SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   -----------

                                    FORM 10-K
(Mark One)

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

                   For the fiscal year ended December 31, 2002

                                       OR

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

           For the transition period from ____________to ____________


                         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:  $2,447,728  (based on the average
bid and asked prices of the common stock on the Over-the-Counter  Bulletin Board
on March 20, 2003).

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock as of March 20, 2003: 48,954,561.


<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE:

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


                                     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 the Company's
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 year ended  December  31,  2002,  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) 927-2200.

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  MLS access  connectivity  products,
                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.

                                       2
<PAGE>

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.  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.

         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.

         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 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 development of the Company's marketing strategy.

Product Development

         The Company  believes  that it is critical to  continually  enhance the
performance and features of its 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.


                                       3
<PAGE>

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.

Employees

         As of March 20, 2003, the Company had a total of 70 employees.  Of this
total,  18 were in sales  and  marketing,  26 in  product  development  and data
aggregation, 17 in technical services and customer support, and 9 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. In return,  Fidelity  accepted (i) a convertible  revolving  promissory
note  (the  "Note")  and (ii) a stock  purchase  warrant  (the  "Warrant").  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.

         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.

         Short-term liabilities at December 31, 2002 include the $3,000,000 note
payable to Fidelity,  which  matured on April 24, 2003.  On April 25, 2003,  the
Company and Fidelity entered into a formal  standstill  agreement until June 30,
2003 to continue  negotiations  underway  concerning the note. Unless payment is
made in full, the terms of the note  re-negotiated,  or the note is satisfied by
some other means, Fidelity may enter into foreclosure procedures on the note.

         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.

         As a result of the  issuance to  Fidelity of the Note and the  Warrant,
Fidelity  has a currently  exercisable  right to  purchase  up to  approximately
12,238,640  shares,  or the equivalent of 25% of the  outstanding  shares of the
Company's common stock,  calculated by applying  Fidelity's right to acquire 25%
of the Company's  outstanding shares to the total of 48,954,561 shares currently
issued and  outstanding.  The actual  number of shares  issuable  to Fidelity is
likely  to be  greater  than  12,238,640  because  of  the  dilutive  effect  of
exercising  the Note and Warrant.  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.

         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.


                                       4
<PAGE>

         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
for withheld for unpaid licensing obligations of the Company


Item 2.  Description Of Property.

         The  Company has no owned real  property  either for its own use or for
investment  purposes.  The Company has one office  facility in Brea,  California
consisting of  approximately  20,000 square feet of leased space.  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  under an agreement
expiring on July 31, 2004 unless terminated earlier with sixty-days notice.


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
will require an amendment to its Articles of Incorporation increasing the number
of authorized shares of common stock in an amount necessary to accommodate these
agreements,  options and warrant exercises. This amendment will require approval
by the Company's stockholders in a Meeting of Stockholders for which the meeting
date has not yet been  established.  The Company has also 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.


                                       5
<PAGE>

                                     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, 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

First Quarter (ended March 31, 2002)................       $0.25      $0.05
Second Quarter (ended June 30, 2002)................       $0.14      $0.05
Third Quarter (ended September 30, 2002)............       $0.09      $0.04
Fourth Quarter (ended December 31, 2002)............       $0.08      $0.03


         As of December 31, 2002, there were approximately 570 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.




                                       6
<PAGE>

Item 6.  Selected Financial Data.
<TABLE>
<CAPTION>
 ---------------------------------    ---------------------------------------       -----------------------------------
 (Amounts  in  thousands,  except        Year Ended         Six-months Ended                Year Ended June 30
 per share data)                      December 31, 2002     December 31, 2001         2001         2000         1999
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 <S>                                  <C>                   <C>                     <C>          <C>          <C>
 Revenues                                       $10,020                $6,035         $17,392      $11,090       $3,419
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 Net income (loss)                                2,814               (11,966)        (51,627)     (25,034)      (4,842)
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 Basic and diluted  net income                    (0.25)
 (loss) per common share                           0.06                                 (1.66)       (1.47)       (0.53)
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 Total assets                                     1,439                 2,879           8,723       40,026       16,889
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 Long-term liabilities                              167                 2,982           1,758        1,015          383
 ---------------------------------    -----------------     -----------------       ---------    ---------    ---------
 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.  Accordingly,  the  comparisons  in this annual
report  will be for  the  twelve-month  period  ended  December  31,  2002,  the
six-month  period ended  December 31, 2001 and the years ended June 30, 2001 and
2000.

         As discussed  elsewhere in this Form 10-K, the Company has a history of
recurring losses from operations and has an accumulated deficit of approximately
$101.7  million at December 31, 2002.  Similarly,  the Company has a significant
working capital deficit and limited cash reserves. Because of these factors, the
reports of the  independent  auditors on the  Company's  consolidated  financial
statements for the year ended December 31,  2002, the six-months  ended December
31,  2001 and the years  ended June 30,  2001 and 2000  include  an  explanatory
paragraph  indicating there is substantial  doubt about the Company's ability to
continue as a going concern.

         The Company began operating with a new management team in October 2001,
borrowing $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.
The Company immediately commenced a significant restructuring of its operations,
reducing its fixed operating expenses, and consolidating its operations into one
location.  By the end of its  first  quarter  ending  March  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.  Subsequently,  the
Company announced  operating profits and net income during each of its following
three  quarterly  periods ending  December 2002. For the year ended December 31,
2002  the  Company   announced  that  its  Earnings  Before   Interest,   Taxes,
Depreciation and Amortization ("EBITDA") was in excess of $1.6 million or 16% of
gross  revenues  and  its  net  income,  subject  to  gains  recorded  from  the
re-negotiation of certain of its legacy debt, was $3.1 million.


                                       7
<PAGE>

         Although the Company has  recently  experienced  profitability  for the
first time in its history, there can be no assurances of continued profitability
and the  Company  may  record  losses in the  foreseeable  future.  The  Company
continues  to maintain a  significant  working  capital  deficit  from its prior
operations 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 although
the Company's  significant working capital deficit and limitations  attributable
to its capital structure make it difficult to attract  additional debt or equity
capital.  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.

         There can be no  assurances  that the  Company  will be able to sustain
profitable  operations  or that the Company can  successfully  continue with its
plan to 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 possible  that the Company  would cease  operations or
otherwise seek protection under Federal  bankruptcy laws. (See "Risk Factors and
Cautionary Statement Regarding Forward-Looking Information.")

Results of Operations

         Business acquisitions and comparability

         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 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.  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.
Accordingly,  certain  categories of revenue and expense are dissimilar  between
periods due to differing  accounting systems between the entities acquired.  The
Company  changed  its  fiscal  year end from June 30 to  December  31,  filing a
transitional   report  for  the  six-month   period  ended  December  31,  2001.
Accordingly,  the operating  results for the year ended  December 31, 2002,  the
six-months  ended  December  31, 2001 and the years ended June 30, 2001 and 2000
are not comparable.

         Revenues

         For the year  ended  December  31,  2002,  desktop  software  sales and
related  revenues were $3.6 million or 36.3% of total revenues.  Website hosting
revenues  accounted for $2.5 million or 24.7% of total revenue.  Programming and
custom  development  revenues  were  $2.9  million  or 28.7% of total  revenues.
Included in custom  development  revenues was the one-time  recognition  of $1.2
million associated with the delivery of one custom software project.  Web portal
advertising and other revenues were $1.0 million or 10.3% of total revenues.

         For the six-months ended December 31, 2001,  software sales and license
revenues  (including  $1.5  million in revenues  attributable  to the  Company's
discontinued  MLS  operations)  were $3.2  million  or 53.8% of total  revenues.
Website hosting revenues,  programming, custom development, portal revenues, and
other revenues were $2.8 million or 46.2% of total revenues.

         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.


                                       8
<PAGE>

         Cost of revenues

         Cost of revenues  during the year ended December 31, 2002 totaling $1.8
million  was  primarily  composed  of salary  costs  incurred  attributable  for
production  and  customer   services,   computer   systems  hosting  costs,  and
third-party  royalties.  Cost of  revenues  totaling  $2.0  million  during  the
six-months  ended  December 31, 2001 was primarily  composed of salary costs and
royalties.  The noticeable  variance between periods is attributable to the lack
of costs  associated  with the  discontinued  MLS  operations  and a significant
decrease in personnel and related salary costs between periods.

