backups in and between our two data centers, we remain
subject to the consequences of power loss, internal or external
telecommunications failures, fire, and various natural disasters.



| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend on our intellectual property and
	technological know-how, and our failure to protect that
	intellectual property or advance our know-how could have an
	adverse effect on our business.

We rely on trademark and copyright laws, trade
secret protection, and confidentiality and other agreements with
our employees, customers, and others to protect our intellectual
property. However, some of our intellectual property and our
technological know-how is not protected and, despite our
precautions, it may be possible for third parties to use our
intellectual property and know-how without authorization from
us. We may not be successful in protecting our proprietary
rights and know-how. Any infringement of any of our

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intellectual property rights or third-party use
of our know-how could have an adverse effect on our ability to
operate successfully.




| |                            
| | ---------------------------
| | We depend on key personnel.

Our success depends, in large part, upon the
continuing efforts and abilities of our executive officers,
particularly our Chief Executive Officer, J. H. Donnan. We do
not have an employment agreement with Mr. Donnan or any of
our other executive officers or key personnel. In addition, we
likely will depend on the key management of any significant
businesses we acquire in the future. The loss of the services of
one or more of our key employees before we are able to attract
and retain qualified replacement personnel could adversely
affect our business.



| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | Our articles of incorporation, bylaws, and
	Colorado law could make it more difficult for a third party to
	acquire us.

Our articles of incorporation and bylaws contain
provisions that may have the effect of making more difficult,
discouraging, or delaying attempts by others to obtain control
of our company, even when these attempts may be in the best
interests of our shareholders. These provisions include the
following:



| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the ability of our Board of Directors to issue
	authorized but unissued common and preferred stock without
	action by our shareholders;                                                          
|
| |  | a classified Board of Directors, which provides
	for the election of directors for three-year terms, with
	approximately one-third of the Board of Directors standing for
	election each year;   
|
| |  | limitations on alteration of the classified Board
	provisions and the ability of shareholders to remove
	directors; and                                                                          
|
| |  | the requirement to obtain the affirmative vote of
	the holders of at least two-thirds of our capital stock to
	approve a merger, dissolution, or sale of all or substantially
	all of our assets.



| |                                                                 
| | ----------------------------------------------------------------
| | We must evaluate our intangible assets
	annually for impairment.

Our intangible assets are recorded at cost less
accumulated amortization and consist of customer lists,
goodwill, covenants not-to-compete, license agreements,
intellectual property, and loan origination costs. Through
December 31, 2001, customer lists and goodwill were
amortized using the straight-line method over 15 years; and
covenants not-to-compete and license agreements were amortized
over the life of the agreements, which ranged from three to
10 years; intellectual property was amortized from 13 to
15 years; and loan origination costs were amortized over
the loan term.

In June 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets.
SFAS 142 provides that goodwill and certain intangibles no
longer will be amortized, but instead will be tested for
impairment at least annually. In the event that we determine our
intangible assets have been impaired, we must record a
write-down of those assets on our statement of operations during
the period of impairment. Our determination of impairment will
consider various factors, including the following:



| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | significant underperformance relative to expected
	historical or projected future operating results;          
|
| |  | significant changes in the manner of our use of
	the acquired assets or the strategy for our overall business;
|
| |  | significant negative industry or economic trends;                                                             
|
| |  | significant decline in our stock price for a
	sustained period; and                                           
|
| |  | our market capitalization relative to net book
	value.                                                        

We plan to adopt SFAS 142 during fiscal
2002, and we may incur future impairments of our intangible
assets or goodwill upon adoption.

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In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS 144 requires the recognition
of an impairment loss if the carrying amount of a long-lived
assets is not recoverable from their undiscounted cash flows and
measures the impairment loss as the difference between the
carrying amount and fair value of the assets.

We expect to continue to amortize our customer
lists and intellectual property over the same time periods as
previously used. These recent accounting pronouncements,
however, require the testing of our intangible assets for
impairment at least once each year. In addition, we are required
to assess the consumptive life, or longevity, of our intangible
assets and adjust their amortization periods accordingly. Our
net intangible assets were recorded on our balance sheet at
approximately $28.7 million as of December 31, 2001,
and we expect the carrying value of net intangible assets will
increase significantly as we acquire additional businesses. Any
impairments in future periods of those assets, or a reduction in
their consumptive lives, could materially and adversely affect
our statement of operations and financial position.



| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | Directors, officers, and certain other
	shareholders own a significant portion of our common
	stock.

Our directors and executive officers and persons
associated with them beneficially own a total of approximately
57.5% of the issued and outstanding shares of our common stock.
As a result of this ownership, these persons have the power to
control our company, including the election of directors, the
determination of matters requiring shareholder approval, and
other matters pertaining to corporate governance. This
concentration of ownership also may have the effect of delaying
or preventing a change in control of our company.



| |                                  
| | ---------------------------------
| | Our stock price may be
	volatile.

The market price of our common stock could be
subject to wide fluctuations as a result of many factors,
including the following:



| |   |                                                                                      
| | - | -------------------------------------------------------------------------------------
| |  | variations in quarterly operating results;                                           
|
| |  | amortization and possible impairment of the
	carrying value of our intangible assets;
|
| |  | the level and success of our acquisition program
	and new service offerings;         
|
| |  | the success of our integration of acquisitions;                                      
|
| |  | changes in earnings estimates published by
	analysts;                                
|
| |  | the level of interest rates;                                                         
|
| |  | general economic, political, market, and industry
	conditions;                       
|
| |  | seasonality and weather conditions;                                                  
|
| |  | governmental policies and regulations;                                               
|
| |  | industry performance in general;                                                     
|
| |  | factors relating to suppliers, customers, and
	competitors; and                      
|
| |  | recruitment or departures of key personnel.                                          

In addition, the relatively few number of shares
held by the public, periodically weak market demand for
small-and mid-capitalization stocks, and price and volume
fluctuations in the stock market unrelated to our performance
could result in significant fluctuations in the market price of
our common stock. The performance of our common stock could
adversely affect our ability to raise equity in the public
markets and adversely affect our acquisition program.



| |                                                            
| | -----------------------------------------------------------
| | Shareholders may incur immediate and
	substantial dilution.

The issuance of additional common or preferred
stock in the future, including shares that we may issue pursuant
to exercise of outstanding options or warrants and future
acquisitions, may result in dilution in the net

16



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##### Table of Contents



tangible book value per share of our common
stock. Our Board of Directors has the power and authority to
determine the terms of an offering of shares of our capital
stock, or securities convertible into or exchangeable for these
shares, to the extent of our shares of authorized and unissued
capital stock.




| |                                                                                       
| | --------------------------------------------------------------------------------------
| | Sales of large number of shares could
	adversely affect the price of our common stock.

Substantial sales of our common stock in the
public market, including shares issued upon the exercise of
outstanding options and warrants, or the perception that these
sales could occur, may have a depressive effect on the market
price of our common stock and could impair our ability to raise
capital or make acquisitions through the issuance of equity
securities. As of March 31, 2002, there were
6,119,893 shares of our common stock outstanding. Of these
shares, 2,650,650 are freely tradable without restriction or
further registration under the securities laws and
3,469,243 shares are held by directors, officers, and other
affiliates of our company. We have registered for resale
1,669,243 shares held by affiliates of two of our
directors. The remaining balance of shares held by our
directors, officers and other affiliates are subject to the
resale limitations of Rule 144 described below. In
addition, approximately 880,000 shares issuable upon the
exercise of options and warrants outstanding as of
March 31, 2002 may become available for sale in the public
markets.

In general, under Rule 144 adopted under the
Securities Act, any person that beneficially owns restricted
securities for one year and any person deemed to be an affiliate
of our company is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of
(1) 1% of the then outstanding shares of common stock of
our company or (2) the average weekly trading volume in
common stock during the four calendar weeks preceding such sale.
A person that is not an affiliate and has held restricted
securities for at least two years is entitled to sell such
shares without any limitations.




Item 2.     Properties

Our corporate offices are located in two
buildings in Loveland, Colorado. We have 20-year operating
leases for 32,086 square feet of space in one building and
19,349 square feet in the other. We anticipate the two
spaces will be adequate to meet our office requirements for the
foreseeable future. We also hold six operating leases for our
regional offices, most of which are not material and none of
which has a term exceeding ten years.




Item 3.     Legal
Proceedings

We are not a party to any legal proceedings
except those in the ordinary course of our business. We believe
there is no proceeding threatened or pending against us which,
if determined adversely, would have a material adverse effect on
our financial condition or results of operations.




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

No matters were submitted by us to a vote of our
security holders during the fourth quarter of our fiscal year
ended December 31, 2001.




Item 5.     Market
for Registrants Common Equity and Related Shareholder
Matters

Our common stock is quoted on the Nasdaq National
Market under the symbol FDCC. The following table
sets forth, for the periods indicated, the high and low sales
prices of our common stock as reported on the Nasdaq National
Market:

|               |  |      |      |     |  |   |      | 
|-------------- |  | ---- | ---- | --- |  | - | ---- | 
|2000           |  | High |      | Low
|               |  |      |      |    
|First Quarter  |  | $    | 8.56 |     |  | $ | 6.75 | 
|Second Quarter |  |      | 9.25 |     |  |   | 8.00 | 
|Third Quarter  |  |      | 9.38 |     |  |   | 7.38 | 
|Fourth Quarter |  |      | 7.88 |     |  |   | 5.00 | 

17



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##### Table of Contents



|               |  |   |       |  |  |   |      | 
|-------------- |  | - | ----- |  |  | - | ---- | 
|2001           |  |   |       | 
|               |  |   |       | 
|First Quarter  |  | $ | 7.06  |  |  | $ | 5.00 | 
|Second Quarter |  |   | 7.73  |  |  |   | 6.81 | 
|Third Quarter  |  |   | 11.75 |  |  |   | 7.21 | 
|Fourth Quarter |  |   | 11.34 |  |  |   | 7.79 | 

On April 12, 2002, the last reported sales
price of our common stock as reported on the Nasdaq National
Market was $7.25 per share. As of April 12, 2002, there
were 33 holders of record of our common stock and
approximately 600 beneficial owners of our common stock.

We have not paid or declared cash distributions
or dividends on our common stock and do not intend to pay cash
dividends in the foreseeable future. Our bank credit facility
has customary restraints on our ability to pay cash dividends.
Any cash dividends in the future will be determined by our Board
of Directors based on our earnings, financial condition, capital
requirements, and other relevant factors.




Item 6.     Selected
Financial Data

The following selected consolidated financial
data should be read in conjunction with our consolidated
financial statements and related notes thereto appearing
elsewhere in this report. The consolidated statements of
operations data for the years ended December 31, 1997,
1998, 1999, and 2000 and the consolidated balance sheet data as
of December 31, 1997, 1998, 1999, and 2000 are derived from
our consolidated financial statements, which have been audited
by Ehrhardt Keefe Steiner & Hottman PC, our former
independent public accountants. The consolidated statements of
operations data for the year ended December 31, 2001 and
the consolidated balance sheet data as of December 31, 2001
are derived from our consolidated financial statements, which
have been audited by BDO Seidman LLP, our independent public
accountants, as

18



---



##### Table of Contents



indicated in their report included herein. The
selected financial data provided below is not necessarily
indicative of our future results of operations or financial
performance.


|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |        |        |        | 
|------------------------------------ | --------------------------------------------- | ---------------------------------------- | ------------------------ | ----- | ----- | ----- | - | ------ | ----- | ----- | - | ------ | ------ | ------ | - | ------- | ------ | ------ | - | ------ | ------ | ------ | 
|                                     |                                               |                                         
|                                     |                                               | For the Years Ended December 31,        
|                                     |                                               |                                         
|                                     |                                               | 1997                                     |                          | 1998  |       | 1999  |   | 2000   |       | 2001 
|                                     |                                               |                                          |                          |       |       |       |   |        |       |      
|                                     |                                               |                                         
|                                     |                                               | (in thousands, except per share amounts)
|Statements of Operations Data:       |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|Revenue:                             |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Mortgage services                             |                                          | $                        | 3,450 |       |       | $ | 8,867  |       |       | $ | 23,738 |        |        | $ | 25,560  |        |        | $ | 42,552 |       
|                                     | Consumer services                             |                                          |                          |      |       |       |   |       |       |       |   |       |        |        |   | 3,180   |        |        |   | 6,476  |       
|                                     | Other services                                |                                          |                          | 70    |       |       |   | 1,077  |       |       |   | 2,092  |        |        |   | 2,521   |        |        |   | 2,212  |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     |                                               | Total revenue                            |                          |       | 3,520 |       |   |        | 9,944 |       |   |        | 25,830 |        |   |         | 31,261 |        |   |        | 51,240 |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|Operating expenses:                  |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Cost of services                              |                                          |                          | 1,603 |       |       |   | 4,747  |       |       |   | 15,400 |        |        |   | 18,280  |        |        |   | 29,828 |       
|                                     | Selling, general, and administrative          |                                          |                          | 766   |       |       |   | 2,067  |       |       |   | 4,907  |        |        |   | 8,132   |        |        |   | 9,263  |       
|                                     | Depreciation and amortization                 |                                          |                          | 355   |       |       |   | 776    |       |       |   | 2,715  |        |        |   | 4,131   |        |        |   | 3,621  |       
|                                     | Acquisition consolidation costs(1)            |                                          |                          |      |       |       |   |       |       |       |   | 1,245  |        |        |   | 602     |        |        |   | 158    |       
|                                     | Branch efficiency costs(2)                    |                                          |                          |      |       |       |   |       |       |       |   |       |        |        |   | 3,046   |        |        |   | (170   | )     
|                                     | Impairment adjustment to intangible assets(3) |                                          |                          |      |       |       |   |       |       |       |   |       |        |        |   | 11,798  |        |        |   |       |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     |                                               |                                          | Total operating expenses |       |       | 2,724 |   |        |       | 7,590 |   |        |        | 24,267 |   |         |        | 45,989 |   |        |        | 42,700 | 
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Income (loss) from operations                 |                                          |                          | 796   |       |       |   | 2,354  |       |       |   | 1,563  |        |        |   | (14,728 | )      |        |   | 8,540  |       
|                                     | Other income                                  |                                          |                          | 29    |       |       |   | 185    |       |       |   | 201    |        |        |   | 502     |        |        |   | 496    |       
|                                     | Interest expense                              |                                          |                          | (78   | )     |       |   | (152   | )     |       |   | (580   | )      |        |   | (1,542  | )      |        |   | (2,239 | )     
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Income (loss) before income taxes             |                                          |                          | 747   |       |       |   | 2,387  |       |       |   | 1,184  |        |        |   | (15,768 | )      |        |   | 6,797  |       
|                                     | Income tax expense (benefit)                  |                                          |                          | 244   |       |       |   | 810    |       |       |   | 525    |        |        |   | (5,611  | )      |        |   | 2,661  |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Net income (loss)                             |                                          | $                        | 503   |       |       | $ | 1,577  |       |       | $ | 659    |        |        | $ | (10,157 | )      |        | $ | 4,136  |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|Earnings (loss) per share:           |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Basic                                         |                                          | $                        | 0.28  |       |       | $ | 0.59   |       |       | $ | 0.13   |        |        | $ | (1.89   | )      |        | $ | 0.72   |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Diluted                                       |                                          | $                        | 0.28  |       |       | $ | 0.57   |       |       | $ | 0.13   |        |        | $ | (1.89   | )      |        | $ | 0.71   |       
|                                     |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|Weighted average shares outstanding: |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Basic                                         |                                          |                          | 1,800 |       |       |   | 2,681  |       |       |   | 4,938  |        |        |   | 5,383   |        |        |   | 5,757  |       
|                                     | Diluted                                       |                                          |                          | 1,800 |       |       |   | 2,769  |       |       |   | 5,219  |        |        |   | 5,383   |        |        |   | 5,819  |       
|Balance Sheet Data:                  |                                               |                                          |                          |       |       |       |   |        |       |       |   |        |        |        |   |         |        |        |   |       
|                                     | Current assets                                |                                          | $                        | 1,219 |       |       | $ | 6,331  |       |       | $ | 5,637  |        |        | $ | 6,322   |        |        | $ | 12,794 |       
|                                     | Total assets                                  |                                          |                          | 2,864 |       |       |   | 18,177 |       |       |   | 39,692 |        |        |   | 42,800  |        |        |   | 50,884 |       
|                                     | Current liabilities                           |                                          |                          | 1,103 |       |       |   | 4,546  |       |       |   | 8,014  |        |        |   | 12,781  |        |        |   | 14,268 |       
|                                     | Long-term debt and other liabilities          |                                          |                          | 1,114 |       |       |   | 2,795  |       |       |   | 6,319  |        |        |   | 5,971   |        |        |   | 4,754  |       
|                                     | Experian and other capital lease obligations  |                                          |                          |      |       |       |   |       |       |       |   |       |        |        |   | 8,793   |        |        |   | 7,387  |       
|                                     | Shareholders equity                          |                                          |                          | 647   |       |       |   | 10,836 |       |       |   | 25,359 |        |        |   | 15,255  |        |        |   | 24,475 |       



---



| | 
| | 
| | 



|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Acquisition consolidation costs include charges
	for items such as recruiting fees, salaries, and travel costs
	from the consolidation and relocation of the acquired
	companies operations to our regional processing centers.

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|    |                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Branch-efficiency costs consist primarily of
	future operating lease payments for office space,
	telecommunications and office equipment, leasehold improvements,
	furniture, and equipment.                                                                                           
|   
|(3) | During fiscal 2000, we elected to change our
	method of evaluating intangible assets from an undiscounted cash
	flow approach to a discounted cash flow approach, resulting in a
	one-time charge of approximately $11.8 million. See
	note 3 to our consolidated financial statements.




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

You should read the following discussion and
analysis in conjunction with our audited consolidated financial
statements, including the notes thereto contained elsewhere in
this report. This discussion contains forward-looking statements
that involve risks, uncertainties, and assumptions. Our actual
results may differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including the special considerations set forth in Item 1
and elsewhere in this report.

Overview

We provide a wide range of customized information
services to businesses across the United States that assist them
in making critical decisions, such as determining whether to
make a mortgage or other loan, offer employment, accept new
tenants, or enter into a business relationship. We specialize in
providing customized mortgage credit reports and other mortgage
related services, consumer credit reports, employment screening,
resident screening, and commercial credit reports. Our customers
include mortgage lenders and independent mortgage brokers,
consumer lenders, employers, property managers, and other
business customers desiring information regarding
creditworthiness and other matters. We believe we are an
industry leader in delivering our service offerings over the
Internet and in utilizing technology and focusing on customer
service to provide our services with the speed, reliability,
accuracy, and customization that industry participants
increasingly demand.

Critical Accounting Policies

We have identified the policies below as critical
to our business operations and the understanding of our results
of operations. The impact and any associated risks related to
these policies on our business operations is discussed
throughout Managements Discussion and Analysis of
Financial Condition and Results of Operations when such policies
affect our reported and expected financial results.

In the ordinary course of business, we have made
a number of estimates and assumptions relating to the reporting
of results of operations and financial condition in the
preparation of our financial statements in conformity with
accounting principles generally accepted in the United States.
Actual results could differ significantly from those estimates
under different assumptions and conditions. We believe that the
following discussion addresses our most critical accounting
policies, which are those that are most important to the
portrayal of our financial condition and results of operations
and require our most difficult, subjective, and complex
judgments, often as a result of the need to make estimates about
the effect of matters that are inherently uncertain.



| |                    
| | -------------------
| | Revenue Recognition

We recognize revenue when the mortgage credit
report or other information, collectively a unit,
has been delivered to the customer, persuasive evidence of the
terms of the arrangement exists, our fee is fixed and
determinable, and collectibility is reasonably assured. Delivery
usually takes place electronically and revenue is recognized
when the customer has access to the data. Our 4 Hours or
Its Free guarantee applies to line-item
verifications and updates on our reports. We do not recognize
revenue on services subject to the guarantee until the guarantee
conditions are met. The fees we charge our customers are based
on the type of unit delivered. We do not receive upfront set up
fees or other upfront fees from our customers. Our cost of
services primarily includes data costs, which are expensed when
the unit is delivered to the customer.

20



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##### Table of Contents





| |                                                   
| | --------------------------------------------------
| | Valuation of Goodwill and Other Intangible
	Assets

We assess the impairment of identifiable
intangible assets and goodwill whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. Factors we consider important that could trigger an
impairment review include the following:



| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | significant underperformance relative to expected
	historical or projected future operating results;          
|
| |  | significant changes in the manner of our use of
	the acquired assets or the strategy for our overall business;
|
| |  | significant negative industry or economic trends;                                                             
|
| |  | significant decline in our stock price for a
	sustained period; and                                           
|
| |  | our market capitalization relative to net book
	value.                                                        

Until our adoption of SFAS No. 142 discussed
below, when we determine that the carrying value of other
intangible assets and goodwill may not be recoverable based upon
the existence of one or more of the above indicators of
impairment, we measure any impairment based on a projected
discounted cash flow method using a discount rate determined by
us to be commensurate with the risk inherent in our current
business model. Other intangible assets and net goodwill
amounted to $28.7 million as of December 31, 2001.

In 2002, Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and
Other Intangible Assets became effective. As of
December 31, 2001, the net carrying amount of goodwill of
$168,000 will no longer be amortized and will be subject to
impairment testing under SFAS No. 142. In lieu of
amortization, we are required to perform an initial impairment
review of our goodwill in 2002 and an annual impairment review
thereafter. We are currently assessing, but have not yet
determined, how the adoption of SFAS No. 142 will impact
our financial position and results of operations. Other
intangible assets with a carrying amount of $28.5 million
at December 31, 2001 will be subject to the amortization
methods prescribed by SFAS No. 142.



| |                                 
| | --------------------------------
| | Allowance for Doubtful
	Accounts

We estimate the uncollectability of our accounts
receivable. We specifically analyze accounts receivable,
historical bad debts, customer concentrations, customer
creditworthiness, current economic trends, and changes in our
customer payment terms when evaluating the adequacy of the
allowance for doubtful accounts. Material differences may result
in the amount and timing of expenses for any period if we made
different judgments or utilized different estimates. Our
accounts receivable was $6.2 million as of
December 31, 2001, and our allowance for doubtful accounts
was $244,000 as of December 31, 2001.



| |                            
| | ---------------------------
| | Accounting for Income Taxes

As part of the process of preparing our
consolidated financial statements, we are required to estimate
our income taxes. This process involves estimating our current
tax exposure together with assessing temporary differences
resulting from differing treatment of items for tax and
accounting purposes. These differences result in deferred tax
assets and liabilities, which are recorded in our consolidated
balance sheet.

