SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
                                   -----------

                                    FORM 10-K
(Mark One)

       |_|       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                 EXCHANGE ACT OF 1934

                                       OR

       |X|       TRANSITION  REPORT UNDER  SECTION 13 OR 15(d) OF THE SECURITIES
                 EXCHANGE ACT OF 1934

        For the transition period from July 1, 2001 to December 31, 2001

                         Commission file number 0-23835

                          HomeSeekers.com, Incorporated
             (Exact name of registrant as specified in its Charter)

                    Nevada                                 87-0397464
       (State or Other Jurisdiction of                  (I.R.S. Employer
        Incorporation or Organization)                 Identification No.)

    2800 Saturn Street, Suite 200, Brea, CA                   92821
    (Address of Principal Executive Offices)                (Zip Code)

                                 (714) 927-2200
              (Registrant's Telephone Number, Including Area Code)

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

      Title of Each Class            Name of Each Exchange on Which Registered
      -------------------            -----------------------------------------
              None                                    None

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value
                                (Title of Class)

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

         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 the  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. |_|

         State the aggregate  market value of the voting and  non-voting  equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked prices of such common  equity,  as
of a specified  date within the past 60 days:  $6,853,639  (based on the average
bid and asked prices of the common stock on the Over-the-Counter  Bulletin Board
on March 20, 2002).

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock as of March 20, 2002: 48,954,561.


                      DOCUMENTS INCORPORATED BY REFERENCE:

         Proxy Statement (to be filed) accompanying the notice of annual meeting
of HomeSeekers.com, Incorporated's stockholders (Part III hereof).


<PAGE>


                                     PART I



Item 1.  Description Of Business.

General

         HomeSeekers.com,  Incorporated (d/b/a Realigent, Inc.) is a provider of
real  estate  information  and  technology  targeted  for  use  by  real  estate
professionals,  consumers  and other  parties  who have an  interest in the real
estate   industry.   One  of  the  Company's  major   objectives  is  to  enable
professionals, through the use of technology, to be better equipped to engage in
real estate  transactions  with consumers,  who, through the use of our products
and services, can be better educated and prepared for such transactions.  Unless
otherwise  indicated in this Form 10-K,  references  to "the  Company,"  "we" or
"our" mean HomeSeekers.com, Incorporated.

         The  products  and  services  offered by the Company can  generally  be
classified as  technology  services for real estate  professionals,  real estate
professional  productivity tools or other products and services. The Company has
determined  that during the  six-months  ended December 31, 2001, it operated in
one business  segment.  Current  products and services are described below under
the heading "Products and Services."

         The Company is a Nevada  corporation  that is the  successor  to a Utah
corporation originally organized in 1983. It has been engaged in the business of
marketing technology-based products to real estate professionals since 1987. The
Company operated as "NDS Software,  Inc." prior to July 1998 when it changed its
name to "HomeSeekers.com,  Incorporated." In March, 2002 the Company began doing
business  as  "Realigent,  Inc." The  Company's  sole  office is located at 2800
Saturn Street, Suite 200, Brea, California 92821, telephone (714) 993-4295.


Background

         The Company has developed its product and service  offerings  through a
series of business  acquisitions,  asset purchases and strategic alliances.  The
following  is a summary  description  of  significant  acquisition  transactions
completed in recent years:

         o        In August 1998 - the customer list and certain other assets of
                  Genstar Media, a company  engaged in the  development and sale
                  of Websites to real estate agents.

         o        In  September  1999 - TDT, LLC  ("Terradatum"),  a provider of
                  technology-based  solutions for the Multiple  Listing  Service
                  ("MLS") market.  Multiple  Listing Services are aggregators of
                  real estate data for geographic areas.

         o        In  September  1999  -  Information  Management  Company,  LLC
                  ("IMCO"), an operator of MLSs in several states.

         o        In April  2000 - ISG Inc.,  an  electronic  forms and  systems
                  integration company operating under the name of Formulator.

         o        In July 2000 - IRIS LLC, a provider of  productivity  software
                  to real estate professionals  including the Lightning Software
                  Suite consisting of the Lightning 2000 MLS access connectivity
                  product,  Lightning  Flyers and Lightning  Comparative  Market
                  Analysis (CMA) Plus.

         In December,  2001 the Company sold  substantially all of the assets of
its  MLS  operating   division  (composed  of  the  former  Terradatum  LLC  and
Information Management Company, LLC) to Fidelity National Information Solutions,
Inc. ("FNIS"). See "Fidelity Transactions" below.


Products and Services

         The Company provides a range of products and services that are designed
for  consumers  as well as real  estate  professionals.  The  Company  generates
revenues from the following products and services:

         Real Estate  Portal.  Our  consumer-based  products are offered free to
users and enable potential buyers and sellers to browse our searchable  database
of homes. We provide  consumers with properties that are typically  updated on a
daily basis and are available for viewing in several languages.


                                       2
<PAGE>

         Our Website provides prospective  homebuyers with access to listings of
homes for sale in a subscribing MLS geographical region. These products employ a
search engine with numerous searchable fields to allow both broadly and narrowly
defined searches.  The systems will search, find and display listings that match
a prospective buyer's criteria,  including a preferred location within a city or
state,  number of bedrooms and baths and other desired features.  Users are also
able to enter a search, save it and automatically search for updated inventory.

         Internet Solutions for Real Estate Professionals.  We provide Web-based
technologies  for  brokers,  agents and other real estate  professionals.  These
customizable   Web-based   technologies  are  designed  to  enable  real  estate
professionals  to reach their target  audience and to increase the visibility of
their inventory of real estate listings.

         Lightning Desktop Products. These software products are targeted at the
broker and agent market,  with the objective  being to deliver  technologies  to
provide products ranging from better  communication,  presentation and marketing
to improved efficiency in handling data in the transaction process.

         Consulting and Development  Services.  We provide  technical design and
support, on a project basis, to clients in need of technological services. These
services  include Website  development  and hosting and other  Internet/Intranet
solutions, including designing Internet strategies, architecture and planning.

         Discontinued  Businesses.  Throughout  the year ended June 30, 2001 and
continuing into the six-months ended December 31, 2001, the Company discontinued
a number of its  businesses  including  its  publishing  businesses  whereby  it
published  several  magazines,  principally  in the Midwest,  the  Northwest and
Florida,  under the  HomeSeekers.com  brand.  Such  publishing  businesses  were
acquired in May 1999 and February 2000.


Sales and Marketing

         The Company  sells its  products to the real  estate  industry  through
distributor  networks,  trade shows, direct sales and telemarketing  efforts. In
the case of Website  sales,  these efforts are targeted at real estate  industry
professionals  interested  in marketing  their  services  through the  Internet.
Marketing efforts are targeted to real estate professionals, consumers and other
real  estate  related  service  providers.  The  Company's  sales force plays an
important  role  in  the  marketing   strategy.   Our  direct  sales  staff  and
telemarketing  personnel focus on maintaining contact with our targeted customer
pool to maintain the database that is used for additional marketing follow-up.


Product Development

         The Company  believes  that it is critical to  continually  enhance the
performance and features of its Website and desktop software product  offerings.
The  development  organization  focuses on developing  products and services for
consumers and real estate  professionals  aimed at  differentiating  us from our
competitors.  The  Company  seeks to enhance  its market  position  by  building
proprietary  systems  and  features,  such as  search  engines  for real  estate
listings and the technologies used to aggregate real estate content.


Trademarks, Copyrights and Proprietary Rights

         The  Company  has not  sought  patent  protection  for its  proprietary
software  systems and software  products,  although may apply for patents in the
future.  The Company  seeks to maintain its  proprietary  rights by trade secret
protection,  copyright notices,  non-competition  and non-disclosure  agreements
with its employees and, as appropriate,  with its vendors. The Company will seek
formal  copyright   and/or  patent   protection  for  certain  software  program
applications  and obtain patents where feasible.  There can be no assurance that
meaningful  proprietary  protection  can be  attained  as a  result  of any such
filing, and any proprietary rights that we might choose to protect through legal
action may involve substantial costs.

         The Company  believes that the technology edge it currently enjoys will
likely lessen over time and in order to be  competitive,  it must provide a high
quality,  continually  improving,  complete  solution to consumers,  real estate
agents  and  other  industry  providers.  The  Company  believes  that  its core
technical  competence  and  knowledge of the real estate market will allow it to
maintain  leading  edge  products  and  services  that  will  have  value in the
marketplace.


                                       3
<PAGE>

Employees

         As of March 20, 2002, the Company had a total of 82 employees.  Of this
total,  13 were in sales  and  marketing,  27 in  product  development  and data
aggregation,  29 in technical  services and customer support,  and 13 in finance
and administration.


Fidelity Transactions

         On October 25, 2001,  Fidelity National  Financial,  Inc.  ("Fidelity")
agreed to loan the Company up to $4,000,000,  which was  consummated on November
5, 2001.  The  purpose of the  Fidelity  loan to the  Company  was to enable the
Company to pay off  certain  existing  debt so as to release  lenders'  liens on
certain  assets being  purchased by FNIS as  described  above.  Fidelity and the
Company entered into a Credit Agreement,  pursuant to which Fidelity  eventually
loaned the Company  $3,000,000  for the purpose of paying off and  canceling its
loan agreements with E-Home.com, Inc. d/b/a HomeMark ("HomeMark"), the repayment
of an earlier  secured  promissory  note of  $400,000,  and for general  working
capital purposes.

         In return,  Fidelity  accepted  (i) a  revolving  promissory  note with
stated interest at prime plus 2% convertible into shares of the Company's common
stock at $0.10 per share (the  "Note") and (ii) a stock  purchase  warrant  (the
"Warrant").  The Note is  convertible  into  30,000,000  shares of the Company's
common stock;  however,  the aggregate  potential equity represented in the Note
and the Warrant is 25% of the Company's  outstanding Common Stock. To the extent
the Note is not converted to a number of shares of common Stock  representing  a
25% equity stake in the Company,  the Warrant is exercisable to bring Fidelity's
beneficial  ownership  to as much as 25% of the  outstanding  shares  of  Common
Stock.  Both the Note and the Warrant were filed as exhibits to a Form 8-K filed
on November 20, 2001.

         On November 1, 2001 the Company entered into a Business  Separation and
Settlement Agreement with HomeMark and HomeSeekers  Management,  Inc., which was
consummated on November 5, 2001. In accordance  with the terms of the agreement,
the  companies  terminated,  and released  any and all  obligations  under,  all
agreements  between the parties including a Loan Agreement,  Security  Agreement
and Financing  Statement,  and the Securities  Purchase  Agreement dated June 6,
2001; the Security  Agreement and Financing  Statement  dated June 19, 2001, the
Intercorporate  Services  Agreement  dated  July 1,  2001;  the Loan  Agreement,
Security  Agreement and Financing  Statement dated July 17, 2001; all promissory
notes including,  without  limitation,  those issued in connection with the June
Loan  Agreements  and the  June  Security  Agreement.  In  connection  with  the
settlement,  and in  addition to other terms and  conditions,  the Company  paid
HomeMark $1,875,000 and assigned to HomeMark its Loan Agreement and the Security
Agreement  and  Financing  Agreement  dated  July  16,  2001  between  EntrePort
Corporation and the Company in the total principal amount of $500,000.

         As an inducement to make the loan,  Fidelity agreed to accept equity in
the Company in the form of the Note and  Warrant  described  above.  FNIS has no
rights to receive or control  disposition  of any of the shares of Common Stock.
Fidelity  and the  Company  also  executed a  Security  Agreement  securing  the
Company's  obligations  to  Fidelity.  The  Security  Agreement  was filed as an
exhibit to the Form 8-K filed on November 20, 2001.

         On October 25,  2001,  FNIS and the Company  entered  into an agreement
whereby  FNIS  would  purchase  certain  assets  of  the  Company   representing
substantially all of the Company's MLS operations, such assets amounting to less
than twenty  percent (20%) of the Company's  total assets.  FNIS and the Company
also entered into an agreement (the  "Management  Agreement")  pursuant to which
FNIS would provide management services to the Company until the earlier to occur
between the close or the termination of the Asset Purchase Agreement.  The Asset
Purchase  Agreement and the Management  Agreement were filed as exhibits on Form
8-K as filed on November 20, 2001.

         On December 3, 2001,  the agreement was  consummated  and FNIS acquired
substantially  all of the  assets,  including  corporate  and  trade  names  and
goodwill  associated with the business,  of the Company's  XMLSweb(tm)  division
(formerly  Terradatum LLC and Information  Management  Company,  LLC). The total
consideration  paid was  $2,000,000,  of which $500,000 was advanced in November
and $1,275,000  was paid in December 2001. An additional  amount of $225,000 was
withheld  pending the  resolution of licensing  obligations of the Company which
had not been resolved as of April 23, 2002.


Item 2.  Description Of Property.

         The  Company has no owned real  property  either for its own use or for
investment purposes. The Company has moved all of its operations into one office
facility in Brea,  California consisting of approximately 25,000 square feet. In
connection with the purchase of the Company's MLS operations, the original lease
was  assumed  by  FNIS  and  the  Company  is  subleasing   the  premises  on  a
month-to-month basis.


                                       4
<PAGE>

Item 3.  Legal Proceedings.

         The Company is involved in various legal proceedings arising out of its
operations in the ordinary course of its business, including various claims that
have been  asserted  or  complaints  that have been  filed  alleging  patent and
copyright  infringement,  breach of employment  and separation  agreements,  and
non-payment under various agreements. In addition, various claims have been made
against the Company in connection  with certain of its  acquisitions,  including
breach of registration  rights  agreements.  Management  intends to contest each
case and in certain  instances  may attempt to reach a settlement  of the issues
claimed.  The  Company  does not  believe  that  these  proceedings  will have a
material  adverse  effect on its  business,  financial  condition,  or result of
operations  beyond  the  amounts  recorded  in  the  accompanying   consolidated
financial statements for the estimated settlement of specific actions.  However,
if settlement is not reached and the matters  proceed to trial,  an  unfavorable
outcome could have a material adverse effect on the Company's financial position
and results of operations.

         The  Company  has  commitments  to  issue  common  stock in the form of
options,  warrants and other  agreements,  that,  if  fulfilled,  will cause the
Company to exceed its authorized  number of shares of common stock.  The Company
has begun  preparation  of a proxy  statement in  contemplation  of a Meeting of
Stockholders  to be held  between June and July,  2002 to, among other  matters,
approve an amendment to the Company's  Articles of Incorporation  increasing the
number  of  authorized  shares  of  common  stock  in  an  amount  necessary  to
accommodate these  agreements,  options and warrant  exercises.  The Company has
entered into business purchase agreements that include  requirements to register
the shares of the Company's common stock issued in connection with the purchase.
The  Company's  ability to register  these shares is in question  subject to the
approval of the increase in the authorized  number of shares.  Accordingly,  the
Company is currently in violation of these registration rights agreements.


Item 4.  Submission Of Matters To A Vote Of Security Holders.

         None.


                                     PART II


Item 5.  Market For Registrant's Common Equity And Related Stockholder Matters.

         The Company's common stock was traded on the Nasdaq SmallCap Market for
the period  from  September  16,  1999  through  July 16,  2001 under the symbol
"HMSK."  Effective  July 17, 2001, the common stock was delisted from the Nasdaq
SmallCap  Market due to a failure to  maintain a minimum  bid price of $1.00 per
share and trading commenced on the Over-the-Counter (OTC) Bulletin Board market.
The following  table sets forth the high and low bid  quotations  for the common
stock for the periods indicated.  The quotations subsequent to July 16, 2001, as
reported by North American  Quotations,  reflect prices between dealers,  do not
include  retail  mark-ups,  markdowns,   commissions  and  may  not  necessarily
represent actual transactions.


 Period                                                        High        Low
 ------                                                        ----        ---

First Quarter (ended March 31, 2000)....................      $25.50     $11.56
Second Quarter (ended June 30, 2000)....................      $14.88      $2.06
Third Quarter (ended September 30, 2000)................       $3.41      $2.00
Fourth Quarter (ended December 31, 2000)................       $2.59      $0.47

First Quarter (ended March 31, 2001)....................       $0.66      $0.13
Second Quarter (ended June 30, 2001)....................       $1.04      $0.13
Third Quarter (ended September 30, 2001)................       $0.69      $0.25
Fourth Quarter (ended December 31, 2001)................       $0.26      $0.03


         As of December 31, 2001, there were approximately 500 holders of record
and  approximately  5,500 beneficial  holders of the 48,954,561 shares of common
stock that were issued and  outstanding.  The  transfer  agent for the shares is
Atlas Stock Transfer Co., 5899 South State Street,  Salt Lake City,  Utah 84107,
telephone (801) 266-7151.

         The Company has never paid cash  dividends on its common stock and does
not anticipate that any cash dividends will be paid in the  foreseeable  future.
The future  dividend  policy will  depend on the  Company's  operating  results,
capital  requirements,  expansion plans,  financial condition and other relevant
factors.


                                       5
<PAGE>

Sales of Unregistered Securities

         On July 21, 2000, the Company acquired IRIS, a provider of productivity
software to real estate  professionals  and issued  500,000 shares of its common
stock,  along with $25,000 in cash at that time. The Company then issued 400,000
shares of its common  stock on January  9, 2001 and  2,500,000  shares of common
stock on February  28, 2001 to complete  the  acquisition.  The shares of common
stock were valued at $2.6 million.  The owners of IRIS were accredited investors
or otherwise had such experience in financial and business  matters so that they
were able to evaluate the risks and merits of an investment in the Company,  and
had access to or otherwise  were provided with  financial and other  information
concerning the Company.  In addition,  the certificates  representing the shares
issued to them contained a legend relating to  restrictions  on  transferability
under the Securities  Act.  Accordingly,  this  transaction  was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
or Rule 506 of the rules and regulations thereunder.

         In October 2000,  the Company issued 199,203 shares of its common stock
to the prior  owners of IMCO.  This  consideration  was payable  pursuant to the
purchase  agreement on the one-year  anniversary of the  acquisition of IMCO. In
November  2000,  the Company  issued 700,000 shares of common stock to the prior
owners of Terradatum as required by the purchase  agreement for the  acquisition
of  Terradatum.  The Company  also issued in November  2000 and January  2001, a
total of  1,284,146  shares of  common  stock to a  corporation  in  payment  of
$1,000,000  of  a  liability  incurred  pursuant  to  the  Terradatum   purchase
agreement.  In December  2000, the Company issued 106,948 shares of common stock
to the prior owners of  Connect2Call  as required by the purchase  agreement for
the acquisition of Connect2Call.  In February 2001, the Company issued 2,200,000
shares of its common  stock to the prior  owners of ISG pursuant to an amendment
to the original purchase agreement, representing a settlement of total shares to
be issued under the purchase  agreement.  The  individuals  and  companies  were
accredited  investors or otherwise had such experience in financial and business
matters so that they were able to evaluate the risks and merits of an investment
in the Company,  and had access to or otherwise were provided with financial and
other  information   concerning  the  Company.  In  addition,  the  certificates
representing   the  shares  issued  to  them  contained  a  legend  relating  to
restrictions on  transferability  under the Securities Act.  Accordingly,  these
transactions  were exempt from the  registration  requirements of the Securities
Act pursuant to Section  4(2)  thereof or Rule 506 of the rules and  regulations
thereunder.

         During the year ended June 30, 2001,  the Company  issued an additional
94,699  shares of its common stock valued at  approximately  $189,000 to vendors
and  employees  for goods and  services.  The  individuals  and  companies  were
accredited  investors or otherwise had such experience in financial and business
matters so that they were able to evaluate the risks and merits of an investment
in us, and had access to or otherwise  were  provided  with  financial and other
information concerning us. In addition, the certificates representing the shares
issued to them contained a legend relating to  restrictions  on  transferability
under the Securities Act.  Accordingly,  these transactions were exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
or Rule 506 of the rules and regulations thereunder.

         During the year ended June 30,  2001,  the Company  issued  warrants to
purchase a total of 375,106 shares of common stock to individuals  and companies
for services  valued at $496,000,  at exercise prices ranging from $.40 to $3.00
per share.  The Company  also issued  warrants to purchase a total of  1,925,000
shares of common stock to individuals for interest  expense,  debt extension and
penalty fees valued at $765,000,  at exercise  prices  ranging from $.19 to $.80
per share.  In  addition,  the  Company  issued  warrants to purchase a total of
1,200,000  shares of common stock to eBay Inc. in  connection  with an operating
agreement  with that  company,  at an  exercise  price of $1.50 per  share.  The
Company issued warrants to purchase a total of 930,000 shares of common stock to
individuals and companies in equity fund raising activities,  at exercise prices
ranging from $.19 to $.40 per share.  The Company issued  warrants to purchase a
total of 200,000  shares of common stock to members of our Board of Directors at
an  exercise  price  of $.59 per  share.  The  individuals  and  companies  were
accredited  investors or otherwise had such experience in financial and business
matters so that they were able to evaluate the risks and merits of an investment
in us, and had access to or otherwise  were  provided  with  financial and other
information concerning us. In addition, the certificates representing the shares
issued to them contained a legend relating to  restrictions  on  transferability
under the Securities Act.  Accordingly,  these transactions were exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
or Rule 506 of the rules and regulations thereunder.