         Cost of revenues  decreased  from $13.6  million  during the year ended
June 30, 2001 to $2.0 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  recognized during the year ended December 31, 2002
totaled $7.7 million.  Of this total, $1.1 million was recorded for depreciation
and amortization  expenses.  General operating expenses totaled $6.7 million and
included $4.4 million attributable to salary and compensation expenses, $750,000
for professional and consulting fees (including  accounting and legal services),
$683,000 for facilities  and  communications  expenses,  $244,000 for travel and
lodging expenses, and $174,000 for insurance expenses.

         Operating expenses  recognized during the six-months ended December 31,
2001  totaled  $15.6  million.  Of this total,  $1.7  million was  recorded  for
depreciation  and  amortization  expenses.  After careful  assessment of various
factors,  management  determined it was  appropriate to write down the remaining
value of its intangible assets. Accordingly,  such assets were written down by a
total of $1.0 million during the six-months ended December 31, 2001.

         General  operating   expenses  incurred  during  the  six-months  ended
December 31, 2001 totaled $12.9 million which included $5.2 million attributable
to separation  and  settlement  agreements  with three of the  Company's  former
officers and directors  which were  subsequently  re-negotiated  during the year
ended December 31, 2002.  (See "Other income  (expense)"  below).  The remaining
expenses included $4.3 million attributable to salary and compensation expenses,
$1.2  million for  facilities  and  communications  expenses,  $1.1  million for
professional,  consulting and outside service fees, $318,000 for advertising and
marketing, and $246,000 for travel and lodging.

         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.


                                       9
<PAGE>

         For the years  ended June 30, 2001 and 2000,  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  years  ended  June 30,  2001  and  2000,  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 $600,000.

         For  the  years  ended  June  30,  2001  and  2000,   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 between periods.

         Other income (expense)

         Net other income at December 31, 2002 totaled $2.3 million. Included in
this amount was $2.2 million  recognized upon the  re-negotiation  of separation
agreements with three of the Company's former officers,  as well as $1.1 million
recognized  as gain  from  the  extinguishment  of debt  (primarily  from  trade
creditors) at less than face value.  The Company is continuing with its attempts
to re-negotiate its past due obligations  under more favorable  payment terms or
otherwise at less than face value in full  satisfaction  of the claim.  Interest
expense of $1.3 million at December 31, 2002, $1.1 million during the six-months
ended  December  31, 2001 and  $944,000 and $77,000 for the years ended June 30,
2001 and 2000 was  attributable  to notes payable with stated  interest  bearing
rates,  interest expense valuations  associated with the issuance of warrants or
amortization of debt discount during these periods.

Commitments
<TABLE>
<CAPTION>
                                                                     Payments Due by Period
                                              -----------------------------------------------------------------------
                                                              Less than        1 to           4 to           After
                                                 Total        one year        3 years        5 years        5 years
                                              -----------    -----------    -----------    -----------    -----------
<S>                                           <C>            <C>            <C>            <C>            <C>
Long-term debt                                $ 3,615,654    $ 3,610,110    $     5,544    $         -    $         -

Employment Contract - Mr. Chaffee                 647,014        360,000        287,014              -              -

Employment Contract - Mr. Crane                   606,667        260,000        346,667              -              -

Other Employment Contracts - Non-Officers         444,542        212,542        232,000

Capital Lease Obligations                          72,956         68,743          4,213              -              -

Operating Lease                                   467,611        292,380        175,231              -              -
                                              -----------    -----------    -----------    -----------    -----------

Total Cash Commitments                        $ 5,854,444    $ 4,803,775    $ 1,050,669    $         -    $         -
                                              ===========    ===========    ===========    ===========    ===========
</TABLE>


                                       10
<PAGE>

Liquidity and Capital Resources

         The Company has limited cash reserves and a working  capital deficit of
$11.7   million  at  December  31,  2002.   Although  the  Company   experienced
profitability  for the first time in its history,  there can be no assurances of
continued  profitability  and the Company may record  losses in the  foreseeable
future.  The Company has  inadequate  cash  reserves to fully  satisfy its trade
debts,  the  majority  of which are  significantly  past  due.  The  Company  is
considering entering into other arrangements or business combinations that would
provide  the  Company  with  incremental   working   capital,   increased  sales
opportunities,  or redundant cost savings. Similarly, the Company is considering
obtaining   additional  debt  or  equity  financing.   However,   the  Company's
significant  working  capital  deficit and the  limitations  attributable to its
current  capital  structure  make it  exceedingly  difficult,  or in many  cases
impossible, to attract business partners, additional debt or equity capital.

         If  additional  funds can be raised  through the  issuance of equity or
convertible  securities,  the percentage  ownership of the current  stockholders
will  be  reduced  and  the new  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  or
otherwise seek protection under Federal  bankruptcy laws. (See "Risk Factors and
Cautionary Statement Regarding Forward-Looking Information.")

         The Company's note agreement with Fidelity contains conversion features
that, if converted,  would significantly  reduce the percentage ownership of the
current stockholders.  Additionally,  Fidelity has a currently exercisable right
to purchase up to approximately  12,238,640  shares, or the equivalent of 25% of
the  outstanding  shares of the Company's  common stock,  calculated by applying
Fidelity's right to acquire 25% of the Company's outstanding shares to the total
of 48,954,561  shares  currently  issued and  outstanding.  The actual number of
shares issuable to Fidelity is likely to be greater than  12,238,640  because of
the dilutive  effect of exercising  the Note and Warrant.  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.

         Although  the Company  significantly  reduced  its overall  liabilities
between  periods,  there can be no assurances that the Company can  successfully
continue  its plan to  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 possible  that the Company  would cease
operations  or  otherwise  seek  protection   under  Federal   bankruptcy  laws.
Accordingly, because of the Company's significant history of net losses, working
capital deficit, accumulated deficit and uncertainty as to its ability to secure
additional financing or satisfy its existing trade creditors, the reports 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 1 of the notes to the consolidated financial statements.

         During the year ended  December  31,  2002,  the  Company  successfully
reduced its total  liabilities  by $4.8 million or 27.6% while using $797,000 of
its cash reserves from the prior period. Much of this reduction came as a result
of  re-negotiating  past due sums or settling  accounts payable  obligations for
less than face value.  However,  at the end of the period,  current  liabilities
exceeded  current assets by $11.7 million and total  liabilities  exceeded total
assets by $11.5 million.  Although the Company  generated  operating profits and
net  income  for the  first  time in its  history,  the  Company  maintained  an
accumulated  deficit of  approximately  $101.7 million at the end of the period.
Included in current  liabilities at December 31, 2002 are significant amounts of
past due accounts  payable and short-term  debt from prior periods (the "legacy"
debt) of which the Company is  continuing  in its  attempts to settle in full or
re-negotiate  the payment terms with its creditors.  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.  Short-term  liabilities  at December 31, 2002
also include the $3 million note payable to Fidelity, which matured on April 24,
2003.  On April  25,  2003,  the  Company  and  Fidelity  entered  into a formal
standstill  agreement  until June 30,  2003 to  continue  negotiations  underway
concerning  the  note.  Unless  payment  is made in full,  the terms of the note
re-negotiated,  or the note is satisfied by some other means, Fidelity may enter
into foreclosure procedures on the note.


                                       11
<PAGE>

         The  Company  has a history  of  generating  negative  cash  flows and,
although  it is  generating  positive  cash flows  sufficient  to cover  current
operating expenses,  the Company's settlements of legacy debt obligations caused
it to record a net use of cash in  operating  activities  during  the year ended
December  31,  2002 in the  amount  of  $310,000.  Net  cash  used  for  capital
expenditures during 2002 was $134,000 and repayments of note payable obligations
totaled  $353,000.  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.