Significant judgment is required in determining
our provision for income taxes and deferred tax assets and
liabilities. We recorded a net deferred tax asset of
approximately $3.9 million at December 31, 2001, of
which approximately $3.8 million related to intangible
assets. We believe that it is more likely than not that the
deferred tax assets will be realized from the generation of
future taxable income. Although the deferred tax asset is
considered realizable, actual amounts could be reduced, and
charged against our results from operations in future periods,
if we do not generate sufficient future taxable income.



| |                                        
| | ---------------------------------------
| | Capitalized Software Development
	Costs

We capitalize costs, which include primarily
salaries in connection with developing software for internal
use. We use judgment in determining whether development costs
meet the criteria for immediate expense or

21



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##### Table of Contents



capitalization. Direct costs incurred in the
development of software are capitalized once the preliminary
project stage is completed, management has committed to funding
the project, and completion and use of the software for its
intended purpose are probable. We cease capitalization of
development costs once the software has been substantially
completed and is ready for its intended use. We capitalized
$624,000, $755,000, and $749,000 of costs during the years ended
December 31, 1999, 2000, and 2001, respectively. The
software development costs capitalized are amortized over the
estimated useful life of the software, which we estimate to be
three years. Amortization expense was $416,000, $514,000, and
$654,000 for the years ended December 31, 1999, 2000, and
2001, respectively.


Business Segments

We classify our business operations into three
reporting segments: mortgage services, consumer services, and
other services. Historically, we have derived most of our
revenue from mortgage services, with our primary service in this
segment being our mortgage credit reports. Through our consumer
services business, we generate revenue primarily from the
delivery of consumer credit reports. Our other services consist
of resident and employment screening services.

Results of Operations



| |                                        
| | ---------------------------------------
| | Years Ended December 31, 2000 and
	2001

Revenue, cost of services, and cost of services
as a percent of revenue for our operating segments for the
periods indicated are as follows (in thousands):

|                                         |  |          |        |          |  |          |       |       |  |   |       |   |  |   |        |  
|---------------------------------------- |  | -------- | ------ | -------- |  | -------- | ----- | ----- |  | - | ----- | - |  | - | ------ | -
|Year Ended                               |  | Mortgage |        | Consumer |  | Other    |       |      
|December 31, 2001                        |  | Services |        | Services |  | Services |       | Total
|                                         |  |          |        |          |  |          |       |      
|Revenue                                  |  | $        | 42,552 |          |  | $        | 6,476 |       |  | $ | 2,212 |   |  | $ | 51,240 |  
|Cost of services                         |  |          | 24,286 |          |  |          | 3,872 |       |  |   | 1,670 |   |  |   | 29,828 |  
|Cost of services as a percent of revenue |  |          | 57.1   | %        |  |          | 59.8  | %     |  |   | 75.5  | % |  |   | 58.2   | %

|                                         |  |          |        |          |  |          |       |       |  |   |       |   |  |   |        |  
|---------------------------------------- |  | -------- | ------ | -------- |  | -------- | ----- | ----- |  | - | ----- | - |  | - | ------ | -
|Year Ended                               |  | Mortgage |        | Consumer |  | Other    |       |      
|December 31, 2000                        |  | Services |        | Services |  | Services |       | Total
|                                         |  |          |        |          |  |          |       |      
|Revenue                                  |  | $        | 25,560 |          |  | $        | 3,180 |       |  | $ | 2,521 |   |  | $ | 31,261 |  
|Cost of services                         |  |          | 15,417 |          |  |          | 1,875 |       |  |   | 988   |   |  |   | 18,280 |  
|Cost of services as a percent of revenue |  |          | 60.3   | %        |  |          | 59.0  | %     |  |   | 39.2  | % |  |   | 58.5   | %

Total revenue increased $19.9 million, or
63.6%, from $31.3 million in 2000 to $51.2 million in
2001.

Mortgage services revenue increased
$17.0 million, or 66.4%, from $25.6 million in 2000 to
$42.6 million in 2001 as a result of our ability to obtain
new business from national accounts and independent mortgage
brokers, acquisitions in key market areas, continued advances in
our technology, and a favorable mortgage environment, which
fueled demand for our mortgage services.

Consumer services revenue increased
$3.3 million, or 103.1%, from $3.2 million in 2000 to
$6.5 million in 2001 as a result of the benefit of a full
year of business in all three Experian territories and the
addition of new customers in these territories.

Other services revenue decreased $300,000, or
12.0%, from $2.5 million in 2000 to $2.2 million in
2001. This overall decrease consisted of a $453,000 increase in
resident and employment screening services as a result of the
development of new customers, offset by a $753,000 decrease as a
result of our termination of a resident screening agreement.

Cost of services are direct operational costs and
consist of data costs, salaries, and telecommunications costs.
Total cost of services increased $11.5 million, or 62.8%,
from $18.3 million in 2000 to $29.8 million in 2001.
These costs are primarily variable costs, which tend to
fluctuate with changes in revenue, but tend to remain fairly
consistent as a percentage of revenue. As a percentage of
revenue, cost of services decreased from 58.5% in 2000 to 58.2%
in 2001.

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Mortgage cost of services increased
$8.9 million, or 57.8%, from $15.4 million in 2000 to
$24.3 million in 2001 as a result of our increased revenue.
However, as a percentage of revenue, mortgage cost of services
decreased from 60.3% in 2000 to 57.1% in 2001 as a result of
lower data costs and our ability to use our technology to reduce
salary costs.

Consumer cost of services increased
$2.0 million, or 105.3%, from $1.9 million in 2000 to
$3.9 million in 2001 as a result of increased revenue. As a
percentage of revenue, these costs remained fairly consistent,
increasing from 59.0% in 2000 to 59.8% in 2001.

Other cost of services increased $712,000, or
72.1%, from $988,000 in 2000 to $1.7 million in 2001 and
increased as a percentage of revenue from 39.2% in 2000 to 75.5%
in 2001. This increase was due to our implementation of a new
marketing call center for other services during the fourth
quarter of 2000 and our termination of a resident screening
agreement.

Selling, general, and administrative expenses
increased $1.2 million, or 14.8%, from $8.1 million in
2000 to $9.3 million in 2001. As a percentage of revenue,
these costs decreased from 26.0% to 18.1%, a 7.9% reduction. We
expect selling, general, and administrative expenses to increase
in the aggregate as we grow our business. However, these
expenses should tend to decrease as a percentage of revenue as
we integrate acquisitions and lower our costs through continued
technological advances.

Depreciation and amortization decreased $500,000
or 12.2%, from $4.1 million in 2000 to $3.6 million in
2001. This decrease reflected the impact on amortization of the
$11.8 million write-down of intangible assets in 2000. The
adjustment was the result of our election to change our
accounting policy in assessing our intangible assets from a
policy based upon undiscounted cash flows to a policy that
utilizes discounted cash flows. We believed that the use of a
discounted methodology was preferable and was consistent with
the methodology we utilized in assessing acquisition
opportunities.

Acquisition consolidation costs decreased
$444,000, or 73.8%, from $602,000 in 2000 to $158,000 in 2001.
This decrease was due primarily to the fewer number of
acquisitions in 2001 than in 2000. These costs included
consolidation charges for items such as recruiting fees,
salaries, and travel costs for the consolidation and relocation
of the acquired companies to our regional processing centers.

In 2001, we recorded a $170,000 reduction in our
previous estimate of branch efficiency costs of
$3.0 million in 2000. The branch efficiency costs in 2000
consisted primarily of future operating lease payments for
office space, telecommunications and office equipment, leasehold
improvements, furniture, and equipment.

In 2000, we recorded an impairment adjustment to
intangible assets of $11.8 million because of a change in
accounting policy. In 2001, we did not have any impairment
adjustment.

Interest expense increased $700,000, or 46.7%,
from $1.5 million in 2000 to $2.2 million in 2001.
This increase primarily was due to a full year of interest
recognized under our $10.3 million Experian capitalized
lease agreements during 2001.

Income tax expense was $2.7 million in 2001
compared to an income tax benefit of $5.6 million in 2000.
Our effective tax rate was 39.1% for 2001.

As a result of the foregoing factors, net income
in 2001 was $4.1 million, or $0.71 per diluted share,
compared to a net loss of $10.2 million, or $1.89 per
diluted share, in 2000.

Our EBITDA (earnings before interest, taxes,
depreciation, and amortization but excluding branch efficiency
costs and an impairment adjustment to intangible assets), was
$12.5 million in 2001 compared to $4.7 million in
2000, a $7.8 million, or a 165.9%, increase over 2000.
EBITDA should not be considered as an alternative to net income,
an indicator of operating performance, an alternative to cash
flow, a measure of liquidity, or an ability to service debt
obligations. EBITDA is not in accordance with, or superior to,
accounting principles generally accepted in the United States,
but it provides additional information for evaluating our
operating performance. We believe EBITDA is a useful financial
metric for evaluating our business.

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| |                                        
| | ---------------------------------------
| | Years Ended December 31, 1999 and
	2000

Revenue, cost of services, and cost of services
as a percent of revenue for our operating segments for the
periods indicated are as follows (in thousands):

|                                         |  |          |        |          |  |          |       |       |  |   |       |   |  |   |        |  
|---------------------------------------- |  | -------- | ------ | -------- |  | -------- | ----- | ----- |  | - | ----- | - |  | - | ------ | -
|Year Ended                               |  | Mortgage |        | Consumer |  | Other    |       |      
|December 31, 2000                        |  | Services |        | Services |  | Services |       | Total
|                                         |  |          |        |          |  |          |       |      
|Revenue                                  |  | $        | 25,560 |          |  | $        | 3,180 |       |  | $ | 2,521 |   |  | $ | 31,261 |  
|Cost of services                         |  |          | 15,417 |          |  |          | 1,875 |       |  |   | 988   |   |  |   | 18,280 |  
|Cost of services as a percent of revenue |  |          | 60.3   | %        |  |          | 59.0  | %     |  |   | 39.2  | % |  |   | 58.5   | %

|                                         |  |          |        |          |  |          |   |       |  |   |       |   |  |   |        |  
|---------------------------------------- |  | -------- | ------ | -------- |  | -------- | - | ----- |  | - | ----- | - |  | - | ------ | -
|Year Ended                               |  | Mortgage |        | Consumer |  | Other    |   |      
|December 31, 1999                        |  | Services |        | Services |  | Services |   | Total
|                                         |  |          |        |          |  |          |   |      
|Revenue                                  |  | $        | 23,738 |          |  | $        |  |       |  | $ | 2,092 |   |  | $ | 25,830 |  
|Cost of services                         |  |          | 14,114 |          |  |          |  |       |  |   | 1,286 |   |  |   | 15,400 |  
|Cost of services as a percent of revenue |  |          | 59.5   | %        |  |          |  |       |  |   | 61.4  | % |  |   | 59.6   | %

Total revenue increased $5.5 million, or
21.3%, from $25.8 million in 1999 to $31.3 million in
2000.

Mortgage services revenue increased
$1.9 million, or 8.0%, from $23.7 million in 1999 to
$25.6 million in 2000 primarily as a result of the
full-year impact of acquisitions in 1999 and the partial year
impact of acquisitions in 2000 as well as our ability to obtain
new business from national accounts and independent mortgage
brokers. These acquisitions contributed to our ability to
increase revenue despite the overall market decline in mortgage
originations in 2000.

Consumer services revenue in 2000 was
$3.2 million. We did not generate any consumer services
revenue in 1999. During May 2000, we entered into our first
lease agreement with Experian covering the state of Colorado.

Other services increased $400,000, or 19.0%, from
$2.1 million in 1999 to $2.5 million in 2000. This
increase was primarily due to the commencement of a resident
screening agreement.

Total cost of services increased
$2.9 million, or 18.8%, from $15.4 million in 1999 to
$18.3 million in 2000. These costs are primarily variable
costs, which tend to fluctuate with changes in revenue, but
remain fairly consistent as a percentage of revenue. As a
percentage of revenue, cost of services decreased 1.1% from
59.6% in 1999 to 58.5% in 2000.

Mortgage cost of services increased
$1.3 million, or 9.2%, from $14.1 million in 1999 to
$15.4 million in 2000 as a result of increased revenue.
However, as a percentage of revenue, mortgage cost of services
increased slightly from 59.5% in 1999 to 60.3% in 2000 as a
result of duplicate system costs, extra salary costs, and higher
data costs incurred during the conversion period of acquisitions.

Consumer cost of services were $1.9 million
in 2000. We entered into our first Experian lease agreement in
May 2000; therefore, we did not incur any consumer cost of
services in 1999.

Other cost of services decreased $312,000, or
24.0%, from $1.3 million in 1999 to $988,000 in 2000 and
decreased as a percentage of revenue from 61.4% in 1999 to 39.2%
in 2000, primarily as a result of the commencement of a resident
screening agreement.

Selling, general, and administrative expenses
increased $3.2 million, or 65.3%, from $4.9 million in
1999 to $8.1 million in 2000. As a percentage of revenue,
these costs increased from 19.0% in 1999 to 26.0% in 2000. This
increase related to costs associated with building our corporate
and regional processing centers and our technology
infrastructure.

Depreciation and amortization increased
$1.4 million, or 51.8%, from $2.7 million in 1999 to
$4.1 million in 2000. The increase reflected a full year of
amortization expense for the 19 acquisitions made in 1999 as
well as the incremental amortization expense for the four
acquisitions made in 2000.

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Acquisition consolidation costs decreased
$598,000, or 49.8%, from $1.2 million in 1999 to $602,000
in 2000. This decrease was primarily due to the fewer number of
acquisitions in 2000 than in 1999. These costs include
consolidation charges for items, such as recruiting fees,
salaries, and travel costs for the consolidation and relocation
of the acquired companies to our regional processing centers.

Branch efficiency costs for the year 2000 were
$3.0 million. We did not incur any branch efficiency costs
in 1999 (see note 5 to our consolidated financial
statements). The branch efficiency costs consisted primarily of
future operating lease payments for office space,
telecommunications and office equipment, leasehold improvements,
furniture, and equipment.

During 2000, we recorded an impairment adjustment
to intangible assets of $11.8 million (see note 3 to
our consolidated financial statements). This charge resulted
from an election to change our method of evaluating intangible
assets during the fourth quarter of 2000 from an undiscounted
cash flow approach to a discounted cash flow approach. The
discount rate we use in evaluating our intangible assets is
based on the weighted average cost of capital for companies in
our industry in addition to other internal and external factors.
We historically had followed an undiscounted cash flow approach
in evaluating the recoverability of our intangible assets,
consistent with the provisions of Statement of Financial
Accounting Standard (SFAS) No. 121 Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of.

Interest expense increased $962,000 or 166.0%,
from $580,000 in 1999 to $1.5 million in 2000. This
increase was due to additional notes payable issued in
connection with our acquisitions and the addition of two
Experian capitalized lease agreements in 2000.

We recorded an income tax benefit of
$5.6 million in 2000 compared to an income tax expense of
$525,000 in 1999. The tax benefit in 2000 was due primarily to
branch efficiency costs and the impairment adjustment to
intangible assets.

As a result of the foregoing factors, net loss in
2000 was $10.2 million, or $1.89 per diluted share,
compared to net income of $659,000, or $0.13 per diluted
share, in 1999.

Our EBITDA (earnings before interest, taxes,
depreciation, and amortization but excluding branch efficiency
costs and an impairment adjustment to intangible assets), was
$4.7 million in 2000 compared to $4.5 million in 1999.
EBITDA should not be considered as an alternative to net income,
an indicator of operating performance, an alternative to cash
flow, a measure of liquidity, or an ability to service debt
obligations. EBITDA is not in accordance with, or superior to,
accounting principles generally accepted in the United States,
but it provides additional information for evaluating our
operating performance. We believe EBITDA is a useful financial
metric for evaluating our business.

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##### Table of Contents



Quarterly Results of Operations

The following table presents selected
consolidated financial information for each of our last eight
fiscal quarters. The information has been derived from unaudited
consolidated financial statements that, in the opinion of
management, reflect all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the
quarterly information. The operating results for any quarter are
not necessarily indicative of the results for any subsequent
quarter.

|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |       |  
|------------------------------------ | ------------------------------------------ | -------------- | ----- | ------- |  | ------------ | ----- | ----------- |  | -------- | ----- | ------- | - | ------------ | ------- | ----------- | - | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- | -
|                                     |                                            |               
|                                     |                                            | Quarter Ended 
|                                     |                                            |               
|                                     |                                            |                |       |        
|                                     |                                            | 2000           |       | 2001   
|                                     |                                            |                |       |        
|                                     |                                            | March 31       |       | June 30 |  | September 30 |       | December 31 |  | March 31 |       | June 30 |   | September 30 |         | December 31
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |            
|                                     |                                            |               
|                                     |                                            | (in thousands)
|Revenue                              |                                            | $              | 7,789 |         |  | $            | 8,026 |             |  | $        | 7,819 |         |   | $            | 7,627   |             |   | $ | 13,064 |       |  | $ | 12,715 |       |  | $ | 11,873 |       |  | $ | 13,588 |      
|Operating expenses:                  |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|                                     | Cost of services                           |                |       | 4,368   |  |              |       | 4,575       |  |          |       | 4,497   |   |              |         | 4,840       |   |   |        | 7,531 |  |   |        | 7,413 |  |   |        | 6,930 |  |   |        | 7,954 |  
|                                     | Selling, general, and administrative       |                |       | 1,793   |  |              |       | 2,078       |  |          |       | 2,112   |   |              |         | 2,148       |   |   |        | 2,295 |  |   |        | 2,215 |  |   |        | 2,133 |  |   |        | 2,622 |  
|                                     | Depreciation and amortization              |                |       | 911     |  |              |       | 980         |  |          |       | 1,075   |   |              |         | 1,165       |   |   |        | 861   |  |   |        | 896   |  |   |        | 909   |  |   |        | 954   |  
|                                     | Acquisition consolidation costs            |                |       | 290     |  |              |       | 36          |  |          |       | 162     |   |              |         | 114         |   |   |        | 37    |  |   |        | 60    |  |   |        | 61    |  |   |        |      |  
|                                     | Branch efficiency costs                    |                |       |        |  |              |       |            |  |          |       |        |   |              |         | 3,047       |   |   |        |      |  |   |        |      |  |   |        |      |  |   |        | (170  | )
|                                     | Impairment adjustment to intangible assets |                |       |        |  |              |       |            |  |          |       |        |   |              |         | 11,799      |   |   |        |      |  |   |        |      |  |   |        |      |  |   |        |      |  
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Total operating expenses             |                                            |                | 7,362 |         |  |              | 7,669 |             |  |          | 7,846 |         |   |              | 23,113  |             |   |   | 10,723 |       |  |   | 10,584 |       |  |   | 10,033 |       |  |   | 11,360 |      
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Income (loss) from operations        |                                            |                | 427   |         |  |              | 357   |             |  |          | (27   | )       |   |              | (15,486 | )           |   |   | 2,341  |       |  |   | 2,131  |       |  |   | 1,840  |       |  |   | 2,228  |      
|Other expense, net                   |                                            |                | 140   |         |  |              | 284   |             |  |          | 378   |         |   |              | 238     |             |   |   | 507    |       |  |   | 570    |       |  |   | 376    |       |  |   | 289    |      
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Income (loss) before income taxes    |                                            |                | 287   |         |  |              | 73    |             |  |          | (405  | )       |   |              | (15,724 | )           |   |   | 1,834  |       |  |   | 1,561  |       |  |   | 1,464  |       |  |   | 1,939  |      
|Income tax expense (benefit)         |                                            |                | 117   |         |  |              | 44    |             |  |          | (128  | )       |   |              | (5,644  | )           |   |   | 692    |       |  |   | 633    |       |  |   | 555    |       |  |   | 781    |      
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Net income (loss)                    |                                            | $              | 170   |         |  | $            | 29    |             |  | $        | (277  | )       |   | $            | (10,080 | )           |   | $ | 1,142  |       |  | $ | 928    |       |  | $ | 909    |       |  | $ | 1,158  |      
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Earnings (loss) per share:           |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|                                     | Basic                                      |                | $     | .03     |  |              | $     | .01         |  |          | $     | (.05    | ) |              | $       | (1.87       | ) |   | $      | .21   |  |   | $      | .17   |  |   | $      | .15   |  |   | $      | .19   |  
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|                                     | Diluted                                    |                | $     | .03     |  |              | $     | .01         |  |          | $     | (.05    | ) |              | $       | (1.87       | ) |   | $      | .21   |  |   | $      | .17   |  |   | $      | .15   |  |   | $      | .19   |  
|                                     |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|Weighted average shares outstanding: |                                            |                |       |         |  |              |       |             |  |          |       |         |   |              |         |             |   |   |        |       |  |   |        |       |  |   |        |       |  |   |        |      
|                                     | Basic                                      |                |       | 5,380   |  |              |       | 5,381       |  |          |       | 5,383   |   |              |         | 5,385       |   |   |        | 5,387 |  |   |        | 5,389 |  |   |        | 6,119 |  |   |        | 6,120 |  
|                                     | Diluted                                    |                |       | 5,481   |  |              |       | 5,679       |  |          |       | 5,696   |   |              |         | 5,385       |   |   |        | 5,391 |  |   |        | 5,400 |  |   |        | 6,262 |  |   |        | 6,206 |  

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The following table sets forth selected
consolidated financial information as a percentage of total
revenue for each of our last eight fiscal quarters.

|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |      |  
|--------------------------------- | ------------------------------------------ | ------------- | ----- | ------- |  | ------------ | ----- | ----------- |  | -------- | ----- | ------- |  | ------------ | ------ | ----------- |  |  | ----- | ---- |  |  | ----- | ---- |  |  | ----- | ---- |  |  | ----- | ---- | -
|                                  |                                            |              
|                                  |                                            | Quarter Ended
|                                  |                                            |              
|                                  |                                            |               |       |        
|                                  |                                            | 2000          |       | 2001   
|                                  |                                            |               |       |        
|                                  |                                            | March 31      |       | June 30 |  | September 30 |       | December 31 |  | March 31 |       | June 30 |  | September 30 |        | December 31
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |            
|Revenues                          |                                            |               | 100.0 | %       |  |              | 100.0 | %           |  |          | 100.0 | %       |  |              | 100.0  | %           |  |  | 100.0 | %    |  |  | 100.0 | %    |  |  | 100.0 | %    |  |  | 100.0 | %   
|Operating expenses:               |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     
|                                  | Cost of services                           |               |       | 56.1    |  |              |       | 57.0        |  |          |       | 57.5    |  |              |        | 63.5        |  |  |       | 57.6 |  |  |       | 58.3 |  |  |       | 58.4 |  |  |       | 58.5 |  
|                                  | Selling, general, and administrative       |               |       | 23.0    |  |              |       | 25.9        |  |          |       | 27.0    |  |              |        | 28.2        |  |  |       | 17.6 |  |  |       | 17.4 |  |  |       | 17.9 |  |  |       | 19.3 |  
|                                  | Depreciation and amortization              |               |       | 11.7    |  |              |       | 12.2        |  |          |       | 13.7    |  |              |        | 15.3        |  |  |       | 6.6  |  |  |       | 7.0  |  |  |       | 7.7  |  |  |       | 7.0  |  
|                                  | Acquisition consolidation costs            |               |       | 3.7     |  |              |       | 0.5         |  |          |       | 2.1     |  |              |        | 1.4         |  |  |       | 0.3  |  |  |       | 0.5  |  |  |       | 0.5  |  |  |       |     |  
|                                  | Branch efficiency costs                    |               |       |        |  |              |       |            |  |          |       |        |  |              |        | 40.0        |  |  |       |     |  |  |       |     |  |  |       |     |  |  |       | (1.2 | )
|                                  | Impairment adjustment to intangible assets |               |       |        |  |              |       |            |  |          |       |        |  |              |        | 154.6       |  |  |       |     |  |  |       |     |  |  |       |     |  |  |       |     |  
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     
|Total operating expenses          |                                            |               | 94.5  |         |  |              | 95.6  |             |  |          | 100.3 |         |  |              | 303.0  |             |  |  | 82.1  |      |  |  | 83.2  |      |  |  | 84.5  |      |  |  | 83.6  |     
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     
|Income (loss) from operations     |                                            |               | 5.5   |         |  |              | 4.4   |             |  |          | (0.3  | )       |  |              | (203.0 | )           |  |  | 17.9  |      |  |  | 16.8  |      |  |  | 15.5  |      |  |  | 16.4  |     
|Other expense, net                |                                            |               | 1.8   |         |  |              | 3.5   |             |  |          | 4.8   |         |  |              | 3.1    |             |  |  | 3.9   |      |  |  | 4.5   |      |  |  | 3.2   |      |  |  | 2.1   |     
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     
|Income (loss) before income taxes |                                            |               | 3.7   |         |  |              | 0.9   |             |  |          | (5.1  | )       |  |              | (206.1 | )           |  |  | 14.0  |      |  |  | 12.3  |      |  |  | 12.3  |      |  |  | 14.3  |     
|Income tax expense (benefit)      |                                            |               | 1.5   |         |  |              | 0.5   |             |  |          | (1.6  | )       |  |              | (74.0  | )           |  |  | 5.3   |      |  |  | 5.0   |      |  |  | 4.7   |      |  |  | 5.7   |     
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     
|Net income (loss)                 |                                            |               | 2.2   | %       |  |              | 0.4   | %           |  |          | (3.5  | )%      |  |              | (132.1 | )%          |  |  | 8.7   | %    |  |  | 7.3   | %    |  |  | 7.6   | %    |  |  | 8.6   | %   
|                                  |                                            |               |       |         |  |              |       |             |  |          |       |         |  |              |        |             |  |  |       |      |  |  |       |      |  |  |       |      |  |  |       |     

Liquidity and Capital Resources

We had cash balances of $6.2 million at
December 31, 2001. In June 2001, we received cash proceeds
of $5.0 million from the exercise of common stock warrants
issued in our initial public offering in May 1998. As of
December 31, 2001, we had a working capital deficit of
$1.5 million. There was $2.2 million outstanding under
our line of credit, which was recorded as a current liability as
of December 31, 2001 and contributed to the working capital
deficit. We plan to extend the maturity date of the line of
credit to April 30, 2003, with the option to convert a
portion of the principal balance to a term loan. Also
contributing to our working capital deficit was
$4.6 million of current long-term debt and $510,000 in
accrued branch efficiency costs.