         On  October  25,  2001,   the  Company   entered  into  the   following
transactions  with  Fidelity:  (i) a revolving  promissory  note of  $3,000,000,
convertible  into shares of the  Company's  common  stock at $0.10 per share and
(ii) a stock purchase warrant. The note is currently convertible into 30,000,000
shares of the Company's common stock;  however,  the aggregate  potential equity
represented  in the Note and the  Warrant  is 25% of the  Company's  outstanding
Common  Stock.  To the extent the Note is not converted to a number of shares of
common Stock  representing  a 25% equity  stake in the  Company,  the Warrant is
exercisable to bring  Fidelity's  beneficial  ownership to as much as 25% of the
outstanding  shares  of  Common  Stock.  These  transactions  were  exempt  from
registration  requirements  of the  Securities  Act  pursuant  to  Section  4(2)
thereof.


                                       6
<PAGE>

Item 6.  Selected Financial Data.
<TABLE>
<CAPTION>


  (Amounts  in  thousands,            Six-months Ended       -----------------Year Ended June 30-----------------
  except  per share data)             December 31, 2001         2001          2000          1999          1998
  -------------------------------     -----------------      ----------    ----------    ----------    ----------
<S>                                       <C>                 <C>           <C>            <C>           <C>
  Revenues                                 $6,035              $17,392       $11,090        $3,419        $1,666
  -------------------------------     -----------------      ----------    ----------    ----------    ----------

  Net loss                                (11,966)             (51,627)      (25,034)       (4,842)       (2,796)
  -------------------------------     -----------------      ----------    ----------    ----------    ----------

  Basic  and   diluted   net
  loss  per common share                    (0.25)               (1.66)        (1.47)        (0.53)        (0.50)
  -------------------------------     -----------------      ----------    ----------    ----------    ----------

  Total assets                              2,879                8,723        40,026        16,889         1,898
  -------------------------------     -----------------      ----------    ----------    ----------    ----------

  Long-term liabilities                     3,671                1,758         1,015           383           140
  -------------------------------     -----------------      ----------    ----------    ----------    ----------

  Cash dividends declared                    None                 None          None          None          None
  -------------------------------     -----------------      ----------    ----------    ----------    ----------
</TABLE>


Item 7. Management's  Discussion And Analysis Of Financial Condition And Results
        Of Operations.

         The  following   discussion  of  financial  condition  and  results  of
operations  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto included  elsewhere in this report.  This Form 10-K
contains  "forward-looking   statements"  within  the  meaning  of  the  Private
Securities  Litigation Reform Act of 1995 that involves risks and uncertainties,
such  as  statements  of  the  Company's  plans,  objectives,  expectations  and
intentions.  When used in this Form 10-K,  the words  "expects,"  "anticipates,"
"intends"  and  "plans"  and  similar   expressions  are  intended  to  identify
forward-looking  statements.  The cautionary  statements  made in this Form 10-K
should be read as being  applicable  to all related  forward-looking  statements
wherever they appear in this document.  Actual  results could differ  materially
from those  discussed  in or implied by this Form  10-K.  The  Company  does not
intend to update any of the  forward-looking  statements  after the date of this
filing to conform those  statements to actual results.  Factors that could cause
or contribute to such differences include those discussed below.


Overview

         On February 13, 2002, the Company announced a change in its fiscal year
end from June 30 to  December  31. The change was  effective  for the  six-month
period ended December 31, 2001. The Company had previously  released results for
the three months ended  September 30, 2001. The  comparisons in this  transition
report  will be for  the  six-month  period  ended  December  31,  2001  and the
twelve-month periods ended June 30, 2001 and 2000.

         As discussed  elsewhere in this Form 10-K, the Company has  experienced
recurring losses from operations and has an accumulated deficit of approximately
$104.5  million at December 31, 2001.  Similarly,  the Company has a significant
working capital deficit and limited cash reserves. Because of these factors, the
reports of the independent auditors on our consolidated financial statements for
the  six-months  ending  December  31,  2001 and the year  ended  June 30,  2001
includes an explanatory  paragraph  indicating there is substantial  doubt about
the Company's ability to continue as a going concern.

         In October,  2001 the Company  borrowed $3.0 million to pay off certain
existing debt and for working  capital needs.  In December 2001 the Company sold
its MLS operating  division  generating net cash  available for working  capital
purposes of  approximately  $1.7 million.  Since  November 2001, the Company has
moved  quickly  to reduce  its fixed  operating  expenses  and  consolidate  its
operations  into one  location.  In a press  release  dated March 12, 2002,  the
Company  announced  that,  for the first time in its history,  it was generating
revenues and cash flows sufficient to cover current operating needs. However, as
noted above,  the Company  continues to maintain a significant  working  capital
deficit from its prior  activities  and has  inadequate  cash  reserves to fully
satisfy its existing  trade debts.  The Company is  continuing in its efforts to
further increase sales revenues,  reduce operating expenses, and develop methods
for  reducing its  existing  trade debts and  liabilities.  See  "Liquidity  and
Capital Resources." The Company may consider obtaining additional debt or equity
financing.  Similarly, the Company may consider entering into other arrangements
or business combinations that would provide the Company with incremental working
capital, increased sales opportunities, or redundant cost savings.

         The Company is operating with a new management  team and has undertaken
a significant  restructuring of its operations.  There can be no assurances that
the Company will be able to sustain  profitable  operations  or that the Company
can develop a plan that will  adequately  satisfy its trade  creditors  and debt
holders.  If the Company is unable to achieve these results or otherwise  cannot
obtain  additional  financing on acceptable terms, it is likely that the Company
would cease  operations.  See "Risk Factors and Cautionary  Statement  Regarding
Forward-Looking Information."


                                       7
<PAGE>

Results of Operations

         Business acquisitions and comparability

         During the three years ended June 30, 2001,  the Company  developed its
family of products and services through a series of business acquisitions, asset
purchases and strategic alliances.  Many of these transactions were accomplished
through the issuance of equity  securities  beginning  late in during the fiscal
year ended June 30, 1999,  continuing  through  fiscal 2000,  and into the first
quarter of the year ended June 30,  2001.  During the year ended June 30,  2001,
the Company expended efforts and financial  resources to combine and restructure
the operations of its business acquisitions and its ongoing businesses including
the sale or closing of all publishing  operations  during the latter part of the
year. Similarly, during the six-months ended December 31, 2001, the Company sold
its MLS  operating  division,  and revenues and  expenses  recognized  from that
division  do not extend  across  the  entire  six-month  period.  Also,  certain
categories  of revenue  and  expense may be  dissimilar  between  periods due to
differing  accounting  systems  between  entities.  Accordingly,  the  operating
results  for each of the  fiscal  years  ended  June  30,  2001 and 2000 and the
six-months ended December 31, 2001 are not comparable.

         Revenues

         For the six-months ended December 31, 2001,  software sales and license
revenues were $3.1 million or 51.8% of total  revenues.  Website hosting and web
page  development  revenues  were  $2.1  million  or  34.4%  of  total  revenue.
Programming,  custom development,  and portal revenues were $655,000 or 10.9% of
total revenues.  The Company  attributes an overall  decrease in revenues to the
Company's  lack of capital  resources and minimal  marketing  efforts during the
period.  The Company  anticipates  that revenues  attributable  to  programming,
custom   development  and  network  hosting   activities  may  increase  in  the
foreseeable  future  due to new  initiatives  and  expanded  efforts  for  those
products and services.

         Revenues  increased  from $11.1 million in fiscal 2000 to $17.4 million
in fiscal 2001.  Growth in revenues  resulted from significant  increases in two
areas:   (1)  programming  and  licensing  and  (2)  Web  page  development  and
Website-related revenues. Programming and licensing revenues increased from $3.1
million in fiscal 2000 to $7.5  million in fiscal 2001,  principally  due to the
acquisitions  of ISG in April 2000 and IRIS in July 2000.  Also  contributing to
this increase in fiscal 2001 was approximately  $371,000 in additional  revenues
recognized from XMLS Web contracts.  Web page  development  and  Website-related
revenues  increased  from $4.6  million in fiscal 2000 to $5.7 million in fiscal
2001  primarily  due to continued  growth of our  telemarketing  and field sales
programs.   We  also   experienced   an  increase  in  publishing   revenues  of
approximately  $702,000 in fiscal 2001, primarily due to inclusion in operations
of HomeSeekers Magazines, Inc., which was acquired in February 2000, for most of
fiscal 2001. However,  all publishing  operations were sold or closed during the
latter part of fiscal 2001,  and no publishing  revenues are  anticipated in the
future.

         Cost of revenues

         Cost of revenues  decreased  from $13.6  million  during the year ended
June 30, 2001 to $2.9 million during the  six-months  ended December 31, 2001 as
the Company  ceased or was unable to allocate  financial  resources to its sales
efforts.  Similarly,  the Company  discontinued its printing  operations between
periods  which  had a  significantly  higher  cost of  sale.  Cost  of  revenues
increased  from $9.4 million in fiscal 2000 to $13.6 million in fiscal 2001, due
primarily to the increase in business in fiscal 2001.

         Operating expenses

         Operating  expenses  during the  six-months  ended  December  31,  2001
totaled $14.7 million. In general, operating expenses were on a steep decline at
the end of the period as the Company further reduced its employee base and fixed
operating costs.  Included in operating  expenses was approximately $5.2 million
attributable to separation and settlement agreements with three of the Company's
former  officers and directors and an additional $1 million  attributable to the
further write-down of intangible assets.

         Operating expenses increased from $27.2 million in fiscal 2000 to $53.1
million  in  fiscal  2001 in  part  because  of  additional  operating  expenses
associated with acquisitions completed near the end of fiscal 2000 and the first
month of fiscal  2001.  In addition,  the Company was involved in  restructuring
activities  during the third and fourth  quarters of fiscal 2001  including  the
discontinuance  of its publishing  operations,  the closing of certain operating
locations and consolidation of operating divisions.

         The Company  recorded a $20.1  million  write-down of  investments  and
purchased intangible assets during fiscal year 2001. After careful assessment of
various  factors  relating to its  intangible  assets,  including  the Company's
decision to  discontinue  its  publishing  operations  in the third  quarter and
consolidation  and restructuring of other acquired  businesses  primarily in the
fourth quarter, management determined it was appropriate to write down the value
of these assets. Accordingly,  such assets were written down by a total of $13.3
million for the year to estimated  fair value based on estimated  discounted net
cash flows for the operating  entities  that had  separately  identifiable  cash
flows in  accordance  with SFAS No. 121. The cash flow periods used were 3 years
with  a  discount  rate  of  15  percent  which  are  assumptions  that  reflect
management's best estimates.  The Company wrote off its remaining  investment in
its foreign  affiliate  during the third and fourth quarters of fiscal 2001 as a
result of its  affiliate's  inability  to raise  capital or generate  profitable
operations.  The  Company  also  wrote off the  remaining  $1.7  million  of its
investment in the common stock of  BuySellBid.com  during fiscal 2001 due to its
continuing losses and the uncertainty of further recovery on the investment.


                                       8
<PAGE>

         For the six-months  ended December 31, 2001,  compensation  and related
costs totaled $7.4  million.  Compensation  expense and related costs  increased
from $9.6  million in fiscal  2000 to $15.9  million in fiscal  2001,  primarily
because of the additional personnel  associated with the acquisitions  completed
near the end of fiscal 2000 and during the first month of fiscal 2001.  Employee
headcount  included in operating expenses was approximately 231 at the beginning
of  fiscal  2001.  Restructuring  efforts  during  2001 and into  2002  included
headcount  reductions as facilities  were closed and  divisions  combined.  As a
result of these efforts,  employee  headcount included in operating expenses was
82 as of  March  20,  2002.  In  connection  with  these  headcount  reductions,
significant severance and employee termination costs were incurred during fiscal
2001 and the Company recognized a non-cash expense of $2.3 million in the fourth
quarter of fiscal 2001 due to the repricing of employee stock options.

         For the six-months ended December 31, 2001 facilities  expenses totaled
$583,000.  Facilities  expenses  increased  from  $1.8  million  in 2000 to $2.7
million in 2001 because of acquisitions between periods. Travel, trade shows and
related expenses decreased from $4.1 million in 2000 to $1.6 million in 2001 and
promotion and  marketing  expenses  decreased  from $2.9 million in 2000 to $2.1
million in 2001 primarily due to the limited operating funds available for these
activities. For the six-months ended December 31, 2001, expenses attributable to
these activities were less than $500,000.

         Depreciation  and amortization  expense  increased from $2.4 million in
fiscal 2000 to $5.4 million in fiscal 2001 because of the property and equipment
and purchased  intangible  assets  acquired late in fiscal 2000 and early fiscal
2001. A substantial  portion of the assets  attributable  to these  acquisitions
were  disposed of or written down during  2001.  Accordingly,  depreciation  and
amortization  expense was $1.7  million for the  six-months  ended  December 31,
2001.


Liquidity and Capital Resources

         The Company has limited cash reserves and a working  capital deficit of
over $11.4 million at December 31, 2001. The Company stated in its Annual Report
on Form 10-K for the year ended June 30, 2001, and as filed on October 12, 2001,
that it had run out of cash, was unable to fully-fund its payroll on October 10,
2001, and would have to consider curtailing or ceasing its operations  including
the  possibility  of filing  bankruptcy.  The Company  further noted that in the
event  outside  financing in the form of debt or equity was not obtained  within
the next several weeks, it might be required to curtail or cease operations.

         On October 25, 2001,  the Company  entered into a loan  agreement  with
Fidelity which ultimately  totaled  $3,000,000.  The loan enabled the Company to
pay off certain  existing debt so as to release lenders' liens on certain assets
being  purchased  by FNIS and  provided  the  Company  with a limited  amount of
working capital which was quickly absorbed in operations.  Similarly, on October
25, 2001 the Company  entered  into an  agreement  with FNIS  whereby FNIS would
acquire  certain  assets of the Company  representing  its MLS  operations for a
total purchase price of $2,000,000.  The purchase was consummated on December 3,
2001 generating net cash available for working capital purposes of approximately
$1.7 million.

         Since November, 2001, the Company has moved quickly to reduce its fixed
operating  expenses and  consolidate  its operations  into one facility in Brea,
California. In a press release dated March 12, 2002, the Company announced that,
for the first time in its  history,  it was  generating  revenues and cash flows
sufficient to cover current operating needs.  However,  the Company continues to
maintain a significant working capital deficit from its prior activities and has
inadequate cash reserves to fully satisfy its existing trade debts.

         Accordingly,  because of the Company's significant net losses,  working
capital deficit, accumulated deficit and uncertainty as to its ability to secure
additional financing, the report of the independent auditors on the consolidated
financial  statements  contains an  explanatory  paragraph  indicating  there is
substantial  doubt about the Company's  ability to continue as a going  concern.
This uncertainty is further discussed in Note 2 of the notes to the consolidated
financial statements.

         During the year ended June 30, 2001 and through  the  six-months  ended
December 31, 2001,  the operations of the Company were partly funded through the
issuance of equity securities.  As a result of these issuances, the stockholders
experienced  significant  dilution.  The Company's  note agreement with Fidelity
contains conversion features that, if converted,  would significantly reduce the
percentage ownership of the current stockholders.  Similarly, the agreement with
Fidelity  includes a purchase  warrant such that the aggregate  potential equity
represented  in the note and the  warrant  is 25% of the  Company's  outstanding
common  stock.  To the extent the note is not converted to a number of shares of
common stock  representing  a 25% equity  stake in the  Company,  the warrant is
exercisable to bring  Fidelity's  beneficial  ownership to as much as 25% of the
outstanding  shares of common  stock.  Fidelity has the sole right to receive or
the power to direct the receipt of dividends from, or proceeds from the sale of,
the shares of the Company's  common stock issuable upon the exercise of the note
and the warrant.  If additional  funds are raised through the issuance of equity
or convertible  securities,  the percentage  ownership of the stockholders  will
continue to be reduced,  the stockholders  will experience  additional  material
dilution and such securities may have rights,  preferences or privileges  senior
to those of the existing stockholders. It is also likely that the Company may be
required  to  issue  warrants  for the  purchase  of  common  stock  in any such
financing, which may result in additional dilution. Furthermore, there can be no
assurance  that  additional  financing will be available when needed or that, if
available,  such  financing  will include terms  favorable to the Company or its
stockholders.  If  such  financing  is not  available  when  required  or is not
available on acceptable terms, the Company may not be able to meet its operating
obligations and the Company may be forced to cease operations. See "Risk Factors
and Cautionary Statement Regarding Forward-Looking Information" below.


                                       9
<PAGE>

         At  December  31, 2001 the  Company's  cash  balance  was $1.2  million
compared to $1.4 million at June 30, 2001, a decrease in cash of $200,000.  Also
at December 31, 2001,  the Company had an accumulated  deficit of  approximately
$104.5 million,  current  liabilities  exceeded current assets by $11.4 million,
and total  liabilities  exceeded  total  assets by $13.7  million.  Included  in
current  liabilities  at December 31, 2001 are  significant  amounts of past due
accounts  payable and short-term debt. The Company is currently in default under
a $500,000  note payable to one of its former  officers that became due in April
2001.  Pursuant  to the note,  the  Company is  obligated  to issue  warrants to
purchase  100,000  shares of common  stock  each week  until all  principal  and
interest  is  repaid.  Long-term  liabilities  at  December  31,  2001  included
$3,000,000  for a note payable to Fidelity  which  matures on April 24, 2003. At
June 30,  2001,  long-term  liabilities  were  primarily  comprised  of deferred
revenues.

         The Company has  experienced  negative cash flows from  operations from
inception.  Net cash used in operating  activities  during the six-months  ended
December 31, 2001 was $3.7 million  compared to $10.3 million in fiscal 2001 and
$12.5  million in fiscal 2000.  As shown in the  consolidated  statement of cash
flows for the six-months ended December 31, 2001 and for the year ended June 30,
2001, a significant portion of operating expenses were non-cash, including write
downs of assets,  compensation  expense from option  repricings and common stock
and warrants issued for services and interest.

         Net cash provided from investing activities during the six-months ended
December 31, 2001 was $1.7 million of which  virtually  all of this was from the
sales of the Company's MLS operation to FNIS.  Net cash provided from  investing
activities  during fiscal 2001 was $786,000,  with $1.3 million  provided by the
sale of investments,  $354,000 from the sale of intangible assets, $157,000 from
payments on notes receivable,  and $200,000 received from our foreign affiliate,
net of $1.0 million used to acquire  property and equipment and $212,000 used to
acquire technology and other intangible assets.

         The Company generated net cash provided by financing activities of $1.8
million during the six-months  ended December 31, 2001, of which all but $10,000
was from debt offerings.  Operations  were partially  funded in fiscal 2001 from
the net  proceeds of $7.5 million from the sale of common stock and warrants and
the exercise of options and warrants and from proceeds of debt of  approximately
$2.0 million.  The Company repaid debt of $569,000  during fiscal 2001,  much of
which was assumed from business acquisitions.


Risk Factors and Cautionary Statement Regarding Forward-Looking Information

         Investors are cautioned  that this Form 10-K contains  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 that involve risks and uncertainties,  including the following:  (1) the
Company's plans, strategies, objectives, expectations and intentions are subject
to  change  at any  time  at the  discretion  of  management  and the  Board  of
Directors; (2) the Company's plans and results of operations will be affected by
its ability to manage any growth and working  capital and its ability to finance
future operations,  none of which is assured;  and (3) the Company's business is
highly competitive and the success of existing or new competitors in the markets
in which the Company  competes could  adversely  affect the Company's  plans and
results of  operations.  In addition,  the Company  identifies  the risk factors
discussed  below that may  affect the  Company's  actual  results  and may cause
actual  results to differ  materially  from that  expressed in or implied by any
forward-looking  statement. The factors represented below are not represented to
be an exhaustive list. Additional factors are discussed from time to time in the
Company's filings with the Securities and Exchange Commission.


                                       10
<PAGE>

         The report of our  independent  auditors  expresses  substantial  doubt
about the Company's  ability to continue as a going  concern,  and indicates the
Company may have to consider  curtailing  or ceasing  operations,  including the
possibility of filing bankruptcy.

         The Company stated in its Annual Report on Form 10-K for the year ended
June 30, 2001,  and as filed on October 12,  2001,  that it had run out of cash,
was unable to  fully-fund  its  payroll on October 10,  2001,  and would have to
consider  curtailing  or ceasing its  operations  including the  possibility  of
filing bankruptcy. The Company further noted that in the event outside financing
in the form of debt or equity was not obtained within the next several weeks, it
might be required to curtail or cease operations.

         On October 25,  2001 the Company  entered  into a loan  agreement  with
Fidelity which ultimately  totaled  $3,000,000.  The loan enabled the Company to
pay off existing debt so as to release  lenders'  liens on certain  assets being
purchased  by FNIS and  provided  the Company  with a limited  amount of working
capital which was quickly absorbed in operations. Similarly, on October 25, 2001
the Company  entered  into an agreement  with FNIS  whereby  FNIS would  acquire
certain  assets  of the  Company  representing  its MLS  operations  for a total
purchase price of $2,000,000.  The purchase was  consummated on December 3, 2001
generating net cash available for working capital purposes of approximately $1.7
million.

         Since November, 2001, the Company has moved quickly to reduce its fixed
operating  expenses and  consolidate  its operations  into one facility in Brea,
California. In a press release dated March 12, 2002, the Company announced that,
for the first time in its  history,  it was  generating  revenues and cash flows
sufficient to cover current operating needs.  However,  the Company continues to
maintain a significant working capital deficit from its prior activities and has
inadequate cash reserves to fully satisfy its existing trade debts.