         During the  six-months  ended  December 31, 2001, the operations of the
Company  were partly  funded  through the issuance of equity  securities  and by
increased  accounts payable and accrued  expenses.  Subject to these activities,
the 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  statements  of cash  flows  for the
six-months  ended  December  31,  2001 and for the year ended June 30,  2001,  a
significant  portion of the operating  expenses were non-cash,  including  write
down of assets, compensation expense from option repricings and common stock and
warrants  issued for  services  and  interest.  On October  25, 2001 the Company
entered into a loan agreement with Fidelity securing $3 million in net proceeds.
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 that was quickly  absorbed in
operations.  Subject  to these  transactions,  net cash  provided  by  financing
activities  was $1.8  million  during the  six-months  ended  December 31, 2001.
Simultaneous  with the  execution  of the  note,  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 million.  The
purchase was  consummated on December 3, 2001  generating net cash available for
working capital purposes of approximately  $1.7 million (see above).  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.


                                       12
<PAGE>

The reports of our  independent  auditors  express  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 has limited cash reserves and a working  capital deficit of
$11.7   million  at  December  31,  2002.   Although  the  Company   experienced
profitability  for the first time in its history,  there can be no assurances of
continued  profitability  and the Company may record  losses in the  foreseeable
future.  The Company has  inadequate  cash  reserves to fully  satisfy its trade
debts,  the  majority  of which are  significantly  past  due.  The  Company  is
considering entering into other arrangements or business combinations that would
provide  the  Company  with  incremental   working   capital,   increased  sales
opportunities,  or redundant cost savings. Similarly, the Company is considering
obtaining   additional  debt  or  equity  financing.   However,   the  Company's
significant  working  capital  deficit and the  limitations  attributable to its
current  capital  structure  make it  exceedingly  difficult,  or in many  cases
impossible, to attract business partners, additional debt or equity capital.

         Accordingly,  because of the Company's  history of net losses,  working
capital deficit, accumulated deficit and uncertainty as to its ability to secure
additional   financing,   the  reports  of  the  independent   auditors  on  the
consolidated  financial  statements contain 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 1 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, it will be severely limited in its ability to implement any
operating  plans for the growth of the Company.  In fact,  should the Company be
unable  to  obtain  financing,  it may not be able to meet  necessary  operating
obligations and it is possible that it may cease operations.

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

         In order to fund  its  operations,  the  Company  issued a  substantial
number of equity  securities.  Coupled  with a  decreasing  stock  price,  these
issuances  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.  The Company has  experienced  a  significant
decline in its stock price.  Accordingly,  any  issuances  of equity  securities
necessary  for the Company to fund its  business  would  result in even  greater
dilution to our stockholders.


                                       13
<PAGE>

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, 2003 the Company had 48,954,561  shares of common stock
outstanding.  In  addition,  as of that date  there  were  options  to  purchase
2,538,582 shares of common stock and warrants to purchase  36,761,096  shares of
common stock outstanding.  Similarly, in connection with the note from Fidelity,
Fidelity  has a currently  exercisable  right to  purchase  up to  approximately
12,238,640  shares,  or the equivalent of 25% of the  outstanding  shares of the
Company's common stock,  calculated by applying  Fidelity's right to acquire 25%
of the Company's  outstanding shares to the total of  48,954,561shares of common
stock issued and  outstanding.  The actual number of shares issuable to Fidelity
is likely to be  greater  than  12,238,640  because  of the  dilutive  effect of
exercising  the Note  and  Warrant.  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.

         Any  increase in the  authorized  capital  requires an amendment to the
Articles  of  Incorporation,  which must be approved  by the  stockholders.  The
Company  anticipates it will seek approval to increase the authorized  number of
shares of common stock in a Meeting of  Stockholders  for which the meeting date
has not yet been  established.  If the Company does not receive approval of this
increase,  it will be forced  to  default  on its  obligations.  Similarly,  the
Company  relied  heavily on the issuance of common stock in the past for 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 for the purpose of funding
its current operation or for raising additional capital necessary for the growth
of the Company.

The Company has only recently  achieved  profitability  and may record losses in
the foreseeable future.

         The  Company  recorded  net income of $2.8  million  for the year ended
December 31, 2002  whereas the net loss for the  six-months  ended  December 31,
2001 was $12.0 million.  The Company had an  accumulated  deficit as of December
31,  2002 of $101.7  million.  Although it has  significantly  reduced its fixed
operating  expenses,  the  Company  may  record  net losses in the future due to
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,  its business,
operating  results and financial  condition  will be  materially  harmed and the
Company 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.

         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.


                                       14
<PAGE>

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.  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.


                                       15
<PAGE>

         The Company must attract and retain  personnel  while  competition  for
personnel in the industry is intense.  Given the Company's financial  condition,
it may be unable to retain its 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
knowledgebase,  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.


                                       16
<PAGE>

         The Company's  inability to successfully  address these risks adversely
affected its business,  financial condition and results of operations.  Up until
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 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.


                                       17
<PAGE>

         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.


                                       18
<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.


                                       19
<PAGE>

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.

         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.

Critical accounting policies and estimates.

         Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses the Company's consolidated  financial statements,  which
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America. The preparation of these consolidated financial
statements requires management to make estimates and assumptions that affect the
reported  amounts  of assets  and  liabilities  at the date of the  consolidated
financial  statements and the reported  amounts of revenues and expenses  during
the  reporting  period.  Continually,  management  evaluates  its  estimates and
judgments,  including  those related to bad debt reserves,  revenue  recognition
including  deferred  revenue,   liabilities   related  to  warrants,   financing
operations, and contingencies and litigation. Management bases its estimates and
judgments  on  historical  experience  and on  various  other  factors  that are
believed to be reasonable under the circumstances, the results of which form the
basis for making  judgments  about the carrying value of assets and  liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions and conditions;  however, management
believes that the estimates,  including those for the above-described items, are
reasonable.


Item 7A. Quantitative and Qualitative Disclosure About Market Risk

         As of December 31, 2002 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, 2002, 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  November  12,  2002,  Corbin & Wertz were  dismissed  as
         independent accountants for HomeSeekers.com, Incorporated.

                (2) The report of Corbin & Wertz for the six-month  period ended
         December 31, 2001 contained no adverse opinion or disclaimer of opinion
         and was not  qualified  or  modified  as to audit  scope or  accounting
         principle.   However,  the  report  contained  a  paragraph  expressing
         substantial doubt about the Registrant's ability to continue as a going
         concern.  Corbin & Wertz did not serve as independent  accountants  for
         the Registrant during any prior periods.

                (3) The  decision  to change  accountants  was  approved  by the
         Registrant's board of directors.

                (4) In connection with its audit for the six-month  period ended
         December  31,  2001 and  through  November  12,  2002 there had been no
         disagreements   with  Corbin  &  Wertz  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  Corbin  &  Wertz,  would  have  caused  them  to make
         reference  thereto  in  their  report  on  the  consolidated  financial
         statements for such years.


                                       20
<PAGE>

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

                (6) 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.

                (7) 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 consolidated financial statements for such years.

                (8) 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  Stonefield  Josephson,  Inc. as its new
         independent  accountants  as of November 15, 2002.  During the two most
         recent  years and through  November 15, 2002,  the  Registrant  has not
         consulted  with  Stonefield  Josephson,  Inc.  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 consolidated financial statements.

                (2) The Company  requested that Corbin & Wertz furnish it with a
         letter  addressed to the SEC stating  whether or not it agreed with the
         above  statements.  A copy of such letter was filed as Exhibit  16.3 to
         Form 8-K dated November 18, 2002.


                                    PART III


Item 10.  Directors and Executive Officers, Promoters and Control Persons.

         The  following  sets forth  information  concerning  the  directors and
executive officers of the Company:

 Name                                   Age     Position Held
 ----                                   ---     -------------
 Thomas A. Chaffee, Jr................   38     Chairman of the Board and Chief
                                                Executive Officer
 Steven M. Crane......................   47     President, Chief Operating
                                                Officer, and Director
 James Sherry.........................   60     Director
 Fred R. Deluca.......................   52     Director

         The  Company's  directors  will serve in such  capacity  until the next
meeting of the stockholders of the Company. The officers serve at the discretion
of the Company's directors.

         Thomas Chaffee was appointed to the Board of Directors in June 2001 and
has served as the Company's  Chairman of the Board and Chief  Executive  Officer
since October 2001.  Mr. Chaffee is the founder and Chief  Executive  Officer of
Chaffee Interactive,  Inc., a fully-integrated  Internet  professional  services
company.  Since 1988, he and his company have served as advisers and consultants
to large and middle  market  organizations  seeking  to  maximize  resources  by
creating  quantifiable  results  in the  Internet  space.  He also  is a  highly
requested speaker and industry expert on e-commerce,  focusing on the fragmented
real estate industry and its need for change.