In May 2000, we obtained a $10.0 million
credit facility with a commercial bank. Of the
$10.0 million, $4.0 million was used to restructure
seller promissory notes from prior acquisitions. The
$4.0 million note is a five-year term note that matures in
May 2005 with monthly principal and interest payments of
$97,000. The note bears interest at a rate of 10.1%. The note
had a balance of $2.7 million as of December 31, 2001.

The remaining $6.0 million of the credit
facility is an operating line of credit with interest payable at
the floating rate or the eurodollar rate as defined in the
agreement, 4.8% at December 31, 2001. Principal and unpaid
interest is due in April 2002. We used $1.7 million of the
operating line of credit for acquisitions. Two acquisitions were
completed in 2001 for $1.25 million in cash and
$1.7 million in notes payable. In connection with these
acquisitions, we acquired primarily fixed and intangible assets
and access to certain key operating markets. As of
March 31, 2002, we had $4.3 million available under
the credit line for acquisitions and operations. The credit line
requires us to meet certain financial restrictive covenants, all
of which were met as of December 31, 2001, including the
following:



| |   |                                 
| | - | --------------------------------
| |  | minimum quarterly EBITDA levels;
|
| |  | interest coverage ratio;        
|
| |  | book-to-net worth ratio;        

27



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| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | debt service ratio;                                              
|
| |  | annual capital expenditures;                                     
|
| |  | total funded debt to last twelve months pro forma
	EBITDA; and   
|
| |  | total senior funded debt to last twelve months
	pro forma EBITDA.

We are currently working to extend and increase
our credit facilities.

We believe that our anticipated cash requirements
for operations will be met from internally generated funds and
our bank credit line. We may be required to obtain additional
public, private, or debt financing or a combination of the
foregoing to continue our acquisition program and development of
new information services.

Contractual Commitments and Commercial
Commitments

The following table sets forth a summary of our
contractual obligations and commercial commitments as of
December 31, 2001:

|             |  |                |       |           |  |         |       |               |  |           |       |       |  |   |        |  |  |   |        |  |  |   |        | 
|------------ |  | -------------- | ----- | --------- |  | ------- | ----- | ------------- |  | --------- | ----- | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|             |  |                |       |           |  |         |       | Experian      |  |           |       |      
|Year Ending  |  | Line of        |       | Long-Term |  | Capital |       | Capital Lease |  | Operating |       |      
|December 31, |  | Credit         |       | Debt      |  | Leases  |       | Agreements    |  | Leases    |       | Total
|             |  |                |       |           |  |         |       |               |  |           |       |      
|             |  |               
|             |  | (in thousands)
|2002         |  | $              | 2,200 |           |  | $       | 2,208 |               |  | $         | 532   |       |  | $ | 2,783  |  |  | $ | 1,434  |  |  | $ | 9,157  | 
|2003         |  |                |      |           |  |         | 2,240 |               |  |           | 493   |       |  |   | 3,363  |  |  |   | 1,428  |  |  |   | 7,524  | 
|2004         |  |                |      |           |  |         | 1,377 |               |  |           | 242   |       |  |   | 3,437  |  |  |   | 1,420  |  |  |   | 6,476  | 
|2005         |  |                |      |           |  |         | 419   |               |  |           | 44    |       |  |   | 1,561  |  |  |   | 1,103  |  |  |   | 3,127  | 
|2006         |  |                |      |           |  |         |      |               |  |           |      |       |  |   | 16     |  |  |   | 901    |  |  |   | 917    | 
|Thereafter   |  |                |      |           |  |         |      |               |  |           |      |       |  |   |       |  |  |   | 9,150  |  |  |   | 9,150  | 
|             |  |                |       |           |  |         |       |               |  |           |       |       |  |   |        |  |  |   |        |  |  |   |        | 
|Total        |  | $              | 2,200 |           |  | $       | 6,244 |               |  | $         | 1,311 |       |  | $ | 11,160 |  |  | $ | 15,436 |  |  | $ | 36,351 | 
|             |  |                |       |           |  |         |       |               |  |           |       |       |  |   |        |  |  |   |        |  |  |   |        | 




Item 7A.     Quantitative
and Qualitative Disclosure about Market Risk

As of December 31, 2001, we had one interest
rate swap agreement for a principal amount of $4.0 million,
expiring in May 2002. The interest rate swap agreement was
entered into with our bank in May 2000 in connection with our
long-term debt obligation to the bank. Under the agreement, we
pay a fixed rate of interest of 10.1%, which effectively
converts a portion of our long-term debt from a floating rate
obligation to a fixed-rate obligation. At December 31,
2001, the estimated fair value of the interest rate swap was a
$59,000 liability and was included in accounts payable in our
consolidated balance sheet with the corresponding change in
value of $59,000 for the year ended December 31, 2001
included in interest expense in the accompanying consolidated
statements of income.

We use the interest rate swap agreement to manage
interest rate risk with regard to our variable rate notes
payable. Our interest rate swap does not qualify for using the
hedge method of accounting. The fair value of the interest rate
swap is recorded as an asset or liability and changes in its
fair value are recorded currently in earnings.

We are exposed to credit risk in the event of
non-performance by the counter-party to the interest rate swap
agreement. We do not, however, anticipate non-performance by the
counter-party.

As of December 31, 2001, our notes payable
to corporations and individuals totaling $3.5 million bore
interest at fixed rates of 8.0% to 12.0%. Our Experian capital
lease agreements totaling $11.2 million are discounted at a
fixed rate of interest of 10.0%, and our other capital lease
obligations totaling $1.3 million are discounted at fixed
rates of interest of 8.1% and 10.7%.

We are also exposed to some market risk through
interest rates related to our $6.2 million investment in
cash and cash equivalents. These funds are generally invested in
money market funds with short maturities.

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We believe that fluctuations in interest rates on
our debt obligations and our invested cash and cash equivalents
in the near term will not materiality affect our operating
results, financial position, or cash flows.




Item 8.     Financial
Statements and Supplementary Data

Reference is made to the financial statements,
the notes thereto, and the reports thereon, commencing on page
F-1 of this report, which financial statements, notes, and
reports are incorporated herein by reference.




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

Not applicable.




Item 10.     Directors
and Executive Officers of the Registrant

The following sets forth certain information
regarding each of our directors and executive officers:

|                      |  |     |    |          |  |                                                  
|--------------------- |  | --- | -- | -------- |  | -------------------------------------------------
|Name                  |  | Age |    | Position
|                      |  |     |    |         
|J.H. Donnan(1)        |  |     | 56 |          |  | Chairman of the Board and Chief Executive Officer
|James N. Donnan       |  |     | 30 |          |  | President and Director                           
|Todd A. Neiberger     |  |     | 37 |          |  | Chief Financial Officer and Director             
|Russell E. Donnan     |  |     | 38 |          |  | Chief Information Officer and Corporate Secretary
|Robert J. Terry(1)(2) |  |     | 61 |          |  | Director                                         
|Abdul H. Rajput(1)(2) |  |     | 55 |          |  | Director                                         
|Daniel G. Helle(1)    |  |     | 40 |          |  | Director                                         
|J. Barton Goodwin(2)  |  |     | 55 |          |  | Director                                         



---



|    |                                     
|--- | ------------------------------------
|(1) | Member of the Compensation Committee
|   
|(2) | Member of the Audit Committee       

J.H. Donnanhas
served as our Chairman of the Board and Chief Executive Officer
since he founded our company in January 1985 and served as
our President until July 2000. Mr. Donnan is
responsible for oversight of corporate development and services,
operations, technical development, and policies and procedures.
Mr. Donnans prior experience includes 15 years
in financial services where he was responsible for lending and
servicing a multi-hundred-million-dollar portfolio and managing
geographically diverse branches with many employees.
Mr. Donnan served as a founding member and past president
of the National Credit Reporting Association, a trade
association established to promote ethical standards and fair
competition within the credit reporting industry.
Mr. Donnan is currently a Board member of Associated Credit
Bureaus, Inc., an international trade association representing
consumer credit, mortgage reporting, collection service, tenant
screening, and employment reporting companies.

James N. Donnanhas
served as our President since July 2000 and as a director since
January 1998, and is responsible for management of our internal
operations. Mr. Donnans duties also include overall
sales, growth, and customer service development. Mr. Donnan
has been employed by us in various capacities on a full-time
basis since 1994 and on a part-time basis from 1986 to 1994.
Mr. Donnan served as our Corporate Secretary from January
1998 until July 2000, and as our Vice President from October
1999 until July 2000. Mr. Donnan graduated from Colorado
State University in 1994 with a degree in history.

Todd A. Neibergerhas served as our Chief Financial Officer since March 1995 and
as a director since January 1998. Mr. Neiberger joined our
company in March 1995 with 10 years experience in
staff, senior, and management level positions with various
public accounting firms. From 1994 through 1995,
Mr. Neiberger served as the audit manager of
Rickards & Co. P.C., and from 1991 through 1993 he
served as the tax manager for Krutchen & Co., both
Fort Collins, Colorado-based certified public accounting
firms. From 1988 through 1990, Mr. Neiberger was employed
with a local Colorado certified public accounting firm, as a
staff

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and senior level accountant in the audit and tax
department. Mr. Neiberger is a Certified Public Accountant.
Mr. Neiberger graduated from the University of Northern
Colorado in 1987 with a degree in accounting.


Russell E. Donnanhas served as our Chief Information Officer since March 1998 and
as our Corporate Secretary since July 2000. Mr. Donnan is
responsible for technical project management for software and
support services. Before joining our company in August 1993,
Mr. Donnan served as a senior design engineer at Apple
Computer, Inc. in the Power Book division from February 1992
through August 1993. Mr. Donnan is experienced in the super
computer field and was previously employed by Convex Computer
Corp. (from 1990 through 1992) and as a founding member and
employee of Key Computer (from 1988 through 1990), now a
subsidiary of Amdahl Corporation. Mr. Donnan graduated from
The Ohio State University in 1987 with a degree in electrical
engineering.

Robert J. Terryhas
served as a director of our company since February 1998. From
February 1994 to his retirement in January 1998, Mr. Terry
served as a director, president, and chief operating officer of
Mail-Well, Inc., a publicly traded envelope manufacturer and
printing company. Prior to his Mail-Well experience,
Mr. Terry was associated with Georgia Pacific Corporation
and its predecessor companies in various management positions,
including Executive Vice President of its envelope division and
as regional vice president for Butler Paper Company.
Mr. Terry graduated from DePaul University with a degree in
business, and the Advanced Executive Program at the University
of Michigan in 1988.

Abdul H. Rajputhas
served as a director of our company since February 1998.
Mr. Rajput served as an executive vice president of
national operations of GreenPoint Credit, LLC from September
1998 through February 2002. From 1991 to September 1998,
Mr. Rajput served as senior vice president of
administration with a subsidiary of Bank of America Corporation.
From 1990 and until its acquisition by us in August 1998,
Mr. Rajput owned and operated Factual Data Minnesota, Inc.,
one of our former franchisees, which operates in Minnesota and
Iowa. Mr. Rajput graduated from the university of Sindh,
Pakistan with a degree in mathematics in 1968 and a masters
degree in statistics in 1970.

Daniel G. Hellehas
served as a director of our company since March 1999. Since
1992, Mr. Helle has served as a Managing Director of CIVC
Partners LLC and its predecessor, Continental Illinois Venture
Corporation, a private equity investment subsidiary of Bank of
America Corporation. From 1989 to 1992, Mr. Helle served as
a vice president of Continental Illinois Venture Corporation.
Mr. Helle is also a director of several private companies.
Mr. Helle obtained a degree in finance from Western
Illinois University in 1982 and a masters degree in finance from
the University of Illinois in 1984.

J. Barton
Goodwinhas served as a director of
our company since July 1999. Since 1986, Mr. Goodwin has
served as a General Partner of BCI Partners, Inc., a private
capital investment group. Mr. Goodwin is also a director of
BKF Capital Group, Inc., an asset management company traded on
the New York Stock Exchange. Mr. Goodwin is also a director
of several private companies. From 1974 to 1986,
Mr. Goodwin was a shareholder and Vice President of Kidder,
Peabody & Co., Inc. where he performed corporate
finance services. Mr. Goodwin graduated from
Washington & Lee University and he obtained a masters
degree in business administration from Columbia University.

Russell and James Donnan are sons of J.H. Donnan.

Our Board of Directors is divided into three
classes, with each class serving for three years. Each director
holds office until the first meeting of shareholders immediately
following the expiration of his three-year term of office or
until his successor is qualified and elected.

In connection with a private placement of our
securities completed in April 1999, the four members of the
Donnan family agreed to vote their shares of common stock in
favor of CIVC Fund L.P.s nominee (currently
Mr. Helle) as a director so long as the fund owns at least
177,600 shares of common stock. We also agreed that we
would not liquidate, dissolve, or enter into any merger,
consolidation, joint venture, recapitalization, partnership, or
other combination, or sell, lease or dispose of or permit any
subsidiary to sell, lease or otherwise dispose of, more than 50%
of our consolidated assets without prior unanimous approval of a
special committee of our Board of Directors. The special
committee would consist of the CIVC director and

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two other members of our Board who are
(i) independent directors, and (ii) appointed to serve
on the special committee by the CIVC director.


Director Compensation

Our directors who are also employees do not
receive any additional compensation for their services as
directors. During fiscal 2002, non-employee directors will
receive an annual retainer of $10,000 plus a reasonable travel
allowance per meeting, subject to a $500 deduction for each
meeting not attended. Non-employee directors who serve on a
committee will receive a $500 per committee assignment. We
also intend to grant to each non-employee director options to
purchase 2,500 shares of our common stock at an
exercise price equal to the market price of our stock on the
date of grant. The option will be prorated for non-employee
directors who do not serve for the entire year.

Board Committees

Our Board of Directors has two committees.

The functions of the Audit Committee are to
review our internal accounting principles and auditing practices
and procedures, consult with and review the services provided by
our independent accountants, and make recommendations to the
Board of Directors about selecting independent accountants. The
Audit Committee consists entirely of independent directors.

The Compensation Committee reviews and approves
compensation and benefit programs for key executives and
administers our stock options plans. The members of our
Compensation Committee are non-employee directors except
Mr. Donnan who is our Chief Executive Officer.

Compensation Committee Interlocks and Insider
Participation

During the fiscal year ended December 31,
2001, our Compensation Committee consisted of J.H. Donnan,
Robert J. Terry, Abdul H. Rajput, and Daniel G. Helle.
Mr. Donnan served as our Chief Executive Officer during
fiscal 2001. None of these committee members had any contractual
or other relationships with our Company during the last three
fiscal years other than as officers and directors.

Section 16(a) Beneficial Ownership
Reporting Compliance

Section 16(a) of the Securities Exchange Act
of 1934 requires our directors and executive officers, and
persons who own more than 10% of our common stock to file with
the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of our common
stock. Executive officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish us with
copies of all Section 16(a) reports they file. To our
knowledge, based solely on review of the copies of such reports
furnished to us or advice that no filings were required, during
fiscal year 2001 all executive officers, directors and greater
than 10% beneficial owners complied with the Section 16(a)
filing requirements.

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Item 11.     Executive
Compensation

Executive Compensation

The following table sets forth certain
information concerning compensation paid to our Chief Executive
Officer and each other executive officer whose salary and bonus
exceeded $100,000 during fiscal 2001.

Summary Compensation Table

|                  |                   |                     |      |            |  |       |         |              |  |   |         |     |  |  |        |       | 
|----------------- | ----------------- | ------------------- | ---- | ---------- |  | ----- | ------- | ------------ |  | - | ------- | --- |  |  | ------ | ----- | 
|                  |                   |                     |      |            |  |       |         | Long-Term   
|                  |                   |                     |      |            |  |       |         | Compensation
|                  |                   |                     |      |            |  |       |         | Awards      
|                  |                   |                     |      |           
|                  |                   | Annual Compensation |      | Securities
|                  |                   |                     |      | Underlying
|Name              |                   | Year                |      | Salary(1)  |  | Bonus |         | Options(3)  
|                  |                   |                     |      |            |  |       |         |             
|J.H. Donnan       |                   |                     | 2001 |            |  | $     | 267,006 |              |  | $ | 241,203 | (2) |  |  | 7,644  |      
|                  | Chief Executive   |                     |      | 2000       |  |       |         | 172,414      |  |   |         |    |  |  |        | 4,202 | 
|                  | Officer           |                     |      | 1999       |  |       |         | 107,554      |  |   |         |    |  |  |        |      | 
|James N. Donnan   |                   |                     | 2001 |            |  | $     | 149,939 |              |  | $ | 94,168  | (2) |  |  | 4,247  |      
|                  | President         |                     |      | 2000       |  |       |         | 99,355       |  |   |         |    |  |  |        | 2,629 | 
|                  |                   |                     | 1999 |            |  |       | 72,986  |              |  |   |        |     |  |  |       |      
|Todd A. Neiberger |                   |                     | 2001 |            |  | $     | 118,750 |              |  | $ | 57,012  | (2) |  |  | 17,297 |      
|                  | Chief Financial   |                     |      | 2000       |  |       |         | 86,929       |  |   |         |    |  |  |        | 1,579 | 
|                  | Officer           |                     |      | 1999       |  |       |         | 71,979       |  |   |         |    |  |  |        |      | 
|Russell E. Donnan |                   |                     | 2001 |            |  | $     | 177,856 |              |  | $ | 107,086 | (2) |  |  | 3,597  |      
|                  | Chief Information |                     |      | 2000       |  |       |         | 124,609      |  |   |         |    |  |  |        | 2,143 | 
|                  | Officer           |                     |      | 1999       |  |       |         | 88,659       |  |   |         |    |  |  |        |      | 



---



| | 
| | 
| | 



|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The listed executive officers also received
	certain perquisites, the value of which did not exceed the
	lesser of $50,000 or 10% of their salary and bonus during any
	fiscal year. 
|   
|(2) | Represents bonuses earned by the executive
	officer during 2001 under our MBO Incentive-Based Compensation
	Plan and our EBITDA Bonus Plan. The bonuses were paid during
	March 2002.
|   
|(3) | The exercise price of all stock options were
	equal to the fair market value of our common stock on the date
	of grant.                                                              

Our Bonus Models

During 2001, our Board of Directors adopted two
separate bonus models for evaluating and compensating selected
executive officers and key employees. Under the MBO
Incentive-Based Compensation Model, our Compensation Committee
sets performance objectives and goals at the beginning of the
year for selected executive officers and key employees. If all
performance objectives are achieved, the employee will be
entitled to a bonus, as determined by the Compensation
Committee, of 20% to 30% of the employees base salary. Our
executive officers and key employees earned bonuses of $341,000
in 2001 under this model.

Under the EBITDA Bonus Model, our executive
officers can earn bonuses of increasing percentages of their
base salary if we achieve specified EBITDA thresholds during the
fiscal year. Our executive officers earned bonuses of $383,313
in 2001 under this model.

1999 Formula Award Stock Option Plan

In August 1999, our Board of Directors adopted
our 1999 Formula Award Stock Option Plan, and our shareholders
approved the plan during October 1999. Our Board amended the
plan during June 2000, and our shareholders approved the
amendment to the plan during July 2000. The purpose of the plan
is to encourage ownership of our common stock by eligible
employees, to provide increased incentive for such employees to
render services and to exert maximum effort for our success, and
to align further the interests of our employees

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and shareholders. Employees who have been
employed by us for at least one year are eligible to participate
in the 1999 plan. Full-time employees of companies that we
acquire are eligible to participate in the 1999 plan beginning
the month following 60 days after the closing date of the
acquisition, so long as the employee has completed one year of
service.