         Accordingly,  because of the Company's significant net losses,  working
capital deficit, accumulated deficit and uncertainty as to its ability to secure
additional financing, the report of the independent auditors on the consolidated
financial  statements  contains an  explanatory  paragraph  indicating  there is
substantial  doubt about the Company's  ability to continue as a going  concern.
This uncertainty is further discussed in Note 2 of the notes to the consolidated
financial statements.

         The  Company  may not be able to obtain  additional  financing  for its
current and future operating and capital needs.

         Historic operations have consumed  substantial amounts of capital.  The
business is capital intensive,  particularly with respect to product development
costs  associated  with the  design  and  creation  of  software  and web  based
products.  Public or private  financing may not be available  when needed or may
not be  available  on terms  favorable  or  acceptable  to us, if at all. If the
Company is unable to obtain financing in the near future, or it is not available
on  acceptable  terms,  we will be  limited  in our  ability  to  implement  our
operating  plans  and meet  operating  obligations.  Should  this  occur,  it is
possible that we would cease operations.

         The  stockholders  have  experienced  and may  continue  to  experience
significant dilution.

         In order to fund its  operations,  the Company has issued a substantial
number of equity  securities.  Coupled  with a  decreasing  stock  price,  these
issuances have had a substantial dilutive effect on the stockholders. Any future
issuances would continue to reduce the percentage  ownership of the stockholders
and the stockholders will experience material dilution.

         Sales of a substantial number of shares of common stock into the public
market,  or the perception that those sales could occur,  could adversely affect
the Company's  stock price or could impair its ability to obtain capital through
an offering of equity  securities.  Any decline in stock price could force us to
issue even more  securities to raise capital or to fund our business,  resulting
in even greater dilution to our stockholders.

         The number of  authorized  shares of common stock is not  sufficient to
meet  outstanding  obligations  to issue  common  stock and does not  permit the
Company to raise additional capital through the issuance of common stock.

         As of March 20, 2002 the Company had 48,954,561  shares of common stock
outstanding.  In  addition,  as of that date  there  were  options  to  purchase
3,004,493 shares of common stock and warrants to purchase  16,745,556  shares of
common stock outstanding.  Similarly, in connection with the loan from Fidelity,
the  Company  issued  a note  payable  to  Fidelity  that  is  convertible  into
30,000,000 shares of the Company's common stock. The aggregate  potential equity
represented in the note and related warrant is 25% of the Company's  outstanding
common  stock.  To the extent the Note is not converted to a number of shares of
common Stock  representing  a 25% equity  stake in the  Company,  the warrant is
exercisable to bring  Fidelity's  beneficial  ownership to as much as 25% of the
outstanding  shares  of common  stock.  The  Company  also has a number of other
commitments to issue common stock and securities  convertible  into common stock
in the future. The Company's Articles of Incorporation  currently  authorize the
issuance of 50,000,000  shares of common stock.  Therefore,  before it can issue
common  stock upon the  exercise of options or warrants  or in  accordance  with
other obligations,  the Company must increase the number of authorized shares of
common stock.


                                       11
<PAGE>

         Any  increase in the  authorized  capital  requires an amendment to the
Articles  of  Incorporation,  which must be approved  by the  stockholders.  The
Company  has  begun  preparation  of a  proxy  statement  for a  meeting  of the
stockholders  that could be held at the earliest in June or July 2002,  at which
the Company will seek  approval to increase the  authorized  number of shares of
common stock in an amount  necessary to meet the  existing  obligations.  If the
Company does not timely receive  approval of this increase,  it may be forced to
default on some of its  obligations.  The Company relied heavily on the issuance
of common stock in the past funding of its  operations.  If it does not increase
the number of shares  available  for  issuance,  the Company will not be able to
issue stock to fund its business operations.  Additionally,  it will not be able
to issue  common  stock to raise  capital in the  future  until an  increase  is
approved and effected.

         The Company is not profitable and may continue to record losses for the
foreseeable future.

         The Company  recorded a net loss of $12.0  million  for the  six-months
ended December 31, 2001, a net loss of $51.6 million for the year ended June 30,
2001 and had an accumulated  deficit as of December 31, 2001 of $104.5  million.
Although  it has  significantly  reduced  its fixed  operating  expenses  and is
generating  positive cash flows, the Company may record net losses in the future
due to non-cash  expenditures  or unexpected  shortfalls in sales  activity.  By
necessity, future expenses will include additional product development expenses,
sales and marketing costs, general and administrative  expenses. The Company may
incur additional acquisition costs and additional restructuring costs. There can
be no assurance  that the Company will  maintain  sufficient  revenues to offset
anticipated  operating  and  acquisition  costs.  The  Company  may not  achieve
sustained profitability.  If it fails to sustain or increase profitability,  our
business,  operating  results and financial  condition will be materially harmed
and we could be forced to cease operations.

         Market  competition  among  existing  and  potential   competitors  may
adversely affect our business.

         The market for on-line real estate content and e-commerce  providers is
rapidly  evolving  and  highly  competitive,  and  competition  is  expected  to
intensify  in the future.  Our failure to maintain  and enhance our  competitive
position  could  seriously  harm  our  business.  The  technological  and  other
requirements to remain competitive are changing continually, and we must be able
to  respond  to  changes in the  industry  in order to remain  competitive.  Our
competitors  vary in size and in the scope and breadth of products  and services
they offer.

         Our principal  competitors for real estate  professionals,  homebuyers,
sellers and renters and related content include:

                Websites  offering  real  estate  listings  together  with other
                related   services,    such   as    Homestore.com,    Homes.com,
                Apartments.com,   CyberHomes,   HomeHunter.com,  iOwn,  LoopNet,
                Microsoft's HomeAdvisor, NewHomeNetwork.com and RentNet;

                Websites  offering real estate related content and services such
                as mortgage  calculators  and  information  on the home  buying,
                selling and renting processes;

                General-purpose  consumer  Websites such as AltaVista and Yahoo!
                that also offer real estate-related content on their site; and

                Traditional print media such as newspapers and magazines.

         Our principal competitors for advertising revenues include:

                Web portals and other general purpose consumer  Websites such as
                AltaVista,  America Online, Excite, Lycos,  Netscape's Netcenter
                and Yahoo!;

                Online ventures of traditional media and classified  advertising
                services offered through daily and other  newspapers'  Websites;
                and

                Traditional media such as newspapers, magazines and television.


                                       12
<PAGE>

         The barriers to entry for Web-based  services and  businesses  are low,
making it possible for new  competitors  to  proliferate  rapidly.  In addition,
parties  with whom we have  listing and  marketing  agreements  could  choose to
develop their own Internet  strategies  or competing  real estate sites upon the
termination  of their  agreements  with us. Many of our existing  and  potential
competitors have longer operating histories in the Internet market, greater name
recognition,   larger  consumer  bases  and  significantly   greater  financial,
technical  and  marketing  resources  than we do,  and thus could  respond  more
quickly to changing  opportunities,  technology and consumer demands. Also, some
of our current and potential  competitors  have better name recognition and more
extensive  customer bases that may allow them to gain additional market share to
our  detriment.  These  competitors  may be able  to  undertake  more  extensive
promotional   activities  and  adopt  more  competitive   pricing  policies  for
advertising  and goods and services than we can. In addition,  our  competitors,
especially  those  with  greater  resources  than we have,  could  significantly
enhance their product offerings by developing improved  technology  solutions or
offering daily updates of listings. This could significantly reduce or eliminate
any  competitive  advantage  we  currently  might have and,  accordingly,  could
significantly harm our business.

         Competitive  pressures may make it difficult  for us to acquire  market
share.

         We cannot be certain that we will be able to compete  successfully with
existing or new competitors.  If we fail to compete successfully against current
and future competitors, our business and prospects will be seriously harmed.

         We must continue to obtain  listings from real estate agents,  brokers,
homebuilders, multiple listing services and property owners.

         We believe that our success depends in large part on the number of real
estate  listings  received  from  agents,   brokers,   homebuilders,   MLSs  and
residential,  rental  and  commercial  property  owners.  Many  of the  original
agreements with the MLSs,  brokers and agents to display their property listings
had fixed fees per  listing  and fixed  terms,  typically  12 to 30 months.  The
Company is currently  delinquent on payments to many of these providers and they
may choose not to continue to provide the listing information to us. The Company
is in the process of  developing  and entering  into new  agreements  with these
providers that are intended to satisfy past claims,  provide more flexibility in
the payment terms, and deliver more value to the providers for the listing data.
However,  there can be no assurance that the Company will be successful in these
efforts  or that the  listing  data  providers  will  accept  the new  terms and
provisions of these agreements. Accordingly, our business would be harmed.

         In addition, some providers of listing data may choose to provide their
listings to one or more  competitors on an exclusive  basis.  In particular,  at
least one  competitor  has entered into exclusive  listing  arrangements  with a
significant  number of MLSs and, in order for us to display  listings covered by
this arrangement, we must seek the consent of the individual broker who provided
these  listings to the MLS.  These  listings can be more difficult to obtain and
involve  more  recruiting  costs to acquire  them and our use of these  listings
could potentially subject us to claims by the parties to these exclusive listing
arrangements.  If our  competitors  are  successful in increasing  the number of
exclusive listing  arrangements with MLSs or large groups of brokers,  we may be
limited in the number of  listings we are able to display on our Website and our
business  may  be  harmed.  We  have  expended  significant  amounts  to  secure
agreements  for  listings  of real  estate for sale and may be required to spend
additional  large  amounts or offer  other  incentives  in order to renew  these
agreements.  If owners of large  numbers  of  property  listings,  such as large
brokers, MLSs, or property owners in key real estate markets choose not to renew
their  relationship  with us, our Website could become less  attractive to other
real estate industry participants or consumers.

         Quarterly financial results are subject to significant fluctuations.

         Our results of  operations  could vary  significantly  from  quarter to
quarter.  The Company is  substantially  dependent  on sales of its software and
website  products and services.  We also expect to incur  significant  sales and
marketing expenses to promote our brand and services.  Therefore,  our quarterly
revenues and  operating  results are likely to be  particularly  affected by the
number of  customers  purchasing  our products and services as well as sales and
marketing  expenses  for  a  particular  period.  If  revenues  fall  below  our
expectations,  we may not be able to reduce our spending  rapidly in response to
the shortfall.

         Other factors that could affect our quarterly operating results include
the following:

                the amount of advertising  sold on our Website and the timing of
                payments for this advertising;

                the level of  renewals  for our  products  and  services by real
                estate agents and brokers;

                the amount  and timing of our  operating  expenses  and  capital
                expenditures;

                costs related to  acquisitions  of  businesses or  technologies;
                changes in the mix of products and services we sell; and

                increased  sales,  marketing,  administrative  and  research and
                development expenses.


                                       13
<PAGE>

         Accordingly,  we  believe  that  period-to-period  comparisons  of  our
operating  results  may not be  meaningful,  and you  should  not  rely on these
comparisons as an indication of our future performance.

         Our  success  will  depend  on  the  continuing   contribution  of  key
management personnel and the attraction and retention of qualified employees.

         Our operations depend on the continuing  contribution of key personnel.
Our future success and continued  viability depends on the continued services of
our senior  strategic,  technical  and  operations  personnel.  Their  near-term
departure  could have a significant  adverse  effect on our business,  financial
condition and results of operations.

         The Company must attract and retain  personnel  while  competition  for
personnel in the industry is intense.  Given our financial condition,  we may be
unable to retain our key  employees  or to attract,  assimilate  or retain other
highly qualified  employees.  If we do not increase the number of authorized and
issuable shares to accommodate  employee  incentive  stock options,  we may have
significant  difficulty in attracting and retaining highly  qualified  employees
and executive officers.  We have from time to time in the past experienced,  and
we expect in the future to again experience,  difficulty in hiring and retaining
highly skilled  employees with appropriate  qualifications as a result of growth
and expansion.  Attracting and retaining  qualified personnel with experience in
the real estate  industry,  a complex  industry that requires a unique knowledge
base, is an  additional  challenge for us. If we do not succeed in retaining and
motivating our current personnel, our business,  financial condition and results
of operations will be adversely affected.

         The  Company  may not be able to adapt  to  evolving  technologies  and
customer demands, which could cause our business to suffer.

         The Company  maintains  and operates  complex  network data and hosting
systems  which  the  Company  believes  are  technologically   superior  to  its
competition.  The Company must  continually  upgrade and enhance  these  systems
while  continuing to develop its real estate portal content and desktop  product
and service offerings. To remain competitive,  the Company must expend necessary
capital on development  efforts which may require us to develop internally or to
license  increasingly  complex  technologies.  In addition,  many  companies are
continually   introducing   new   Internet-related   products,    services   and
technologies,  which  will  require  us to  update  or  modify  our  technology.
Developing  and  integrating  new products,  services or  technologies  into our
business could be expensive and time consuming.  Any new features,  functions or
services so developed  may not achieve  market  acceptance  or enhance our brand
loyalty. If we fail to develop and introduce or acquire new features,  functions
or services  effectively  and on a timely basis,  we may not continue to attract
new customers and may be unable to retain our existing  users.  Furthermore,  we
may not succeed in incorporating new technologies into our products and services
even though, in order to do so, we may incur substantial expenses.

         Our prior business  acquisitions  and any future  acquisitions  may not
result in achieving the desired benefits of the transactions.

         A  significant  part of the Company's  business  strategy from 1999 and
into  the  earlier  part  of  2001  was  the   acquisition   of  businesses  and
technologies.  A number of these  acquisitions  were not  successful for various
reasons.  The success of acquisitions is subject to many risks,  and the reasons
for failure include:

                The  inability  to  assimilate  the  operations  of the acquired
                businesses;

                The disruption of the existing businesses;

                The addition of significant additional expenses;

                The assumption of unknown liabilities and litigation;

                The inability to integrate, train, retain and motivate personnel
                of the acquired businesses;

                The diversion of existing management from day-to-day operations;

                The inability to  incorporate  acquired  products,  services and
                technologies successfully into existing product lines;

                The difficulty in identifying good acquisitions;

                The  potential   impairment  of  relationships  with  employees,
                customers and strategic partners; and

                The inability to maintain uniform standards, controls procedures
                and policies.


                                       14
<PAGE>

         The Company's  inability to successfully  address these risks adversely
affected its business, financial condition and results of operations. During the
year ended June 30, 2001 and again  during the  six-months  ended  December  31,
2001, the Company incurred  significant  expenses relating to the discontinuance
of various  operations,  the impairment and write-down of intangible assets, and
the restructuring and consolidation of other operating divisions.

         The Company depends upon a number of third-party relationships, many of
which are  short-term  or  terminable,  to provide the Company  with  content to
generate revenue.

         The Company depends on a number of third-party relationships to provide
content  and  increase  traffic  on  HomeSeekers.com   and  ultimately  generate
revenues. Outside parties include unrelated Website operators that provide links
to HomeSeekers.com and providers of real estate content. Many relationships with
third-party  Websites and other third-party  service providers are not exclusive
and are short-term or may be terminated at the convenience of either party.  The
Company is not assured that third parties regard the  relationship  with them as
important to their respective businesses and operations. They may reassess their
commitment  at any time in the future and may  develop  competitive  services or
products.

         The   Company   cannot   assure  that  it  will  be  able  to  maintain
relationships  with third  parties that supply  content,  related  products,  or
services  that are crucial to our  success,  or that such  content,  products or
services will be able to sustain any third-party  claims or rights against their
use.  The Company is currently  in default of many of its  contracts  with third
parties that are  considered  crucial to its business.  Also, the Company cannot
assure that the content,  products or services of those  companies  that provide
access or links to our Website  will achieve  market  acceptance  or  commercial
success.  Accordingly,  there is no assurance that existing  relationships  will
result  in  sustained  business  partnerships,  successful  product  or  service
offerings or the generation of revenues.

         There are  substantial  risks  associated  with the  protection  of our
intellectual  property and the infringement of the intellectual  property rights
of third parties.

         Our success is dependent upon the intellectual  property that we use in
our business.  We regard our Internet  domain name,  copyrights,  service marks,
trademarks,  trade secrets and similar intellectual  property that we use in our
business as critical to our  success.  We rely on a  combination  of  copyright,
trademark  and  trade  secret  laws,  confidentiality  procedures,   contractual
provisions and license and other agreements with employees, customers and others
to protect our intellectual  property rights.  In addition,  we may also rely on
the third party owners of the intellectual property rights we license to protect
those rights. Effective Internet domain name, copyright, service mark, trademark
and trade secret  protection  may not be available in every country in which our
products and services are made available online. The steps taken by us and other
third parties to protect our  intellectual  property rights may not be adequate,
and third parties may infringe upon or misappropriate the intellectual  property
and similar proprietary rights used in our business, which could have an adverse
effect on our business, financial condition and results of operations.

         We are  also  subject  to the risk of  adverse  claims  and  litigation
alleging infringement of the intellectual property rights we use. The resolution
of any  infringement  claims  may  result  in  lengthy  and  costly  litigation.
Moreover,  resolution of a claim may require us to obtain a license to use those
intellectual property rights or possibly to cease using those rights altogether.
Any of those  events  could  have a  material  adverse  effect on our  business,
financial condition and results of operations.

         Our  ability to  operate  in  international  markets  may be  adversely
affected by foreign political and economic conditions.

         Our  international  business is subject to a number of risks associated
with doing business  abroad.  Although we have to date marketed our products and
services to brokers, agents, and other real estate professionals located outside
of North America on a limited basis,  we may market our Website and products and
services on a more  extensive  global basis.  Expansion  into new  international
markets may present  competitive  challenges  different  from those we currently
face. There can be no assurance that we will expand  internationally or that any
such expansion will result in profitable operations.


                                       15
<PAGE>

         Our business is dependent on the strength of the real estate industry,
which is both cyclical and seasonal.

         The real estate  industry  traditionally  has been  cyclical.  Economic
swings  in the real  estate  industry  may be caused by  various  factors.  When
interest rates are high or general  national and global economic  conditions are
or are  perceived to be weak,  there  typically  is less sales  activity in real
estate.  Recent reports  indicate that the real estate industry may be adversely
affected by a general economic decline and a concern regarding  terrorism in the
United States.  Purchases of real property and related products and services are
particularly  affected by negative trends in the general economy.  A decrease in
the current  level of sales of real estate and products and services  related to
real estate will adversely affect our business,  financial condition and results
of operations.

         Additionally,  the Company has experienced seasonality in its business.
The real estate industry generally experiences a decrease in activity during the
winter.  However,  it is difficult for us to fully assess the impact of seasonal
factors on our business. If we are unable to effectively manage our resources in
anticipation of any seasonality of revenues and the increased costs we may incur
during periods of lower revenues, our business will be harmed.

         The success of our  operations  depends to a significant  extent upon a
number of factors relating to discretionary  consumer and business  spending and
the  overall  economy,  as well as regional  and local  economic  conditions  in
markets where we operate,  including  perceived and actual economic  conditions;
interest rates;  taxation policies;  availability of credit;  employment levels;
and wage and salary levels.

         In addition, because a consumer's purchase of real property and related
products  and  services  is  a   significant   investment   and  is   relatively
discretionary,  any reduction in disposable income in general may affect us more
significantly than companies in other industries.

         Regulations  and laws applicable to the real estate industry could have
an adverse impact on our business.

         We have risks  associated with changing  legislation in the real estate
industry.  Real  estate  is a  heavily  regulated  industry  in the  U.S.  These
regulations include the Fair Housing Act, the Real Estate Settlement  Procedures
Act and state advertising  laws. In addition,  states could enact legislation or
regulatory  policies in the future that could  require us to expend  significant
resources to comply.  These laws and related  regulations  may limit or restrict
our activities. As the real estate industry evolves in the Internet environment,
legislators,  regulators  and  industry  participants  may  advocate  additional
legislative or regulatory  initiatives.  Should  existing laws or regulations be
amended  or new laws or  regulations  be  adopted,  we may need to  comply  with
additional legal  requirements and incur resulting costs, or we may be precluded
from certain  activities.  To date, we have not spent  significant  resources on
lobbying or related government  issues.  Any need to significantly  increase our
lobbying or related activities could substantially increase our operating costs.

         We depend on  increased  use of the  Internet to expand our real estate
related advertising products and services.

         If the Internet  fails to become a viable  marketplace  for real estate
content,  information and  e-commerce,  our real estate portal business will not
grow.  Broad acceptance and adoption of the Internet by consumers and businesses
when searching for real estate and related products and services will only occur
if the Internet  provides them with greater  efficiencies and improved access to
information.  Internet  usage and  growth  in the real  estate  industry  may be
inhibited for a number of reasons, including: inadequate network infrastructure;
security concerns; uncertainty of legal and regulatory issues concerning the use
of the  Internet;  inconsistent  quality of  service;  lack of  availability  of
cost-effective,  reliable,  high-speed  service;  and failure of Internet use to
expand internationally.

         We depend on continued  improvements  to our  computer  network and the
infrastructure of the Internet.