                                       21
<PAGE>

         Steven  Crane was  appointed to the Board of Directors in July 2002 and
has served as the Company's President and Chief Operating Officer since December
2001. Since May 2000 Mr. Crane has been a Partner with Tatum CFO Partners,  LLP,
a professional  provider of financial and information  technology services.  For
six years prior to this,  Mr. Crane was the  President  of Adler  Communications
Group, a marketing and sales support service provider specializing in technology
products  and  businesses.  Prior to this,  Mr. Crane was the  President,  Chief
Operating  Officer,  and  Director  for RGB  Computer & Video,  Inc.  (NASDAQ) a
provider of personal computer-based video editing systems. Mr. Crane also served
as the Senior Vice President - Finance and  Administration,  and Chief Financial
Officer for CompuTrac,  Inc (AMEX),  a provider of integrated  turnkey  computer
systems  designed  specifically for the legal  marketplace.  Mr. Crane began his
career in 1979 with Price Waterhouse, an international public accounting firm.

         James Sherry was appointed to the Board of Directors in July 2002.  For
the past four and one-half  years,  Mr.  Sherry has lead  Innovative  Solutions,
Inc., a consulting firm providing the real estate industry expert  assistance in
navigating the changing business  environment.  For three years prior to joining
Innovative  Solutions,  Inc., he was President  and Chief  Executive  Officer of
Interealty,  the nation's largest MLS services vendor. He has been active in the
real estate industry and an industry consultant for over twenty years.

         Fred Deluca was appointed to the Board of Directors in July 2002. Since
December  2000 Mr.  Deluca  has  been the  Chairman  of  Aristotle  Broadcasting
Networks, a multimedia communications  corporation.  From 1982 and continuing to
this  day,  Mr.  Deluca  has  served in  various  capacities  with the  American
Institute of Architects,  including its Chief Financial,  Chief  Operating,  and
Chief  Executive  Officer.  Prior to this,  Mr.  Deluca  served  in a  financial
management  capacity with both the American Petroleum Institute and the American
Association of Retired Persons.

         Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section 16(a) of the  Securities  Exchange Act of 1934, as amended (the
"1934 Act"),  requires the  Company's  directors  and  executive  officers,  and
persons who own more than ten percent (10%) of the Company's  outstanding Common
Stock,  to file with the Securities and Exchange  Commission (the "SEC") initial
reports of  ownership  and report  changes in ownership  of Common  Stock.  Such
persons are  required by SEC  regulations  to furnish the Company with copies of
all such reports they file.

         To the Company's  knowledge,  based solely on a review of the copies of
reports  furnished  to  the  Company,  all  Section  16(a)  filing  requirements
applicable  to our  officers,  directors  and  greater  than ten  percent  (10%)
beneficial owners have been complied with.


Item 11.  Executive Compensation

         The following table sets forth,  for the six-months  ended December 31,
2001 and the  twelve-months  ended December 31, 2002 the aggregate  compensation
awarded to, earned by, or paid to Mr.  Chaffee,  the Company's  Chief  Executive
Officer and Mr. Crane, the Company's President and Chief Operating Officer.  The
Company did not grant any bonus,  restricted stock awards or stock  appreciation
rights  nor make any  long-term  incentive  plan  payouts or  payments  of other
compensation to any of the Named Executive Officers during these periods.

                                                               Salary
Name and Principal Position            Period              Compensation (1)
---------------------------      -------------------       ----------------
                                 Six-months ended
Thomas A. Chaffee, Jr.           December 31, 2001           $   40,000
Chief Executive Officer          Twelve-months ended
                                 December 31, 2002           $  360,000

                                 Six-months ended
Steven M. Crane                  December 31, 2001           $   73,846
President, Chief Operating       Twelve-months ended
Officer                          December 31, 2002           $  235,529


(1) Although earned and accrued,  none of Mr. Chaffee's salary  compensation has
been paid to-date.


                                       22
<PAGE>

Compensation of Directors

         The Company  reimburses all members of the Board of Directors for their
expenses  incurred in  connection  with their  activities  as  Directors  of the
Company.

Employment  Contracts  and  Termination  of  Employment  and  Change in  Control
Arrangements

         Thomas  Chaffee is employed by the  Company as its  Chairman  and Chief
Executive Officer pursuant to an employment agreement with a term of three years
dated  October  18,  2001.  Under the terms of the  agreement,  Mr.  Chaffee  is
entitled  to  a  base  salary  of  $360,000  per  annum,  an  annual   incentive
compensation  bonus  based  upon  established  performance  and  goals,  and the
reimbursement  of expenses  incurred in  connection  with his  employment by the
Company.  Mr. Chaffee is eligible to participate in any employment benefit plans
established by the Company.  Mr.  Chaffee is indemnified by the Company  against
actions or proceedings resulting from his capacity as an officer and director of
the Company and,  upon  termination,  including  termination  attributable  to a
"Change in  Control"  as set forth in federal  securities  law,  Mr.  Chaffee is
entitled to receive  severance  compensation  equivalent to twelve-months of his
base salary.

         Steven  Crane is  employed by the  Company as its  President  and Chief
Operating Officer pursuant to an employment agreement with a term of three years
dated May 1, 2002. Under the terms of the agreement,  Mr. Crane is entitled to a
base salary of $260,000 per annum, an annual incentive  compensation bonus based
upon  established  performance  and goals,  and the  reimbursement  of  expenses
incurred in connection with his employment by the Company. Mr. Crane is eligible
to participate in any employment  benefit plans established by the Company.  Mr.
Crane is indemnified  by the Company  against  actions or proceedings  resulting
from  his  capacity  as an  officer  and  director  of  the  Company  and,  upon
termination,  including termination attributable to a "Change in Control" as set
forth in federal  securities  law,  Mr.  Crane is entitled to receive  severance
compensation equivalent to twelve-months of his base salary.

Compensation Committee Interlocks and Insider Participation

         James Sherry and Fred Deluca serve as the  Compensation  Committee  for
the Company. Neither individual is an officer of the Company

Board Compensation Committee Report on Executive Compensation

         The Compensation  Committee of the Board of Directors (the "Committee")
is responsible for establishing and administering the policies for the Company's
compensation programs and for approving the compensation levels of the executive
officers of the Company,  including its Chief Executive  Officer.  In making its
determination,  the  Committee  considers  various  factors,  including the base
compensation  levels offered by competing  companies and the need to attract and
retain the qualified  individuals  necessary to manage the Company's  operations
and the difficulties  incurred due to the distressed  financial condition of the
Company.

Performance Graph

         The following graph sets forth the cumulative total shareholder  return
on the Company's  Common Stock over the last six calendar  years, as compared to
the total returns of the Nasdaq  Composite  Index and a group of peer  companies
(the "Peer Group"). The graph assumes $100 was invested on December 31, 1997.

         The Peer Group  includes the  Company,  Fidelity  National  Information
Solutions  Inc., and  Homestore,  Inc. The Peer Group consists of companies that
are engaged in providing  technology  products  and services in the  residential
real estate industry.


                                       23
<PAGE>

Assumes $100 Invested on December 31, 1997

                          12/97    12/98     12/99    12/00    12/01    12/02
                          ------   ------   -------   ------   ------   ------
Homeseekers.com, Inc.     100.00   233.18    604.61    24.42     2.76     2.30
SIC Code Index            100.00   205.78   1007.26   230.19   148.53   194.50
Nasdaq Composite Index    100.00   139.63    259.13   157.32   124.44    85.05


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets forth,  as of March 20, 2003,  the number of
shares of Common Stock of the Company which were owned  beneficially by (i) each
person  who is known by the  Company  to own  beneficially  more  than 5% of its
Common Stock,  (ii) each director and nominee for director,  (iii) the executive
officers of the Company,  and (iv) all directors and officers as a group. Unless
otherwise indicated,  the address of each beneficial owner is 2800 Saturn, Suite
200, Brea, California 92821.
<TABLE>
<CAPTION>
 Name and Address                       Amount and Nature of            Percentage of
 Of Beneficial Owner                    Beneficial Ownership (1) (2)    Shares Owned (1)
 -------------------                    ----------------------------    ----------------
<S>                                     <C>                             <C>
 Thomas A. Chaffee, Jr.                               0  (3)                 *
 Steven M. Crane                                825,000  (4)                 1.66%
 James Sherry                                         0                      *
 Fred R. Deluca                                 400,000                      *
 All directors and executive officers        1,225,0000                      2.4%
 as a group (4 persons)
 --------------------------
 * Indicates less than 1% of outstanding shares owned.
</TABLE>

(1)      A person is deemed to be the beneficial owner of securities that can be
         acquired  by such  person  within  60 days  from  March  20,  2003 upon
         exercise  of  options,   warrants  and  convertible  securities.   Each
         beneficial owner's percentage  ownership is determined by assuming that
         options,  warrants  and  convertible  securities  that are held by such
         person  (but  not  those  held  by  any  other  person)  and  that  are
         exercisable within 60 days from March 20, 2003 have been exercised.