The 1999 plan provides for the annual grant of
options to purchase shares of our common stock to eligible
persons. We have reserved for issuance 400,000 shares of
our common stock under the plan. As of March 31, 2002, we
had issued 1,663 shares of common stock under the 1999
plan, there were outstanding options to
purchase 342,058 shares of common stock under the
plan, and there were 56,279 shares of common stock
available for grant under the plan.

Our Board of Directors, or a committee of two or
more non-employee directors designated by the Board, administers
the 1999 plan. The plan administrator will have full authority
to construe, interpret, amend, and apply the terms of the plan.
The plan administrator will have the right to either terminate
the plan or indefinitely suspend or cancel the future grant of
options under the 1999 plan. Unless earlier terminated by our
Board of Directors, the plan will terminate December 14,
2009.

Annually on January 15, and subject to
adjustment by the plan administrator, we will grant each
eligible employee options to purchase that number of shares of
common stock determined by the sum of



| |   |                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the quotient of (a) 10% of the
	employees compensation for the preceding year, divided by
	(b) the fair market value of the common stock; plus                 
|
| |  | the product of (i) 10% of the quotient
	obtained above, multiplied by (ii) the number of years in
	which the eligible person has been employed with our company.

Fractional shares will not be issued and will be
rounded down to the nearest whole share. Each option shall have
a term of ten years, an exercise price equal to the fair market
value of the common stock, and 20% of the shares underlying each
option shall vest and become exercisable on each of the first
five anniversaries of the date of grant. As a result of the
formula above, our more highly paid employees, such as our
executive officers, likely will receive more options than other
employees. If there are insufficient shares reserved under the
plan to cover the number of option grants required under the
plan in any year, then the number of shares underlying each
grant will be proportionately reduced for each eligible employee.

If an employee ceases to be employed by us for
any reason other than death, disability, or retirement, the
employee may exercise any vested options for a three-month
period following his or her termination. In the event of death,
disability, or retirement, the optionee (or the optionees
estate) may exercise any options, to the extent such options
were exercisable on the date of death, disability, or
retirement, for one year (or in no event after the expiration of
the option) following the date of death, disability, or
retirement.

In the event of a merger or consolidation of our
company, the sale of all or substantially all of our assets, or
a similar transaction in which we are not the surviving company
and the plan will be discontinued, all options outstanding under
the 1999 plan will immediately vest and become exercisable. In
the event of such a transaction, the Board will give no less
than 20 days notice to the plan participants of such
transaction so that the optionholders will have the right to
exercise all or any portion of their options. At the end of the
period, any options granted under the plan may be terminated as
of a date fixed by the plan administrator. If any change is made
in the common stock subject to the 1999 plan, or subject to any
award granted under the plan (through stock dividends, stock
splits, combination of shares, or otherwise), the plan provides
that appropriate adjustments will be made as to the aggregate
number and exercise prices with respect to each outstanding
option.

1997 Stock Incentive Plan

During June 1997, our Board of Directors adopted
our 1997 Stock Incentive Plan, and our shareholders approved the
plan during June 1997. The plan is intended to attract persons
of training, experience, and ability to continue as employees,
directors, and consultants of our company, and to furnish
additional incentive to

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such persons to become shareholders of our
company. Employees, directors, and consultants of our company
are eligible to participate in the 1997 plan.


The 1997 plan provides for the granting of
(a) incentive stock options or non-qualified stock options
to acquire our common stock, and (b) shares of restricted
common stock. We have reserved for issuance 200,000 shares
of our common stock under the plan, which may be granted in the
form of stock options or shares of restricted stock. As of
March 31, 2002, we had issued 3,667 shares of common
stock under the 1997 plan, there were outstanding options to
purchase 42,725 shares of common stock under the plan,
and there were 153,608 shares of common stock available for
grant under the plan. If any option expires without being
exercised in full, or if the conditions of a restricted stock
award are not fulfilled, the shares underlying the option or the
shares of restricted stock shall be available for granting of
further options or restricted stock awards under the plan.

Our Board of Directors, or a committee consisting
of at least two or more non-employee directors, administers the
plan. The administrator has the discretion to interpret the
provisions of the plan. The administrator will also determine
the persons who will receive awards under the plan, and the
number of shares, vesting period, and other terms and conditions
of the awards. Our Board of Directors may amend or discontinue
the plan at any time, and the plan will expire during June 2007.

Options granted under the plan may be either
incentive stock options, as defined under the Internal Revenue
Code, or nonqualified options. The expiration date, maximum
number of shares purchasable, vesting provisions, and any other
provisions of options granted under the plan will be established
at the time of grant. The plan administrator will set the term
of each option, but no options may be granted for terms of
greater than ten years. Options will vest and become exercisable
in whole or in one or more installments at such time as may be
determined by the plan administrator. With respect to incentive
stock options granted, the exercise price shall not be less than
the fair market value of the common stock on the date of grant,
and shall not be less than 110% of the fair market value of the
common stock on the date of grant in the event an optionee owns
10% or more of our common stock. With respect to nonqualified
options, the exercise price may be less than the fair market
value of the common stock on the date of grant. If the optionee
terminates his or her relationship with our company for any
reason, including death or disability, the optionee (or the
optionees estate) may exercise any vested options for a
three-month period following his or her termination.

We may grant shares of restricted stock to
eligible persons upon the payment of consideration, if any, as
determined by the plan administrator. The administrator may
establish a performance goal that must be achieved as a
condition to the retention of the restricted stock. The
performance goal may be based on the attainment of performance
measurement criteria, which may differ as to various eligible
persons. The plan administrator will set the performance
criteria and will communicate the criteria in writing to the
award recipient prior to the commencement of the period to which
the performance relates. During the restricted period, and
subject to restrictions on transfer of the shares, the award
recipient shall have all voting, dividend, liquidation, and
other rights with respect to the common stock. In the event the
eligible person ceases to be an employee, director, or
consultant during a restriction period, or in the event
performance goals attributable to a restricted stock award are
not achieved, the shares subject to the award that have not been
earned are subject to forfeiture.

If any change is made in the common stock subject
to the 1997 plan, or subject to any award granted under the plan
(through stock dividends, stock splits, combination of shares,
or otherwise), the plan provides that appropriate adjustments
will be made as to the aggregate number and exercise prices with
respect to each outstanding award. In the event of a merger,
consolidation, or other reorganization of our company, all
restrictions relating to restricted stock awards will lapse, and
optionees will be entitled to receive upon exercise of the
option those shares or other securities that the optionee would
have received had the option been exercised prior to such
transaction. Upon any other liquidation of our company, any
unexercised options under the 1997 plan will be canceled.

34



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##### Table of Contents



1999 Employee Stock Purchase Plan

During August 1999, our Board of Directors
adopted our 1999 Employee Stock Purchase Plan, or ESPP, and our
shareholders approved the ESPP during October 1999. The ESPP is
intended to provide an opportunity for our employees to acquire
a proprietary interest in our company by purchasing shares of
our common stock through voluntary payroll deductions. Employees
of our company who have completed at least one year of service
are eligible to participate in the ESPP. Under the ESPP,
eligible employees may purchase shares of our common stock at a
purchase price per share equal to 90% of the closing price of
our common stock on the offering termination date. The purchase
price is to be paid through periodic payroll deductions not to
exceed 10% of the participants earnings during each
three-month offering period. An employee may not participate in
the ESPP if the purchase would cause him or her to own 5% or
more of our companys combined voting power or value of our
common stock. In addition, no participant may purchase more than
$25,000 worth of common stock annually.

The ESPP provides for successive three-month
offering periods, with a new offering period beginning the first
day of each January, March, July, and October. The Board has the
power to change the duration of offering periods with respect to
future offerings without shareholder approval if such change is
announced at least five days prior to the scheduled beginning of
the first offering period affected. Our Board of Directors, or a
committee of the Board, administers the ESPP and has the
authority to construe, interpret, and apply the terms of the
ESPP. The Board may at any time and for any reason amend or
terminate the plan. Unless otherwise terminated by the Board,
the ESPP will terminate upon the tenth anniversary of adoption
by our Board of Directors.

We have reserved 75,000 shares of our common
stock for issuance under the ESPP. If the number of shares with
respect to which options are to be exercised exceeds the number
of shares then available under the ESPP, we will make a pro rata
allocation of the shares remaining available for purchase among
the participants. The shares covered by the ESPP will be
proportionately adjusted for any increase or decrease in the
number of issued shares of common stock resulting from a stock
split, reverse stock split, stock dividend, or other combination
or reclassification of our common stock.

The purchase right of a participant will
terminate automatically in the event the participant ceases to
be an employee of our company, or in the event of the
participants death. In such event, any payroll deductions
collected from such individual during the three-month period in
which such termination occurs will be refunded. In the event of
the proposed dissolution or liquidation of our company, the
offering period then in progress will be reduced by setting a
new offering termination date, and will terminate immediately
prior to the consummation of the proposed dissolution or
liquidation, unless otherwise provided by the Board.

In the event of a proposed sale of all or
substantially all of the assets of our company, or other merger
of our company with or into another company, each outstanding
option will be assumed or an equivalent option substituted by
the successor corporation. In the event the successor
corporation refuses to assume or substitute for the option, the
offering period then in progress will be reduced by setting a
new offering termination date, which will be before the date of
the sale or merger.

35



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##### Table of Contents



Option Grants

Options granted to the executive officers named
in the table above during 2001 were as follows:

Option/ SAR Grants in Last Fiscal
Year

|                  |  |                   |        |            |  |             |     |                        |  |                   |      |     |  |  |           |  |  |   |        |  |  |   |         | 
|----------------- |  | ----------------- | ------ | ---------- |  | ----------- | --- | ---------------------- |  | ----------------- | ---- | --- |  |  | --------- |  |  | - | ------ |  |  | - | ------- | 
|                  |  |                   |        |            |  |            
|                  |  | Individual Grants |        |            |  |            
|                  |  |                   |        |           
|                  |  |                   |        | Percent    |  |             |     | Potential Realizable  
|                  |  |                   |        | of Total   |  |             |     | Value at Assumed      
|                  |  | Number of         |        | Options    |  |             |     | Annual Rates of Stock 
|                  |  | Securities        |        | Granted to |  |             |     | Price Appreciation for
|                  |  | Underlying        |        | Employees  |  | Exercise or |     |                        |  | Option Term($)(2)
|                  |  | Options           |        | in Fiscal  |  | Base Price  |     | Expiration             |  |                  
|Name              |  | Granted(#)(1)     |        | Year       |  | ($/Sh)      |     | Date                   |  | 5%                |      | 10%
|                  |  |                   |        |            |  |             |     |                        |  |                   |      |    
|J.H. Donnan       |  |                   | 7,644  |            |  |             | 3.7 | %                      |  | $                 | 6.31 |     |  |  | 1/15/2011 |  |  | $ | 30,334 |  |  | $ | 76,872  | 
|James N. Donnan   |  |                   | 4,247  |            |  |             | 2.1 | %                      |  | $                 | 6.31 |     |  |  | 1/15/2011 |  |  | $ | 16,853 |  |  | $ | 42,710  | 
|Todd A. Neiberger |  |                   | 2,297  |            |  |             | 1.1 | %                      |  | $                 | 6.31 |     |  |  | 1/15/2011 |  |  | $ | 9,115  |  |  | $ | 23,100  | 
|                  |  |                   | 15,000 |            |  |             | 7.3 | %                      |  | $                 | 8.00 |     |  |  | 5/04/2011 |  |  | $ | 75,467 |  |  | $ | 191,249 | 
|Russell E. Donnan |  |                   | 3,597  |            |  |             | 1.7 | %                      |  | $                 | 6.31 |     |  |  | 1/15/2011 |  |  | $ | 14,274 |  |  | $ | 36,173  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All options grants to the listed officers are
	non-qualified stock options exercisable during the ten-year
	period from the date of grant with such options vesting 20% on
	each of the first, second, third, fourth, and fifth
	anniversaries of the date of grant.                                                                                                                                          
|   
|(2) | Calculated from a base price equal to the
	exercise price of each option, which was the fair market value
	of the common stock on the date of grant. The amounts represent
	only certain assumed rates of appreciation. Actual gains, if
	any, on stock option exercises and common stock holders cannot
	be predicted, and there can be no assurance that the gains set
	forth on the table will be achieved.

Recent Grants of Stock Options

During January 2002, we granted options to
acquire an aggregate of 18,553 shares of our common stock
to our executive officers for services rendered in 2001. These
options include options to acquire 8,192 shares of common
stock to Mr. J.H. Donnan, options to acquire
4,430 shares of common stock to Mr. James N. Donnan,
options to acquire 3,637 shares of common stock to
Mr. Russell Donnan, and options to acquire
2,294 shares of common stock to Mr. Neiberger. All of
the options have an exercise price of $8.80 per share, have
ten-year terms, and vest in one-fifth increments on each
anniversary date.

Option Values and Holdings

The following table provides information
regarding unexercised stock options held by the executive
officers listed as of December 31, 2001. None of these
officers exercised options during fiscal 2001.

Number and Value of

Options Held as of December 31,
2001


|                  |  |                            |       |                      |  |             |        |               |  |   |        |  |  |   |        | 
|----------------- |  | -------------------------- | ----- | -------------------- |  | ----------- | ------ | ------------- |  | - | ------ |  |  | - | ------ | 
|                  |  |                            |       |                     
|                  |  | Number of Securities       |       | Value of Unexercised
|                  |  | Underlying Unexercised     |       | in-the-Money Options
|                  |  | Options at Fiscal Year-End |       | at Fiscal Year-End  
|                  |  |                            |       |                     
|Name              |  | Exercisable                |       | Unexercisable        |  | Exercisable |        | Unexercisable
|                  |  |                            |       |                      |  |             |        |              
|J.H. Donnan       |  |                            | 3,208 |                      |  |             | 8,638  |               |  | $ | 5,648  |  |  | $ | 16,849 | 
|James N. Donnan   |  |                            | 1,900 |                      |  |             | 4,976  |               |  | $ | 3,299  |  |  | $ | 9,603  | 
|Todd A. Neiberger |  |                            | 7,590 |                      |  |             | 17,786 |               |  | $ | 16,370 |  |  | $ | 12,824 | 
|Russell E. Donnan |  |                            | 1,576 |                      |  |             | 4,164  |               |  | $ | 2,749  |  |  | $ | 8,065  | 

36



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##### Table of Contents






Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

The following table sets forth certain
information regarding the beneficial ownership of our common
stock as of April 10, 2002 by



| |   |                                                                                                  
| | - | -------------------------------------------------------------------------------------------------
| |  | each of our executive officers and directors;                                                    
|
| |  | all of our executive officers and directors as a
	group; and                                     
|
| |  | each person who is known by us to own
	beneficially more than 5% of our outstanding common stock.

|                                                       |  |                       |           |              |  |  |      |  
|------------------------------------------------------ |  | --------------------- | --------- | ------------ |  |  | ---- | -
|                                                       |  |                       |           | Percent     
|                                                       |  | Number of Shares      |           | Beneficially
|Name of Beneficial Owner                               |  | Beneficially Owned(1) |           | Owned(2)    
|                                                       |  |                       |           |             
|Executive Officers and Directors:                      |  |                       |           |              |  |  |      |  
|J.H. Donnan(3)(13)                                     |  |                       | 1,257,312 |              |  |  | 20.5 | %
|James N. Donnan(4)(13)                                 |  |                       | 276,964   |              |  |  | 4.5  |  
|Todd A. Neiberger(5)                                   |  |                       | 7,590     |              |  |  | *    |  
|Russell E. Donnan(6)(13)                               |  |                       | 274,108   |              |  |  | 4.5  |  
|Robert J. Terry(7)                                     |  |                       | 40,500    |              |  |  | *    |  
|Abdul H. Rajput(8)                                     |  |                       | 10,000    |              |  |  | *    |  
|Daniel G. Helle(9)(13)                                 |  |                       | 1,112,829 |              |  |  | 18.2 |  
|J. Barton Goodwin(10)                                  |  |                       | 556,414   |              |  |  | 9.1  |  
|All officers and directors as a group (eight
	persons) |  |                       | 3,535,717 |              |  |  | 57.5 |  
|5% Shareholders:                                       |  |                       |           |              |  |  |      |  
|Marcia R. Donnan(3)                                    |  |                       | 1,257,312 |              |  |  | 20.5 |  
|CIVC Fund L.P.(9)(13)                                  |  |                       | 1,112,829 |              |  |  | 18.2 |  
|BCI Growth V, L.P.(10)                                 |  |                       | 545,286   |              |  |  | 8.9  |  
|Gruber & McBaine Capital Management,
	LLC(11)          |  |                       | 428,200   |              |  |  | 7.0  |  
|Marshall Financial Partners, L.P.(12)                  |  |                       | 399,111   |              |  |  | 6.5  |  



---



| | 
| | 
| | 



| |   |               
| | - | --------------
| | * | Less than 1.0%



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Except as otherwise indicated, each person named
	in the table has sole voting and investment power with respect
	to all common stock beneficially owned, subject to applicable
	community property law. Except as otherwise indicated, each
	person may be reached at 5200 Hahns Peak Drive, Loveland,
	Colorado 80538.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (2) | The percentages shown are calculated based upon
	6,119,931 shares of common stock outstanding on
	April 15, 2002. The numbers and percentages shown include
	the shares of common stock actually owned as of April 15,
	2002 and the shares of common stock that the identified person
	or group had the right to acquire within 60 days of such
	date. In calculating the percentage of ownership, all shares of
	common stock that the identified person or group had the right
	to acquire within 60 days of April 15, 2002 upon the
	exercise of options or warrants are deemed to be outstanding for
	the purpose of computing the percentage of shares of common
	stock owned by such person or group, but are not deemed to be
	outstanding for the purpose of computing the percentage of the
	shares of common stock owned by any other person.
|
| | (3) | Represents 626,202 shares of common stock
	held by each of J.H. Donnan and Marcia Donnan. Amounts listed
	for Mr. Donnan include 3,208 shares of common stock
	issuable upon exercise of stock options and the amounts for
	Ms. Donnan include 1,700 shares of common stock
	issuable upon exercise of stock options. J.H. Donnan and Marcia
	Donnan are husband and wife but each disclaims beneficial
	ownership of the others shares shown above.                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (4) | Represents 275,064 shares of common stock
	and 1,900 shares of common stock issuable upon exercise of
	stock options. Includes 5,064 shares of common stock held
	in trust for the benefit of Mr. Russell                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

37



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##### Table of Contents



| |     |                                                                                                                                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Donnans children. Mr. James Donnan
	serves as trustee of the trust and retains voting and
	dispositive power over such shares.                                                                                                                                                                                                     
|
| | (5) | Represents 7,590 shares of common stock
	issuable upon exercise of stock options.                                                                                                                                                                                                                                                   
|
| | (6) | Represents 272,532 shares of common stock
	and 1,576 shares of common stock issuable upon exercise of
	stock options. Includes 2,532 shares of common stock held
	in trust for the benefit of Mr. James Donnans son.
	Mr. Russell Donnan serves as trustee of the trust and
	retains voting and dispositive power over such shares.
|
| | (7) | Represents 35,500 shares of common stock and
	5,000 shares of common stock issuable upon exercise of
	stock options.                                                                                                                                                                                                                
|
| | (8) | Represents 5,000 shares of common stock and
	5,000 shares of common stock issuable upon exercise of
	stock options.                                                                                                                                                                                                                 
|
| | (9) | Mr. Helle is a managing director of CIVC
	Fund L.P., and is deemed to be a beneficial owner of its shares.
	Mr. Helle has shares voting and dispositive power with
	respect to the shares held by CIVC Fund L.P. The address of CIVC
	Fund L.P. is 231 South LaSalle Street, Chicago, Illinois 60697.                               



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Mr. Goodwin is a general partner of BCI
	Partners, Inc., an investment management company which advises
	BCI Growth V, L.P. and BCI Investors, LLC, and is deemed to
	be a beneficial owner of the shares held by these entities.
	Amounts listed for Mr. Goodwin include 545,286 shares
	held by BCI Growth V, L.P. and 11,128 shares held by
	BCI Investors, LLC. Mr. Goodwin has shared voting and
	dispositive power over shares held by BCI Growth V, L.P.
	and BCI Investors, LLC. The address for BCI Growth V, L.P.
	is c/o BCI Advisors, Inc., Glenpointe Centre West, Teaneck,
	New Jersey 07666.                                                                                                                                                                                                                                                                             
|    
|(11) | Represents 428,200 shares of common stock
	beneficially owned by Gruber & McBaine Capital
	Management, LLC, or its controlling persons, in its capacity as
	registered investment adviser on behalf of its clients. GMCM has
	shared voting and dispositive power over 363,000 of such shares,
	and certain controlling persons of GMCM have sole voting and
	dispositive power over 65,200 of such shares. Information is
	based solely upon a Schedule 13G filed with the Commission on
	February 13, 2002. The address of Gruber & McBaine
	Capital Management, LLC is 50 Osgood Place, Penthouse,
	San Francisco, California 94133.                                                                                                                                                                                                                                                 
|    
|(12) | The address for Marshall Financial Partners, L.P.
	is 903 North 3rd Street, Suite 300, Minneapolis,
	Minnesota 55401.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(13) | J.H. Donnan, Marcia Donnan, James Donnan, Russell
	Donnan, and CIVC Fund, L.P. are parties to an Investors
	Agreement. The parties to the agreement have agreed to vote
	their shares of common stock in all elections of directors in
	favor of the director designated by CIVC for so long as CIVC
	beneficially owns at least 177,600 shares of our common
	stock. Currently, Mr. Helle is the designee of CIVC. In
	addition, without the prior approval of a special committee of
	the Board of Directors, which must be comprised of
	Mr. Helle and two independent directors appointed by
	Mr. Helle, we may not enter into any merger, consolidation,
	joint venture, recapitalization, partnership, or other
	combination, or sell or otherwise dispose of more than 50% of
	our consolidated assets, or similar transaction. See
	Item 10, Directors and Executive Officers.




Item 13.     Certain
Relationships and Related Transactions

There were no transactions between us and any of
our officers, directors, or shareholders owning more than 5% of
our voting securities during the year ended December 31,
2001.






|         |                                                                  
|-------- | -----------------------------------------------------------------
|Item 14. | Exhibits, Financial Statement Schedules,
	and Reports on Form 8-K

(a) Financial Statements and Financial
Statement Schedules



| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | (1) Financial Statements are listed in the
	Index to Consolidated Financial Statements on page F-1 of this
	report.

38



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) See Schedule II on page F-27.
	No other Financial Statement Schedules are included because such
	schedules are not applicable, are not required, or because the
	required financial information is included in the Consolidated
	Financial Statements or notes thereto.