         In order to further assure the  dependability  and rapid response times
of its  networks,  in March 2002 the Company  migrated  its systems to a hosting
facility  designed and maintained by Qwest  Communications  International,  Inc.
("Qwest").  Although the hosting  facility  further  assures the  integrity  and
availability  of the  Company's  systems,  there  can be no  guarantees  against
failure and any  failure of our  computer  systems  that cause  interruption  or
slower  response times on our Website or hosting  systems could result in a loss
of  Website  users and real  estate  professional  customers.  If  sustained  or
repeated,  these  performance  issues  could  reduce the  attractiveness  of our
Website  to  consumers,   advertisers,  real  estate  professionals,  and  other
providers of real estate related products and services.  Increases in the volume
of our Website  traffic could also strain the capacity of our existing  computer
systems,  which could lead to slower  response  times or system  failures.  This
would  cause  the  number  of  real  property  search   inquiries,   advertising
impressions,  other revenue producing offerings and our informational  offerings
to decline,  any of which could hurt our revenue  growth and our brand  loyalty.
The Company  anticipates  incurring  additional  costs to upgrade  its  computer
systems in order to accommodate increased demand.


                                       16
<PAGE>

         To a certain  extent,  our ability to increase  the speed with which we
provide  services to consumers  and to increase  the scope of these  services is
limited  by and  dependent  upon the  speed  and  reliability  of the  Internet.
Consequently,  the  emergence  and  growth of the  market  for our  services  is
dependent on the  performance of and future  improvements  to the Internet.  Our
internal network infrastructure could be disrupted.

         We could  experience  system failures and security  breaches that could
harm our business and reputation.

         Our  operations  depend upon our  ability to  maintain  and protect our
computer  systems,  most of  which  are now  located  at the  Qwest  CyberCenter
facilities  in Burbank,  California.  Our systems are  vulnerable to damage from
break-ins, unauthorized access, terrorism, vandalism, fire, floods, earthquakes,
power loss, telecommunications failures and similar events. Although we maintain
insurance  against  fires and  general  business  interruptions,  the  amount of
coverage may not be adequate in any particular case.

         Experienced computer programmers,  or hackers, may attempt to penetrate
our network  security from time to time.  Although we have not  experienced  any
material security breaches to date, a hacker who penetrates our network security
could  misappropriate  proprietary  information  or cause  interruptions  in our
services.  We might be required to expend  significant  capital and resources to
protect against,  or to alleviate,  problems caused by hackers.  We also may not
have a timely  remedy  against a hacker  who is able to  penetrate  our  network
security.   In  addition  to  purposeful  security  breaches,   the  inadvertent
transmission of computer  viruses could expose us to litigation or to a material
risk of loss.

         We could face liability for information on our Website and for products
and services sold over the Internet.

         We provide third-party content on our Website, particularly real estate
listings.  We could be exposed to  liability  with  respect to this  third-party
information.  Persons  might assert,  among other  things,  that, by directly or
indirectly  providing links to Websites operated by third parties,  we should be
liable for copyright or trademark  infringement or other wrongful actions by the
third parties  operating those  Websites.  They could also assert that our third
party information contains errors or omissions, and consumers could seek damages
for losses incurred if they rely upon incorrect information.

         We enter into agreements with other companies under which we share with
these other  companies'  revenues  resulting from advertising or the purchase of
services  through direct links to or from our Website.  These  arrangements  may
expose us to additional legal risks and uncertainties,  including local,  state,
federal and foreign government regulation and potential liabilities to consumers
of these services,  even if we do not provide the services ourselves.  There can
be no assurance that any  indemnification  provided to us in our agreements with
these parties, if available, will be adequate.

         Even if these  claims do not result in  liability to us, we could incur
significant  costs in  investigating  and defending  against  these claims.  Our
general  liability  insurance may not cover all potential claims to which we are
exposed and may not be adequate to  indemnify us for all  liability  that may be
imposed.

         Our common stock has been delisted from the Nasdaq National Market.

         In July 2001,  our common stock was delisted from trading on the Nasdaq
National  Market  because  our common  stock did not meet the  requirements  for
continued listing. Delisting may negatively impact the value of our common stock
as securities  trading on the over the counter  market are typically less liquid
and trade with larger variations between the bid and ask price.

         The market  price for our common stock has been  adversely  affected by
the general depression of stock prices of Internet-related companies.

         The trading prices of many technology and  Internet-related  companies'
stocks are  currently  at  historical  lows.  A rise in the market  price of our
common  stock  is  partially  dependent  upon  a  recovery  in the  markets  for
technology companies.  If stock prices for technology companies do not generally
increase,  it is likely that our stock  price will remain at low levels.  During
the same period,  these  companies'  stocks also have  recorded  lows well below
historical  highs.  There can be no  assurance  that our stock will trade at the
same levels of other  Internet  stocks or that we can sustain our common stock's
trading price.


                                       17
<PAGE>

         Many of the factors that might cause  volatility in the market price of
our common  stock are beyond our  control.  These  factors  may  materially  and
adversely  affect the market  price of our common  stock,  regardless  of how we
operate.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

         As of December 31, 2001 the Company was not a party to any  significant
financing  arrangements  that are subject to significant  interest rate risk. In
addition,  the Company had no material  investments as of December 31, 2001, and
therefore was not subject to significant market risks.

Item 8.  Financial Statements and Supplementary Data.

         The  financial  statements  required  by this Form 10-K  appear  herein
commencing on page F-1.

Item 9.  Changes  In  And  Disagreements  With  Accountants  On  Accounting  And
         Financial Disclosures.

         (a)    Previous independent auditors

                (1)   On  October  16,  2001,  Ernst &  Young  LLP  resigned  as
independent auditors for HomeSeekers.com, Incorporated.

                (2)   The  reports of Ernst & Young LLP for both the fiscal year
ended June 30,  2000 and 2001  contained  no adverse  opinion or  disclaimer  of
opinion and were not  qualified  or  modified  as to audit  scope or  accounting
principle.  However,  both reports contained a paragraph expressing  substantial
doubt about the Registrant's ability to continue as a going concern.

                (3)   Not applicable.

                (4)   In  connection  with its  audits  for the two most  recent
fiscal years and through October 16, 2001 there have been no disagreements  with
Ernst & Young LLP on any matter of accounting principles or practices, financial
statement  disclosure,  or auditing scope and procedure,  which disagreements if
not resolved to the satisfaction of Ernst & Young LLP, would have caused them to
make  reference  thereto in their report on the  financial  statements  for such
years.

                (5)   During  the two  most  recent  fiscal  years  and  through
October 16, 2001 there have been no reportable  events (as defined in Regulation
S-K Item 304 (a)(1)(v)).

                (6)   Ernst & Young LLP furnished us with a letter  addressed to
the SEC stating  whether or not it agrees with the above  statements.  A copy of
such letter was filed as Exhibit 16.2 to a Form 8-K filed on October 24, 2001.

         (b)    New independent auditors

                (1)   The Company  engaged Corbin & Wertz as its new independent
auditors as of February  12, 2002.  During the two most recent  fiscal years and
through  February 12,  2002,  the Company did not consult with Corbin & Wertz on
items  regarding  the  application  of  accounting  principles  to  a  specified
transaction,  either  completed or proposed,  or the type of audit opinion which
might be rendered on the Registrant's financial statements.



                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

         Information  regarding  directors and executive officers of the Company
will be set forth under the  captions  "Executive  Officers"  and  "Election  of
Directors"  in the Company's  proxy  statement  related to the Company's  annual
meeting of stockholders  for the fiscal year ended December 31, 2001 (the "Proxy
Statement") and is  incorporated  herein by reference.  Information  required by
Item 405 of Regulation  S-K will be set forth under the caption  "Section  16(a)
Beneficial  Ownership  Reporting  Compliance"  in  the  Proxy  Statement  and is
incorporated herein by reference.


                                       18
<PAGE>

Item 11. Executive Compensation.

         Information  required  by this item will be set forth under the caption
"Executive  Compensation"  in the Proxy Statement and is incorporated  herein by
reference.


Item 12. Security Ownership of Certain Beneficial Owners and Management.

         Information  required  by this item will be set forth under the caption
"Security  Ownership of Certain  Beneficial  Owners and Management" in the Proxy
Statement and is incorporated herein by reference.


Item 13. Certain Relationships and Related Transactions.

         Information  required  by this item will be set forth under the caption
"Certain  Relationships and Related  Transactions" in the Proxy Statement and is
incorporated herein by reference.



                                     PART IV

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

         (a)    (1) and (2) All  required  financial  statements  and  financial
                    statement schedules appear herein commencing on page F-1.

                (3) See Exhibit Index  following the signature page of this Form
                    10-K.

         (b)    Reports on Form 8-K:

                (1) The  Company  filed a Current  Report on Form 8-K on October
                    23, 2001 reporting the  resignations of three of its members
                    of the board of directors  including  its  Chairman,  Joseph
                    Harker.

                (2) The  Company  filed a Current  Report on Form 8-K on October
                    24, 2001  reporting a change in its  certifying  accountants
                    due to the  resignation  of  Ernst  &  Young  LLP  effective
                    October 16, 2001.

                (3) The Company  filed a Current  Report on Form 8-K on November
                    20, 2001  reporting a change of control and a disposition of
                    assets  attributable  to a Note and Warrant  agreement  with
                    Fidelity  National  Financial,  Inc.  and an Asset  Purchase
                    Agreement with Fidelity National Information Solutions, Inc.
                    of which all documents were included as exhibits thereto.




                                       19
<PAGE>



                          HOMESEEKERS.COM, INCORPORATED
                        CONSOLIDATED FINANCIAL STATEMENTS

                                TABLE OF CONTENTS




Report of Corbin & Wertz, Independent Auditors......................       F-1
Report of Ernst & Young LLP, Independent Auditors...................       F-2
Consolidated Balance Sheets at December 31, 2001 and
  June 30, 2001.....................................................       F-3
Consolidated Statements of Operations for the Six-months
  Ended December 31, 2001 and Years Ended June 30, 2001 and 2000....       F-4
Consolidated Statements of Stockholders' Equity (Deficit) for
  the Six-months Ended December 31, 2001 and Years Ended
  June 30, 2001 and 2000............................................       F-5
Consolidated Statements of Cash Flows for the Six-months Ended
  December 31, 2001 and Years Ended June 30, 2001 and 2000..........       F-8
Notes to Consolidated Financial Statements..........................      F-10





                                       20
<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
HomeSeekers.com, Incorporated


We have audited the accompanying  consolidated balance sheet of HomeSeekers.com,
Incorporated   (the  "Company")  as  of  December  31,  2001,  and  the  related
consolidated  statements of operations,  stockholders' equity (deficit) and cash
flows  for  the  six-months  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 financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of the Company as of
December 31, 2001, and the  consolidated  results of its operations and its cash
flows for the six-months then ended,  in conformity  with accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements, the Company has incurred significant operating losses, has
significant  negative  cash  flows  from  operations  for the  six-months  ended
December  31,  2001,  and  has  working   capital  deficit  of  $11,450,000  and
stockholders'  accumulated  deficit of $104,553,000 at December 31, 2001.  These
factors,  among others,  raise  substantial doubt about the Company's ability to
continue as a going concern.  Management's  current plans and actions in regards
to these  matters  are  discussed  in Note 2. The  financial  statements  do not
include any adjustments  relating to the  recoverability  and  classification of
assets carrying  amounts or the amounts and  classification  of liabilities that
might result should the Company be unable to continue as a going concern.



                                                                  CORBIN & WERTZ

Irvine, California
March  20,  2002,  except  for Notes 3 and 14, as to which the date is April 23,
2002

                                      F-1
<PAGE>



                Report of Ernst & Young LLP, Independent Auditors

To the Board of Directors and Stockholders
HomeSeekers.com, Incorporated

We have audited the accompanying  consolidated balance sheet of HomeSeekers.com,
Incorporated as of June 30, 2001, and the consolidated statements of operations,
stockholders'  equity (deficit) and cash flows for the years ended June 30, 2001
and 2000.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of HomeSeekers.com,
Incorporated as of June 30, 2001, and the consolidated results of its operations
and its cash flows for the years  ended June 30,  2001 and 2000,  in  conformity
with accounting principles generally accepted in the United States.

The   accompanying    financial   statements   have   been   prepared   assuming
HomeSeekers.com,  Incorporated will continue as a going concern. As discussed in
Note  2,  the  Company's  significant  net  losses,   working  capital  deficit,
accumulated  deficit  and  uncertainty  as to the  Company's  ability  to secure
additional  financing  raise  substantial  doubt about the Company's  ability to
continue  as a going  concern,  and  indicates  the Company may have to consider
curtailing  or  ceasing   operations,   including  the   possibility  of  filing
bankruptcy.  The financial  statements do not include any adjustments to reflect
the possible future effects on the  recoverability  and classification of assets
or the  amounts  and  classification  of  liabilities  that may result  from the
outcome of this uncertainty.

                                                               ERNST & YOUNG LLP

Reno, Nevada
September 19, 2001




                                      F-2
<PAGE>

<TABLE>
<CAPTION>



                          HOMESEEKERS.COM, INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2001 AND JUNE 30, 2001
             (Amounts in thousands, except share and per share data)


                                                                                                           December 31,   June 30,
                                                                                                               2001         2001
                                                                                                           ------------   --------
                                     ASSETS
<S>                                                                                                         <C>          <C>
Current assets
   Cash and cash equivalents............................................................................     $  1,232     $ 1,433
   Accounts receivable, net of allowance for uncollectible accounts of $190 and $288, respectively......           57         513
   Accounts and notes receivable, related parties.......................................................           92         179
   Other assets.........................................................................................           86         511
                                                                                                             ---------    --------
      Total current assets..............................................................................        1,467       2,636
Investments, net of valuation allowance of $180 and $170, respectively..................................           20          30
Property and equipment, net.............................................................................        1,337       2,561
Purchased intangible assets, net of accumulated amortization of $5 and $1,281, respectively.............            5       3,262
Other assets............................................................................................           50         234
                                                                                                             ---------    --------
                                                                                                             $  2,879     $ 8,723
                                                                                                             =========    ========



                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities
   Accounts payable.....................................................................................     $  3,945     $ 3,114
   Accrued payroll and other liabilities................................................................        4,704       2,631
   Liability under purchase agreement...................................................................          500         500
   Long-term obligations, current portion...............................................................        1,046       2,249
   Deferred revenue, current portion....................................................................        2,722       3,887
                                                                                                             ---------    --------

      Total current liabilities.........................................................................       12,917      12,381
Long-term liabilities
   Long-term obligations................................................................................        3,088         125
   Deferred revenue.....................................................................................          583       1.633
                                                                                                             ---------    --------

      Total long-term liabilities.......................................................................        3,671       1,758
Commitments and contingencies
Stockholders' equity (deficit)
   Common stock; $.001 par, 50,000,000 shares authorized; 48,954,561 shares and 47,091,597
       shares issued and outstanding at December 31, 2001 and June 30, 2001, respectively...............           49          47
   Additional paid-in capital...........................................................................       90,975      87,302
   Accumulated other comprehensive loss.................................................................         (180)       (170)
     Accumulated deficit................................................................................     (104,553)    (92,587)
   Note receivable from officer.........................................................................            -          (8)
                                                                                                             ---------    --------

      Total stockholders' equity (deficit)..............................................................      (13,709)     (5,416)
                                                                                                             ---------    --------

                                                                                                             $  2,879     $ 8,723
                                                                                                             =========    ========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      F-3
<PAGE>

<TABLE>
<CAPTION>


                          HOMESEEKERS.COM, INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE SIX-MONTHS ENDED DECEMBER 31, 2001 AND THE YEARS
                          ENDED JUNE 30, 2001 AND 2000
             (Amounts in thousands, except share and per share data)



                                                                      December 31,       June 30,        June 30,
                                                                          2001             2001            2000
                                                                      ------------     -----------     -----------
<S>                                                                   <C>              <C>             <C>
Revenues.........................................................     $    6,035       $  17,392       $  11,090
Cost of revenues.................................................          2,850          13,559           9,404
                                                                      ------------     -----------     -----------
   Gross profit..................................................          3,185           3,833           1,686
                                                                      ------------     -----------     -----------
Operating expenses:
    Operating expenses...........................................         12,031          27,520          22,002
    Depreciation and amortization................................          1,658           5,442           2,403
    Write down of investments and intangible assets..............          1,034          20,130           2,793
                                                                      ------------     -----------     -----------
                                                                          14,723          53,092          27,198
                                                                      ------------     -----------     -----------
Loss from operations.............................................        (11,538)        (49,259)        (25,512)
Other income (expense)
   Interest expense..............................................         (1,029)           (944)            (77)
   Interest income...............................................              3              74             290
   Other, net....................................................            598          (1,498)            265
                                                                      ------------     -----------     -----------
                                                                            (428)         (2,368)            478
                                                                      ------------     -----------     -----------
Net loss.........................................................        (11,966)        (51,627)        (25,034)
Other comprehensive income (loss)................................            (10)            483            (653)
                                                                      ------------     -----------     -----------
Total comprehensive loss.........................................     $  (11,976)      $ (51,144)      $ (25,687)
                                                                      ============     ===========     ===========

Net loss.........................................................     $  (11,966)      $ (51,627)      $ (25,034)
                                                                      ============     ===========     ===========

Basic and diluted net loss per common share......................     $    (0.25)      $   (1.66)      $   (1.47)
                                                                      ============     ===========     ===========



Shares used in computing basic and diluted share data............      48,622,383      31,145,564      17,031,852
                                                                      ============     ===========     ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-4
<PAGE>

<TABLE>
<CAPTION>


                          HOMESEEKERS.COM, INCORPORATED
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
            FOR THE SIX-MONTHS ENDED DECEMBER 31, 2001 AND THE YEARS
                          ENDED JUNE 30, 2001 AND 2000
                    (Amounts in thousands, except share data)


                                                                                       Accumu-
                                                                                        lated
                                                                             Invest-    Other                   Note       Stock-
                                                               Additional     ment     Compre-    Accumu-    Receivable    holders'
                                            Common Stock        Paid In        in      hensive    lated         from       Equity
                                          Shares     Amount     Capital       LLC       Loss      Deficit      Officer    (Deficit)
                                        ----------   ------    ----------    -------   -------   ---------   ----------   ---------
<S>                                     <C>            <C>       <C>          <C>        <C>     <C>           <C>         <C>
Balance at June 30, 1999                14,946,283     $ 15      $29,051      $(450)     $  -    $(15,926)     $   -       $12,690

Securities acquired in settlement
   of investment in LLC.............             -        -          793        450         -           -          -         1,243
Shares issued for services..........       277,969        -        3,282          -         -           -          -         3,282
Warrants issued for services........             -        -          463          -         -           -          -           463
Exercises of stock options..........       677,497        -        1,495          -         -           -          -         1,495
Exercises of warrants...............     1,026,039        1        3,033          -         -           -          -         3,034
Shares issued for cash..............       917,407        1        5,436          -         -           -          -         5,437
Shares issued for asset and
   investment purchases.............       341,077        -        3,838          -         -           -          -         3,838
Compensation charge for option
   exercise.........................             -        -          156          -         -           -          -           156
Shares issued in business
   acquisitions.....................     1,608,188        2       16,846          -         -           -          -        16,848
Shares and warrants issued for
   investment in foreign affiliate..     1,638,750        2        7,720          -         -           -          -         7,722
Issuance of note receivable to
   officer for option exercise......             -        -            -          -         -           -       (320)         (320)
Net loss............................             -        -            -          -         -     (25,034)         -       (25,034)

Net unrealized loss on investments..             -        -            -          -      (653)          -          -          (653)
                                        ----------   ------    ----------    -------   -------   ---------   ----------   ---------

   Balance at June 30, 2000             21,433,210     $ 21     $ 72,113       $  -    $ (653)   $(40,960)     $ (320)     $ 30,201
                                        ==========   ======    ==========    =======   =======   =========   ==========   =========
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-5
<PAGE>

<TABLE>
<CAPTION>


                          HOMESEEKERS.COM, INCORPORATED
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - CONTINUED
            FOR THE SIX-MONTHS ENDED DECEMBER 31, 2001 AND THE YEARS
                          ENDED JUNE 30, 2001 AND 2000
                    (Amounts in thousands, except share data)



                                                                             Accumulated                    Note
                                                               Additional       Other                    Receivable   Stockholders'
                                            Common Stock        Paid In     Comprehensive   Accumulated     from         Equity
                                          Shares     Amount     Capital         Loss          Deficit      Officer      (Deficit)
                                        ----------   ------    ----------   -------------   -----------  ----------   ------------
<S>                                     <C>            <C>      <C>            <C>           <C>            <C>         <C>
Balance at June 30, 2000                21,433,210     $ 21     $ 72,113       $ (653)       $(40,960)      $(320)      $30,201

Shares issued for services..........     2,977,960        3          838            -               -           -           841
Shares issued for interest expense..        75,000        -           38            -               -           -            38
Warrants issued for services........             -        -          563            -               -           -           563
Warrants issued for interest expense             -        -          765            -               -           -           765
Exercises of stock options..........         3,334        -            2            -               -           -             2
Compensation expense from option
   repricings.......................             -        -        2,270            -               -           -         2,270
Exercises of warrants...............       200,000        1           37            -               -           -            38
Shares issued for cash..............    14,378,746       14        7,466            -               -           -         7,480
Shares issued in payment of
   liabilities......................     1,417,196        1        1,032            -               -           -         1,033
Shares issued in business
   acquisitions.....................     6,606,151        7        2,178            -               -           -         2,185
Reduction of note receivable from
   officer.........................              -        -            -            -               -         312           312
Net loss............................             -        -            -            -         (51,627)          -       (51,627)