(2)      Unless  otherwise noted, the Company believes that all persons named in
         the table have sole  voting and  investment  power with  respect to all
         shares of Common Stock beneficially owned by them.

(3)      Does not include options to purchase  6,000,000 shares of the Company's
         Common  Stock at an  exercise  price of $.03 per share  pursuant to Mr.
         Chaffee's  employment  agreement  for which the grant is  subject to an
         increase  in the  authorized  number of common  shares  issuable by the
         Company which must be approved by the Company's stockholders.

(4)      Does not include options to purchase  3,600,000 shares of the Company's
         Common  Stock at an  exercise  price of $.09 per share  pursuant to Mr.
         Crane's  employment  agreement  for which the  grant is  subject  to an
         increase  in the  authorized  number of common  shares  issuable by the
         Company, which must be approved by the Company's stockholders.


Item 13.  Certain Relationships and Related Party Transactions

         Due to its  inability to establish  credit,  the Company  subleases its
computer-hosting  site in Burbank,  California  through Chaffee  Interactive,  a
company  wholly  owned by  Thomas  Chaffee,  the  Company's  Chairman  and Chief
Executive Officer for $30,000 on a month-to-month basis. Similarly,  the Company
contracts with Chaffee  Interactive  for web site design and marketing  services
for which the Company  does not have  available  in-house  expertise.  The total
lease  expense  and cost of design  services  recognized  during  the year ended
December  31,  2002  attributable  to this  arrangement  was  $362,879  of which
$133,380 was unpaid and was included in accounts payable at the end of the year.


                                       24
<PAGE>


                                     PART IV


Item 14.  Controls and Procedures

         Based  on the  evaluation  of the  Company's  disclosure  controls  and
procedures by Thomas Chaffee,  the Company's Chief Executive Officer, and Steven
M. Crane,  the Company's  President and Chief  Financial  Officer,  as of a date
within 90 days of the filing date of this report,  our Chief  Executive  Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective in ensuring that  information  required to be disclosed
by the Company in the reports that it files or submits under the  Securities and
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported,  within the time  period  specified  by the  Securities  and  Exchange
Commission's rules and forms.

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to the date of their  evaluation,  including any  corrective  actions
with regard to significant deficiencies and material weaknesses.


Item 15.  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:

                The Company  filed a Current  Report on Form 8-K on November 18,
                2002 reporting a change in its certifying  accountants effective
                November 12, 2002.



                                       25
<PAGE>

                          HOMESEEKERS.COM, INCORPORATED
                        CONSOLIDATED FINANCIAL STATEMENTS

                                TABLE OF CONTENTS



Report of Stonefield Josephson, Independent Auditors ....................   F-1
Report of Corbin & Wertz, Independent Auditors ..........................   F-2
Report of Ernst & Young LLP, Independent Auditors .......................   F-3
Consolidated Balance Sheets at December 31, 2002 and 2001 ...............   F-4
Consolidated Statements of Operations for the Year Ended
   December 31, 2002, the Six-months Ended December 31, 2001
   and for the Years Ended June 30, 2001 and 2000 .......................   F-5
Consolidated Statements of Stockholders' Equity (Deficit) for
   the Year Ended December 31, 2002, the Six-months Ended
   December 31, 2001, and for the Years Ended June 30, 2001 and 2000 ....   F-6
Consolidated Statements of Cash Flows for the Year Ended December
   31, 2002, the Six-months Ended December 31, 2001 and for the
   Years Ended June 30, 2001 and 2000 ...................................   F-8
Notes to Consolidated Financial Statements ..............................  F-10






                                       26
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


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

We have audited the accompanying balance sheet of HomeSeekers.com,  Incorporated
(hereinafter  referred to as the  "Company")  as of December 31,  2002,  and the
related statements of operations,  stockholders' equity (deficit) and cash flows
for the year then ended.  These financial  statements are the  responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Company as of December 31,
2002,  and the  results of its  operations  and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company has incurred significant operating losses, has
significant  negative cash flows from operations for the year ended December 31,
2002, and has working capital deficit of $10,358,000 and accumulated  deficit of
$101,739,000  at  December  31,  2002.  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 1. 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.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements  taken as a whole.  Schedule  II in Item 14  listed  in the  index of
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and are  not  part  of the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in the audit of the basic  financial  statements  and,  in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.



                                                      STONEFIELD JOSEPHSON, INC.

Irvine, California
April 25, 2003



                                       F-1
<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 (hereinafter referred to as the "Company") as of December 31, 2001,
and the related  consolidated  statements of  operations,  stockholders'  equity
(deficit) and cash flows for the six-month period then ended. In connection with
our audit,  we have also audited the related  consolidated  financial  statement
schedule for the six-month  period ended December 31, 2001.  These  consolidated
financial  statements and the consolidated  financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated  financial statements and the related consolidated
financial statement schedule 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 consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
December 31, 2001, and the results of their  operations and their cash flows for
the  six-month  period then ended,  in  conformity  with  accounting  principles
generally  accepted in the United States of America.  Also, in our opinion,  the
related consolidated  financial statement schedule,  when considered in relation
to the consolidated  financial statements taken as a whole,  presents fairly, in
all material respects, the information set forth therein.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company has incurred significant operating losses, has
significant  negative cash flows from operations for the six-month  period ended
December 31,  2001,  and has a working  capital  deficit of  $12,935,000  and an
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 1. 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


                                       F-2
<PAGE>


                Report of Ernst & Young LLP, Independent Auditors


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


We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders'  equity (deficit) and cash flows for the years ended June 30, 2001
and 2000. Our audit also included the financial statement schedule listed in the
Index at Item 15. (a) (2).  These  financial  statements  and  schedule  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United  States.  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  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.  Also, in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
financial  statements taken as a whole,  presents faily in all material respects
the information set forth therein.

The   accompanying    financial   statements   have   been   prepared   assuming
HomeSeekers.com,  Incorporated will continue as a going concern. As discussed in
Note  1,  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-3
<PAGE>

<TABLE>
<CAPTION>
                          HOMESEEKERS.COM, INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2002 AND 2001
             (Amounts in thousands, except share and per share data)

                                                                   December 31,     December 31,
                                                                       2002             2001
                                                                   ------------     ------------
<S>                                                                <C>              <C>
                                    ASSETS
 Current assets
   Cash and cash equivalents                                       $        435     $      1,232
   Accounts receivable, net of allowance for doubtful
    accounts of $40 and $190, respectively                                  516               57
   Accounts and notes receivable, related parties                          --                 92
   Other assets                                                              85               86
                                                                   ------------     ------------
      Total current assets                                                1,036            1,467

Investments, net                                                           --                 20
Property and equipment, net                                                 396            1,337
Purchased intangible assets, net                                           --                  5
Other assets                                                                  7               50
                                                                   ------------     ------------
                                                                   $      1,439     $      2,879
                                                                   ============     ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
   Accounts payable                                                $      2,935     $      3,945
   Accrued payroll and other liabilities                                  2,294            4,704
   Liability under purchase agreement                                       500              500
   Accrued liabilites related to warrants                                 1,555            1,485
   Long-term obligations, current portion, net of unamortized
   discount of $165 and $0, respectively                                  3,610            1,046
   Deferred revenue, current portion                                      1,849            2,722
                                                                   ------------     ------------
      Total current liabilities                                          12,743           14,402
Long-term liabilities
   Long-term obligations, net of unamortized discount
   of $0 and $689, respectively                                               6            2,399
   Deferred revenue                                                         161              583
                                                                   ------------     ------------
      Total long-term liabilities                                           167            2,982