(b) Reports on Form 8-K

None

(c) Exhibits

|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                       
|------- | -- | --- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |            
|Number  |    |     |  | Description
|        |    |     |  |            
|        | 3  | .1  |  |            |  | Restated and Amended Articles of Incorporation.(1)                                                                                                                                                                                                                                                                                    
|        | 3  | .2  |  |            |  | Amended Bylaws of the Registrant.(1)                                                                                                                                                                                                                                                                                                  
|        | 4  | .1  |  |            |  | Specimen Common Stock Certificate of the
	Registrant.(1)                                                                                                                                                                                                                                                                              
|        | 4  | .2  |  |            |  | Form of Representative Option Agreement.(1)                                                                                                                                                                                                                                                                                           
|        | 4  | .3  |  |            |  | Share Purchase Agreement dated March 25,
	1999 by and between the Registrant and the purchasers thereto,
	together with Registration Rights Agreement and Investors
	Agreement of even date therewith.(2)                                                                                                                             
|        | 10 | .1  |  |            |  | Office Lease between FDC Office I, LLC and
	Lenders Resource Incorporated dated August 14, 1997 and as
	amended December 26, 1997.(1)                                                                                                                                                                                                 
|        | 10 | .2  |  |            |  | Registrants 1997 Stock Incentive Plan, as
	amended, with form of Stock Option Agreement.(1)                                                                                                                                                                                                                                          
|        | 10 | .3  |  |            |  | Credit Agreement dated May 23, 2000 between
	the Registrant and Wells Fargo Bank, N.A.(3)                                                                                                                                                                                                                                             
|        | 10 | .5  |  |            |  | Form of Indemnification Agreement.(1)                                                                                                                                                                                                                                                                                                 
|        | 10 | .7  |  |            |  | Amendment to Credit Agreement dated
	March 27, 2001 between the Registrant and Wells Fargo Bank,
	N.A.(4)                                                                                                                                                                                                                             
|        | 10 | .8  |  |            |  | Experian Affiliate Services Agreement (Lease
	Expansion-Colorado), between Experian Information Solutions,
	Inc. and the Registrant, dated April 28, 2000.(5)                                                                                                                                                                         
|        | 10 | .11 |  |            |  | Agreement for Service  Consumer
	Reporting Agencies, between Equifax Credit Information Services,
	Inc. and the Registrant, dated October 8, 1998.*                                                                                                                                                                                  
|        | 10 | .12 |  |            |  | Reseller Services Agreement, between the
	Registrant and Experian Information Solutions, Inc., dated
	November 17, 1998.*                                                                                                                                                                                                             
|        | 10 | .13 |  |            |  | Reseller Service Agreement, between the
	Registrant and TransUnion LLC, dated October 30, 2001.*                                                                                                                                                                                                                                      
|        | 10 | .14 |  |            |  | Second Amendment to Credit Agreement dated
	April 30, 2001 between the Registrant and Wells Fargo Bank,
	N.A.*                                                                                                                                                                                                                        
|        | 10 | .16 |  |            |  | 1999 Employee Stock Purchase Plan.(6)                                                                                                                                                                                                                                                                                                 
|        | 10 | .17 |  |            |  | 1999 Formula Award Stock Option Plan.(6)                                                                                                                                                                                                                                                                                              
|        | 10 | .18 |  |            |  | Credit Reporting Company Agreement, between the
	Registrant and Federal Home Loan Mortgage Corporation, dated
	January 1, 2000. Note: Portions of this agreement have been
	omitted pursuant to a request for confidential treatment
	submitted to the Securities and Exchange Commission as further
	noted on this Exhibit as filed.*
|        | 21 |     |  |            |  | Subsidiaries of the Registrant.(4)                                                                                                                                                                                                                                                                                                    
|        | 23 | .1  |  |            |  | Consent of BDO Seidman LLP.*                                                                                                                                                                                                                                                                                                          
|        | 23 | .2  |  |            |  | Consent of Ehrhardt Keefe Steiner &
	Hottman PC.*                                                                                                                                                                                                                                                                                     



---



| |   |                
| | - | ---------------
| | * | Filed herewith.



|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to our Registration
	Statement on Form SB-2 (Registration No. 333-47051).       
|   
|(2) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on April 12,
	1999.
|   
|(3) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on June 6, 2000.   

39



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##### Table of Contents





|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Incorporated by reference to our Annual Report on
	Form 10-KSB for the year ended December 31, 2000 filed
	with the Commission on March 30, 2001. 
|   
|(5) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on August 17,
	2000.                                       
|   
|(6) | Incorporated by reference to our Registration
	Statement on Form S-8 (Registration No. 333-92693)
	filed with the Commission on December 14, 1999.

40



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##### Table of Contents






SIGNATURES

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



| |                   
| | ------------------
| | FACTUAL DATA CORP.



| |     |                
| | --- | ---------------
| | By: | /s/ J.H. DONNAN

| |                        
| | -----------------------
| |                        
| | J.H. Donnan, Chairman  
| | Chief Executive Officer

Date: April 15, 2002

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

|                                       |  |                                                                                               |  |                |  | 
|-------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                       |  |                                                                                               |  |               
|Signature                              |  | Title                                                                                         |  | Date          
|                                       |  |                                                                                               |  |               
|                                      
|/s/ J.H. DONNANJ.H. Donnan             |  | Chairman of the Board of Directors and Chief
	Executive Officer (Principal Executive Officer) |  | April 15, 2002
|                                      
|/s/ TODD A. NEIBERGERTodd A. Neiberger |  | Chief Financial Officer and a Director (Principal
	Financial and
	Accounting Officer)         |  | April 15, 2002
|                                      
|/s/ JAMES N. DONNANJames N. Donnan     |  | President and a Director                                                                      |  | April 15, 2002
|                                      
|/s/ ROBERT J. TERRYRobert J. Terry     |  | Director                                                                                      |  | April 15, 2002
|                                      
|/s/ ABDUL H. RAJPUTAbdul H. Rajput     |  | Director                                                                                      |  | April 15, 2002
|                                      
|/s/ DANIEL G. HELLEDaniel G. Helle     |  | Director                                                                                      |  | April 15, 2002
|                                      
|J. Barton Goodwin                      |  | Director                                                                                      |  | April   , 2002

41



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##### Table of Contents



FACTUAL DATA CORP.

CONTENTS

|                                                   |  |      |             | 
|-------------------------------------------------- |  | ---- | ----------- | 
|                                                   |  | Page
|                                                   |  |     
|Report of Independent Certified Public Accounts    |  |      | F-2         | 
|Independent Auditors Report                       |  |      | F-3         | 
|Consolidated Balance Sheets                        |  |      | F-4         | 
|Consolidated Statements of Operations              |  |      | F-5         | 
|Consolidated Statements of Shareholders
	Equity   |  |      | F-6         | 
|Consolidated Statements of Cash Flows              |  |      | F-7         | 
|Summary of Significant Accounting Policies         |  |      | F-8  F-12  | 
|Notes to Consolidated Financial Statements         |  |      | F-13  F-24 | 
|Report of Independent Certified Public Accountants |  |      | F-25        | 
|Independent Auditors Report                       |  |      | F-26        | 
|Schedule II  Valuation and
	Qualifying Accounts   |  |      | F-27        | 

F-1



---



##### Table of Contents






REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS

The Board of Directors and Shareholders

Factual Data Corp.


Loveland, Colorado


We have audited the accompanying consolidated
balance sheet of Factual Data Corp. as of December 31, 2001
and the related consolidated statements of operations,
shareholders equity and cash flows for the year then
ended. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the financial position of Factual Data Corp. at
December 31, 2001 and the results of its operations and its
cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.



| |                     
| | --------------------
| | /s/ BDO SEIDMAN, LLP

February 1, 2002

Denver, Colorado


F-2



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##### Table of Contents






INDEPENDENT AUDITORS REPORT

The Board of Directors and Shareholders

Factual Data Corp.


Loveland, Colorado


We have audited the accompanying consolidated
balance sheet of Factual Data Corp. and Subsidiary as of
December 31, 2000, and the related consolidated statements
of income (loss), changes in shareholders equity and cash
flows for the years ended December 31, 1999 and 2000. These
consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with
generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures
in the consolidated 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 financial position of Factual Data Corp. and
Subsidiary as of December 31, 2000 and the results of their
operations and their cash flows for the years ended
December 31, 1999 and 2000 in conformity with generally
accepted accounting principles.



| |                                            
| | -------------------------------------------
| | /s/ EHRHARDT KEEFE STEINER & HOTTMAN,
	P.C.

March 28, 2001

Denver, Colorado


F-3



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##### Table of Contents



FACTUAL DATA CORP.

CONSOLIDATED BALANCE SHEETS

|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |            |            | 
|--------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- |  | --------- | ---------- | ---------- | 
|                                                                                  |                                                                                                           |                                           
|                                                                                  |                                                                                                           | December 31,                              
|                                                                                  |                                                                                                           |                                           
|                                                                                  |                                                                                                           | 2000                                       |           | 2001      
|                                                                                  |                                                                                                           |                                            |           |           
|Assets (Note 6)                                                                  
|Current:                                                                          |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  | Cash and cash equivalents                                                                                 |                                            | $         | 347,926    |            |  | $         | 6,163,743  |           
|                                                                                  | Trade accounts receivable, net of allowance of
	$103,531 and $243,946                                     |                                            |           | 4,149,820  |            |  |           | 5,919,521  |           
|                                                                                  | Income tax refund receivable                                                                              |                                            |           | 987,558    |            |  |           |           |           
|                                                                                  | Prepaid expenses and other                                                                                |                                            |           | 207,036    |            |  |           | 244,356    |           
|                                                                                  | Deferred income taxes (Note 9)                                                                            |                                            |           | 629,342    |            |  |           | 466,344    |           
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total current assets                       |           |            | 6,321,682  |  |           |            | 12,793,964 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|Property and equipment, net (Notes 2
	and 7)                                      |                                                                                                           |                                            | 5,245,949 |            |            |  | 5,722,515 |           
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|Other assets:                                                                     |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  | Intangible assets, net (Notes 3 and 7)                                                                    |                                            |           | 27,173,678 |            |  |           | 28,684,010 |           
|                                                                                  | Deferred income taxes (Note 9)                                                                            |                                            |           | 3,854,455  |            |  |           | 3,463,237  |           
|                                                                                  | Other assets                                                                                              |                                            |           | 204,333    |            |  |           | 219,805    |           
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total other assets                         |           |            | 31,232,466 |  |           |            | 32,367,052 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total assets                               |           | $          | 42,800,097 |  |           | $          | 50,883,531 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|Liabilities and Shareholders
	Equity                                            
|Current liabilities:                                                              |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  | Line of credit (Note 6)                                                                                   |                                            | $         | 3,406,395  |            |  | $         | 2,200,000  |           
|                                                                                  | Current portion of long-term debt (Note 7)                                                                |                                            |           | 2,220,881  |            |  |           | 2,650,862  |           
|                                                                                  | Current portion of capitalized lease
	obligation  license agreements (Note 7)                            |                                            |           | 1,003,538  |            |  |           | 1,927,139  |           
|                                                                                  | Accounts payable                                                                                          |                                            |           | 4,166,744  |            |  |           | 4,806,209  |           
|                                                                                  | Accrued branch efficiency costs (Note 5)                                                                  |                                            |           | 1,504,697  |            |  |           | 510,199    |           
|                                                                                  | Accrued compensation                                                                                      |                                            |           | 279,943    |            |  |           | 1,335,466  |           
|                                                                                  | Income taxes payable                                                                                      |                                            |           |           |            |  |           | 332,138    |           
|                                                                                  | Accrued expenses                                                                                          |                                            |           | 160,760    |            |  |           | 426,986    |           
|                                                                                  | Deferred revenue                                                                                          |                                            |           | 37,850     |            |  |           | 78,624     |           
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total current liabilities                  |           |            | 12,780,808 |  |           |            | 14,267,623 | 
|Capitalized lease obligation  license
	agreements, less current portion (Note 7) |                                                                                                           |                                            | 8,792,840 |            |            |  | 7,386,831 |           
|Long-term debt, less current portion (Note 7)                                     |                                                                                                           |                                            | 5,971,149 |            |            |  | 4,754,222 |           
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total liabilities                          |           |            | 27,544,797 |  |           |            | 26,408,676 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|Commitments and Contingencies (Notes 7
	and 8)                                    |                                                                                                           |                                            |           |            |            |  |           |           
|Shareholders equity (Note 10):                                                   |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  | Preferred stock, no par value, 1,000,000 shares
	authorized; none issued and outstanding                  |                                            |           |           |            |  |           |           |           
|                                                                                  | Common stock, no par value, 10,000,000 shares
	authorized; 5,387,371 and 6,120,380 issued and outstanding |                                            |           | 22,532,809 |            |  |           | 27,615,506 |           
|                                                                                  | Accumulated deficit                                                                                       |                                            |           | (7,277,509 | )          |  |           | (3,140,651 | )         
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total shareholders equity                 |           |            | 15,255,300 |  |           |            | 24,474,855 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           
|                                                                                  |                                                                                                           | Total liabilities and shareholders equity |           | $          | 42,800,097 |  |           | $          | 50,883,531 | 
|                                                                                  |                                                                                                           |                                            |           |            |            |  |           |           

See accompanying summary of significant
accounting policies and notes to

consolidated financial statements.


F-4



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##### Table of Contents



FACTUAL DATA CORP.

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |            |            |  
|----------------------------------------------- | ---------------------------------------------------- | ------------------------ | ---------- | ---------- | ---------- | ---- | ----------- | ---------- | ----------- | - | ---------- | ---------- | ---------- | -
|                                                |                                                      |                         
|                                                |                                                      | Year Ended December 31, 
|                                                |                                                      |                         
|                                                |                                                      | 1999                     |            | 2000       |            | 2001
|                                                |                                                      |                          |            |            |            |     
|Revenue                                         |                                                      | $                        | 25,830,062 |            |            | $    | 31,261,206  |            |             | $ | 51,240,221 |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Operating expenses:                             |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                | Cost of services                                     |                          |            | 15,399,461 |            |      |             | 18,279,719 |             |   |            | 29,828,159 |           
|                                                | Selling, general and administrative                  |                          |            | 4,907,378  |            |      |             | 8,131,984  |             |   |            | 9,263,426  |           
|                                                | Depreciation and amortization                        |                          |            | 2,715,342  |            |      |             | 4,130,988  |             |   |            | 3,620,783  |           
|                                                | Acquisition consolidation costs (Note 4)             |                          |            | 1,245,059  |            |      |             | 601,809    |             |   |            | 158,114    |           
|                                                | Branch efficiency costs (Note 5)                     |                          |            |           |            |      |             | 3,046,516  |             |   |            | (169,973   | )         
|                                                | Impairment adjustment to intangible assets
	(Note 3) |                          |            |           |            |      |             | 11,798,674 |             |   |            |           |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                |                                                      | Total operating expenses |            |            | 24,267,240 |      |             |            | 45,989,690  |   |            |            | 42,700,509 |  
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Income (loss) from operations                   |                                                      |                          | 1,562,822  |            |            |      | (14,728,484 | )          |             |   | 8,539,712  |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Other income (expense):                         |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                | Other income                                         |                          |            | 201,458    |            |      |             | 501,780    |             |   |            | 496,256    |           
|                                                | Interest expense                                     |                          |            | (579,668   | )          |      |             | (1,542,028 | )           |   |            | (2,238,603 | )         
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                |                                                      | Total other expense      |            |            | (378,210   | )    |             |            | (1,040,248  | ) |            |            | (1,742,347 | )
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Income (loss) before income taxes               |                                                      |                          | 1,184,612  |            |            |      | (15,768,732 | )          |             |   | 6,797,365  |           
|Income tax expense (benefit) (Note 9)           |                                                      |                          | 525,198    |            |            |      | (5,610,502  | )          |             |   | 2,660,507  |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                |                                                      | Net income (loss)        |            | $          | 659,414    |      |             | $          | (10,158,230 | ) |            | $          | 4,136,858  |  
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Earnings (loss) per share (Note 11):            |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                | Basic                                                |                          | $          | 0.13       |            |      | $           | (1.89      | )           |   | $          | 0.72       |           
|                                                | Diluted                                              |                          | $          | 0.13       |            |      | $           | (1.89      | )           |   | $          | 0.71       |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|Weighted average shares outstanding
	(Note 11): |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                | Basic                                                |                          |            | 4,937,763  |            |      |             | 5,382,590  |             |   |            | 5,756,808  |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           
|                                                | Diluted                                              |                          |            | 5,219,140  |            |      |             | 5,382,590  |             |   |            | 5,819,337  |           
|                                                |                                                      |                          |            |            |            |      |             |            |             |   |            |           

See accompanying summary of significant
accounting policies and notes to

consolidated financial statements.


F-5



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##### Table of Contents



FACTUAL DATA CORP.






CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY


|                           |                                                                                      |                                              |           |                   |   |          |            |            |  |   |            |             |   |   |            |             |  
|-------------------------- | ------------------------------------------------------------------------------------ | -------------------------------------------- | --------- | ----------------- | - | -------- | ---------- | ---------- |  | - | ---------- | ----------- | - | - | ---------- | ----------- | -
|                           |                                                                                      |                                             
|                           |                                                                                      | Years Ended December 31, 1999, 2000 and 2001
|                           |                                                                                      |                                             
|                           |                                                                                      |                                              |           |                  
|                           |                                                                                      | Common Stock                                 |           | Retained Earnings |   |         
|                           |                                                                                      |                                              |           | (Accumulated      |   |         
|                           |                                                                                      | Shares                                       |           | Amount            |   | Deficit) |            | Total     
|                           |                                                                                      |                                              |           |                   |   |          |            |           
|Balance, January 1, 1999   |                                                                                      |                                              | 3,551,346 |                   |   | $        | 8,614,705  |            |  | $ | 2,221,307  |             |   | $ | 10,836,012 |            
|                           | Shares retired from escrow account (Note 10)                                         |                                              |           | (83,694           | ) |          |            |           |  |   |            |            |   |   |            |            |  
|                           | Net proceeds from private placement (net of
	offering costs of $1,636,461) (Note 10) |                                              |           | 1,912,451         |   |          |            | 13,863,539 |  |   |            |            |   |   |            | 13,863,539  |  
|                           | Net income                                                                           |                                              |           |                  |   |          |            |           |  |   |            | 659,414     |   |   |            | 659,414     |  
|                           |                                                                                      |                                              |           |                   |   |          |            |            |  |   |            |             |   |   |            |            
|Balance, December 31, 1999 |                                                                                      |                                              | 5,380,103 |                   |   |          | 22,478,244 |            |  |   | 2,880,721  |             |   |   | 25,358,965 |            
|                           | Shares issued for employee stock purchases and
	exercise of employee stock options   |                                              |           | 7,268             |   |          |            | 54,565     |  |   |            |            |   |   |            | 54,565      |  
|                           | Net loss                                                                             |                                              |           |                  |   |          |            |           |  |   |            | (10,158,230 | ) |   |            | (10,158,230 | )
|                           |                                                                                      |                                              |           |                   |   |          |            |            |  |   |            |             |   |   |            |            
|Balance, December 31, 2000 |                                                                                      |                                              | 5,387,371 |                   |   |          | 22,532,809 |            |  |   | (7,277,509 | )           |   |   | 15,255,300 |            
|                           | Exercise of investor warrants (Note 10)                                              |                                              |           | 725,759           |   |          |            | 5,020,767  |  |   |            |            |   |   |            | 5,020,767   |  
|                           | Shares issued for employee stock purchases and
	exercise of employee stock options   |                                              |           | 7,250             |   |          |            | 61,930     |  |   |            |            |   |   |            | 61,930      |  
|                           | Net income                                                                           |                                              |           |                  |   |          |            |           |  |   |            | 4,136,858   |   |   |            | 4,136,858   |  
|                           |                                                                                      |                                              |           |                   |   |          |            |            |  |   |            |             |   |   |            |            
|Balance, December 31, 2001 |                                                                                      |                                              | 6,120,380 |                   |   | $        | 27,615,506 |            |  | $ | (3,140,651 | )           |   | $ | 24,474,855 |            
|                           |                                                                                      |                                              |           |                   |   |          |            |            |  |   |            |             |   |   |            |            

See accompanying summary of significant
accounting policies and

notes to consolidated financial statements.


F-6



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##### Table of Contents



FACTUAL DATA CORP.