Net unrealized gain on investments..             -        -            -          483               -           -           483
                                        ----------   ------    ----------      -------      -----------   ----------   ---------

   Balance at June 30, 2001             47,091,597     $ 47     $ 87,302       $ (170)       $(92,587)      $  (8)      $(5,416)
                                        ==========   ======    ==========      =======      ===========   ==========   =========
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-6
<PAGE>

<TABLE>
<CAPTION>


                          HOMESEEKERS.COM, INCORPORATED
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - CONTINUED
            FOR THE SIX-MONTHS ENDED DECEMBER 31, 2001 AND THE YEARS
                          ENDED JUNE 30, 2001 AND 2000
                    (Amounts in thousands, except share data)

                                                                              Accumulated                    Note
                                                                Additional       Other                    Receivable   Stockholders'
                                             Common Stock        Paid In     Comprehensive   Accumulated     from         Equity
                                           Shares      Amount    Capital         Loss          Deficit      Officer      (Deficit)
                                         ----------    ------   ----------   -------------   -----------  ----------   ------------
<S>                                      <C>            <C>      <C>              <C>        <C>              <C>       <C>
Balance at June 30, 2001                 47,091,597     $ 47     $ 87,302         $(170)     $ (92,587)       $ (8)     $ (5,416)

Shares issued for notes receivable.....   1,020,834        1          499                                                    500
Exercises of stock options.............      54,000        -           10             -              -           -            10
Shares issued for separation agreements     788,130        1          403             -              -           -           404
Warrants issued for services...........           -        -           44             -              -           -            44
Warrants issued for interest expense...           -        -          872             -              -           -           872
Warrants issued under separation and
   settlement agreements...............           -        -        1,845             -              -           -         1,845
Reduction of note receivable from
   officer.............................           -        -            -             -              -           8             8
Net loss...............................           -        -            -             -        (11,966)          -       (11,966)

Net unrealized loss on investments.....           -        -            -           (10)             -           -           (10)
                                         ----------    ------   ----------   -------------   -----------  ----------   ------------

   Balance at December 31, 2001          48,954,561     $ 49     $ 90,975        $ (180)     $(104,553)       $  -      $(13,709)
                                         ==========    ======   ==========   =============   ===========  ==========   ============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-7
<PAGE>

<TABLE>
<CAPTION>

                          HOMESEEKERS.COM, INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE SIX-MONTHS ENDED DECEMBER 31, 2001 AND YEARS
                          ENDED JUNE 30, 2001 AND 2000
                             (Amounts in thousands)

                                                                                     December 31,     June 30,      June 30,
                                                                                         2001           2001          2000
                                                                                     -----------    ----------    ----------
<S>                                                                                   <C>           <C>           <C>
Cash flows from operating activities
   Net loss.......................................................................    $ (11,966)    $ (51,627)    $ (25,034)
   Adjustments to reconcile net loss to net cash used in operating activities
      Depreciation................................................................          685         1,670           793
      Amortization................................................................          973         9,670         4,519
      Write down of investments and intangible assets.............................        1,034        20,130         2,793
      Equity in loss in foreign affiliate.........................................            -           283            81
      Compensation expense from option repricings.................................            -         2,270             -
      (Gain) loss on sale of investments..........................................            -           974           (46)
      Gain on sale of assets......................................................         (524)            -             -
      Other.......................................................................          (52)          405           (39)
      Common stock and warrants issued for services...............................        2,293         1,404           653
      Common stock and warrants issued for interest...............................          872           803             -
   Changes in assets and liabilities net of effect from acquisitions
      Accounts receivable.........................................................          143           735         1,090
      Prepaid expenses............................................................          516           626          (550)
      Other assets................................................................          164          (111)          (86)
      Accounts payable............................................................        1,328         1,279           383
      Accrued payroll and other liabilities.......................................        2,095           661         1,090
      Deferred revenue............................................................       (1,241)          496         1,864
                                                                                     -----------    ----------    ----------
           Net cash used in operating activities..................................       (3,680)      (10,332)      (12,489)
                                                                                     -----------    ----------    ----------
Cash flows from investing activities
   Purchase of property and equipment.............................................          (54)       (1,008)       (2,238)
   Purchase of intangible assets..................................................            -          (212)       (1,114)
   Issuance of notes receivable...................................................            -             -          (440)
   Payments on notes receivable...................................................            8           157           190
   Business acquisitions, net of cash.............................................            -             -        (1,441)
   Proceeds from sales of securities..............................................            -         1,291           101
   Proceeds from sales of property and equipment..................................            -             4           343
   Proceeds from sales of intangibles.............................................            -           354             -
   Payment from foreign affiliate.................................................            -           200           200
   Proceeds from sale of business entities........................................        1,725             -             -
   Net change in other assets.....................................................            -             -             -
   Investment in foreign affiliate................................................            -             -          (387)
                                                                                     -----------    ----------    ----------
           Net cash provided by (used in) investing activities....................        1,679           786        (4,786)
                                                                                     -----------    ----------    ----------
Cash flows from financing activities
   Proceeds from notes payable-related parties....................................        1,035             -             -
   Payments on notes payable-related parties......................................       (2,085)            -             -
   Proceeds from notes payable....................................................        3,000         1,950             -
   Repayments of debt.............................................................         (160)         (569)       (1,232)
   Net proceeds from sale/exercise of common stock, options, and warrants.........           10         7,520         9,968
                                                                                     -----------    ----------    ----------
           Net cash provided by financing activities..............................        1,800         8,901         8,736
                                                                                     -----------    ----------    ----------
Net increase (decrease) in cash and cash equivalents..............................         (201)         (645)       (8,539)
Cash and cash equivalents at beginning of year....................................        1,433         2,078        10,617
                                                                                     -----------    ----------    ----------
Cash and cash equivalents at end of year..........................................    $   1,232     $   1,433     $   2,078
                                                                                     ===========    ==========    ==========
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-8
<PAGE>




SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>

                                                                                             December 31,     June 30,    June 30,
                                                                                                 2001           2001        2000
                                                                                             ------------    ---------   ---------
<S>                                                                                              <C>            <C>         <C>
   Cash paid for interest.................................................................       $ 25           $ 69        $ 77


   Cash paid for income taxes.............................................................       $  -           $  -        $  -
</TABLE>



SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

<TABLE>
<CAPTION>
                                                                                             December 31,     June 30,    June 30,
                                                                                                 2001           2001        2000
                                                                                             ------------    ---------   ---------
<S>                                                                                            <C>           <C>         <C>
   Common stock issued for advertising/exclusive provider arrangement.....................     $      -      $     -     $  3,091
   Common stock issued for investment.....................................................            -            -        3,000
   Investment acquired for advertising arrangement........................................            -            -        2,000
   Investment acquired as settlement of investment in LLC.................................            -            -        1,243
   Property and equipment acquired by capital lease obligations...........................            -          141            -
   Net change in investments and accumulated other comprehensive loss.....................          (10)         483         (653)
   Common stock and warrants issued for investment in foreign affiliate...................            -            -        7,722
   Common stock issued for purchased intangible assets....................................            -            -          838
   Investment acquired through reduction of accounts and notes receivable, related party..            -            -          208
   Common stock issued for payment of liabilities.........................................            -        1,033            -
   Note receivable issued for common stock................................................         (500)           -            -
   Other..................................................................................            -          348            -

BUSINESS ACQUISITIONS AND DISPOSITIONS
    Shares issued in business acquisitions................................................     $      -      $(2,185)    $(16,848)
    Cash paid.............................................................................            -            -       (1,441)
    Liability under purchase agreement....................................................            -            -       (1,500)
    Accounts receivable, net..............................................................         (400)         145          550
    Prepaid expenses......................................................................           91           30           37
    Property and equipment................................................................         (362)         298        1,932
    Intangible assets.....................................................................       (1,252)       2,907       19,727
    Other assets..........................................................................          (20)           -            -
    Note receivable.......................................................................         (500)           -            -
                                                                                             ------------    ---------   ---------
    Liabilities assumed (assets sold).....................................................     $ (2,443)     $ 1,195     $  2,457
                                                                                             ============    =========   =========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      F-9
<PAGE>




                          HOMESEEKERS.COM, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    SIX-MONTHS ENDED DECEMBER 31, 2001 AND YEARS ENDED JUNE 30, 2001 AND 2000

NOTE 1--ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

         HomeSeekers.com,  Incorporated (the "Company"),  a successor to various
companies through mergers, was originally incorporated under the laws of Utah on
January 31, 1983.  The Company is a provider of web-based and other  information
and technology targeted for use by professionals,  consumers,  and other parties
involved in the real estate industry.


Principles of Consolidation and Basis of Presentation

         The  consolidated   financial   statements   include  the  accounts  of
HomeSeekers.com, Incorporated and its wholly owned subsidiaries. All significant
inter-company  balances and transactions  have been eliminated in consolidation.
Certain  reclassifications  have been made to prior year consolidated  financial
statements to conform to the current  year's  presentation  and had no impact on
loss from operations or net loss.


Segment Reporting

         The Company has determined  that for the six-months  ended December 31,
2001 and for the years ended June 30, 2001 and 2000, it operated in one business
segment, real estate technology and information.  In addition,  through December
31,  2001,  the  Company's  operations  were  conducted  primarily in the United
States.


Revenue Recognition

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"). The Company adopted SAB 101 during the fourth quarter of fiscal year 2001
and such adoption did not have a material impact on its  consolidated  financial
statements.

         The Company has also derived revenue from technology  services provided
and productivity  and information  tools sold to real estate  professionals  and
consumers and from the sale of software  licenses.  The Company  recognizes such
revenue in accordance with Statement of Position ("SOP") 97-2, "Software Revenue
Recognition",   as  amended.  Revenue  from  license  fees  is  recognized  when
persuasive  evidence  of an  agreement  exists,  delivery  of  the  product  has
occurred,  the fee is fixed or determinable and  collectibility is probable.  If
collectibility is not considered probable, revenue is recognized when the fee is
collected.  The Company  recognizes  revenue  allocated to maintenance  fees for
ongoing  customer  support and product  updates  ratably  over the period of the
maintenance  contract.  Payments  for  maintenance  fees are  generally  made in
advance, are non-refundable and have terms of one to two years.

         The Company also sells banner  advertising  pursuant to contracts  with
terms  varying from 3 to 5 years,  which may include the  guarantee of a minimum
number  of  click-throughs  or  links  by  the  users  of the  Company's  online
properties.  Arrangements  where the Company  receives up front fees  associated
with  advertising  services  are  deferred  and  recognized  as  revenue  on the
straight-line  method over the terms of the  respective  contracts.  The Company
also sells  leads,  referrals  and data  matching  services  pursuant to certain
contracts.  Revenue  from leads,  referrals,  data  matching  services and other
performance-based  arrangements  is recognized as such services are delivered or
other  performance  criteria  are  met,  provided  that no  significant  Company
obligations remain and collection of the related receivable is probable.

         Revenues   from  the  sale  of   advertising   placed  in  real  estate
publications are recognized upon the distribution of real estate publications in
their  individual  market  areas.  Advance  payments  received  for real  estate
publications  advertising  are shown as deferred  revenues  in the  accompanying
balance sheets.  Direct expenses  related to the production and  distribution of
real  estate  publications   (including  listings,   production,   printing  and
distribution  costs) are recognized  concurrently with the related revenues upon
real estate publications distribution.

                                      F-10
<PAGE>

Product Development Costs

         The Company has adopted the Emerging  Issues Task Force Issue No. 00-2,
"Accounting for Web Site Development Costs" ("EITF 00-2"). Costs incurred by the
Company to enhance,  manage,  monitor and  operate  the  Company's  web site are
expensed as incurred.  The Company accounts for the costs of developing software
products  to be  sold in  accordance  with  Statement  of  Financial  Accounting
Standards No. 86 ("SFAS No. 86"), "Accounting for the Costs of Computer Software
to be Sold, Leased, or Otherwise Marketed", which requires the capitalization of
costs only during the period from the establishment of technological feasibility
to the time at which the product is available for general  release to customers.
The  costs  incurred  by the  Company  that  should  have  been  capitalized  in
accordance with EITF 00-2 and SFAS No. 86 were not material and were expensed as
incurred.

         The Company has adopted SOP 98-1, "Accounting for the Costs of Computer
Software  Developed or Obtained  for Internal  Use".  SOP 98-1  establishes  the
accounting  practice for  capitalization of certain costs incurred in connection
with the acquisition or development of computer software to be used for internal
purposes,  including  internal  costs.  The  adoption of SOP 98-1 did not have a
material effect on the Company's  consolidated financial statements or cause the
Company to capitalize  any material  costs  associated  with the  acquisition or
development  of  computer  software  to be  used  by the  Company  for  internal
purposes.

         In  addition,  the  Company is involved in  activities  to  continually
improve existing  products.  These costs have been charged to operating expenses
in the accompanying  consolidated statements of operations in the amounts of $0,
$1,389,930 and  $1,413,186 for the six-months  ended December 31, 2001 and years
ended June 30, 2001 and 2000, respectively.


Cash and Cash Equivalents

         Cash and cash equivalents consist of cash balances and instruments with
maturities of three months or less at the time of purchase.


Concentrations

         Concentration of Credit Risk -- Financial  instruments that potentially
subject the  Company to credit risk  consist  primarily  of cash in bank,  trade
receivables, and receivables from related parties. At December 31, 2001 and June
30, 2001,  substantially all trade receivables are due from customers within the
real estate and related industries.

         Concentrations  of Operations -- All of the Company's  current products
are  designed  for  operation  in the  national  and  international  real estate
markets. Any recessionary pressures or other disturbances in those markets could
have an adverse effect on the Company's operations.

         For the  six-months  ended  December  31, 2001 and years ended June 30,
2001 and  2000,  no  single  customer  accounted  for over 10% of the  Company's
revenues.


Fair Value of Financial Instruments

         The Company's financial  instruments include capital lease obligations,
long-term debt, cash and cash equivalents, accounts receivable, accounts payable
and accrued  liabilities.  The  carrying  amounts of capital  lease  obligations
approximate  their  fair  values,  which  have  been  determined  by the  use of
discounted cash flow analyses.  The carrying  values of the Company's  long-term
debt  approximated  their fair values,  based on current  incremental  borrowing
rates for similar types of borrowing arrangements.  The carrying amounts of cash
and  cash  equivalents,   accounts  receivable,  accounts  payable  and  accrued
liabilities approximate fair value, based upon their short-term nature. The fair
value of accounts and notes receivable from related parties are not determinable
as these transactions are with related parties.


Use of Estimates

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and disclosures of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses during the reporting period.  Significant  estimates made by management
are, among others,  the  realizability of property and equipment,  and valuation
allowance  on  deferred  tax  assets.  Actual  results  could  differ from these
estimates.


Investments

         At December 31, 2001 and June 30, 2001, the Company's  entire portfolio
of marketable securities is classified as  available-for-sale.  These securities
are stated at fair market value,  determined based on quoted market prices, with
the  unrealized   gains  and  losses   reported  in  a  separate   component  of
stockholders'  equity (deficit).  Realized gains or losses are included in other
income (expense) in the statement of operations.  The cost of securities sold is
based on the specific identification method.

                                      F-11
<PAGE>

Property and Equipment

         Property  and   equipment   are  stated  at  cost.   Depreciation   and
amortization is calculated using the straight-line  method over estimated useful
lives of 3 to 5 years, or the lease term, whichever is shorter.


Purchased Intangible Assets

         The  Company's  intangible  assets,  primarily  purchased  in  business
acquisitions, are stated at cost and are amortized on a straight-line basis over
periods ranging from 3 to 15 years.


Asset Impairment

         The  Company  reviews its  purchased  intangible  and other  long-lived
assets  periodically  in  accordance  with  SFAS No.  121,  "Accounting  for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of."
When impairment  indicators exist the Company determines potential impairment by
comparing the carrying  value of the assets with estimated  undiscounted  future
cash flows  expected to result from the use of the assets,  including cash flows
from  disposition.  Based on this  analysis,  if the sum of the expected  future
undiscounted  net cash flow is less than its carrying  value,  the Company would
determine whether an impairment loss should be recognized.  As discussed in Note
7, the Company  recorded  significant  impairment  losses during the  six-months
ended December 31, 2001 and the year ended June 30, 2001.


Income Taxes

         The Company accounts for income taxes by the  asset/liability  approach
in  accordance  with the  provisions  of SFAS No.  109,  "Accounting  for Income
Taxes." Under this  pronouncement,  deferred income taxes,  if any,  reflect the
estimated  future  tax   consequences   when  reported  amounts  of  assets  and
liabilities  are recovered or paid.  Deferred  income tax assets and liabilities
are  determined  based on  differences  between the financial  reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that are  scheduled  to be in effect when the  differences  are expected to
reverse.  The provision for income taxes,  if any,  represents  the total income
taxes paid or payable for the current  year,  plus the change in deferred  taxes
during the year.  The tax benefits  related to operating loss carry forwards are
recognized if management believes,  based on available evidence, that it is more
likely than not that they will be realized.


Advertising

         The Company accounts for advertising costs as expenses in the period in
which  they are  incurred.  Total  advertising  costs for the  six-months  ended
December  31,  2001 and  years  ended  June 30,  2001  and  2000  were  $70,444,
$2,097,361 and $1,854,212, respectively.


Net Loss Per Share

         Basic and diluted net loss per share are presented in  conformity  with
SFAS No. 128, "Earnings per Share."

         Basic net loss per share has been determined  using net loss divided by
the weighted average shares outstanding during the period.  Diluted net loss per
share  is  computed  by  dividing  net  loss  by  the  weighted  average  shares
outstanding,  assuming all dilutive  potential common shares were issued.  Since
the Company incurred losses for the six-months ended December 31, 2001 and years
ended June 30,  2001 and 2000,  basic and  diluted  net losses per share are the
same  for  these  periods.   Accordingly,   options  to  purchase  common  stock
outstanding at the end of the six-months ended December 31, 2001 and years ended
June 30, 2001 and 2000,  of 3,004,493  shares,  6,853,580  shares and  7,068,446
shares,  respectively,  and warrants to purchase  common stock in the six-months
ended  December  31, 2001 and years  ended June 30, 2001 and 2000 of  16,745,556
shares, 8,624,685 shares and 2,557,088 shares,  respectively,  were not included
in the calculation of diluted loss per share.


Stock Options

         The Company  accounts  for  employee  stock  options  under  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees."  The Company has  disclosed  the  proforma net loss and net loss per
share  effect in Note 10, as if the Company had used the fair value based method
prescribed under SFAS No. 123, "Accounting for Stock Based Compensation."

                                      F-12
<PAGE>

New Accounting Standards

         In June 2001, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 141,  "Business  Combinations"  and SFAS No. 142,  "Goodwill  and Other
Intangible Assets." Under the new standards, goodwill and intangible assets with
indefinite  lives will no longer be amortized but will be reviewed  annually for
impairment.  Separable  intangible  assets  that  are  not  deemed  to  have  an
indefinite life will continue to be amortized over their estimated useful lives.
The new  standards  generally  will be  effective  for the  Company in the first
quarter of fiscal 2002 and for business combinations  consummated after June 30,
2001. The Company believes the financial impact of adopting SFAS No. 141 and No.
142 will be immaterial to the consolidated financial statements as substantially
all of the Company's purchased  intangibles have been impaired or written off as
of December 31, 2001.


NOTE 2--BASIS OF PRESENTATION

         The  Company   incurred   net  losses  of   approximately   $11,966,000
$51,627,000  and $25,034,000  during the six-months  ended December 31, 2001 and
years ended June 30, 2001 and 2000, respectively, and at December 31, 2001 had a
working capital deficit of approximately $11,450,000,  an accumulated deficit of
approximately   $104,553,000  and  a  stockholders'   deficit  of  approximately
$13,709,000.  In addition, the Company used cash of approximately  $3,680,000 to
fund  operations  during  the most  recent  six-month  period.  The  reports  of
independent  auditors  on the  Company's  December  31,  2001 and June 30,  2001
financial  statements  include  an  explanatory  paragraph  indicating  there is
substantial doubt about the Company's ability to continue as a going concern. In
October 2001, the Company borrowed $3.0 million to pay off existing debt and for
working capital needs. In December 2001, the Company sold an operating division,
generating net cash of approximately  $1.7 million.  The Company has reduced its
fixed operating  expenses and has consolidated its operations into one location.
The Company continues to maintain a significant  working capital deficit and has
inadequate cash reserves to fully satisfy its existing trade debts.  The Company
is  continuing  in its  efforts  to  further  increase  sales  revenues,  reduce
operating  expenses,  and develop  methods for reducing its existing trade debts
and liabilities.  The Company may consider  obtaining  additional debt or equity
financing.  Similarly, the Company may consider entering into other arrangements
or business combinations that would provide the Company with incremental working
capital,  increased sales opportunities,  or redundant cost savings. The Company
is  operating  with a new  management  team  and has  undertaken  a  significant
restructuring  of its  operations.  There can be no assurances  that the Company
will be able to sustain profitable  operations or that the Company can develop a
plan that will  adequately  satisfy its trade  creditors and debt  holders.  The
accompanying  financial statements do not include any adjustments to reflect the
possible future effects on the  recoverability  and  classification of assets or
the amounts and  classification  of liabilities that may result from the outcome
of this uncertainty.