Stockholders' equity (deficit)
   Common stock, $.001 par; 50,000,000 shares authorized;
      48,954,561 shares issued and outstanding                               49               49
   Additional paid-in capital                                            90,419           90,179
   Accumulated other comprehensive loss                                    (200)            (180)
   Accumulated deficit                                                 (101,739)        (104,553)
                                                                   ------------     ------------
      Total stockholders' equity (deficit)                              (11,471)         (14,505)
                                                                   ------------     ------------
                                                                   $      1,439     $      2,879
                                                                   ============     ============
</TABLE>

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


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                          HOMESEEKERS.COM, INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE YEAR ENDED DECEMBER 31, 2002, SIX-MONTHS ENDED DECEMBER 31, 2001
                     AND YEARS ENDED JUNE 30, 2001 AND 2000
                  (Amounts in thousands, except per share data)

                                              December 31,     December 31,       June 30,         June 30,
                                                  2002             2001             2001             2000
                                              ------------     ------------     ------------     ------------
<S>                                           <C>              <C>              <C>              <C>
Revenue, net                                  $     10,020     $      6,035     $     17,392     $     11,090
Cost of revenue                                      1,755            1,976           13,559            9,404
                                              ------------     ------------     ------------     ------------

   Gross profit                                      8,265            4,059            3,833            1,686
                                              ------------     ------------     ------------     ------------
Operating expenses
   Operating expenses                                6,653           12,905           27,520           22,002
   Depreciation and amortization                     1,075            1,658            5,442            2,403
   Impairment of intangible assets                       5            1,034           20,130            2,793
                                              ------------     ------------     ------------     ------------

                                                     7,733           15,597           53,092           27,198
                                              ------------     ------------     ------------     ------------

Income (loss) from operations                          532          (11,538)         (49,259)         (25,512)

Other income (expense)
   Interest expense                                 (1,286)          (1,127)            (944)             (77)
   Interest income                                       7                3               74              290
   Debt forgiveness income                           1,101             --               --               --
   Gain on reduction in fair value of
     warrant liabilities                               279               98             --               --
   Renegotiation of separation agreements            2,227             --               --               --
   Other, net                                          (46)             598           (1,498)             265
                                              ------------     ------------     ------------     ------------

                                                     2,282             (428)          (2,368)             478
                                              ------------     ------------     ------------     ------------

Net Income (loss)                                    2,814          (11,966)         (51,627)         (25,034)
Other comprehensive income (loss)                      (20)             (10)             483             (653)
                                              ------------     ------------     ------------     ------------

Total comprehensive income (loss)             $      2,794     $    (11,976)    $    (51,144)    $    (25,687)
                                              ============     ============     ============     ============

Net income (loss) per common share
    Basic                                     $       0.06     $      (0.25)    $      (1.66)    $      (1.47)
                                              ============     ============     ============     ============
    Diluted                                   $       0.06     $      (0.25)    $      (1.66)    $      (1.47)
                                              ============     ============     ============     ============
Weighted average shares outstanding
    Basic                                       48,954,561       48,622,383       31,145,564       17,031,852
                                              ============     ============     ============     ============
    Diluted                                     49,094,561       48,622,383       31,145,564       17,031,852
                                              ============     ============     ============     ============
</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)
    FOR THE YEAR ENDED DECEMBER 31, 2002, SIX-MONTHS ENDED DECEMBER 31, 2001
                     AND YEARS ENDED JUNE 30, 2001 AND 2000
                    (Amounts in thousands, except share data)

                                                                                    Accumulated
                                                                                       Other                    Note       Stock-
                                                             Additional   Invest-     Compre-                Receivable   holders'
                                          Common Stock        Paid in       ment      hensive   Accumulated     from       Equity
                                       Shares      Amount     Capital      in 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 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
Issuanace 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

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 YEAR ENDED DECEMBER 31, 2002, SIX-MONTHS ENDED DECEMBER 31, 2001
                     AND YEARS ENDED JUNE 30, 2001 AND 2000
                    (Amounts in thousands, except share data)


                                                                                    Accumulated
                                                                                       Other                     Note      Stock-
                                                             Additional   Invest-     Compre-                 Receivable  holders'
                                          Common Stock        Paid in       ment      hensive   Accumulated     from       Equity
                                       Shares      Amount     Capital      in LLC       Loss      Deficit      Officer   (Deficit)
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
<S>                                  <C>         <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       --          --         1,659       --           --          --          --         1,659
Warrants issued under separation
   and settlement agreements               --          --         1,845       --           --          --          --         1,845
Reclassification to warrant
   liabilities                             --          --        (1,583)      --           --          --          --        (1,583)
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  $   90,179  $    --     $     (180) $ (104,553) $     --    $  (14,505)
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

Renegotiation of separation
   agreements                              --          --           240       --           --          --          --           240
Net income                                 --          --          --         --           --         2,814        --         2,814
Net unrealized loss on investments         --          --          --         --            (20)       --          --           (20)
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

   Balance at December 31, 2002      48,954,561  $       49  $   90,419  $    --     $     (200) $ (101,739) $     --    $  (11,471)
                                     ==========  ==========  ==========  ==========  ==========  ==========  ==========  ==========
</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 YEAR ENDED DECEMBER 31, 2002, SIX-MONTHS ENDED DECEMBER 31, 2001
                   AND THE YEARS ENDED JUNE 30, 2001 AND 2000
                             (Amounts in thousands)
                                                                       December 31,    December 31,      June 30,        June 30,
                                                                           2002            2001            2001            2000
                                                                       ------------    ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>             <C>
Cash flows from operating activities
    Net income (loss)                                                  $      2,814    $    (11,966)   $    (51,627)   $    (25,034)
    Adjustments to reconcile net income (loss) to net
    cash used in operating activities
       Depreciation                                                           1,075             685           1,670             793
       Amortization                                                           --                973           9,670           4,519
       Impairment of intangible assets                                            5           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)
       Settlement of accounts payable and other liabilitites                 (1,101)          --              --              --
       Renegotiation of separation agreements                                (2,227)          --              --              --
       Gain on sale of assets                                                 --               (524)          --              --
       Other                                                                  --                (52)            405             (39)
       Common stock and warrants issued for services                          --              2,293           1,404             653
       Common stock, warrants and amortization of debt
          discount issued for interest                                          873             970             803           --
       Gain on reduction in fair value of warrant liabilities                  (279)            (98)          --              --
    Changes in assets and liabilities net of effect from acquisitions
       Accounts receivable                                                     (459)            143             735           1,090
       Other assets, current                                                      1             516             626            (550)
       Other assets                                                              43             164            (111)            (86)
       Accounts payable                                                          91           1,328           1,279             383
       Accrued payroll and other liabilities                                    149           2,095             661           1,090
       Deferred revenue                                                      (1,295)         (1,241)            496           1,864
                                                                       ------------    ------------    ------------    ------------
             Net cash used in operating activities                             (310)         (3,680)        (10,332)        (12,489)
Cash flows from investing activities
    Purchase of property and equipment                                         (134)            (54)         (1,008)         (2,238)
    Purchase of intangible assets                                             --              --               (212)         (1,114)
    Issuance of notes receivable                                              --              --              --               (440)
    Payments of 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           --              --
    Investment in foreign affiliate                                           --              --              --               (387)
                                                                       ------------    ------------    ------------    ------------
             Net cash provided by (used in) investing activities               (134)          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                                                         (353)           (160)           (569)         (1,232)
    Net proceeds from sale/exercise of common stock,
       options and warrants                                                   --                 10           7,520           9,968
                                                                       ------------    ------------    ------------    ------------
             Net cash provided by (used in) financing activities               (353)          1,800           8,901           8,736
                                                                       ------------    ------------    ------------    ------------
Net increase (decrease) in cash and cash equivalents                           (797)           (201)           (645)         (8,539)
Cash and cash equivalents at beginning of year                                1,232           1,433           2,078          10,617
                                                                       ------------    ------------    ------------    ------------
Cash and cash equivalents at end of year                               $        435    $      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,  December 31,    June 30,      June 30,
                                                                                 2002          2001          2001          2000
                                                                             ------------  ------------  ------------  ------------
<S>                                                                          <C>           <C>           <C>           <C>
  Cash paid for interest.................................................... $        413  $         25  $         69  $         77