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |            |            |  
|------------------------------------------------- | ---------------------------------------------------------------------------------- | ----------------------------------------------------------- | - | ----------- | ----------- | ---- | - | ----------- | ---------- | - | - | ---------- | ---------- | -
|                                                  |                                                                                    |                                                            
|                                                  |                                                                                    | Year Ended December 31,                                    
|                                                  |                                                                                    |                                                            
|                                                  |                                                                                    | 1999                                                        |   | 2000        |             | 2001
|                                                  |                                                                                    |                                                             |   |             |             |     
|Increase (Decrease) in Cash and Cash
	Equivalents |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|Cash flows from operating activities:             |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Net income (loss)                                                                  |                                                             | $ | 659,414     |             |      | $ | (10,158,230 | )          |   | $ | 4,136,858  |           
|                                                  | Reconciliation of net income (loss) to net cash
	provided by operating activities: |                                                             |   |             |             |      |   |             |            |   |   |            |           
|                                                  |                                                                                    | Depreciation and amortization                               |   |             | 2,715,342   |      |   |             | 4,130,988  |   |   |            | 3,620,783  |  
|                                                  |                                                                                    | (Gain) loss on sale of fixed assets                         |   |             | (4,524      | )    |   |             | 49,725     |   |   |            | 25,430     |  
|                                                  |                                                                                    | Gain on refinancing of debt                                 |   |             |            |      |   |             | (189,014   | ) |   |            |           |  
|                                                  |                                                                                    | Unrealized loss on swap agreement                           |   |             |            |      |   |             |           |   |   |            | 58,994     |  
|                                                  |                                                                                    | Net cash settlements under swap agreement                   |   |             |            |      |   |             |           |   |   |            | 101,128    |  
|                                                  |                                                                                    | Impairment adjustment to intangible assets                  |   |             |            |      |   |             | 11,421,163 |   |   |            |           |  
|                                                  |                                                                                    | Branch efficiency costs                                     |   |             |            |      |   |             | 3,001,611  |   |   |            | (169,973   | )
|                                                  |                                                                                    | Deferred income taxes                                       |   |             | 61,978      |      |   |             | (4,907,828 | ) |   |            | 554,216    |  
|                                                  | Changes in assets and liabilities:                                                 |                                                             |   |             |             |      |   |             |            |   |   |            |           
|                                                  |                                                                                    | Accounts receivable                                         |   |             | (743,516    | )    |   |             | (486,726   | ) |   |            | (1,857,158 | )
|                                                  |                                                                                    | Prepaid expenses and other                                  |   |             | (182,742    | )    |   |             | 148,495    |   |   |            | (37,320    | )
|                                                  |                                                                                    | Income tax refund receivable                                |   |             | (594,011    | )    |   |             | (393,547   | ) |   |            | 987,558    |  
|                                                  |                                                                                    | Other assets                                                |   |             | (173,320    | )    |   |             | 100,906    |   |   |            | (14,322    | )
|                                                  |                                                                                    | Accrued branch efficiency costs                             |   |             |            |      |   |             |           |   |   |            | (824,525   | )
|                                                  |                                                                                    | Accounts payable                                            |   |             | 873,993     |      |   |             | 1,067,065  |   |   |            | 580,471    |  
|                                                  |                                                                                    | Accrued expenses and compensation and income
	taxes payable |   |             | 13,064      |      |   |             | (527,988   | ) |   |            | 1,553,887  |  
|                                                  |                                                                                    | Deferred revenue                                            |   |             |            |      |   |             | 37,851     |   |   |            | 40,774     |  
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Net cash provided by operating activities                                          |                                                             |   | 2,625,678   |             |      |   | 3,294,471   |            |   |   | 8,756,801  |           
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|Cash flows from investing activities:             |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  |                                                                                    | Cash used for software development                          |   |             | (624,282    | )    |   |             | (754,996   | ) |   |            | (749,216   | )
|                                                  |                                                                                    | Purchases of property and equipment                         |   |             | (2,211,846  | )    |   |             | (1,252,755 | ) |   |            | (1,127,342 | )
|                                                  |                                                                                    | Purchase of other intangible assets                         |   |             |            |      |   |             |           |   |   |            | (149,740   | )
|                                                  |                                                                                    | Proceeds from short-term investments                        |   |             | 2,212,386   |      |   |             |           |   |   |            |           |  
|                                                  |                                                                                    | Net cash settlements under swap agreement                   |   |             |            |      |   |             |           |   |   |            | (101,128   | )
|                                                  |                                                                                    | Cash used in the acquisition of businesses                  |   |             | (13,814,698 | )    |   |             | (2,404,458 | ) |   |            | (1,250,000 | )
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Net cash used in investing activities                                              |                                                             |   | (14,438,440 | )           |      |   | (4,412,209  | )          |   |   | (3,377,426 | )         
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|Cash flows from financing activities:             |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  |                                                                                    | Net proceeds from private placement                         |   |             | 13,863,539  |      |   |             |           |   |   |            |           |  
|                                                  |                                                                                    | Principal payments on long-term debt                        |   |             | (2,620,127  | )    |   |             | (2,422,221 | ) |   |            | (3,439,860 | )
|                                                  |                                                                                    | Net proceeds from warrants exercised                        |   |             |            |      |   |             |           |   |   |            | 5,020,767  |  
|                                                  |                                                                                    | (Payments) borrowings on line-of-credit, net                |   |             | 500,000     |      |   |             | 2,906,395  |   |   |            | (1,206,395 | )
|                                                  |                                                                                    | Net proceeds from employee stock purchase and
	option plans |   |             |            |      |   |             | 54,565     |   |   |            | 61,930     |  
|                                                  |                                                                                    | Loan origination costs                                      |   |             |            |      |   |             | (97,020    | ) |   |            |           |  
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Net cash provided by financing activities                                          |                                                             |   | 11,743,412  |             |      |   | 441,719     |            |   |   | 436,442    |           
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Net increase (decrease) in cash and cash
	equivalents                              |                                                             |   | (69,350     | )           |      |   | (676,019    | )          |   |   | 5,815,817  |           
|                                                  | Cash and cash equivalents, beginning of year                                       |                                                             |   | 1,093,295   |             |      |   | 1,023,945   |            |   |   | 347,926    |           
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           
|                                                  | Cash and cash equivalents, end of year                                             |                                                             | $ | 1,023,945   |             |      | $ | 347,926     |            |   | $ | 6,163,743  |           
|                                                  |                                                                                    |                                                             |   |             |             |      |   |             |            |   |   |           

See accompanying summary of significant
accounting policies and notes to consolidated financial
statements.

F-7



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##### Table of Contents






FACTUAL DATA CORP.






SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


Organization and Business

Factual Data Corp. (FDC or the
Company) was incorporated in the state of Colorado in
1985. The Company provides information services to the mortgage
and consumer lending industries, employers, landlords and other
business customers located throughout the United States. The
Company provides electronic ordering and delivery of customized
information services, including consumer and mortgage credit
reports, employment and resident background screening, fraud
detection and portfolio scoring. Employee background information
is supplied under EMPfactsSM, EMPfacts Quick
IDSM and Resident Qualifier reports for employers and
landlords.

Principles of Consolidation

The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, FDC
Acquisition, Inc. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Revenue Recognition



| |                     
| | --------------------
| | Information Services

Revenue generated from providing mortgage credit
reports and other information services are recognized when the
information has been delivered to the customer.



| |                  
| | -----------------
| | System Affiliates

Pursuant to the various franchise and license
agreements, system affiliates, franchised and licensed offices
of the Company, are required to pay the Company royalties based
on a percentage of their sales. In addition, system affiliates
that provide our employee background screening services are
required to pay $100 per month for national advertising
conducted by the Company.

Royalties allowed under the agreements are
recognized based on the percentage of adjusted gross billings,
as reported by the system affiliates. Included in revenue are
royalties of $1,601,388, $1,172,480 and $1,307,228 for the years
ended December 31, 1999, 2000 and 2001.



| |                 
| | ----------------
| | Deferred Revenue

Deferred revenue primarily represents deposits
that the Company requires certain customers to maintain.



| |                      
| | ---------------------
| | Software License Fees

The Company recognizes revenue from the licensing
of computer software upon customer acceptance of the configured
master. The Company has no significant post-contract support
obligations.

Included in revenue are license fees of $353,667,
$22,812 and $0 for the years ended December 31, 1999, 2000
and 2001.

Cash and Cash Equivalents

The Company considers highly liquid investments
purchased with original maturities of three months or less and
money market accounts to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost.
Provisions for depreciation are computed using the straight-line
method over estimated useful lives ranging from 3 to
30 years. Maintenance and repairs are charged to

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##### Table of Contents



FACTUAL DATA CORP.


SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)

expense as incurred and expenditures for major
improvements are capitalized. When assets are retired or
otherwise disposed of, the property accounts are relieved of
costs and accumulated depreciation and any resulting gain or
loss is credited or charged to operations.

Goodwill and Intangible Assets

Intangible assets are recorded at cost less
accumulated amortization. Through December 31, 2001,
customer rights and customer lists and goodwill are amortized
using the straight-line method over 15 years and
non-compete agreements, franchise and license agreements are
amortized over the life of the agreements, which extend from
three to ten years. Intellectual property is amortized from
13 to 15 years and loan origination costs are amortized
over the loan term. (See Summary of Significant Accounting
Policies  Recent Accounting Pronouncements for
discussion concerning goodwill and customer list amortization
subsequent to December 31, 2001.)

Goodwill represents the excess of the cost over
the fair value of its net assets acquired at the date of
acquisition. Deferred acquisition costs consist of direct third
party costs and expenses associated with the Companys
investigation of potential future acquisitions. Any costs and
expenses associated with unsuccessful efforts will be expensed
in the period in which the acquisition has been deemed to be
unsuccessful. Deferred acquisition costs totaled $3,304 and $0
at December 31, 2000 and 2001.

Amortization expense of goodwill and other
intangible assets was $1,592,523, $2,544,150 and $1,894,443 for
the years ended December 31, 1999, 2000 and 2001.

Long-Lived Assets

Long-lived assets, identifiable intangibles, and
associated goodwill are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount
may not be recoverable. If the expected future cash flow from
the use of the assets and its eventual disposition is less than
the carrying amount of the assets, an impairment loss is
recognized and measured using the assets fair value. (See
Note 3)

Software Development Costs

The Company applies the provisions of Statement
of Position 98-1 (SOP 98-1),
Accounting for Costs of Computer Software Developed for
Internal Use. In accordance with SOP 98-1, the
Company capitalizes certain costs incurred in connection with
developing or obtaining software for internal use. Qualifying
software costs are capitalized and amortized over the estimated
useful life of the software of three years.

The Company capitalized $624,282, $754,996 and
$749,216 of costs for the years ended December 31, 1999,
2000 and 2001.

Comprehensive Income

Statement of Financial Accounting Standards
(SFAS) No. 130, Reporting Comprehensive
Income (SFAS No. 130), governs the
financial statement presentation of changes in
shareholders equity resulting from non-owner sources.
Comprehensive income includes all changes in equity except those
resulting from investments by owners and distribution to owners.
For the years ended December 31, 1999, 2000 and 2001, the
Company had no items of comprehensive income (loss) other than
net losses; therefore, a separate statement of comprehensive
income (loss) has not been presented for these periods.

Use of Estimates

The preparation of the Companys
consolidated financial statements, in conformity with accounting
principles generally accepted in the United States of America,
requires the Company to make estimates and

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##### Table of Contents



FACTUAL DATA CORP.


SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)

assumptions that effect the reported amounts of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the consolidated financial
statements, and the reported revenue and expenses during the
reporting periods. Actual results could differ from those
estimates.

Income Taxes

The Company accounts for income taxes under SFAS
No. 109, Accounting for Income Taxes. Deferred
income taxes result from temporary differences. Temporary
differences are differences between the tax basis of assets and
liabilities and their reported amounts in the financial
statements that will result in taxable or deductible amounts in
future years.

Concentration of Credit Risk

The Companys financial instruments that are
exposed to concentrations of credit risk consist of cash and
cash equivalent balances in excess of the insurance provided by
governmental insurance authorities. The Companys cash and
cash equivalents are placed with financial institutions and are
primarily in demand deposit accounts.

Concentrations of credit risk with respect to
accounts receivable are associated with many customers dispersed
across geographic areas. The Company reviews a customers
credit history before extending credit and establishes an
allowance for doubtful accounts based upon the credit risk of
specific customers, historical trends and other information.

Fair Value of Financial Instruments

The estimated fair value of financial instruments
has been determined using available market information or other
appropriate valuation methodologies. However, considerable
judgment is required in interpreting market data to develop
estimates of fair value. Consequently, the estimates are not
necessarily indicative of the amounts that could be realized or
would be paid in a current market exchange. The carrying amounts
of financial instruments reported on the consolidated balance
sheets approximate their respective fair values.

Segment Information

The Company follows the provisions of SFAS
No. 131, Disclosures about Segments of an Enterprise
and Related Information. This statement establishes
standards for the reporting of information about operating
segments in annual and interim financial statements. Operating
segments are defined as components of an enterprise for which
separate financial information is available that is evaluated
regularly by the chief operating decision makers in deciding how
to allocate resources and in assessing performance.

The Company currently operates in three business
segments: mortgage services, consumer services and other
services, which consist of resident and employment screening
services.

Derivative Instruments

Effective January 1, 2001, the Company
adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. Under SFAS
No. 133, all derivative instruments, whether designated as
hedging relationships or not, are required to be recorded on the
balance sheet at fair value. Derivatives that are not designated
as hedges must be adjusted to fair value through net income
(loss). If the derivative is a hedge, depending on the nature of
the hedge, changes in the fair value of derivatives are either
offset against the change in fair value of assets, liabilities,
or a firm commitment through net income (loss) until the hedged
item is recognized in net income (loss). The ineffective portion
of a derivatives change in fair value is immediately
recognized in earnings. The effect of adoption of this new
accounting standard on the Companys results of operations,
financial position and cash flows was not material.

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##### Table of Contents



FACTUAL DATA CORP.


SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)

Stock Options

The Company applies Accounting Principles Board
(APB) Opinion 25, Accounting for Stock
Issued to Employees, and a related interpretation in
accounting for all stock option plans. Under APB
Opinion 25, compensation cost is recognized for stock
options issued to employees when the exercise price of the
Companys stock options granted is less than the market
price of the underlying common stock on the date of grant.

SFAS No. 123, Accounting for
Stock-Based Compensation, requires the Company to provide
pro forma information regarding net income (loss) as if
compensation cost for the Companys stock options plans had
been determined in accordance with the fair value based method
prescribed in SFAS No. 123. To provide the required pro
forma information, the Company estimates the fair value of each
stock option at the grant date by using the Black-Scholes
option-pricing model.

Net Income (Loss) Per Share

The Company provides for the calculation of
Basic and Diluted earnings per share in
accordance with SFAS No. 128, Earnings Per
Share. Basic earnings per share includes no dilution and
is computed by dividing income (loss) available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflect
the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted earnings per
share.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires the use of the purchase method of
accounting and prohibits the use of the pooling-of-interests
method of accounting for business combinations initiated after
June 30, 2001. SFAS No. 141 also requires that
companies recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria
and, upon adoption of SFAS No. 142, that companies
reclassify the carrying amounts of intangible assets and
goodwill based on the criteria in SFAS No. 141. SFAS
No. 142 requires, among other things, that companies no
longer amortize goodwill, but instead test goodwill for
impairment at least annually. In addition, SFAS No. 142
requires that companies identify reporting units for the
purposes of assessing potential future impairments of goodwill,
reassess the useful lives of other existing recognized
intangible assets, and cease amortization of intangible assets
with an indefinite useful life. An intangible asset with an
indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS No. 142.

The Companys previous business combinations
were accounted for using the purchase method. As of
December 31, 2001, the net carrying amount of goodwill of
$168,163 will no longer be amortized and will be subject to
impairment testing under SFAS No. 142. Other intangible
assets with a carrying amount of $28,515,847 at
December 31, 2001 will be subject to the amortization
methods prescribed by SFAS No. 142. The Company has
determined that it has three reportable units. Currently, the
Company is assessing but has not yet determined how the adoption
of SFAS No. 142 will impact its financial position and
results of operations.

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. SFAS
No. 143 requires the fair value of a liability for an asset
retirement obligation to be recognized in the period in which it
is incurred if a reasonable estimate of fair value can be made.
The associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. SFAS No. 143
is effective for the Company for fiscal years beginning after
June 15, 2002. The Company believes the adoption of this
statement will have no material impact on its consolidated
financial statements.

F-11



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##### Table of Contents



FACTUAL DATA CORP.


SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued)

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS 144 requires that those long-lived
assets be measured at the lower of carrying amount or fair
value, less cost to sell, whether reported in continuing
operations or in discontinued operations. Therefore,
discontinued operations will no longer be measured at net
realizable value or include amounts for operating losses that
have not yet occurred. SFAS 144 is effective for financial
statements issued for fiscal years beginning after
December 15, 2001 and, generally, is to be applied
prospectively.

Reclassifications

Certain reclassifications have been made to the
1999 and 2000 financial statements to conform to the 2001
financial statement presentation. Such reclassifications have no
effect on financial position or net income (loss) as previously
reported.

F-12



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##### Table of Contents



FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1.  Business Acquisitions

The Company completed two acquisitions (Credit
Bureau of Dallas, Inc. and Factual Data of Florida) in 2001 and
four acquisitions (C.B. Unlimited, Inc., Quality Credit Reports,
LLC, Air Credit Reporting Midwest, Inc. and Credit Bureau of
Carbon County Credit Reporting Department) in 2000. The purpose
of these acquisitions was either to acquire competitors or to
acquire franchise rights, enabling the Company to increase
market share. The acquisitions have been accounted for using the
purchase method and the results of operations are reflected in
the consolidated financial statements from the date of the
acquisitions. The purchase price allocation of the acquisitions
and consideration paid were as follows:

|                                   |  |       |               |                         |  |      |           |  |  |   |           | 
|---------------------------------- |  | ----- | ------------- | ----------------------- |  | ---- | --------- |  |  | - | --------- | 
|                                   |  |       |               |                        
|                                   |  |       |               | Year Ended December 31,
|                                   |  |       |               |                        
|                                   |  | Lives |               | 2000                    |  | 2001
|                                   |  |       |               |                         |  |     
|Fair value of assets:              |  |       |               |                         |  |      |           |  |  |   |           | 
|Property and equipment             |  |       | 3 to 7  years |                         |  | $    | 164,000   |  |  | $ | 265,300   | 
|Customer rights and customer lists |  |       | 15 years      |                         |  |      | 2,656,208 |  |  |   | 2,348,350 | 
|Non-compete agreements             |  |       | 3 years       |                         |  |      | 80,000    |  |  |   | 40,000    | 
|Goodwill                           |  |       | 15 years      |                         |  |      |          |  |  |   | 160,200   | 
|Franchise and license agreements   |  |       | 10 years      |                         |  |      |          |  |  |   | 135,000   | 
|Intellectual property              |  |       | 15 years      |                         |  |      | 175,000   |  |  |   |          | 
|Other assets                       |  |       | N/A           |                         |  |      | 4,250     |  |  |   | 1,150     | 
|                                   |  |       |               |                         |  |      |           |  |  |   |           | 
|                                   |  |       |               |                         |  | $    | 3,079,458 |  |  | $ | 2,950,000 | 
|                                   |  |       |               |                         |  |      |           |  |  |   |           | 
|Consideration paid:                |  |       |               |                         |  |      |           |  |  |   |           | 
|Notes payable issued               |  |       |               |                         |  | $    | 675,000   |  |  | $ | 1,700,000 | 
|Cash payments                      |  |       |               |                         |  |      | 2,404,458 |  |  |   | 1,250,000 | 
|                                   |  |       |               |                         |  |      |           |  |  |   |           | 
|                                   |  |       |               |                         |  | $    | 3,079,458 |  |  | $ | 2,950,000 | 
|                                   |  |       |               |                         |  |      |           |  |  |   |           | 

The following unaudited pro forma information
presents the consolidated results of operations of the Company
as if the 2000 acquisitions had occurred on January 1, 1999
and the 2001 acquisitions had occurred on January 1, 2000.
The unaudited pro forma financial data does not purport to be
indicative of the actual results, which would have been
obtained, or the results, which may be obtained in the future.

|                                  |  |                         |            |      |  |      |            |   |  |   |            | 
|--------------------------------- |  | ----------------------- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | 
|                                  |  |                        
|                                  |  | Year Ended December 31,
|                                  |  |                        
|                                  |  | 1999                    |            | 2000 |  | 2001
|                                  |  |                         |            |      |  |     
|Total revenue                     |  | $                       | 30,057,036 |      |  | $    | 37,854,920 |   |  | $ | 51,576,918 | 
|Net income (loss)                 |  | $                       | 952,343    |      |  | $    | (9,659,745 | ) |  | $ | 4,196,251  | 
|Basic earnings (loss) per share   |  | $                       | 0.19       |      |  | $    | (1.79      | ) |  | $ | 0.73       | 
|Diluted earnings (loss) per share |  | $                       | 0.18       |      |  | $    | (1.79      | ) |  | $ | 0.72       | 

F-13



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

2.  Property and Equipment

Property and equipment consisted of the following:

|                                               |  |              |           |      |  |   |            | 
|---------------------------------------------- |  | ------------ | --------- | ---- |  | - | ---------- | 
|                                               |  |             
|                                               |  | December 31,
|                                               |  |             
|                                               |  | 2000         |           | 2001
|                                               |  |              |           |     
|Computer equipment and software                |  | $            | 4,276,876 |      |  | $ | 5,252,330  | 
|Furniture and fixtures                         |  |              | 2,520,855 |      |  |   | 2,801,741  | 
|Software development costs                     |  |              | 2,277,602 |      |  |   | 3,026,818  | 
|Leasehold improvements                         |  |              | 478,641   |      |  |   | 619,885    | 
|Vehicles                                       |  |              | 140,990   |      |  |   | 146,376    | 
|                                               |  |              |           |      |  |   |            | 
|                                               |  |              | 9,694,964 |      |  |   | 11,847,150 | 
|Less accumulated depreciation and amortization |  |              | 4,449,015 |      |  |   | 6,124,635  | 
|                                               |  |              |           |      |  |   |            | 
|                                               |  | $            | 5,245,949 |      |  | $ | 5,722,515  | 
|                                               |  |              |           |      |  |   |            | 

Depreciation expense for the years ended
December 31, 1999, 2000 and 2001 was $1,122,819, $1,586,838
and $1,726,340.

3.  Intangible Assets

Intangible assets consisted of the following:

|                                   |  |              |            |      |  |   |            | 
|---------------------------------- |  | ------------ | ---------- | ---- |  | - | ---------- | 
|                                   |  |             
|                                   |  | December 31,
|                                   |  |             
|                                   |  | 2000         |            | 2001
|                                   |  |              |            |     
|Customer rights and customer lists |  | $            | 21,745,034 |      |  | $ | 24,362,094 | 
|Goodwill                           |  |              | 8,771      |      |  |   | 168,971    | 
|Non-compete agreements             |  |              | 1,459,121  |      |  |   | 1,505,151  | 
|Franchise and license agreements   |  |              | 7,763,845  |      |  |   | 8,334,350  | 
|Intellectual property              |  |              | 452,902    |      |  |   | 462,902    | 
|Loan origination costs             |  |              | 97,020     |      |  |   | 97,020     | 
|                                   |  |              |            |      |  |   |            | 
|                                   |  |              | 31,526,693 |      |  |   | 34,930,488 | 
|Less accumulated amortization      |  |              | 4,353,015  |      |  |   | 6,246,478  | 
|                                   |  |              |            |      |  |   |            | 
|                                   |  | $            | 27,173,678 |      |  | $ | 28,684,010 | 
|                                   |  |              |            |      |  |   |            | 

During the year ended December 31, 2000, the
Company recorded an impairment adjustment to its intangible
assets of approximately $11,799,000. The adjustment was the
result of the Company electing to change its accounting policy
in assessing its intangible assets from one based upon
undiscounted cash flows to a policy which utilizes discounted
cash flows. The Company believes that the use of a discounted
methodology is preferable, and is consistent with the
methodology utilized by management in assessing acquisition
investment opportunities. In applying this discounted approach,
the Company evaluates its aggregate intangible assets
individually on a reporting unit basis in assessing
recoverability of net capitalized amounts. In determining the
appropriate rate at which to discount future cash flows of each
reporting unit, the Company reviews internal and market factors
to estimate the industry or market rate of return required for
similar investments.

F-14



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

4.  Acquisition Consolidation
Costs

The Company presents certain costs incurred in
connection with the Companys acquisitions, as acquisition
consolidation costs. These costs include charges for items such
as recruiting fees, salaries and travel costs for the
consolidation and relocation of the acquired companies
operations to the Companys regional processing centers.

5.  Branch Efficiency
Costs

During the fourth quarter of 2000, the Company
recorded an expense of $3,046,516 in connection with its
decision to combine several of its branch offices for efficiency
purposes. The combination was possible due to the completion and
development of the Companys technology center located at
its headquarters. Management believes that the strategic
decision to combine several of its branches will result in
significant future savings to the Company as a result of
efficiencies created through the use of technology.