         On February 13, 2002, the Company announced a change in its fiscal year
end from June 30 to December  31. The change was  effective  for the  six-months
ended  December 31, 2001. The Company had  previously  released  results for the
three months ended September 30, 2001.


NOTE 3--BUSINESS ACQUISITIONS AND DISPOSITIONS

         The Company has completed the asset and business acquisitions discussed
below,  all of which were  accounted for by the purchase  method of  accounting.
Accordingly,  results  of  operations  for the  acquired  businesses  have  been
included in the  consolidated  statements  of operations  from their  respective
dates of acquisition.  The purchase price of each acquisition has been allocated
to the assets acquired and the  liabilities  assumed based on the estimated fair
market value at the date of acquisition.


Genstar Media

         On August 4,  1998,  the  Company  purchased  substantially  all of the
assets of  Genstar  Media,  a sole  proprietorship  engaged in the  business  of
offering  websites  and e-mail to realtors.  These assets  included the customer
base,  computers and other media equipment,  and the business name. The purchase
price  consisted of 50,000  shares of the  Company's  common stock issued to the
seller. The Company valued the securities issued at approximately $225,000 based
on the fair  market  value of the common  stock on the date of  acquisition.  In
addition,  the Company  committed  to the  contingent  issuance of common  stock
having an aggregate  value of $400,000 if certain  revenue  thresholds were met.
During the years ended June 30, 2000 and 1999,  the revenue  levels were met and
the additional  common stock was issued and the Company allocated the additional
$400,000 to the  customer  base.  During the year ended June 30,  2000,  the net
remaining  unamortized  balance of the customer base relating to these increases
of approximately $267,000 was written off (see Note 7).


Holloway Publications, Inc. ("HPI")

         During the year ended  June 30,  2001,  the  Company  discontinued  the
operations  of HPI and  accordingly  wrote  off  the  $1,145,000  net  remaining
unamortized  balance of this intangible  asset.  Revenues  recognized during the
years  ended  June  30,  2001  and  2000  totaled   $1,437,000  and  $1,540,000,
respectively.

                                      F-13
<PAGE>

TDT, LLC ("Terradatum")

         On  September  30,  1999,  the Company  acquired  all of the issued and
outstanding common stock of Terradatum,  a developer,  marketer, and licensor of
Internet-based  multiple  listing service  systems.  Consideration  consisted of
640,000 shares of the Company's common stock valued at approximately  $7,960,000
based on the fair  market  value of the  Company's  common  stock at the date of
acquisition  and  $200,000 in cash.  The  acquisition  agreement  called for the
issuance of additional  shares of the Company's common stock and additional cash
consideration  of $1,500,000  if the market price of the Company's  common stock
was below certain levels prior to the first anniversary of the closing date. The
Company recorded  $1,500,000 as a current  liability as of June 30, 2000 because
the market price of the  Company's  common  stock was  projected to be below the
stipulated  level.  The purchase price,  including the additional  payment,  was
allocated  primarily  to  purchased  technology  in the  approximate  amount  of
$7,966,000,  which was being  amortized  over 3 years.  The market  price of the
Company's  common  stock was  below the  levels  stipulated  by the  acquisition
agreement,  and during the year ended June 30, 2001,  the Company issued a total
of  1,984,146  shares of the  Company's  common  stock for the fair market value
adjustment and in payment of $1,000,000 of the liability,  with no further value
recorded to the purchased  technology  for the issuance of these shares.  During
the latter part of the year ended June 30, 2001,  the Company  restructured  the
operations  of this entity and recorded an  impairment  charge of  approximately
$2,730,000  during the fourth  quarter  (see Note 7). On December  3, 2001,  the
Company  sold  substantially  all  the  assets  of its MLS  operating  division,
including the business  unit to which  Terradatum  was a component,  to Fidelity
National Information Solutions, Inc. ("FNIS") (see below).


Information Management Company, Inc. ("IMCO")

         On September 30, 1999, the Company  completed the acquisition of all of
the issued and  outstanding  common  stock of IMCO,  a  provider  of  electronic
publishing  and  software  development  for the real estate  listing  management
industry. The purchase price consisted of 341,151 shares of the Company's common
stock valued at $1,000,000, based on the fair market value of the stock given in
the acquisition. The acquisition agreement provides for additional consideration
of $1,000,000 payable in the Company's common stock in equal installments on the
first and second  anniversaries  of the  agreement.  This amount was recorded as
additional  purchase  price and  included as  additional  paid in  capital.  The
purchase  price  was  allocated   primarily  to  purchased   technology  in  the
approximate amount of $1,918,000, which was being amortized over 3 years. During
the year ended June 30, 2001, the Company issued  199,203  additional  shares of
its  common  stock  to the  prior  owners  of  IMCO  for the  first  anniversary
installment,  with no further value recorded to the purchased technology for the
issuance  of these  shares.  During the  latter  part of the year ended June 30,
2001, the Company  restructured the operations of this entity,  discontinued the
use  of  the  purchased  technology,   and  recorded  an  impairment  charge  of
approximately $866,000 (see Note 7).

         On December 3, 2001, the Company sold  substantially  all the assets of
its MLS  operating  division,  including  the business  unit to which IMCO was a
component,  to FNIS (see below).  As noted above,  the Company was  obligated to
make a common  stock  payment  of  $500,000  on the  second  anniversary  of the
original  purchase  agreement which was not made. In connection with the sale of
IMCO to FNIS, and in lieu of the original agreement,  the Company entered into a
settlement  agreement  to  issue  $437,000  of  common  stock  to  the  original
principals  of IMCO,  not to  exceed  3.5  million  shares,  at such time as the
Company has sufficient shares authorized to make the issuance.


Home Seekers Magazines, Inc. ("HMI")

         On February 8, 2000,  the Company  completed the  acquisition of all of
the  issued  and  outstanding  common  stock  of  HMI,  a real  estate  magazine
publication company, for approximately  $1,053,000 in cash and the assumption of
approximately  $1,189,000 in  liabilities.  The excess cost over the fair market
value of the net assets acquired was approximately  $1,858,000,  which was being
amortized  over 15 years.  During the year ended June 30, 2001, the Company sold
the magazine  publication  businesses  comprising of HMI to four separate buyers
and recognized a loss of  $1,347,000,  including the write-off of the $1,267,000
net remaining  balance of the intangible asset.  Revenues  recognized during the
years  ended  June  30,  2001  and  2000  totaled   $1,551,000   and   $746,000,
respectively.


Information Solutions Group, Inc ("ISG")

         On  April  3,  2000,  the  Company  acquired  all  of  the  issued  and
outstanding  common stock of ISG, a real estate  electronic forms provider.  The
purchase price consisted of 279,400 shares of the Company's  common stock valued
at approximately  $4,238,000,  based upon the average closing price of the stock
on  specified  days  preceding  the  date  of  acquisition,  the  assumption  of
liabilities of approximately  $849,000 and other costs aggregating $346,000. The
original acquisition agreement provided for additional  consideration payable in
the Company's  common stock  depending  upon the closing prices of the Company's
common stock on specified  days  preceding the first  anniversary of the closing
date and if certain revenue targets were met, for which the Company  recorded an
additional  $1,000,000  at June 30,  2000.  The  purchase  price  was  allocated
partially to intangible assets in the amount of approximately $1,500,000,  which
were being amortized over 3 years. The excess of cost over the fair market value
of the net  assets  acquired  was  approximately  $4,705,000,  which  were being
amortized  over 5 years.  During the year ended June 30, 2001,  the  acquisition
agreement was amended, and the Company issued 2,200,000 additional shares of the
Company's common stock as final payment of further  consideration  due under the
agreement with no further value recorded to the purchased  intangible assets for
the  issuance  of the  shares.  The amended  agreement  required  the Company to
register the  additional  shares by February 28, 2001. As of March 20, 2002, the
Company had not completed the registration.


                                      F-14
<PAGE>

         During the latter  part of the year ended June 30,  2001,  the  Company
restructured the operations of this entity and recorded an impairment  charge of
approximately $4,112,000 (see Note 7).


Connect2Call ("C2C")

         On June 9, 2000, the Company acquired the assets of C2C, a developer of
voice-over-internet  protocol and web-enabled,  interactive voice  communication
technologies.  The purchase  price  consisted of 347,639 shares of the Company's
common stock valued at  approximately  $1,434,000 based on the fair market value
of the  Company's  common  stock at the  date of  acquisition.  The  acquisition
provided for  additional  consideration  payable in the  Company's  common stock
depending  upon the closing  prices of the  Company's  common stock on specified
days  preceding  effective  registrations  and  certain  earnings  targets.  The
purchase  price was allocated  primarily to purchased  technology and a covenant
not  to  compete  in  the   approximate   amounts  of  $699,000  and   $675,000,
respectively,  and was being amortized over 3 years.  During the year ended June
30, 2001, the Company issued 106,948  additional  shares of the Company's common
stock  to the  prior  owners  of C2C,  with no  further  value  recorded  to the
purchased  intangible  assets for the issuance of shares.  During the six-months
ended December 31, 2001 the Company  wrote-down its remaining  investment in C2C
for a total expense of approximately $170,000.


Immediate Results Through Intuitive Systems, LLC ("IRIS")

         On July 21, 2000, the Company  completed the  acquisition of all of the
issued and outstanding common stock of IRIS, a provider of productivity software
to real estate  professionals,  through payment of $25,000 cash, the issuance of
500,000  shares of the Company's  common stock and the assumption of liabilities
of $1,195,000.  The purchase agreement provided for additional  consideration of
up to 2,900,000  shares of the Company's  common stock on specified dates within
the first year of the agreement,  which the Company issued during the year ended
June 30, 2001. The 3,400,000  total shares of the Company's  common stock issued
in the  acquisition  were valued at  $2,587,000,  based on an average of closing
prices per share of the Company's common stock just prior to and after the dates
the shares were issued. The purchase price was allocated  primarily to purchased
technology  and a  covenant  not  to  compete  in  the  approximate  amounts  of
$2,809,000 and $500,000, respectively, and was being amortized over 3 years. The
purchase  agreement  required  the  Company to  register  any  shares  issued as
additional  consideration  by  September  19, 2001.  As of March 20,  2002,  the
Company had not completed the registration.

         During the latter  part of the year ended June 30,  2001,  the  Company
restructured the operations of this entity and recorded an impairment  charge of
approximately $1,747,000 (see Note 7).

         The  following   unaudited  pro  forma   summary   presents   financial
information as if the acquisitions  discussed above occurred as of the beginning
of the  Company's  fiscal  years  ended  June 30,  2001 and 2000.  The pro forma
amounts include certain adjustments, primarily to record additional amortization
of  purchased  intangible  assets and deferred  revenue,  and do not reflect any
benefits from economies that might be achieved from  combining  operations.  The
pro forma information does not necessarily reflect the actual results that would
have occurred nor is it necessarily indicative of future results of operation of
the combined companies.


                                                           June 30,   June 30,
(Amounts in thousands, except per share data, unaudited)     2001       2000
                                                           --------   --------

Revenues.................................................. $ 17,588   $ 18,841
                                                           ========   ========

Net loss.................................................. $(51,913)  $(30,034)
                                                           ========   ========

Basic and diluted net loss per common share............... $  (1.57)  $  (1.42)
                                                           ========   ========


                                      F-15
<PAGE>

MLS Operations Sale to FNIS

         On October 25,  2001,  FNIS and the Company  entered  into an agreement
whereby  FNIS  would  purchase  certain  assets  of  the  Company   representing
substantially all of the Company's MLS operations, such assets amounting to less
than twenty  percent (20%) of the Company's  total assets.  FNIS and the Company
also entered into an agreement (the  "Management  Agreement")  pursuant to which
FNIS would provide management services to the Company until the earlier to occur
between the close or the termination of the Asset Purchase Agreement.

         On December 3, 2001,  the agreement was  consummated  and FNIS acquired
substantially  all of the  assets,  including  corporate  and  trade  names  and
goodwill  associated with the business,  of the Company's  XMLSweb(tm)  division
(formerly  Terradatum LLC and Information  Management  Company,  LLC). The total
consideration  paid was  $2,000,000,  of which $500,000 was advanced in November
and $1,275,000  was paid in December 2001. An additional  amount of $225,000 was
withheld  pending the  resolution of licensing  obligations of the Company which
had not been resolved as of April 23, 2002.


NOTE 4--INVESTMENTS

         As of  December  31,  2001 and  June  30,  2001,  the  Company  had net
investments in marketable securities of $20,000 and $30,000, respectively.

         Certain transactions occurring during the six-months ended December 31,
2001 and year ended June 30, 2001 are described in the following paragraphs.

         The  Company's  investments  in marketable  securities  are held for an
indefinite period and thus are classified as available for sale.  Investments in
marketable  securities at December 31, 2001 and June 30, 2001 are  summarized as
follows:

<TABLE>
<CAPTION>
                                                       December 31, 2001                           June 30, 2001
                                                       -----------------                           -------------
                                                             Gross                                    Gross
                                                          Unrealized        Fair                    Unrealized       Fair
                                              Cost           Loss           Value         Cost         Loss         Value
                                            --------      ----------       --------     --------    -----------    --------
<S>                                         <C>           <C>              <C>          <C>          <C>           <C>
Common stock, related party.............    $200,000      $(180,000)       $ 20,000     $200,000     $(170,000)    $ 30,000
                                            ========      ==========       ========     ========    ===========    ========
</TABLE>


         The Company owns common stock of Webquest, Inc., a company considered a
related party as a former officer and two former members of the Company's  Board
of Directors also served on the Webquest board.

         In prior years, the Company was given 700,000 shares of Webquest common
stock in lieu of cash  payment  for the license of  technology.  During the year
ended June 30,  2000,  the Company  received  an  additional  400,000  shares of
Webquest  common  stock in payment of notes and accounts  receivable  due and as
consideration  for the termination of certain operating  agreements.  At various
dates during the year ended June 30, 2000, the Company sold 54,300 shares of the
common  stock   recognizing   a  gain  on  sale  included  in  other  income  of
approximately  $46,000.  During the year ended June 30,  2001,  the Company sold
245,700 shares of the common stock  recognizing a loss on sale included in other
expense of  approximately  $152,000.  At December  31, 2001,  the Company  owned
500,000 shares of common stock valued at $20,000.

         During the six-months  ended December 31, 2001 and years ended June 30,
2001 and 2000, the Company recorded revenues from the above related party of $0,
$0 and $370,000,  respectively,  related to the technology  licensing and custom
programming fees.


NOTE 5--INVESTMENT IN FOREIGN AFFILIATE

         In May 2000,  the Company  completed  an agreement to acquire an equity
interest  in,  and enter  into an  operating  agreement  with  property  portal!
Limited,  a Hong Kong company that operates an Asian Internet real estate portal
("pp.com").

         In the transaction,  the Company issued 1,638,750 of its common shares,
valued at approximately  $6,452,000, in exchange for 1,613,000 shares of pp.com,
representing  approximately a 23% ownership of pp.com. In addition,  the Company
issued to the  stockholders  of pp.com  fully  vested  warrants  to  purchase an
aggregate of 1,000,000 shares of the Company's common stock at $7 per share. The
warrants were  exercisable  for one year after the date of issue.  The estimated
fair value of the  warrants,  $1,270,000,  was  recorded as a  component  of the
investment in pp.com, and valued using the Black-Scholes  valuation method using
a volatility of 1.226.

                                      F-16
<PAGE>

         The  operating  agreement  was  a  technology  consulting  and  license
agreement whereby the Company granted a license to its products for sales in the
territory of the People's  Republic of China  (including  Hong Kong and Taiwan),
Malaysia,  Singapore and Thailand. Pursuant to the agreement, the Company was to
be paid an initial fee of $1,800,000.  The Company received $200,000 in May 2000
and was to  receive  $1,600,000  following  the  completion  of a defined  trial
period. After the first anniversary date of the agreement, pp.com was to pay the
Company a royalty equal to 14% of all revenue derived from the commercial use by
pp.com of any services or technology provided by the Company.  The agreement was
for a period of ten years,  subject to earlier  termination by the parties under
certain terms of the agreement.

         The  investment  in pp.com was accounted for using the equity method of
accounting,   with  inter-company  accounts  and  transactions  eliminated.  The
Company's  equity in the net loss of pp.com for the year ended June 30, 2001 and
for the period May 16 to June 30, 2000 was $282,914  and $81,308,  respectively,
which was included in other  expense.  The excess of the  Company's  cost of the
investment  over the  Company's  equity in the net  assets  of pp.com  was being
amortized over a period of three years. Amortization expense for the years ended
June 30,  2001 and 2000 was  $1,934,393  and  $310,988,  respectively.  Payments
received  from  pp.com  under the  operating  agreement  were to be applied as a
reduction  of the  investment  until  such  time  as the  investment  was  fully
recovered, then recognized as other income thereafter.

         During the third  quarter of the year ended June 30, 2001,  the Company
wrote its remaining investment in pp.com down to $1,000,000 and restructured its
agreement   with  pp.com.   pp.com   elected  to  merge  with   iShowFlat  in  a
stock-for-stock exchange pursuant to which the Company owns approximately 11% of
the  merged  company  and  terminated   pp.com's  exclusive  agreement  for  the
development  and marketing of the Company's  technology in Asia.  iShowFlat paid
the Company  $200,000  cash in May 2001 for  non-exclusive  agency rights to the
Company's  technology  in  Asia.  Because  of  iShowFlat's  inability  to  raise
necessary capital and its ongoing  operating  losses,  the Company wrote off the
$732,000  balance of its investment  during the fourth quarter of the year ended
June 30,  2001.  Subsequent  to December 31,  2001,  iShowFlat  announced it was
considering  a buyout  offer for the  company  and that,  if it did not  receive
bridge financing in connection with the buyout,  it would have to consider other
financing sources or cease doing business.


NOTE 6--PROPERTY AND EQUIPMENT

  Property and equipment consisted of the following at December 31 and June 30:
<TABLE>
<CAPTION>

                                                            December 31,      June 30,
                                                                2001            2001
                                                            -----------      ----------
<S>                                                         <C>              <C>
Computer equipment.......................................   $3,029,965       $2,986,024
Computer software........................................      266,821          847,613
Furniture and office equipment...........................      258,126          864,547
Leasehold improvements...................................      307,169          392,873
Vehicles.................................................            -           55,000
                                                            -----------      ----------
                                                             3,862,081        5,146,057
Less: accumulated depreciation and amortization..........   (2,524,629)      (2,585,117)
                                                            -----------      ----------
                                                            $1,337,452       $2,560,940
                                                            ===========      ==========
</TABLE>


         The Company has computer  equipment  and software with a net book value
of $141,404 and $293,414, respectively (accumulated depreciation of $110,730 and
$238,342,  respectively)  under capital leases at December 31, 2001 and June 30,
2001.


NOTE 7--PURCHASED INTANGIBLE ASSETS

         Purchased intangible assets consist of the following at December 31 and
June 30:
<TABLE>
<CAPTION>

                                                                            December 31,     June 30,
                                                              Period           2001            2001
                                                            ----------      -----------    -----------
<S>                                                         <C>              <C>          <C>
Acquired technology...................................         3 years        $     -      $ 2,693,240
Cost in excess of net assets of acquired businesses...      3-15 years              -          210,350
Covenants not to compete..............................         3 years              -        1,114,632
Other.................................................       1-2 years          9,651          525,276
                                                                            -----------    -----------
                                                                                9,651        4,543,498
Less: accumulated amortization........................                         (4,633)      (1,281,004)
                                                                            -----------    -----------
                                                                              $ 5,018      $ 3,262,494
                                                                            ===========    ===========
</TABLE>

                                      F-17
<PAGE>

         Amortization  expense was $972,767,  $7,734,956  and $4,209,218 for the
six-months  ended  December  31,  2001 and years  ended June 30,  2001 and 2000,
respectively.

         The  Company  performed  an  assessment  of the  carrying  value of its
long-lived  assets  to be  held  and  used,  including  significant  amounts  of
purchased   intangible   assets   recorded  in   connection   with  its  various
acquisitions.  This  assessment  was  performed  pursuant  to  SFAS  121  due to
significant  negative  industry and economic trends affecting both the Company's
current  and future  operations,  as well as the general  decline of  technology
valuations.  Management  concluded that the decline in market  conditions within
the Company's industry was significant and other than temporary.  As a result of
this assessment, along with the Company's decision to discontinue its publishing
operations in the third quarter and  consolidation  and  restructuring  of other
acquired businesses  primarily in the fourth quarter of fiscal 2001, the Company
wrote down $1,033,982 and $13,307,860 of impaired purchased intangible assets as
of December 31, 2001 and June 30, 2001,  respectively.  Such assets were written
down based on the amount by which the carrying amount exceeded their fair value.
Fair  value  was  determined  based on  discounted  future  cash  flows  for the
operating  divisions that had separately  identifiable cash flows. The cash flow
periods used were three years with a discount rate of 15%, which are assumptions
that reflect management's best estimates.