  Cash paid for income taxes................................................ $          -  $          -  $          -  $          -
<CAPTION>

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

                                                                             December 31,  December 31,    June 30,      June 30,
                                                                                 2002          2001          2001          2000
                                                                             ------------  ------------  ------------  ------------
<S>                                                                          <C>           <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........          (20)          (10)          483          (653)
  Common stock and warrants issued for investment in foreign affiliate......            -             -             -         7,722
  Common stock issued for purchased intangible assets.......................            -             -             -           838
   Warrants issued in renegotiation of separation and settlement agreements.          240             -             -             -
    Note receivable canceled in renegotiation of separation and settlement
     agreements.............................................................           92             -             -             -
  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)            -             -
   Reclassification of warrant liabilities..................................            -         1,583             -             -
  Other.....................................................................            -             -           348             -

BUSINESS ACQUISITIONS
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
Purchased 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
  FOR THE YEAR ENDED DECEMBER 31, 2002, SIX-MONTHS ENDED DECEMBER 31, 2001 AND
                   FOR THE 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.

Basis of Presentation

         For the period  ended  December  31,  2001 and the years ended June 30,
2001 and 2000, 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.
For the year ended December 31, 2002, the Company's  operations were rolled into
one legal entity.  Certain  reclassifications have been made to the prior period
consolidated  financial statements to conform to the current year's presentation
and had no impact on loss from operations or net loss. 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 accompanying  consolidated  financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America,  which  contemplate  continuation of the Company as a going concern.
However, the Company has a history of losses, reporting net income for the first
time of approximately  $2,814,000  during the year ended December 31, 2002 while
incurring a loss of $11,966,000  during the six-months  ended December 31, 2001.
At December 31, 2002 the Company had a working capital deficit of  approximately
$11,707,000  and an  accumulated  deficit  of  approximately  $101,739,000.  The
Company used cash of  approximately  $310,000 and $3,680,000 to fund  operations
during the year ended December 31, 2002 and six-months  ended December 31, 2001,
respectively.  Accordingly, the reports of independent auditors on the Company's
December  31,  2002 and 2001 and June 30, 2001 and 2000  consolidated  financial
statements  include an  explanatory  paragraph  indicating  there is substantial
doubt about the  Company's  ability to continue  as a going  concern.  As of the
filing of this Form 10-K, all outstanding note obligations were in default.

         The Company has taken steps and  continues to develop plans it believes
will be  sufficient  to provide  the  Company  with the  ability to  continue in
existence.  In October 2001,  under a new management  team, 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 reduced its fixed operating expenses and
consolidated its operations into one location.  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 has
recently experienced profitability and as of December 31, 2002, has successfully
reduced its overall  liabilities by $4.8 million or 27.6% from the prior period.
However,  there can be no  assurances  that the Company  will be able to sustain
profitable  operations or that the Company can continue with its plan to satisfy
its trade creditors and debt holders.  The accompanying  consolidated  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.


                                      F-10
<PAGE>

Segment Reporting

         The Company has  determined  that for the year ended December 31, 2002,
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, 2002, 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.

Concentrations

         Concentration of Credit Risk -- Financial  instruments that potentially
subject  the  Company  to  credit  risk  consist  primarily  of cash  and  trade
receivables.  At December 31, 2002  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.

         During the year ended December 31, 2002, Fidelity National  Information
Solutions,  Inc.  ("FNIS")  accounted  for  $2,068,496 or 20.6% of the Company's
gross  revenues.  At December 31, 2002 total  receivables  from FNIS included in
accounts  receivable totaled $196,110.  During the six-months ended December 31,
2001 and the years ended June 30, 2001 and 2000,  no single  customer  accounted
for over 10% of the Company's revenues.



                                      F-11
<PAGE>

Fair Value of Financial Instruments

         The Company's financial  instruments include capital lease obligations,
long-term  debt,  cash and cash  equivalents,  accounts  receivable and accounts
payable.  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 and accounts  payable  approximate  fair value,  based upon
their short-term nature.

Financial Statements 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, the valuation of
deferred tax assets and warrant liabilities, royalty expenses to which it may be
obligated,  and the outcome of any litigation to which it may be a party. Actual
results could differ from these  estimates and it is reasonably  possible that a
change in the estimates presented will occur in the near term.

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.

Accounts Receivable

         The Company  provides an allowance for doubtful  accounts  equal to the
estimated  uncollectible  amounts. The Company's estimate is based on historical
collection  experience  and a review of the  current  status  of trade  accounts
receivable.  It is  reasonably  possible  that  the  Company's  estimate  of the
allowance for doubtful accounts will change in the near term.

Product Development Costs

         Costs incurred by the Company to develop,  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 ("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. In addition, the Company is involved
in activities to continually  improve existing  products.  These costs have been
charged to operating  expenses in the  accompanying  statements of operations in
the amounts of $0, $0, $1,389,930 and $1,413,186 for the year ended December 31,
2002,  the  six-months  ended December 31, 2001 and for the years ended June 30,
2001 and 2000, respectively.

Investments

         At December  31,  2002 and 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) as accumulated  other  comprehensive  loss.  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. At
December 31, 2002, the investments are recorded with no net realizable value.

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.



                                      F-12
<PAGE>

Purchased Intangible Assets

         At December 31, 2002 and 2001, the Company had no significant  recorded
intangible assets on the books. In previous periods, intangible assets primarily
purchased in business  acquisitions,  were stated at cost and are amortized on a
straight-line basis over periods ranging from 3 to 15 years.

Advertising

         The Company accounts for advertising costs as expenses in the period in
which they are incurred. Total advertising costs for the year ended December 31,
2002,  the  six-months  ended December 31, 2001 and for the years ended June 30,
2001 and 2000, were $91,001, $70,444, $2,097,361 and $1,854,212, respectively.

Asset Impairment

         During the year ended December 31, 2002,  the Company  adopted SFAS No.
144,  "Accounting  for the  Impairment  or  Disposal of  Long-Lived  Assets." In
accordance with SFAS No. 144, the Company recorded  impairment  losses of $5,018
during the year ended December 31, 2002. In accordance with then applicable SFAS
121, the Company recorded $1,033,982 and $13,307,860 of impairment losses during
the  six-months   ended  December  31,  2001  and  year  ended  June  30,  2001,
respectively. (See Note 6 - Purchased Intangible Assets.)

Debt Forgiveness Income

         The Company  recognizes the  forgiveness of debt as ordinary  income in
the  period  in  which  it was  forgiven.  In  general,  income  forgiveness  is
attributable  to the  renegotiation  of payment  terms and  amounts for past due
trade credit obligations of the Company.

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.

Net Income (Loss) Per Share

         Basic  and  diluted  net  income  (loss)  per  share  is  presented  in
conformity with SFAS No. 128, "Earnings per Share".

         Basic net income (loss) per share has been determined  using net income
(loss)  divided by the weighted  average shares  outstanding  during the period.
Diluted net income (loss) per share is computed by dividing net income (loss) by
the weighted average shares outstanding,  assuming all dilutive potential common
shares were issued.  At December 31, 2002, the dilutive  effect on the basic net
income per share resulted in no change.  Since the Company  incurred  losses for
the six-months ended December 31, 2001 and for the 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 the 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
the 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 for these periods.


                                      F-13
<PAGE>

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 9, as if the Company had used the fair value based  method
prescribed under SFAS No. 123, "Accounting for Stock Based Compensation."

Accrued Liabilities Related to Warrants

         The Company accounts for freestanding  derivative financial instruments
potentially  settled in its own common  stock under  Emerging  Issues Task Force
Issue No. 00-19 ("EITF 00-19"), "Accounting for Derivative Financial Instruments
Indexed to, and  Potentially  Settled in, a Company's Own Stock." As the Company
does  not  have  sufficient  authorized  shares  available  to  settle  its open
stock-based  contracts,  the  initial  fair  value of the  applicable  contracts
(consisting  primarily  of  nonemployee  stock  warrants  - see Note 8) has been
classified   as  "accrued   liabilities   related  to  warrants"   and  measured
subsequently  at fair value,  with gains and losses included in the statement of
operations.  For the year ended  December 31, 2002 and for the six-month  period
ended  December 31, 2001,  the Company  recorded a gain on the  reduction in the
fair value of warrant  liabilities  of $279,000  and $98,000,  respectively.  At
December  31,  2002 and 2001,  the  balance  of accrued  liabilities  related to
warrants was $1,555,000 and $1,485,000, respectively.