A summary of the activity for these accruals is
as follows:

|                           |  |           |           |              |  |            |            |       |  |   |         |   |  |   |            |  
|-------------------------- |  | --------- | --------- | ------------ |  | ---------- | ---------- | ----- |  | - | ------- | - |  | - | ---------- | -
|                           |  | Operating |           |              |  | Severance, |            |      
|                           |  | lease     |           | Property and |  | moving and |            |      
|                           |  | payments  |           | equipment    |  | relocation |            | Total
|                           |  |           |           |              |  |            |            |      
|Balance, January 1, 2000   |  | $         |          |              |  | $          |           |       |  | $ |        |   |  | $ |           |  
|Beginning accrual          |  |           | 1,296,179 |              |  |            | 1,541,819  |       |  |   | 208,518 |   |  |   | 3,046,516  |  
|Write-down of assets       |  |           |          |              |  |            | (1,541,819 | )     |  |   |        |   |  |   | (1,541,819 | )
|                           |  |           |           |              |  |            |            |       |  |   |         |   |  |   |            |  
|Balance, December 31, 2000 |  |           | 1,296,179 |              |  |            |           |       |  |   | 208,518 |   |  |   | 1,504,697  |  
|Amounts paid/recovered     |  |           | (871,396  | )            |  |            | 132,201    |       |  |   | (85,330 | ) |  |   | (824,525   | )
|Adjustments                |  |           | (16,781   | )            |  |            | (132,201   | )     |  |   | (20,991 | ) |  |   | (169,973   | )
|                           |  |           |           |              |  |            |            |       |  |   |         |   |  |   |            |  
|Balance, December 31, 2001 |  | $         | 408,002   |              |  | $          |           |       |  | $ | 102,197 |   |  | $ | 510,199    |  
|                           |  |           |           |              |  |            |            |       |  |   |         |   |  |   |            |  

6.  Line of Credit

On March 27, 2001, the Company amended its
$6,000,000 line of credit facility agreement with a bank, which
among other things amended certain financial covenants. Advances
on the line-of-credit bear interest at the Floating Rate or
Eurodollar Rate as defined in the agreement. Principal and
unpaid interest is due April 30, 2002. The line of credit
requires the Company to meet certain financial covenants and as
of December 31, 2001, the Company was in compliance with
such covenants. The line is collateralized by substantially all
the assets of the Company. The amount due under the line was
$3,406,395 and $2,200,000 at December 31, 2000 and 2001.
The interest rates on advances at December 31, 2000 and
2001 were 9.562% and 4.759%.

7.  Long-term Obligations

Long-term obligations consisted of the following:

|                                                                                                                                                                                                                                                                   |  |              |  |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ |  | ----------
|                                                                                                                                                                                                                                                                   |  |             
|                                                                                                                                                                                                                                                                   |  | December 31,
|                                                                                                                                                                                                                                                                   |  |             
|                                                                                                                                                                                                                                                                   |  | 2000         |  | 2001      
|                                                                                                                                                                                                                                                                   |  |              |  |           
|Term note payable to a bank, comprised of various
	notes, which were consolidated and refinanced during 2000.
	Monthly principal and interest payments total $97,396. Note
	matures May 2005. Principal on the term note is at a fixed rate
	of interest of 10.10% |  | $3,533,333   |  | $2,733,333

F-15



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |              |  |            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | -----------
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |             
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | December 31,
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |             
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 2000         |  | 2001       
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |              |  |            
|Notes payable to corporations and individuals
	incurred in the acquisition of several businesses. Monthly
	principal and interest payments total $37,381 and are due
	through November 2005. Quarterly principal and interest payments
	total $319,186 and are due through November 2005. Interest is
	payable at rates ranging from 8% to 12%. Notes are
	collateralized by security agreements and assets acquired in the
	acquisitions |  | 3,385,789    |  | 3,511,091  
|Various capital lease obligations expiring
	through March 2005. Monthly principal and interest payments to
	$44,320 with interest at rates ranging from 8.07% to 10.65%,
	collateralized by office furniture and equipment                                                                                                                                                                                                                |  | 1,253,346    |  | 1,160,660  
|Capital lease obligations for service license
	agreements expiring in April and November 2005. Monthly
	principal and interest payments total $170,436, with interest at
	9.985%                                                                                                                                                                                                                                                          |  | 9,796,378    |  | 9,313,970  
|Other note payable                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 19,562       |  |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |              |  |            
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 17,988,408   |  | 16,719,054 
|Less current maturities                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 3,224,419    |  | 4,578,001  
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |              |  |            
|Total long-term obligations                                                                                                                                                                                                                                                                                                                                                                                                               |  | $14,763,989  |  | $12,141,053
|                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |              |  |            

The Company has one interest rate swap agreement
for a principal amount of $4,000,000, expiring in May 2002. The
interest rate swap agreement was entered into in May 2000, in
connection with the Companys term note payable. Under the
agreement, the Company pays a fixed rate of interest of 10.10%,
and therefore converts the Companys term note payable from
a floating rate obligation to a fixed-rate obligation. At
December 31, 2001, the estimated fair value of the interest
rate swap was a $58,994 liability and has been included in
accounts payable in the accompanying consolidated balance sheet
with the corresponding amount included in interest expense in
the accompanying consolidated statement of operations for the
year ended December 31, 2001.

The Companys interest rate swap does not
qualify for using the hedge method of accounting. The Company is
exposed to credit risk in the event of non-performance by the
counter-party to the interest rate swap agreement; however, the
Company does not anticipate non-performance by the counter-party.

Future maturities of these long-term obligations
are as follows:

|                                  |  |           |           |         |  |       |           |            |  |   |           |  |  |   |            | 
|--------------------------------- |  | --------- | --------- | ------- |  | ----- | --------- | ---------- |  | - | --------- |  |  | - | ---------- | 
|                                  |  | Long-Term |           | Capital |  |       |           | License   
|Year Ending December 31,          |  | Debt      |           | Leases  |  | Total |           | Agreements
|                                  |  |           |           |         |  |       |           |           
|2002                              |  | $         | 2,207,913 |         |  | $     | 531,839   |            |  | $ | 2,739,752 |  |  | $ | 2,783,260  | 
|2003                              |  |           | 2,239,778 |         |  |       | 492,694   |            |  |   | 2,732,472 |  |  |   | 3,363,129  | 
|2004                              |  |           | 1,377,331 |         |  |       | 242,222   |            |  |   | 1,619,553 |  |  |   | 3,436,692  | 
|2005                              |  |           | 419,402   |         |  |       | 44,112    |            |  |   | 463,514   |  |  |   | 1,560,594  | 
|2006                              |  |           |          |         |  |       |          |            |  |   |          |  |  |   | 16,486     | 
|                                  |  |           |           |         |  |       |           |            |  |   |           |  |  |   |            | 
|                                  |  |           | 6,244,424 |         |  |       | 1,310,867 |            |  |   | 7,555,291 |  |  |   | 11,160,161 | 
|Less amount representing interest |  |           |          |         |  |       | 150,207   |            |  |   | 150,207   |  |  |   | 1,846,191  | 
|                                  |  |           |           |         |  |       |           |            |  |   |           |  |  |   |            | 
|                                  |  |           | 6,244,424 |         |  |       | 1,160,660 |            |  |   | 7,405,084 |  |  |   | 9,313,970  | 
|Less current maturities           |  |           | 2,207,913 |         |  |       | 442,949   |            |  |   | 2,650,862 |  |  |   | 1,927,139  | 
|                                  |  |           |           |         |  |       |           |            |  |   |           |  |  |   |            | 
|                                  |  | $         | 4,036,511 |         |  | $     | 717,711   |            |  | $ | 4,754,222 |  |  | $ | 7,386,831  | 
|                                  |  |           |           |         |  |       |           |            |  |   |           |  |  |   |            | 

F-16



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

8.  Commitments and
Contingencies



| |                 
| | ----------------
| | Operating Leases

The Company has non-cancelable long-term
operating lease agreements for office space, office furnishings
and equipment.

Rent expense for the operating leases, net of
sublease income for the years ended December 31, 1999, 2000
and 2001 was approximately $1,263,000, $1,405,669 and
$1,131,114. Future minimum lease payments required under
long-term operating leases in effect at December 31, 2001
are as follows:

|                         |  |   |            | 
|------------------------ |  | - | ---------- | 
|Year Ending December 31, |  |  
|                         |  |  
|2002                     |  | $ | 1,433,642  | 
|2003                     |  |   | 1,427,716  | 
|2004                     |  |   | 1,419,945  | 
|2005                     |  |   | 1,102,510  | 
|2006                     |  |   | 900,801    | 
|Thereafter               |  |   | 9,149,542  | 
|                         |  |   |            | 
|                         |  |   | 15,434,156 | 
|Less: sublease income    |  |   | 917,831    | 
|                         |  |   |            | 
|                         |  | $ | 14,516,325 | 
|                         |  |   |            | 



| |                                      
| | -------------------------------------
| | Management by Objective (MBO)
	Plan

Effective April 24, 2001, the Compensation
Committee of the Board of Directors approved the MBO Plan to
compensate certain officers and employees of the Company for
their successful achievement of specific pre-determined
objectives. At December 31, 2001, compensation accrued
under the Plan was $724,313.



| |                           
| | --------------------------
| | Self Funded Insurance Plan

The Company is self-insured for certain losses
relating to employee medical benefits. The Company has purchased
stop-loss coverage, which covers individual claims greater than
$20,000 and aggregate annual claims greater than $717,452.
Self-insured losses are accrued based upon the Companys
estimate of the aggregate liability for uninsured claims.
Amounts accrued for uninsured losses as of December 31,
2000 and 2001 totaled $83,107 and $185,770.



| |            
| | -----------
| | 401(k) Plan

The Company maintains a 401(k) plan for its
eligible employees. Participation is voluntary and employees are
eligible to participate at age 21 and upon completing one month
of employment with the Company. The Company matches 50% of the
employees contributions up to 4% of the employees
salary. Company contributions vest ratably, 20% per year, over
five years. During the years ended December 31, 1999, 2000
and 2001, the Company contributed $105,241, $139,122 and
$146,470 to the 401(k) plan.

F-17



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

9.  Income Tax Expense
(Benefit)

The provision for income taxes consisted of the
following:

|                              |         |                         |         |         |  |      |            |            |   |   |           |           | 
|----------------------------- | ------- | ----------------------- | ------- | ------- |  | ---- | ---------- | ---------- | - | - | --------- | --------- | 
|                              |         |                        
|                              |         | Year Ended December 31,
|                              |         |                        
|                              |         | 1999                    |         | 2000    |  | 2001
|                              |         |                         |         |         |  |     
|Current provision (benefit):  |         |                         |         |         |  |      |            |            |   |   |           |          
|                              | Federal |                         | $       | 403,001 |  |      | $          | (611,326   | ) |   | $         | 1,832,474 | 
|                              | State   |                         |         | 60,219  |  |      |            | (91,348    | ) |   |           | 273,817   | 
|                              |         |                         |         |         |  |      |            |            |   |   |           |          
|                              |         | $                       | 463,220 |         |  | $    | (702,674   | )          |   | $ | 2,106,291 |          
|                              |         |                         |         |         |  |      |            |            |   |   |           |          
|Deferred provision (benefit): |         |                         |         |         |  |      |            |            |   |   |           |          
|                              | Federal |                         | $       | 53,927  |  |      | $          | (4,269,810 | ) |   | $         | 479,925   | 
|                              | State   |                         |         | 8,051   |  |      |            | (638,018   | ) |   |           | 74,291    | 
|                              |         |                         |         |         |  |      |            |            |   |   |           |          
|                              |         |                         | 61,978  |         |  |      | (4,907,828 | )          |   |   | 554,216   |          
|                              |         |                         |         |         |  |      |            |            |   |   |           |          
|                              |         | $                       | 525,198 |         |  | $    | (5,610,502 | )          |   | $ | 2,660,507 |          
|                              |         |                         |         |         |  |      |            |            |   |   |           |          

A reconciliation of the effective tax rates and
the statutory U.S. federal income tax rates is as follows:

|                                                     |  |              |      |      |  |      |      |   |  |  |      |  
|---------------------------------------------------- |  | ------------ | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                     |  |             
|                                                     |  | Year Ended  
|                                                     |  | December 31,
|                                                     |  |             
|                                                     |  | 1999         |      | 2000 |  | 2001
|                                                     |  |              |      |      |  |     
|U.S. federal statutory rates                         |  |              | 34.0 | %    |  |      | 34.0 | % |  |  | 34.0 | %
|State income tax benefit, net of federal tax
	amount |  |              | 3.3  |      |  |      | 3.3  |   |  |  | 3.3  |  
|Other                                                |  |              | 7.0  |      |  |      | (1.7 | ) |  |  | 1.8  |  
|                                                     |  |              |      |      |  |      |      |   |  |  |      |  
|Effective tax rate                                   |  |              | 44.3 | %    |  |      | 35.6 | % |  |  | 39.1 | %
|                                                     |  |              |      |      |  |      |      |   |  |  |      |  

Temporary differences that give rise to a
significant portion of the net deferred tax asset are as follows:

|                                |  |              |           |      |  |   |           |  
|------------------------------- |  | ------------ | --------- | ---- |  | - | --------- | -
|                                |  |             
|                                |  | December 31,
|                                |  |             
|                                |  | 2000         |           | 2001
|                                |  |              |           |     
|Self-insured medical claims     |  | $            | 30,999    |      |  | $ | 69,293    |  
|Consolidation costs             |  |              | 485,383   |      |  |   | 190,304   |  
|Property and equipment          |  |              | (264,619  | )    |  |   | 37,624    |  
|Capitalized software            |  |              | (366,258  | )    |  |   | (401,704  | )
|Intangible assets               |  |              | 4,485,332 |      |  |   | 3,827,317 |  
|Allowance for doubtful accounts |  |              | 38,617    |      |  |   | 90,992    |  
|Accrued wages and vacation      |  |              | 74,343    |      |  |   | 93,751    |  
|Interest rate swap accrued      |  |              |          |      |  |   | 22,004    |  
|                                |  |              |           |      |  |   |           |  
|Net deferred tax asset          |  | $            | 4,483,797 |      |  | $ | 3,929,581 |  
|                                |  |              |           |      |  |   |           |  

At December 31, 2000 and 2001, the Company
believes it is more likely than not that the deferred tax asset
is fully realizable, and therefore, no valuation allowance has
been recorded.

F-18



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

10.  Shareholders
Equity



| |                
| | ---------------
| | Preferred Stock

The Company has authorized the issuance of
1,000,000 shares of preferred stock. As of December 31,
2001, no preferred stock has been issued.



| |         
| | --------
| | Warrants

In March and April of 1999, the Company issued
1,912,451 shares of its common stock in a private placement,
resulting in net proceeds to the Company of $13,863,539. An
agent earned warrants to purchase 55,641 shares of the
Companys Common Stock. These warrants have an exercise
price of $8.08 per share and expire on April 1, 2004.

The Company issued warrants to purchase
1.5 million shares of its common stock and options to
purchase 120,000 shares of common stock in connection with its
initial public offering. Of these warrants, 1.38 million
had an exercise price of $7.15 per share and originally expired
on May 13, 2001, which was extended to June 30, 2001.
The other 120,000 warrants expired during 2001. The 120,000
options have an exercise price of $7.04 and expire on
May 13, 2003. Effective June 30, 2001, warrants to
purchase 725,759 shares of common stock were exercised. The
Company received $5,020,767 of proceeds from the exercise.

The Company issued 100,000 warrants in connection
with a consulting agreement dated March 1, 2000, amended in
September 2000. Of these warrants, 40,000 have an exercise price
of $9.00 per share and 60,000 have an exercise price $11.00 per
share. The warrants expire in September 2003. The warrants
become exercisable by the holder only when the common stock
price trades at the exercise price for 20 consecutive days.
Additionally, the warrants require the achievement of certain
specified performance criteria directly related to raising
capital to be met, prior to becoming exercisable. Compensation
expense will be measured and recorded when the performance
criteria are met.



| |                                    
| | -----------------------------------
| | Shares Retired From Escrow
	Account

In connection with one of the Companys
acquisitions in 1998, the Company placed 297,334 shares of its
common stock in escrow as security for a minimum stock price
guarantee. During 1999, the shares were released from escrow as
provided in the purchase agreement, and 213,640 shares of
its common stock were delivered to the sellers and the remaining
83,694 shares of common stock were maintained by the
Company and retired. The retired shares were treated as a
reduction in the number of shares issued in the acquisition with
no adjustment being made to the purchase price.



| |                    
| | -------------------
| | Stock Purchase Plan

Effective January 1, 2000, the Company
established an Employee Stock Purchase Plan, which allows
eligible employees to purchase shares of the Companys
common stock for 90% of the fair market value at the lesser of
either the beginning or end of each quarter stock purchase
period. An employee must have been employed by the Company for
at least one year before becoming eligible to participate in the
plan. A maximum of 75,000 shares of common stock are
available for sale under the plan.



| |                   
| | ------------------
| | Stock Option Plans

The Company has adopted the 1997 Stock Incentive
Plan whereby the Board of Directors may issue both tax qualified
and nonqualified stock options to officers, employees,
consultants and others. Under the plan, the Company has reserved
200,000 shares for issuance of common stock. As of
December 31, 2001, options to purchase 100,225 shares
of the Companys common stock had been granted under this
plan and options to

F-19



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

purchase 93,725 shares of common stock were
outstanding as of December 31, 2001. The shares vest
equally over three years from the date of grant.

Effective January 1, 2000, the Company
established the 1999 Employee Formula Award Stock Option Plan.
The Company has reserved 400,000 shares of its common stock for
issuance upon the exercise of options available for grant under
the plan. Employees who have been employed by the Company or one
of its affiliates for a least one year and employees who are
designated as full-time are eligible for participation in the
plan. The options vest equally over five years and are
exercisable for ten years. Unless revised by the Board of
Directors, the number of shares of common stock underlying the
options granted on each anniversary date to eligible employees
shall be the sum of (1) the quotient of (a) the
eligible employees compensation for twelve months
preceding the Anniversary Date multiplied by 10%, divided by
(b) the market price of the Companys common stock at
the date of issuance, plus (2) the product of 10% of the
quotient obtained in (a) above multiplied by the number of
years the employee has been with the Company. Options granted
under the plan will be equal to or greater than the market price
of the Companys common stock on the date of grant. As of
December 31, 2001, options to purchase 252,708 shares of
the Companys common stock had been granted under this plan
and options to purchase 191,010 shares of common stock were
outstanding at December 31, 2001.

The Company applies APB Opinion 25,
Accounting for Stock Issued to Employees, and
related interpretations in accounting for the plans. Under APB
Opinion 25, when the exercise price of the Companys
employee stock options is less than the market price of the
underlying stock on the date of grant, compensation cost is
recognized.

SFAS No. 123, Accounting for
Stock-Based Compensation requires the Company to provide
pro forma information regarding net income and net income per
share as if compensation cost for the Companys stock
option plans and other stock awards had been determined in
accordance with the fair value based method prescribed in SFAS
No. 123. The Company estimated the fair value of each stock
award at the grant date by using the Black-Scholes
option-pricing model with the following weighted-average
assumptions:

|                    |  |                         |           |      |  |      |           |  |  |  |           | 
|------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- |  |  |  | --------- | 
|                    |  |                        
|                    |  | Year Ended December 31,
|                    |  |                        
|                    |  | 1999                    |           | 2000 |  | 2001
|                    |  |                         |           |      |  |     
|Dividend yield      |  |                         | 0%        |      |  |      | 0%        |  |  |  | 0%        | 
|Expected volatility |  |                         | 42%       |      |  |      | 42%       |  |  |  | 44%       | 
|Discount rate       |  |                         | 5.5%      |      |  |      | 5.5%      |  |  |  | 5.2%      | 
|Expected lives      |  |                         | 10  years |      |  |      | 10  years |  |  |  | 10  years | 

Under the accounting provisions for SFAS
No. 123, the Companys net income (loss) and basic and
diluted earnings (loss) per share would have been adjusted to
the following pro forma amounts:

|                                   |             |                         |   |         |  |      |   |             |   |  |   |           | 
|---------------------------------- | ----------- | ----------------------- | - | ------- |  | ---- | - | ----------- | - |  | - | --------- | 
|                                   |             |                        
|                                   |             | Year Ended December 31,
|                                   |             |                        
|                                   |             | 1999                    |   | 2000    |  | 2001
|                                   |             |                         |   |         |  |     
|Net income (loss):                 |             |                         |   |         |  |      |   |             |   |  |   |          
|                                   | As reported |                         | $ | 659,414 |  |      | $ | (10,158,230 | ) |  | $ | 4,136,858 | 
|                                   | Pro forma   |                         | $ | 626,393 |  |      | $ | (10,260,246 | ) |  | $ | 3,890,629 | 
|Basic earnings (loss) per share:   |             |                         |   |         |  |      |   |             |   |  |   |          
|                                   | As reported |                         | $ | 0.13    |  |      | $ | (1.89       | ) |  | $ | 0.72      | 
|                                   | Pro forma   |                         | $ | 0.13    |  |      | $ | (1.91       | ) |  | $ | 0.68      | 
|Diluted earnings (loss) per share: |             |                         |   |         |  |      |   |             |   |  |   |          
|                                   | As reported |                         | $ | 0.13    |  |      | $ | (1.89       | ) |  | $ | 0.71      | 
|                                   | Pro forma   |                         | $ | 0.12    |  |      | $ | (1.91       | ) |  | $ | 0.67      | 