NOTE 8-- LONG-TERM DEBT
<TABLE>
<CAPTION>

         Long-term debt consisted of the following at December 31 and June 30:

                                                                                     December 31,     June 30,
                                                                                         2001           2001
                                                                                     -----------     ----------
<S>                                                                                 <C>              <C>
Note payable to Fidelity  National  Financial,  Inc.  ("Fidelity"),  with stated
     interest at prime plus 2% (totaling  6.75% at December 31,  2001),  payable
     quarterly,  secured by certain  assets of the Company,  due April 24, 2003,
     convertible into shares of the Company's common stock at the option of the
     holder at $0.10 per share..................................................     $ 3,000,000     $        -

Notespayable to E-Home.com,  Inc. ("Homemark" see Note 13), with interest at 8%,
     secured by certain assets of the Company, due September 30 to December
     31, 2001...................................................................               -      1,000,000

Note payable to a former  Director of the Company,  with interest at 9%, secured
     by certain assets of the Company,  past due, convertible into shares of the
     Company's common stock at $0.10 per share subordinated to Fidelity note
     payable....................................................................         500,000        500,000

Note payable to a former  Director of the Company,  with stated interest at 10%,
     secured by certain assets of the Company, payable in four equal
     installments, due December 31, 2002 subordinated to Fidelity note payable..         200,000        250,000

Notes payable to individuals, with interest at 9%, unsecured, due December 13,
     2002.......................................................................         162,000        200,000

Capital lease obligations (Note 11).............................................         180,907        273,156

Other...........................................................................          90,793        150,805
                                                                                     -----------     ----------

Total...........................................................................       4,133,700      2,373,961
Less current portion............................................................      (1,045,679)    (2,248,773)
                                                                                     -----------     ----------

Long-term portion...............................................................     $ 3,088,021      $ 125,188
                                                                                     ===========     ==========
</TABLE>


     Future maturities of long-term debt at December 31, 2001 are as follows:


        Years ending December 31:

        2002.................................................   $ 1,045,679
        2003.................................................     3,068,952
        2004.................................................        16,391
        2005.................................................         2,678
                                                                -----------

        Total                                                   $ 4,133,700
                                                                ===========


                                      F-18
<PAGE>

         The Company entered into a Warrant  Purchase  Agreement  simultaneously
with the note  payable to  Fidelity  such that the  aggregate  potential  equity
represented  in the note  payable  to  Fidelity  and the  warrant  is 25% of the
Company's outstanding common stock. To the extent the note is not converted to a
number of shares of common stock representing at least a 25% equity stake in the
Company, the Warrant is exercisable to bring Fidelity's  beneficial ownership to
as much as 25% of the outstanding shares of Common Stock.

         The note  payable  of  $500,000  to a former  Director  contains a late
payment  penalty  clause  requiring  the  Company to issue  warrants to purchase
100,000 shares of the Company's  common stock on April 9, 2001, the original due
date, and additional warrants to purchase 100,000 shares of the Company's common
stock each week  thereafter  until the note is repaid.  As of December  31, 2001
warrants to purchase a total of 3,800,000  shares of the Company's  common stock
at  exercise  prices  ranging  from $0.03 to $0.67 per share were  issued to the
former  Director.  The former  director  was also  issued a warrant to  purchase
375,000  shares of the Company's  common stock at an exercise price of $0.19 per
share at the time the loan was made. The Company recognized  interest expense of
$631,000 and $605,169  attributable  to the value of these warrants  (under SFAS
123) for the  six-months  ended  December 31, 2001 and year ended June 30, 2001,
respectively.  Although the Company has entered into discussions with the former
Director to modify the agreement,  the warrants continue to accrue subsequent to
year-end.  The warrants vest immediately and expire three years from the date of
issuance.

         During the year ended June 30,  2001,  the Company  issued  warrants to
purchase  100,000  shares of the Company's  common stock at an exercise price of
$0.43 per share in connection  with the loan of $250,000 from a former  Director
of the Company. In addition,  the Company issued a total of 75,000 shares of the
Company's  common  stock to the  former  Director  to extend the due date of the
loan.  The loan balance  outstanding  as of December 31, 2001 was $200,000.  The
Company recognized interest expense of $87,000 and $38,000 attributable to these
warrants and shares, respectively, for the year ended June 30, 2001. The Company
did not recognize any interest expense  attributable to these warrants or shares
during the six-months ended December 31, 2001. The warrants vest immediately and
expire three years from the date of issuance.

         During the year ended June 30,  2001,  the Company  issued  warrants to
purchase a total of 250,000 shares of the Company's  common stock at an exercise
price of $0.25 per share to the individuals who loaned the Company $200,000. The
warrants vest immediately and expire three years from the date of issuance.  The
loan  balance  outstanding  as of December  31, 2001 was  $162,000.  The Company
recognized  interest  expense of $241,000  attributable  to the warrants for the
six-months ended December 31, 2001 and $72,500  attributable to the warrants for
the year ended June 30,  2001.  These notes  payable also include a late payment
penalty clause whereby the Company issued 100,000  warrants per week for each of
the two notes  payable with a cap of one million  warrants for each note holder,
which was reached as of  December  31,  2001.  The due dates of these notes were
extended to December 13, 2002.

         The interest rate on capitalized  leases varies from 12.0% to 32.1% and
is imputed based on the lessor's implicit rate of return.


NOTE 9--STOCKHOLDERS' EQUITY (DEFICIT)

         The Company is authorized to issue  50,000,000  shares of common stock,
par value  $.001 per share,  5,000,000  shares of Class A preferred  stock,  par
value $.001 per share, of which 5,000 have been designated as Class A, Series 1,
200,000  shares of Class B  preferred  stock,  par value  $10.00 per share,  and
4,800,000  shares of undesignated  preferred  stock,  par value $.001 per share.
Terms  of the  Class  A,  Class B and  undesignated  preferred  stock  are to be
prescribed by  resolution  of the Board of  Directors.  At December 31, 2001 and
June 30, 2001,  there were no  outstanding  shares of preferred  stock.  In July
2001, the Board of Directors of the Company adopted a resolution  proposing that
the Articles of  Incorporation  be amended to increase the authorized  number of
shares of common stock to  200,000,000,  subject to stockholder  approval of the
amendment.  As of March  20,  2002 the  Company  had not held a  meeting  of its
stockholders to approve such an increase.


                                      F-19
<PAGE>

Common Stock

         As of December  31,  2001,  the Company had  48,954,561  common  shares
issued and  outstanding,  3,004,493  outstanding  options issued pursuant to the
Company's  Amended and Restated  1996 Stock  Option Plan,  as amended (the "1996
Plan") and 16,745,556 outstanding warrants. The Company will require an increase
in the  number  of  authorized  shares  of common  stock to  enable  the  future
exercises of the outstanding options and warrants.

         During the  six-months  ended  December 31,  2001,  options to purchase
54,000  common shares were  exercised at prices  ranging from $0.16 to $0.59 per
share.  During the year ended June 30, 2001, warrants to purchase 200,000 common
shares  were  exercised  at a price of $0.19 per share and  options to  purchase
3,334 common  shares were  exercised  at a price of $0.59 per share.  During the
year ended June 30,  2000,  warrants to purchase  1,026,039  common  shares were
exercised at prices  averaging  $2.96 per share and options to purchase  677,497
common shares were exercised at an average price of $2.21 per share.

         In August 2001,  the Company  issued a total of 1,020,834  unrestricted
common  shares  with a  combined  value of  $500,000  to  EntrePort  Corporation
("EntrePort") as an advance against the purchase price of the existing  business
of EntrePort  (see Note 13). In addition,  the Company issued a total of 788,130
unrestricted  common  shares  to  former  officers  and  directors  as  part  of
separation and settlement  agreements  including  600,000 shares issued to three
such individuals during July and August 2001 (see Note 14).


Common Stock Warrants

         Warrants  for the  purchase  of  common  shares  that were  issued  and
outstanding as of December 31, 2001 are summarized below:


                Number of         Exercise
                Warrants           Price         Expiration
                ---------       -----------      ----------
                3,546,500       $0.03-$0.11       2002-2004
                7,907,371         0.13-0.49       2003-2006
                3,958,075         0.50-0.80       2002-2004
                  283,334         1.47-1.50       2002-2003
                  308,649         2.38-2.47       2003-2005
                  468,527         2.50-3.00       2002-2004
                   18,100              4.00            2002
                  150,000              5.50            2002
                   50,000              6.06            2002
                   55,000             10.19            2003
               ----------
               16,745,556



         During the  six-months  ended  December  31, 2001, a total of 9,390,871
warrants  expiring on various  dates in 2002  through  2004 to  purchase  common
shares at  exercise  prices of $0.03 to $0.67  were  issued to  officers  of the
Company,  consultants and investors (see Note 10 for disclosure of the impact on
net loss and loss per  share had the  warrants  issued  to the  officers  of the
Company  been valued  pursuant to SFAS No.  123).  During the  six-months  ended
December 31, 2001, the Company  recognized  $1,845,403 of compensation  expense,
$871,846 of interest  expense,  and  $43,750 of outside  service  expense in the
accompanying consolidated statements of operations to reflect the differences in
the warrant exercise price and the market value on the date of issuance pursuant
to APB 25.  During the year ended June 30,  2001 a total of  7,439,098  warrants
expiring on various  dates in 2002  through  2006 to purchase  common  shares at
exercise  prices of $0.19 to $3.00 were  issued to  consultants  and  investors.
During the year ended June 30, 2000, a total of 1,809,877  warrants  expiring on
various dates in 2000 through 2004 to purchase  common shares at exercise prices
of $2.38 to $10.81 were issued to consultants and investors.

         During the  six-months  ended  December  31, 2001, a total of 1,270,000
warrants  issued to  consultants  and investors  expired and were  canceled.  In
connection with the note issued to Fidelity,  the Company entered into a Warrant
Purchase Agreement such that as a result of the issuance to Fidelity of the note
and the warrant,  Fidelity has a currently exercisable right convert or purchase
up to the equivalent of 25% of the  outstanding  shares of the Company's  common
stock.  To the extent the Note is not  converted to a number of shares of common
Stock representing a 25% equity stake in the Company, the Warrant is exercisable
to bring  Fidelity's  beneficial  ownership to as much as 25% of the outstanding
shares of Common  Stock.  Fidelity has the sole right to receive or the power to
direct the receipt of dividends  from,  or proceeds from the sale of, the shares
of the  Company's  Common Stock  issuable  upon the exercise of the note and the
warrant.


                                      F-20
<PAGE>

NOTE 10--1996 STOCK OPTION PLAN

         On October 9, 1996, the Company's  Board of Directors  ratified a stock
option plan (the "1996  Plan") under which the Company may grant  qualified  and
non-qualified incentive stock options to employees,  directors, and consultants.
As part of the  provisions  of the  plan,  the  Company  may  grant,  but is not
obligated to grant, options that include reload features.

         Options  granted  generally  have terms from one to five years from the
date of grant and generally vest  immediately  or ratably over their terms.  The
exercise price of incentive stock options granted under the plan may not be less
than 100% of the fair market value of the Company's  common stock on the date of
the grant. For a person who at the time of the grant owns stock representing 10%
of the voting power of all classes of the Company's stock, the exercise price of
the incentive  stock options granted under the plan may not be less than 110% of
the fair market value of the common  stock on the date of the grant.  During the
year ended June 30,  1999,  the Company  amended and  restated  the 1996 Plan to
allow employees 90 days after separation from the Company to exercise all vested
options.  In  addition,  during the year ended June 30, 2000,  the  stockholders
approved an  amendment  to increase  the  authorized  shares under the plan from
5,500,000 shares to 11,500,000 shares.

         In  January  2001,  the  Company's  Board  of  Directors  approved  the
repricing of all outstanding  employee stock options to $0.593 per share.  Prior
vesting  schedules  and the number of shares  underlying  the  options  remained
unchanged.  In April  2001,  the  Company's  Board  of  Directors  approved  the
repricing  of all  outstanding  options of certain  officers and managers of the
Company to $0.13 per share in  consideration  for  reductions  in salary.  These
options now require variable accounting  treatment,  with appropriate charges to
compensation  expense in future  reporting  periods  as the market  price of the
Company's  common stock  fluctuates.  The market price of the  Company's  common
stock on June 30, 2001 was $0.62 per share,  resulting in  compensation  expense
for fiscal year 2001 of  approximately  $2.27  million.  The market price of the
Company's common stock on December 31, 2001 was $0.06 per share,  which is lower
than  previously  issued option prices  resulting in no additional  compensation
expense being recorded.

         The Company  applies APB  Opinion  No. 25 in  accounting  for its fixed
stock granted to employees.  Accordingly,  since the market value and the option
price of the Company's stock were equal on the measurement date, no compensation
cost has been  recognized  for new  issuances  under the plan in the  six-months
ended  December  31,  2001,  and  years  ended  June  30,  2001  and  2000.  Had
compensation  cost been  determined on the basis of fair value  pursuant to SFAS
No. 123, net loss and loss per share would have been impacted as follows:
<TABLE>
<CAPTION>

                  (Amounts in Thousands, Except Per Share Data)

                                                            December 31,    June 30,      June 30,
                                                                2001          2001          2000
                                                            -----------    ----------    ----------
<S>                                                         <C>            <C>           <C>
Net Loss
   As reported............................................  $ (11,966)     $ (51,627)    $ (25,034)
                                                            ===========    ==========    ==========

   Pro forma..............................................  $ (12,456)     $ (61,201)    $ (28,280)
                                                            ===========    ==========    ==========
Basic and Diluted Loss Per Share
   As reported............................................    $ (0.25)       $ (1.66)      $ (1.47)
                                                            ===========    ==========    ==========

   Pro forma..............................................    $ (0.26)       $ (1.96)      $ (1.66)
                                                            ===========    ==========    ==========
</TABLE>


         The  pro  forma  amounts  were   estimated   using  the   Black-Scholes
option-pricing  model with the following  assumptions  for the six-months  ended
December 31, 2001 and years ended June 30, 2001 and 2000:
<TABLE>
<CAPTION>
                                                    December 31,     June 30,       June 30,
                                                        2001           2001           2000
                                                    -----------    ------------    ----------
<S>                                                  <C>           <C>              <C>
Risk-Free Interest Rate.........................          4.0%             5.0%      5.5-6.9%
Expected Life...................................     3-4 years        3-4 years     3-7 years
Expected Volatility.............................        227.2%     121.1-166.4%        121.1%
</TABLE>

         Expected lives are equal to the remaining option terms for all years.


                                      F-21
<PAGE>

         Following is a summary of the status of options  outstanding during the
six-months ended December 31, 2001 and years ended June 30, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                                    Weighted
                                                      Number of        Exercise     average
                                                     shares under       price       exercise
                                                       options          range        price
                                                     ------------     ----------    --------
<S>                                                   <C>             <C>             <C>
        Outstanding at July 1, 1999............        4,082,874      $1.47-9.97      $2.58
        Granted................................        4,310,038      2.31-22.50       7.14
        Canceled...............................        (646,969)      1.47-21.13       9.62
        Exercised..............................        (677,497)       1.47-9.44       2.21
                                                     ------------
        Outstanding at June 30, 2000                   7,068,446      1.47-22.50       4.95
                                                     ============

        Options exercisable at June 30, 2000           3,179,159                       2.54


        Outstanding at July 1, 2000............        7,068,446      1.47-22.50       4.95
        Granted................................        2,003,250       0.13-3.34       1.96
        Canceled...............................       (2,214,782)     0.34-21.94       5.06
        Exercised..............................           (3,334)           0.59       0.59
                                                     ------------

        Outstanding at June 30, 2001                   6,853,580       0.13-1.04       0.31
                                                     ============

        Options exercisable at June 30, 2001           5,806,672                       0.28


        Outstanding at July 1, 2001............        6,853,580       0.13-1.04       0.31
        Granted................................          825,000       0.07-0.49       0.11
        Canceled...............................       (4,620,087)      0.13-1.04       0.26
        Exercised..............................          (54,000)      0.13-0.59       0.16
                                                     ------------
        Outstanding at December 31, 2001               3,004,493       0.07-1.04       0.34
                                                     ============

        Options exercisable at December 31, 2001       1,816,942                      $0.38
</TABLE>


The weighted  average grant date fair value of options granted in the six-months
ended December 31, 2001 and years ended June 30, 2001 and 2000 was $0.11,  $1.49
and $5.57, respectively.

         The following  table  summarizes  information  regarding  stock options
outstanding at December 31, 2001:
<TABLE>
<CAPTION>

                                     Outstanding                                 Exercisable
                     ---------------------------------------------      --------------------------
                                      Weighted
                                      Average
                                     Remaining         Weighted                        Weighted
     Exercise                       Contractual        Average                         Average
    Price Range       Number      Life (In Years)   Exercise Price        Number    Exercise Price
    -----------      ---------    ---------------   --------------      ---------   --------------
<S>                  <C>               <C>               <C>            <C>              <C>
     $0.07-0.13      1,486,999         2.10              $0.10            779,480        $0.12
      0.16-0.56        174,000         2.39               0.42             78,653         0.45
      0.59-1.04      1,343,494         1.30               0.60            958,809         0.59
                     ---------                      --------------      ---------   --------------

                     3,004,493                           $0.34          1,816,942        $0.38
                     =========                      ==============      =========   ==============
</TABLE>


                                      F-22
<PAGE>

NOTE 11--COMMITMENTS AND CONTINGENCIES

Leases

         The  Company has  property  and  equipment  under  capital  leases with
maturity  dates to  February  2004.  Certain of the  leases  are  secured by the
personal guarantee of a shareholder. As of December 31, 2001, the Company has no
future  obligation under any facility leases.  Future minimum payments under all
capital leases as of December 31, 2001 are as follows:

             Years Ending                       Operating      Capital
             December 31:                        Leases        Leases
             ------------                       ---------     ---------
                 2002                             $   -       $ 142,382
                 2003                                 -          63,542
                 2004                                 -           4,345
                 2005                                 -               -
                 2006                                 -               -
              Thereafter                              -               -
                                                ---------     ---------

Total minimum lease payments                      $   -         210,269
                                                =========

Less: amount representing interest                              (29,362)
                                                              ---------
Present value of future minimum lease payments                  180,907
Less: current portion                                           120,818
                                                              ---------
Long-term portion                                              $ 60,089
                                                              =========

         During the six-months  ended December 31, 2001, the Company  terminated
numerous leased facilities and recorded lease termination costs of approximately
$75,000.  The Company  believes  that any  obligations  that might be  remaining
attributable to the closure of these facilities are minimal.  Rental expense for
all operating  leases was $583,461,  $1,229,834  and $559,370 for the six-months
ended December 31, 2001 and years ended June 30, 2001 and 2000, respectively.


Employment Agreements

         The Company has employment  agreements with certain  employees  calling
for annual  salaries,  bonuses  and the grant of stock  options.  Certain of the
agreements were negotiated in connection with business acquisitions.


Claims and Litigation

         The Company is involved in various legal proceedings arising out of its
operations in the ordinary course of its business, including various claims that
have been  asserted  or  complaints  that have been  filed  alleging  patent and
copyright  infringement,  breach of employment  and separation  agreements,  and
non-payment under various agreements. In addition, various claims have been made
against the Company in connection  with certain of its  acquisitions,  including
breach of registration  rights  agreements.  Management  intends to contest each
case and in certain  instances  may attempt to reach a settlement  of the issues
claimed.  The  Company  does not  believe  that  these  proceedings  will have a
material  adverse  effect on its  business,  financial  condition,  or result of
operations beyond the amounts recorded in the accompanying  financial statements
for the estimated settlement of specific actions.  However, if settlement is not
reached and the matters  proceed to trial,  an unfavorable  outcome could have a
material  adverse  effect on the  Company's  financial  position  and results of
operations.


Registration Rights Agreements

         As  discussed  in Note 3, the  Company is  currently  in  violation  of
registration  rights  agreements  associated  with  the  ISG and  IRIS  purchase
agreements and certain  amendments  thereto.  The required  registration  of the
shares issued as additional  consideration  to the former owners of ISG and IRIS
is  pending  the  approval  by the  stockholders  of the  Company  of a proposed
amendment to the Company's  Articles of  Incorporation to increase the number of
authorized common shares.


                                      F-23
<PAGE>

Realty Alliance Agreement

         On May 1, 2001,  the  Company  announced  a  strategic  and  technology
relationship  with The Realty Alliance,  an alliance of independent  residential
real estate  companies in the United States.  The agreement  would have required
the  Company  to issue one  million  shares of its  common  stock to The  Realty
Alliance  and  to  issue  up to  fifteen  million  warrants  exercisable  over a
five-year  period at a price of $0.50 per  share.  The Realty  Alliance  and the
Company  subsequently  terminated  the agreement  with no further  obligation on
behalf of the Company.


NOTE 12 - INCOME TAXES

         Deferred taxes result from temporary  differences in the recognition of
certain  revenue  and  expense  items for  income  tax and  financial  reporting
purposes.  The  significant  components of the Company's  deferred taxes were as
follows as December 31, 2001 and June 30, 2001:

                                                    December 31,    June 30,
                                                       2001           2001
                                                    -----------    -----------
Deferred tax assets:
   Net operating loss carryover.............        $23,098,985    $16,901,554
   Deferred revenue.........................          1,123,743      1,876,445
   Amortization of goodwill.................                  -      2,316,879
   Accrued expenses and other...............          1,003,340        206,510
                                                    -----------    -----------
                                                     25,226,068     21,301,388
Deferred tax liabilities:
   Depreciation.............................             (5,081)        (5,081)
                                                    -----------    -----------
                                                     25,220,987     21,296,307

Less: Valuation allowance...................        (25,220,987)   (21,296,307)
                                                    -----------    -----------
   Net deferred taxes.......................        $         -    $         -
                                                    ===========    ===========


         A  valuation  allowance  has  been  established  due to  the  Company's
accumulated  losses.  The increase in the valuation  allowance  was  $3,924,680,
$9,559,612 and  $6,898,526 for the six-months  ended December 31, 2001 and years
ended  June 30,  2001 and 2000,  respectively.  In  addition,  the  Company  has
available at December 31, 2001,  approximately $70 million of unused Federal net
operating loss  carryforwards  that may be applied against future taxable income
and that expire in various  years from 2008 to 2021.  The  utilization  of these
loss  carryforwards  may be limited by certain  events  including  an  ownership
change as defined by the Internal Revenue Code.

         Deferred tax assets relating to net operating loss  carryforwards as of
December 31, 2001 include approximately  $1,190,000 associated with stock option
activity for which subsequent  recognized tax benefits, if any, will be credited
directly to shareholders' equity.

         The principal  reasons for the difference  between the effective income
tax rate and the federal statutory income tax rate are as follows:
<TABLE>
<CAPTION>

                                                           (Six Months)    (Twelve Months)    (Twelve Months)
                                                           December 31,        June 30,           June 30,
                                                               2001              2001               2000
                                                           ------------    ---------------    ---------------
<S>                                                        <C>              <C>                 <C>
Federal benefit expected at statutory rate..........       $(4,068,440)     $(17,552,559)       $(8,511,560)
Valuation allowance.................................         3,924,680         9,559,612          6,898,526
Write-down of intangible assets.....................                 -         5,337,836                  -
Write-down of investment............................                 -           585,820            850,000
Goodwill amortization...............................           123,760         2,054,192            739,862
Non-deductible expenses.............................            20,000            15,099             23,172
                                                           ------------    ---------------    ---------------

                                                           $         -      $          -        $         -
                                                           ============    ===============    ===============
</TABLE>


                                      F-24
<PAGE>

NOTE 13--HOMEMARK TRANSACTIONS

         On June  6,  2001,  the  Company  entered  into a  Securities  Purchase
Agreement with Homemark.  Homemark  agreed to purchase  5,000,000  shares of the
Company's  Series A convertible  preferred  stock,  subject to certain terms and
conditions including satisfactory completion of due diligence procedures and the
approval by the Company's  stockholders of a proposed amendment to the Company's
Articles of  Incorporation  to increase the number of authorized  common shares.
The cash  considerations  for the preferred stock was $20.0 million,  to be paid
upon closing to the Company in a series of  transactions,  the number and timing
of which were to be determined. In addition to the cash purchase price, Homemark
was to assign to the  Company  $80.0  million  of prepaid  advertising  owned by
Homemark in a national print publication.

         Concurrent  with the  Securities  Purchase  Agreement,  the Company and
Homemark entered into a Loan Agreement,  providing for a non-contingent  loan of
up to $1.0 million.  These funds were advanced to the Company by Homemark during
June 2001,  and were  payable  $500,000 on  September  30, 2001 and  $500,000 on
December 31, 2001 (see Note 8). Homemark also advanced the Company an additional
net amount of $875,000 in the form of short-term  loans during July,  August and
September  2001.  The  Securities   Purchase   Agreement  and  the  transactions
contemplated  by the  agreement  with  Homemark were subject to the approval and
ratification of a majority of the stockholders of the Company.

         On November 1, 2001 the Company entered into a Business  Separation and
Settlement  Agreement  with  HomeMark  and  HomeSeekers   Management,   Inc.  In
accordance  with the  terms of the  agreement,  the  companies  terminated,  and
released any and all obligations under, all agreements  between the parties.  In
connection with the  settlement,  and in addition to other terms and conditions,
the Company paid HomeMark its note payable balance of $1,875,000 and assigned to
HomeMark its Loan Agreement and the Security  Agreement and Financing  Agreement
dated July 16, 2001 between  EntrePort  Corporation and the Company in the total
principal amount of $500,000.


NOTE 14 - SEPARATION AND SETTLEMENT AGREEMENTS

         In July and September  2001,  and in connection  with the  transactions
with Homemark,  the Company  entered into  separation and settlement  agreements
with three of its former  officers and directors.  These  individual  agreements
provided  for the  termination  of the  officers'  employment  with the Company.
Pursuant to the  agreements,  the Company agreed to the  following:  (1) pay all
final  salary,  unpaid  personal  time off and  other  sums due,  which  totaled
approximately  $50,000  combined;  (2) pay a combined $59,000 cash to two of the
officers  in July,  and  $20,000  cash to the  other  officer  each  month  from
September 2001 through January 2002; (3) issue each officer 200,000 unrestricted
shares of the  Company's  common  stock;  (4) cancel all vested  employee  stock
options of the officers  with an exercise  price of $0.13 per share and issue to
them a  total  of  4,078,996  three-year  warrants  to  purchase  shares  of the
Company's common stock at an exercise price of $0.13 per share; and (5) issue to
the officers over a 36 month period shares of the Company's  common stock with a
combined value each month of approximately $72,000, with the number of shares to
be delivered to be  determined  by dividing  the monthly  payment  amount by the
average  closing  price of one share of the  Company's  common stock for the ten
trading  days  immediately  preceding  the  15th day of each  month.  One of the
officers  entered  into a one-year  consulting  agreement  with the  Company for
$5,000 per month  commencing in February 2002, and a note payable to the Company
by this  officer of $70,000 was  forgiven  along with  approximately  $10,000 of
accrued  interest.  Each of the agreements  contained mutual releases of certain
claims,  liabilities  or causes of actions that one party might have against the
other party. During the six-months ended December 31, 2001, the Company recorded
compensation expense of approximately $5,246,000, including an accrued liability
of  $2,731,000  and common stock and  additional  paid-in  capital of $2,249,000
attributable to these agreements.

         The  Company did not issue any stock to any of the  officers  under the
36-month provision called for by the agreements.  Similarly, the Company did not
make any cash payments  called for beyond  September 2001. On April 23, 2002 the
Company and the former officers  entered into new agreements  that,  among other
features,  voided the 36-month stock issuance provision as well as all remaining
cash obligations  under the old agreements.  The Company agreed to issue a total
of 1 million  shares of stock to each of two of the  officers  and  warrants  to
purchase 1 million  shares of the  Company's  common  stock to each of the three
officers  exercisable  during a 5 year period at an  exercise  price of $.10 per
share. The Company agreed to forgive certain indebtedness totaling approximately
$90,000  from one  officer.  Any  issuances  of common  stock or any exercise of
warrants to purchase  common stock as  contemplated  by the new  agreements  are
subject to an increase in the authorized number of common shares available which
must be approved by the Company's  stockholders.  The gain on the  settlement of
these agreements totaled  approximately $2.0 million,  which will be recorded in
the second quarter of fiscal 2002.


                                      F-25
<PAGE>

NOTE 15 --QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

         Summarized unaudited quarterly financial information for the six-months
ended  December  31, 2001 and years ended June 30, 2001 and 2000 are noted below
(in thousands, except per share amounts):
<TABLE>
<CAPTION>

                                          1st Quarter     2nd Quarter   3rd Quarter (1) 4th Quarter (2)
                                          -----------     -----------   --------------- ---------------
<S>                                          <C>              <C>             <C>             <C>
December 31, 2001
   Revenues.........                           $3,403          $2,632               -               -
   Loss from operations                        $7,748          $3,790               -               -
   Net loss.........                           $8,351          $3,615               -               -
   Basic and diluted net loss per
      share.........                            $0.17           $0.08               -               -

June 30, 2001
   Revenues.........                           $4,414          $4,883          $4,412          $3,683
   Loss from operations                        $7,841          $6,620         $14,930         $19,868
   Net loss.........                           $8,664          $7,564         $14,746         $20,653
   Basic and diluted net loss per
      share.........                            $0.39           $0.31           $0.45           $0.51

June 30, 2000
   Revenues.........                           $1,443          $2,574          $3,396          $3,677
   Loss from operations                        $2,751          $4,923          $5,786         $12,052
   Net loss.........                           $2,638          $4,787          $5,684         $11,925
   Basic and diluted net loss per
      share.........                            $0.17           $0.28           $0.32           $0.70
</TABLE>

(1)   Loss from operations and net loss include the impact of charges related to
      asset impairment and investments, totaling $7,852 in the fiscal year ended
      June 30, 2001.
(2)   Loss from operations and net loss include the impact of charges related to
      asset  impairment  and  investments,  totaling  $11,816 in the fiscal year
      ended June 30, 2001


NOTE 16 --TRANSITION PERIOD COMPARATIVE DATA

         The following  table presents  certain  financial  information  for the
six-month period ended December 31, 2001 and 2000, respectively.

                                              (Amounts in Thousands)
                                          Six-Months            Six-Months
                                            Ended                 Ended
                                      December 31, 2001     December 31, 2000
                                      -----------------     -----------------
                                                               (unaudited)

   Revenue..........................        $ 6,035              $ 9,297
   Gross profit.....................          3,185                3,821
   Loss from operations.............        (11,538)             (14,461)
   Net loss.........................        (11,966)             (16,228)





                                      F-26
<PAGE>





                                   SIGNATURES

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


                          HOMESEEKERS.COM, INCORPORATED
                          By: /S/ Thomas Chaffee
                              ------------------------------------
                              Thomas Chaffee
                              Chief Executive Officer


         KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
immediately  below  constitutes  and appoints Thomas Chaffee his true and lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for  him  or her  and in his or her  name,  place  and  stead,  in any  and  all
capacities,  to sign any and all  amendments  to this  Form 10-K and to file the
same with all exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission,  granting unto said attorney-in-fact and
agents,  and each of them,  full power and  authority to do and perform each and
every act and thing  requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person,  hereby ratifying and confirming
all that  said  attorney-in-fact  and  agents  or any of  them,  or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.


      Signature                    Title                             Date
      ---------                    -----                             ----


 /S/ Thomas Chaffee
 ---------------------  Chairman of the Board, Director          April 27, 2002
   Thomas Chaffee       and Chief Executive Officer





 /S/ Steven M. Crane
 ---------------------  President and Chief Operating Officer    April 27, 2002
   Steven M. Crane      (Principal Financial and Accounting Officer)







                                       47
<PAGE>



                                  EXHIBIT INDEX

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

     2.1       Purchase  Agreement,  dated as of July  21,  2000,  by and  among
               HomeSeekers.com  and the  Members of  Immediate  Results  Through
               Intuitive   Systems,   LLC  (incorporated  by  reference  to  the
               Company's   Current  Report  on  Form  8-K,  as  filed  with  the
               Securities and Exchange  Commission (the  "Commission") on August
               7, 2000).

     2.2       First  Amendment  to  Agreement  and Plan of Merger,  dated as of
               February  15,  2001,  by  and  among   HomeSeekers.com   and  the
               Shareholders of Information  Solutions Group, Inc.  (incorporated
               by  reference  to the same  numbered  exhibit  as filed  with the
               Company's Form 10-K for the year ended June 30, 2001).

     2.3       First  Amendment  to  Conditional  Promissory  Note,  dated as of
               February 15, 2001, by and among  HomeSeekers.com  and the Members
               of   Immediate   Results   Through   Intuitive   Systems,    LLC.
               (incorporated  by reference to the same numbered exhibit as filed
               with the Company's Form 10-K for the year ended June 30, 2001).

     3.1       Articles  of  Incorporation  of  the  Company   (incorporated  by
               reference to Exhibit 4.1 to the Company's  Registration Statement
               on Form S-3, as amended (Commission File No. 333-32586), as filed
               with the Commission on March 15, 2000 (the "S-3").

     3.2       Amended  and  Restated  Bylaws of  HomeSeekers.com,  Incorporated
               (incorporated  by  reference  to  Exhibit  3.1 to  the  Company's
               Current  Report on Form 8-K, as filed with the  Commission on May
               23, 2000).

     4.1       Form of  Common  Stock  Warrant  (incorporated  by  reference  to
               Exhibit 4.3 to the S-3).

     4.2       Registration Rights Agreement,  dated as of July 21, 2000, by and
               among  HomeSeekers.com  and  the  Members  of  Immediate  Results
               Through Intuitive Systems,  LLC (incorporated by reference to the
               Company's   Current  Report  on  Form  8-K,  as  filed  with  the
               Commission on August 7, 2000).

     4.3       Form of Common  Stock  Warrant  (Exhibit D to the Equity  Line of
               Credit  Agreement (as defined below))  (incorporated by reference
               to Exhibit 1.1 to the  Company's  Current  Report on Form 8-K, as
               filed with the  Commission  on December  19,  2000 (the  December
               8-K")).

     4.4       Registration  Rights  Agreement,  dated as of January  25,  2001,
               between the Company  and Bradley N Rotter Self  Employed  Pension
               Plan  and  Trust  (incorporated  by  reference  to the  Company's
               Quarterly  Report on Form 10-Q,  as filed with the  Commission on
               May 15, 2001 (the "May 10-Q")).

     4.5       Registration Rights Agreement,  dated as of February 15, 2001, by
               and among  HomeSeekers.com  and the  Shareholders  of Information
               Solutions  Group,  Inc.  (incorporated  by  reference to the same
               numbered  exhibit as filed with the  Company's  Form 10-K for the
               year ended June 30, 2001).

     4.6       Warrant  Agreement,  dated  as of March  15,  2001,  between  the
               Company and Bradley N Rotter Self Employed Pension Plan and Trust
               (incorporated by reference to the May 10-Q).

     7.1       Form of Credit Agreement with Fidelity National  Financial,  Inc.
               dated  October 25, 2001  (incorporated  by  reference to the same
               number exhibit as filed with the Company's Current Report on Form
               8-K, as filed with the Commission on November 5, 2001.).

     7.2       Form of  Convertible  Revolving  Promissory  Note  with  Fidelity
               National Financial, Inc., dated November 5, 2001 (incorporated by
               reference to the same number  exhibit as filed with the Company's
               Current  Report  on Form 8-K,  as filed  with the  Commission  on
               November 5, 2001.).

     7.3       Form of Purchase Warrant with Fidelity National Financial,  Inc.,
               dated  November 5, 2001  (incorporated  by  reference to the same
               number exhibit as filed with the Company's Current Report on Form
               8-K, as filed with the Commission on November 5, 2001.).

     7.4       Form of Security  Agreement  with  Fidelity  National  Financial,
               Inc.,  dated October 25, 2001  (incorporated  by reference to the
               same number exhibit as filed with the Company's Current Report on
               Form 8-K, as filed with the Commission on November 5, 2001.).


                                       48
<PAGE>

     7.5       Form  of  Business  Separation  and  Settlement   Agreement  with
               E-Home.com,  Inc. d/b/a  HomeMark,  Inc.,  dated November 1, 2001
               (incorporated  by reference  to the same number  exhibit as filed
               with the Company's  Current Report on Form 8-K, as filed with the
               Commission on November 5, 2001.).

     7.6       Form  of  Assignment  and  Assumption   Agreement  with  Fidelity
               National  Information  Solutions,  Inc.,  dated  November 1, 2001
               (incorporated  by reference  to the same number  exhibit as filed
               with the Company's  Current Report on Form 8-K, as filed with the
               Commission on November 5, 2001.).

     7.7       Form  of  Asset  Purchase   Agreement   with  Fidelity   National
               Information Solutions, Inc., dated October 25, 2001 (incorporated
               by  reference  to the  same  number  exhibit  as  filed  with the
               Company's   Current  Report  on  Form  8-K,  as  filed  with  the
               Commission on November 5, 2001.).

     7.8       Form of Management  Agreement with Fidelity National  Information
               Solutions,   Inc.,  dated  October  25,  2001   (incorporated  by
               reference to the same number  exhibit as filed with the Company's
               Current  Report  on Form 8-K,  as filed  with the  Commission  on
               November 5, 2001.).

     10.1      Settlement Agreement, dated as of November 21, 2000, by and among
               Terradatum,  LLC, Steven  Hightower,  Peter Krause and William D.
               Biggs  (incorporated  by  reference  to the  Company's  Quarterly
               Report on Form 10-Q, as filed with the Commission on February 14,
               2001 (the "February 10-Q")).

     10.2      Settlement Agreement, dated as of November 28, 2000, by and among
               the  Company,  Alpenglow,  Inc.,  Mark  Stephens  and Greg  Hubly
               (incorporated by reference to the February 10-Q).

     10.3      Equity  Line of  Credit  Agreement  (the  "Equity  Line of Credit
               Agreement"),  dated as of December  4, 2000,  between the Company
               and  Alpha  Venture  Capital,   Inc.  ("AVC")   (incorporated  by
               reference to Exhibit 1.1 to the December 8-K).

     10.4      Letter  Agreement,  dated as of December  15,  2000,  between the
               Company and AVC,  amending  the Equity  Line of Credit  Agreement
               (incorporated by reference to Exhibit 1.2 to the December 8-K).

     10.5      Promissory  Note  between  the  Company and Bradley N Rotter Self
               Employment   Pension  Plan  and  Trust  dated  January  25,  2001
               (incorporated by reference to the May 10-Q).

     10.6      Security  Agreement,  dated January 15, 2001, between the Company
               and  Bradley  N Rotter  Self  Employed  Pension  Plan  and  Trust
               (incorporated by reference to the May 10-Q).

     10.7      Securities Purchase Agreement,  dated as of June 6, 2001, between
               the Company and  E-Home.com,  Inc.  d/b/a  Homemark  ("Homemark")
               (incorporated  by reference to the  Company's  Current  Report on
               Form 8-K filed with the  Commission  on June 11,  2001 (the "June
               2001 8-K").

     10.8      Loan  Agreement,  dated June 6, 2001,  between  the  Company  and
               Homemark (incorporated by reference to the June 2001 8-K).

     10.9*     Amended and  Restated  1996 Stock  Option Plan  (incorporated  by
               reference to Exhibit 6.1 to the Company's 10-KSB (Commission File
               No.  000-23825)  for the year  ended  June 30,  1999  (the  "1999
               10-KSB")).

     10.10*    Amendment  No. 1 to  HomeSeekers.com,  Incorporated  Amended  and
               Restated  1996 Stock  Option Plan  (incorporated  by reference to
               Exhibit 4.1 to the Company's  Registration  Statement on Form S-8
               (Commission File No. 333-44786),  as filed with the Commission on
               August 30, 2000).

     10.11*    Employment  Agreement  between the Company and John Giaimo  dated
               March 9, 1999  (incorporated  by  reference to Exhibit 6.6 to the
               1999 10-KSB).

     10.12*    Employment  Agreement  between the Company and Greg Johnson dated
               March 9, 1999  (incorporated  by  reference to Exhibit 6.7 to the
               1999 10-KSB).

     10.13*    Employment  Agreement  between the Company and Doug Swanson dated
               March 9, 1999  (incorporated  by  reference to Exhibit 6.8 to the
               1999 10-KSB).


                                       49
<PAGE>

     10.14*    Employment  Agreement  between the Company and Greg Costley dated
               August 23, 1999 (incorporated by reference to Exhibit 6.11 to the
               1999 10-KSB).

     10.15     Promissory  Note between the Company and William  Tomerlin  dated
               November  22,  2000.  (incorporated  by  reference  to  the  same
               numbered  exhibit as filed with the  Company's  Form 10-K for the
               year ended June 30, 2001).

     10.16     Security Agreement between the Company and William Tomerlin dated
               November  22,  2000.  (incorporated  by  reference  to  the  same
               numbered  exhibit as filed with the  Company's  Form 10-K for the
               year ended June 30, 2001).

     10.17     Ted  C.  Jones   resignation   letter   dated   October  9,  2001
               (incorporated  by reference  to the same number  exhibit as filed
               with the Company's  Current Report on Form 8-K, as filed with the
               Commission on October 9, 2001.).

     10.18     Joseph   Harker   resignation   letter  dated  October  16,  2001
               (incorporated  by reference  to the same number  exhibit as filed
               with the Company's  Current Report on Form 8-K, as filed with the
               Commission on October 9, 2001.).

     10.19     David  L.   Holmes   resignation   letter   dated   October   18,
               2001(incorporated  by  reference  to the same  number  exhibit as
               filed with the  Company's  Current  Report on Form 8-K,  as filed
               with the Commission on October 9, 2001.).


     16.1      Letter  on  Change  in  Certifying  Accountant  (incorporated  by
               reference  to the  Company's  Annual  Report on Form 10-KSB filed
               with the Commission on October 6, 2001).

     16.2      Letter on Change in Certifying  Accountant from Ernst & Young LLP
               (incorporated  by reference  to the same number  exhibit as filed
               with the Company's  Current Report on Form 8-K, as filed with the
               Commission on October 16, 2001.).

     21.1      Subsidiaries  of  Registrant.  (incorporated  by reference to the
               same numbered  exhibit as filed with the Company's  Form 10-K for
               the year ended June 30, 2001).

     23.1      Consent of CORBIN & WERTZ, Independent Auditors (filed herewith).

     99.1      Escrow  Agreement,  dated as of  December  4, 2000,  between  the
               Company  and  AVC  (Exhibit  E  to  the  Equity  Line  of  Credit
               Agreement)  (incorporated  by  reference  to  Exhibit  1.1 to the
               December 2000 8-K).

     99.2      Press  Release  related to  Securities  Purchase  Agreement  with
               Homemark (incorporated by reference to the June 2001 8-K).

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

* Management contract or compensatory arrangement.

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