F-20



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

A summary of the status of the Companys
stock option plans and outstanding options and warrants is
presented below:

|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|----------------------------- |  | ---------- | ------- | -------------- |  | ---------- | ---- | -------------- |  |  | --------- | - |  | - | ----- | 
|                              |  |            |         |               
|                              |  | Options    |         | Warrants      
|                              |  |            |         |               
|                              |  | Number of  |         | Weighted       |  | Number of  |      | Weighted      
|                              |  | Underlying |         | Average        |  | Underlying |      | Average       
|                              |  | Shares     |         | Exercise Price |  | Shares     |      | Exercise Price
|                              |  |            |         |                |  |            |      |               
|Outstanding January 1, 1999   |  |            | 151,500 |                |  | $          | 6.75 |                |  |  | 1,500,000 |   |  | $ | 7.31  | 
|Granted                       |  |            | 5,000   |                |  |            | 8.00 |                |  |  | 55,641    |   |  |   | 8.08  | 
|Cancelled                     |  |            | (1,166  | )              |  |            | 5.50 |                |  |  |          |   |  |   |      | 
|Exercised                     |  |            |        |                |  |            |     |                |  |  | (100      | ) |  |   | 7.15  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Outstanding December 31, 1999 |  |            | 155,334 |                |  |            | 6.80 |                |  |  | 1,555,541 |   |  |   | 7.34  | 
|Granted                       |  |            | 110,353 |                |  |            | 7.13 |                |  |  | 100,000   |   |  |   | 10.20 | 
|Cancelled                     |  |            | (32,390 | )              |  |            | 7.02 |                |  |  |          |   |  |   |      | 
|Exercised                     |  |            | (667    | )              |  |            | 5.50 |                |  |  |          |   |  |   |      | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Outstanding December 31, 2000 |  |            | 232,630 |                |  |            | 6.93 |                |  |  | 1,655,541 |   |  |   | 7.51  | 
|Granted                       |  |            | 206,080 |                |  |            | 6.72 |                |  |  |          |   |  |   |      | 
|Cancelled                     |  |            | (29,812 | )              |  |            | 6.51 |                |  |  | (774,141  | ) |  |   | 7.46  | 
|Exercised                     |  |            | (4,163  | )              |  |            | 6.15 |                |  |  | (725,759  | ) |  |   | 7.15  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Outstanding December 31, 2001 |  |            | 404,735 |                |  | $          | 6.86 |                |  |  | 155,641   |   |  | $ | 9.44  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Exercisable December 31, 1999 |  |            | 140,341 |                |  | $          | 6.85 |                |  |  | 1,435,541 |   |  | $ | 7.19  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Exercisable December 31, 2000 |  |            | 144,333 |                |  | $          | 6.83 |                |  |  | 1,379,900 |   |  | $ | 7.15  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 
|Exercisable December 31, 2001 |  |            | 159,928 |                |  | $          | 6.85 |                |  |  | 55,641    |   |  | $ | 8.08  | 
|                              |  |            |         |                |  |            |      |                |  |  |           |   |  |   |       | 

|                                                                         |  |         |      |          |  |   |      | 
|------------------------------------------------------------------------ |  | ------- | ---- | -------- |  | - | ---- | 
|                                                                         |  | Options |      | Warrants
|                                                                         |  |         |      |         
|Weighted average fair value of options and
	warrants granted during 2001 |  | $       | 4.39 |          |  | $ |     | 
|Weighted average fair value of options and
	warrants granted during 2000 |  | $       | 4.66 |          |  | $ | 3.17 | 
|Weighted average fair value of options and
	warrants granted during 1999 |  | $       | 5.21 |          |  | $ | 3.19 | 

F-21



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

The following information summarizes stock
options and warrants outstanding and exercisable at
December 31, 2001:

|                |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |      | 
|--------------- | ------ | ----------- | ------- | -------- |  | ----- | ---- | -------- |  | ----- | ----- | ---- |  |  | ------- | ------ |  | - | ---- | ---- | 
|                |        |            
|Outstanding     |        | Exercisable
|                |        |            
|                |        | Weighted    |         |          |  |      
|                |        | Average     |         |          |  |      
|                |        | Remaining   |         | Weighted |  |       |      | Weighted
|                |        | Contractual |         | Average  |  |       |      | Average 
|                |        | Life in     |         | Exercise |  |       |      | Exercise
|Exercise Prices |        | Number      |         | Years    |  | Price |      | Number   |  | Price
|                |        |             |         |          |  |       |      |          |  |      
|Options:        |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     
|$ 5.50          |        |             | 20,000  |          |  |       | 6.37 |          |  | $     | 5.50  |      |  |  | 19,500  |        |  | $ | 5.50 |     
|6.31            |        |             | 133,088 |          |  |       | 9.05 |          |  |       | 6.31  |      |  |  |        |        |  |   |     |     
|6.50            |        |             | 5,000   |          |  |       | 6.43 |          |  |       | 6.50  |      |  |  | 5,000   |        |  |   | 6.50 |     
|7.04            |        |             | 120,000 |          |  |       | 1.38 |          |  |       | 7.04  |      |  |  | 120,000 |        |  |   | 7.04 |     
|7.13            |        |             | 71,147  |          |  |       | 8.05 |          |  |       | 7.13  |      |  |  | 13,428  |        |  |   | 7.13 |     
|8.00            |        |             | 55,500  |          |  |       | 9.35 |          |  |       | 8.00  |      |  |  | 2,000   |        |  |   | 8.00 |     
|                |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     
|$5.50 to $ 8.00 |        |             | 404,735 |          |  |       | 6.45 |          |  | $     | 6.86  |      |  |  | 159,928 |        |  | $ | 6.85 |     
|                |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     
|Warrants:       |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     
|                | $ 8.08 |             |         | 55,641   |  |       |      | 3.25     |  |       | $     | 8.08 |  |  |         | 55,641 |  |   | $    | 8.08 | 
|9.00            |        |             | 40,000  |          |  |       | 4.17 |          |  |       | 9.00  |      |  |  |        |        |  |   |     |     
|11.00           |        |             | 60,000  |          |  |       | 4.17 |          |  |       | 11.00 |      |  |  |        |        |  |   |     |     
|                |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     
|$8.08 to $11.00 |        |             | 155,641 |          |  |       | 3.84 |          |  | $     | 9.44  |      |  |  | 55,641  |        |  | $ | 8.08 |     
|                |        |             |         |          |  |       |      |          |  |       |       |      |  |  |         |        |  |   |      |     

11.  Earnings (Loss) Per
Share

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

|                                                                      |                                                     |                            |           |           |         |      |           |             |   |  |           |           |        | 
|--------------------------------------------------------------------- | --------------------------------------------------- | -------------------------- | --------- | --------- | ------- | ---- | --------- | ----------- | - |  | --------- | --------- | ------ | 
|                                                                      |                                                     |                           
|                                                                      |                                                     | Year Ended December 31,   
|                                                                      |                                                     |                           
|                                                                      |                                                     | 1999                       |           | 2000      |         | 2001
|                                                                      |                                                     |                            |           |           |         |     
|Numerator:                                                            |                                                     |                            |           |           |         |      |           |             |   |  |           |          
|                                                                      | Net income (loss) available to common shareholders  |                            | $         | 659,414   |         |      | $         | (10,158,230 | ) |  | $         | 4,136,858 |       
|                                                                      |                                                     |                            |           |           |         |      |           |             |   |  |           |          
|Denominator:                                                          |                                                     |                            |           |           |         |      |           |             |   |  |           |          
|                                                                      | Basic earnings per share  weighted
	average shares |                            |           | 4,937,763 |         |      |           | 5,382,590   |   |  |           | 5,756,808 |       
|                                                                      | Effect of dilutive securities:                      |                            |           |           |         |      |           |             |   |  |           |           |       
|                                                                      |                                                     | Stock options and warrants |           |           | 281,377 |      |           |             |  |  |           |           | 62,529 | 
|                                                                      |                                                     |                            |           |           |         |      |           |             |   |  |           |          
|Denominator for diluted earnings per
	share  weighted average shares |                                                     |                            | 5,219,140 |           |         |      | 5,382,590 |             |   |  | 5,819,337 |          
|Earnings (loss) per share:                                            |                                                     |                            |           |           |         |      |           |             |   |  |           |          
|                                                                      | Basis                                               |                            | $         | 0.13      |         |      | $         | (1.89       | ) |  | $         | 0.72      |       
|                                                                      | Diluted                                             |                            | $         | 0.13      |         |      | $         | (1.89       | ) |  | $         | 0.71      |       

For the years ended December 31, 1999, 2000
and 2001 total stock options and warrants exercisable into
1,429,498, 1,888,171 and 497,847 shares of common stock, were
not included in the computation of diluted loss per share
because their effect was anti-dilutive. These options and
warrants could potentially dilute earnings per share in future
periods.

F-22



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

12.  Business Segment
Information

The Company operates in three business segments:
mortgage services, consumer services and other services, which
consists of resident and employment screening services.
Operating results and other financial data are presented for the
principal business segments as follows:

|                   |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |             |  
|------------------ | ----------------------------- | -------- | - | ---------- | - | -------- | - | ---------- | - |  | - | --------- |  |  | - | ----------- | -
|                   |                               | Mortgage |   | Consumer   |   | Other    |   |           
|Year Ended         |                               | Services |   | Services   |   | Services |   | Total     
|                   |                               |          |   |            |   |          |   |           
|December 31, 1999: |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            
|                   | Revenue                       |          | $ | 23,738,187 |   |          | $ |           |   |  | $ | 2,091,875 |  |  | $ | 25,830,062  |  
|                   | Cost of services              |          |   | 14,114,259 |   |          |   |           |   |  |   | 1,285,202 |  |  |   | 15,399,461  |  
|                   | Net income                    |          |   | 360,095    |   |          |   |           |   |  |   | 299,319   |  |  |   | 659,414     |  
|                   | Total assets                  |          |   | 38,992,284 |   |          |   |           |   |  |   | 700,191   |  |  |   | 39,692,475  |  
|                   | Depreciation and amortization |          |   | 2,629,407  |   |          |   |           |   |  |   | 85,935    |  |  |   | 2,715,342   |  
|                   | Capital expenditures          |          |   | 2,828,340  |   |          |   |           |   |  |   | 7,788     |  |  |   | 2,836,128   |  
|                   |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            
|December 31, 2000: |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            
|                   | Revenue                       |          | $ | 25,559,738 |   |          | $ | 3,180,380  |   |  | $ | 2,521,088 |  |  | $ | 31,261,206  |  
|                   | Cost of services              |          |   | 15,416,590 |   |          |   | 1,875,191  |   |  |   | 987,938   |  |  |   | 18,279,719  |  
|                   | Net income (loss)             |          |   | (8,997,451 | ) |          |   | (1,877,451 | ) |  |   | 716,672   |  |  |   | (10,158,230 | )
|                   | Total assets                  |          |   | 31,120,270 |   |          |   | 10,944,450 |   |  |   | 735,377   |  |  |   | 42,800,097  |  
|                   | Depreciation and amortization |          |   | 3,667,513  |   |          |   | 317,253    |   |  |   | 146,222   |  |  |   | 4,130,988   |  
|                   | Capital expenditures          |          |   | 1,980,718  |   |          |   | 14,173     |   |  |   | 12,860    |  |  |   | 2,007,751   |  
|                   |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            
|December 31, 2001: |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            
|                   | Revenue                       |          | $ | 42,551,506 |   |          | $ | 6,476,520  |   |  | $ | 2,212,195 |  |  | $ | 51,240,221  |  
|                   | Cost of services              |          |   | 24,286,011 |   |          |   | 3,872,304  |   |  |   | 1,669,844 |  |  |   | 29,828,159  |  
|                   | Net income                    |          |   | 3,966,320  |   |          |   | 140,136    |   |  |   | 30,402    |  |  |   | 4,136,858   |  
|                   | Total assets                  |          |   | 38,264,508 |   |          |   | 11,675,014 |   |  |   | 944,009   |  |  |   | 50,883,531  |  
|                   | Depreciation and amortization |          |   | 3,173,542  |   |          |   | 325,611    |   |  |   | 121,630   |  |  |   | 3,620,783   |  
|                   | Capital expenditures          |          |   | 1,860,684  |   |          |   | 7,499      |   |  |   | 8,375     |  |  |   | 1,876,558   |  
|                   |                               |          |   |            |   |          |   |            |   |  |   |           |  |  |   |            

13.  Cash Flows



| |                                                                         
| | ------------------------------------------------------------------------
| | Supplemental disclosure of non-cash
	investing and financing activities:

During the year ended December 31, 2001, the
Company entered into a capital lease for $570,706 in connection
with acquiring the license rights to the Experian Wyoming
territory. The Company also issued notes payable of $1,700,000
in connection with an acquisition.

During the years ended December 31, 1999 and
2000, the Company financed fixed asset purchases of $700,902 and
$247,592 respectively, with notes payable and capital leases.

During the year ended December 31, 2000, the
Company issued notes payable of $675,000 in connection with
acquisitions.

|                           |  |                         |         |      |  |      |           |  |  |   |           | 
|-------------------------- |  | ----------------------- | ------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|                           |  |                        
|                           |  | Year Ended December 31,
|                           |  |                        
|                           |  | 1999                    |         | 2000 |  | 2001
|                           |  |                         |         |      |  |     
|Cash paid for interest     |  | $                       | 533,062 |      |  | $    | 1,546,114 |  |  | $ | 2,233,706 | 
|Cash paid for income taxes |  |                         | 844,695 |      |  |      | 197,364   |  |  |   | 749,533   | 

F-23



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##### Table of Contents



FACTUAL DATA CORP.


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

14.  Summarized Quarterly Results
(Unaudited)

The following table presents unaudited operating
results for each quarter within the two most recent years. The
Company believes that all necessary adjustments consisting only
of normal recurring adjustments, have been included in the
amounts stated below to present fairly the following quarterly
results when read in conjunction with the financial statements.
Results of operations for any particular quarter are not
necessarily indicative of results of operations for a full
fiscal year.

|                   |                                      |               |   |            |  |               |   |                |  |  |   |            |   |  |   |             |  
|------------------ | ------------------------------------ | ------------- | - | ---------- |  | ------------- | - | -------------- |  |  | - | ---------- | - |  | - | ----------- | -
|                   |                                      |               |   | Second     |  |               |   |               
|                   |                                      | First Quarter |   | Quarter    |  | Third Quarter |   | Fourth Quarter
|                   |                                      |               |   |            |  |               |   |               
|December 31, 2000: |                                      |               |   |            |  |               |   |                |  |  |   |            |   |  |   |            
|                   | Revenue                              |               | $ | 7,789,330  |  |               | $ | 8,026,281      |  |  | $ | 7,819,135  |   |  | $ | 7,626,460   |  
|                   | Operating expenses                   |               |   | 7,361,652  |  |               |   | 7,669,226      |  |  |   | 7,846,222  |   |  |   | 23,112,590  |  
|                   | Gross profit                         |               |   | 3,421,564  |  |               |   | 3,451,463      |  |  |   | 3,322,050  |   |  |   | 2,786,410   |  
|                   | Net income (loss)                    |               |   | 169,905    |  |               |   | 29,280         |  |  |   | (277,349   | ) |  |   | (10,080,066 | )
|                   | Basic earnings (loss) per share(1)   |               |   | 0.03       |  |               |   | 0.01           |  |  |   | (0.05      | ) |  |   | (1.87       | )
|                   | Diluted earnings (loss) per share(1) |               |   | 0.03       |  |               |   | 0.01           |  |  |   | (0.05      | ) |  |   | (1.87       | )
|December 31, 2001: |                                      |               |   |            |  |               |   |                |  |  |   |            |   |  |   |            
|                   | Revenue                              |               | $ | 13,064,407 |  |               | $ | 12,714,923     |  |  | $ | 11,872,688 |   |  | $ | 13,588,203  |  
|                   | Operating expenses                   |               |   | 10,723,492 |  |               |   | 10,583,742     |  |  |   | 10,032,668 |   |  |   | 11,360,607  |  
|                   | Gross profit                         |               |   | 5,533,123  |  |               |   | 5,301,861      |  |  |   | 4,942,707  |   |  |   | 5,634,371   |  
|                   | Net income                           |               |   | 1,142,026  |  |               |   | 928,242        |  |  |   | 908,558    |   |  |   | 1,158,032   |  
|                   | Basic earnings per share(1)          |               |   | 0.21       |  |               |   | 0.17           |  |  |   | 0.15       |   |  |   | 0.19        |  
|                   | Diluted earnings per share(1)        |               |   | 0.21       |  |               |   | 0.17           |  |  |   | 0.15       |   |  |   | 0.19        |  



---



|    |                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Earnings (loss) per share are computed
	independently for each quarter and the full year based upon
	respective average shares outstanding. Therefore, the sum of the
	quarterly net earnings (loss) per share amounts may not equal
	the annual amounts reported.

F-24



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##### Table of Contents






REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS

The Board of Directors and Shareholders

Factual Data Corp.


Loveland, Colorado


The audit referred to in our report dated
February 1, 2002 relating to the consolidated financial
statements of Factual Data Corp., which is contained in
Item 8 of this Form 10-K included the audit of the
financial statement schedule, for the year ended
December 31, 2001, listed in the accompanying index. This
financial statement schedule is the responsibility of the
Companys management. Our responsibility is to express an
opinion on this financial statement schedule based upon our
audit.

In our opinion such financial statement schedule
for the year ended December 31, 2001, presents fairly, in
all material respects, the information set forth therein.



| |                     
| | --------------------
| | /s/ BDO SEIDMAN, LLP

February 1, 2002

Denver, Colorado


F-25



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##### Table of Contents






INDEPENDENT AUDITORS REPORT

The Board of Directors and Shareholders

Factual Data Corp.


Loveland, Colorado


We have audited the financial statements of
Factual Data Corp. as of December 31, 1999 and 2000, and
for each of the years then ended, and have issued our report
thereon dated March 28, 2001; such financial statements and
report are included in Item 8 in this Form 10-K. Our
audits also included the financial statement schedules of
Factual Data Corp., listed in Item 14. These financial
statement schedules are the responsibility of the Companys
management. Our responsibility is to express an opinion based on
our audits.

In our opinion, such financial statement
schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.



| |                                           
| | ------------------------------------------
| | /s/ EHRHARDT KEEFE STEINER & HOFFMAN, P.C.

March 28, 2001

Denver, Colorado


F-26



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##### Table of Contents






FACTUAL DATA CORP.






SCHEDULE II  VALUATION AND
QUALIFYING ACCOUNTS


|                                |  |              |         |                 |  |            |         |               |  |   |         |  |  |   |         | 
|------------------------------- |  | ------------ | ------- | --------------- |  | ---------- | ------- | ------------- |  | - | ------- |  |  | - | ------- | 
|                                |  | Balance at   |         |                 |  |            |         |              
|                                |  | Beginning of |         | Charged to Cost |  |            |         | Balance at   
|Description                     |  | Period       |         | and Expenses    |  | Deductions |         | End of Period
|                                |  |              |         |                 |  |            |         |              
|Allowance for Doubtful Accounts |  |              |         |                 |  |            |         |               |  |   |         |  |  |   |         | 
|Year ended December 31, 1999    |  | $            | 24,635  |                 |  | $          | 299,901 |               |  | $ | 116,386 |  |  | $ | 208,150 | 
|Year ended December 31, 2000    |  | $            | 208,150 |                 |  | $          | 408,537 |               |  | $ | 513,156 |  |  | $ | 103,531 | 
|Year ended December 31, 2001    |  | $            | 103,531 |                 |  | $          | 544,442 |               |  | $ | 404,027 |  |  | $ | 243,946 | 
|                                |  |              |         |                 |  |            |         |               |  |   |         |  |  |   |         | 

F-27



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##### Table of Contents



EXHIBIT INDEX

|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                       
|------- | -- | --- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |            
|Number  |    |     |  | Description
|        |    |     |  |            
|        | 3  | .1  |  |            |  | Restated and Amended Articles of Incorporation.(1)                                                                                                                                                                                                                                                                                    
|        | 3  | .2  |  |            |  | Amended Bylaws of the Registrant.(1)                                                                                                                                                                                                                                                                                                  
|        | 4  | .1  |  |            |  | Specimen Common Stock Certificate of the
	Registrant.(1)                                                                                                                                                                                                                                                                              
|        | 4  | .2  |  |            |  | Form of Representative Option Agreement.(1)                                                                                                                                                                                                                                                                                           
|        | 4  | .3  |  |            |  | Share Purchase Agreement dated March 25,
	1999 by and between the Registrant and the purchasers thereto,
	together with Registration Rights Agreement and Investors
	Agreement of even date therewith.(2)                                                                                                                             
|        | 10 | .1  |  |            |  | Office Lease between FDC Office I, LLC and
	Lenders Resource Incorporated dated August 14, 1997 and as
	amended December 26, 1997.(1)                                                                                                                                                                                                 
|        | 10 | .2  |  |            |  | Registrants 1997 Stock Incentive Plan, as
	amended, with form of Stock Option Agreement.(1)                                                                                                                                                                                                                                          
|        | 10 | .3  |  |            |  | Credit Agreement dated May 23, 2000 between
	the Registrant and Wells Fargo Bank, N.A.(3)                                                                                                                                                                                                                                             
|        | 10 | .5  |  |            |  | Form of Indemnification Agreement.(1)                                                                                                                                                                                                                                                                                                 
|        | 10 | .7  |  |            |  | Amendment to Credit Agreement dated
	March 27, 2001 between the Registrant and Wells Fargo Bank,
	N.A.(4)                                                                                                                                                                                                                             
|        | 10 | .8  |  |            |  | Experian Affiliate Services Agreement (Lease
	Expansion-Colorado), between Experian Information Solutions,
	Inc. and the Registrant, dated April 28, 2000.(5)                                                                                                                                                                         
|        | 10 | .11 |  |            |  | Agreement for Service  Consumer
	Reporting Agencies, between Equifax Credit Information Services,
	Inc. and the Registrant, dated October 8, 1998.*                                                                                                                                                                                  
|        | 10 | .12 |  |            |  | Reseller Services Agreement, between the
	Registrant and Experian Information Solutions, Inc., dated
	November 17, 1998.*                                                                                                                                                                                                             
|        | 10 | .13 |  |            |  | Reseller Service Agreement, between the
	Registrant and TransUnion LLC, dated October 30, 2001.*                                                                                                                                                                                                                                      
|        | 10 | .14 |  |            |  | Second Amendment to Credit Agreement dated
	April 30, 2001 between the Registrant and Wells Fargo Bank,
	N.A.*                                                                                                                                                                                                                        
|        | 10 | .16 |  |            |  | 1999 Employee Stock Purchase Plan.(6)                                                                                                                                                                                                                                                                                                 
|        | 10 | .17 |  |            |  | 1999 Formula Award Stock Option Plan.(6)                                                                                                                                                                                                                                                                                              
|        | 10 | .18 |  |            |  | Credit Reporting Company Agreement, between the
	Registrant and Federal Home Loan Mortgage Corporation, dated
	January 1, 2000. Note: Portions of this agreement have been
	omitted pursuant to a request for confidential treatment
	submitted to the Securities and Exchange Commission as further
	noted on this Exhibit as filed.*
|        | 21 |     |  |            |  | Subsidiaries of the Registrant.(4)                                                                                                                                                                                                                                                                                                    
|        | 23 | .1  |  |            |  | Consent of BDO Seidman LLP.*                                                                                                                                                                                                                                                                                                          
|        | 23 | .2  |  |            |  | Consent of Ehrhardt Keefe Steiner &
	Hottman PC.*                                                                                                                                                                                                                                                                                     



---



| |   |                
| | - | ---------------
| | * | Filed herewith.



|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to our Registration
	Statement on Form SB-2 (Registration No. 333-47051).                                               
|   
|(2) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on April 12,
	1999.                                        
|   
|(3) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on June 6, 2000.                                           
|   
|(5) | Incorporated by reference to our Current Report
	on Form 8-K filed with the Commission on August 17,
	2000.                                       
|   
|(6) | Incorporated by reference to our Registration
	Statement on Form S-8 (Registration No. 333-92693)
	filed with the Commission on December 14, 1999.