Comprehensive Income

         SFAS No. 130, "Reporting  Comprehensive  Income," establishes standards
for the reporting and display of comprehensive  income and its components in the
consolidated financial statements.

New Accounting Pronouncements

         In October 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset
Retirement  Obligations," which requires companies to record the fair value of a
liability  for asset  retirement  obligations  in the  period in which  they are
incurred. The statement applies to a company's legal obligations associated with
the retirement of a tangible long-lived asset that results from the acquisition,
construction,  and  development or through the normal  operation of a long-lived
asset. When a liability is initially recorded,  the company would capitalize the
cost,  thereby  increasing  the  carrying  amount  of  the  related  asset.  The
capitalized asset retirement cost is depreciated over the life of the respective
asset while the liability is accreted to its present value.  Upon  settlement of
the liability,  the obligation is settled at its recorded  amount or the company
incurs a gain or loss.  The  statement is effective  for fiscal years  beginning
after June 30, 2002. The adoption of this Statement by the Company on January 1,
2003 did not have a  material  impact on the  Company's  financial  position  or
results of operations.

         In October  2001,  the FASB issued SFAS No.  144,  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets."  Statement  144  addresses  the
accounting  and reporting for the  impairment or disposal of long-lived  assets.
The statement  provides a single  accounting  model for long-lived  assets to be
disposed  of.  New  criteria  must be met to  classify  the  asset  as an  asset
held-for-sale.  This  statement  also  focuses  on  reporting  the  effects of a
disposal of a segment of a business.  This  statement  is  effective  for fiscal
years beginning  after December 15, 2001. In accordance with the statement,  the
Company recorded  impairment losses of $5,018 during the year ended December 31,
2002.

         In April 2002, the FASB issued  Statement No. 145,  "Rescission of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from  Extinguishment  of Debt," and an amendment of that Statement,  FASB
Statement  No.  64,  "Extinguishments  of  Debt  Made  to  Satisfy  Sinking-Fund
Requirements"  and FASB Statement No. 44,  "Accounting for Intangible  Assets of
Motor  Carriers." This Statement  amends FASB Statement No. 13,  "Accounting for
Leases," to  eliminate an  inconsistency  between the  required  accounting  for
sale-leaseback  transactions  and the  required  accounting  for  certain  lease
modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions.  In accordance with this statement, the Company recorded a gain of
approximately $2.2 million and $1.1 million from the renegotiation of separation
and  settlement  agreements  (see Note 13) and debt  forgiveness  from  vendors,
respectively, for the year ended December 31, 2002.


                                      F-14
<PAGE>

         In June 2002, the FASB issued Statement No. 146,  "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement addresses financial
accounting and reporting for costs  associated with exit or disposal  activities
and  nullifies  Emerging  Issues Task Force (EITF)  Issue No.  94-3,  "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)."  The provisions
of this  Statement  are  effective  for  exit or  disposal  activities  that are
initiated  after  December  31, 2002,  with early  application  encouraged.  The
adoption  of this  Statement  did not have a  material  impact on the  Company's
financial position or results of operations.

         In October 2002, the FASB issued  Statement No. 147,  "Acquisitions  of
Certain  Financial  Institutions-an  amendment of FASB Statements No. 72 and 144
and  FASB  Interpretation  No.  9,"  which  removes  acquisitions  of  financial
institutions  from the scope of both Statement No. 72 and  Interpretation  No. 9
and  requires  that those  transactions  be  accounted  for in  accordance  with
Statements No. 141,  "Business  Combinations,"  and No. 142, "Goodwill and Other
Intangible Assets." In addition, this Statement amends SFAS No. 144, "Accounting
for the  Impairment or Disposal of  Long-Lived  Assets," to include in its scope
long- term  customer-relationship  intangible  assets of financial  institutions
such as  depositor-  and  borrower-relationship  intangible  assets  and  credit
cardholder  intangible  assets.  The  requirements  relating to  acquisitions of
financial  institutions  are  effective for  acquisitions  for which the date of
acquisition is on or after October 1, 2002. The provisions related to accounting
for the  impairment  or  disposal  of  certain  long-term  customer-relationship
intangible assets are effective on October 1, 2002. This  pronouncement does not
currently apply to the Company.

         In December 2002, the FASB issued  Statement No. 148,  "Accounting  for
Stock-Based Compensation-Transition and Disclosure," which amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of  transition  for a  voluntary  change  to the  fair  value  based  method  of
accounting for stock-based employee  compensation.  In addition,  this Statement
amends the  disclosure  requirements  of Statement No. 123 to require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock- based employee  compensation  and the effect of the method
used  on  reported  results.  The  transition  guidance  and  annual  disclosure
provisions  of  Statement  No. 148 are  effective  for fiscal years ending after
December 15, 2002, with earlier application permitted in certain  circumstances.
The interim disclosure provisions are effective for financial reports containing
financial  statements for interim periods beginning after December 15, 2002. The
adoption  of this  Statement  did not have a  material  impact on the  Company's
financial  position or results of  operations  as the Company has not elected to
change to the fair value based method of  accounting  for  stock-based  employee
compensation.

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
of Variable Interest Entities."  Interpretation 46 changes the criteria by which
one company includes another entity in its  consolidated  financial  statements.
Previously,  the  criteria  were  based  on  control  through  voting  interest.
Interpretation  46 requires a variable  interest  entity to be consolidated by a
company if that  company  is subject to a majority  of the risk of loss from the
variable interest  entity's  activities or entitled to receive a majority of the
entity's  residual  returns  or both.  A company  that  consolidates  a variable
interest  entity  is  called  the  primary   beneficiary  of  that  entity.  The
consolidation  requirements of  Interpretation  46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older  entities in the first  fiscal year or interim  period  beginning
after  June  15,  2003.  Certain  of the  disclosure  requirements  apply in all
financial  statements  issued  after  January 31, 2003,  regardless  of when the
variable  interest  entity  was  established.  The  Company  does not expect the
adoption  to have a  material  impact to the  Company's  financial  position  or
results of operations.


NOTE 2--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.



                                      F-15
<PAGE>

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 6).

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.

TDT, LLC ("Terradatum")

         On September  30, 1999,  the Company  acquired  100% 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 6). 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 FNIS (See Note 14).

Information Management Company, Inc. ("IMCO")

         On September 30, 1999, the Company completed its acquisition 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 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 6).

         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 Note 14). 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  make the issuance.  The  settlement
amount was reclassified to accrued  liabilities  related to warrants and reduced
to fair value at December 31, 2002 and 2001 under EITF 00-19 (see Note 1).



                                      F-16
<PAGE>

Home Seekers Magazines, Inc. ("HMI")

         On February 8, 2000,  the Company  completed the  acquisition 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 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 was 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 April 25, 2003, 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 $4,112,000 (see Note 6).

Connect2Call ("C2C")

         On  June  9,  2000,   the  Company   acquired   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 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 April 25, 2003,  the Company had not completed the
registration.


                                      F-17
<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 $1,747,000 (see Note 6).


NOTE 3 -- INVESTMENTS

         At December  31, 2002 and 2001,  the Company  owned  500,000  shares of
common stock with a market value of $0 and $20,000,  respectively,  in 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.

         The Company's investment is being held for an indefinite period of time
and is classified as available for sale. Investments in marketable securities at
December 31, 2002 and 2001 are summarized as follows:

<TABLE>
<CAPTION>
                                            December 31, 2002                     December 31, 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    $(200,000)    None       $200,000    $(180,000)    $ 20,000
                                     ========    ==========    =====      ========    ==========    ========
</TABLE>

Common stock

         During the year ended June 30, 1999,  the Company was an investor in an
LLC with Finet.com,  a publicly held mortgage  company,  and the Company entered
into a license agreement with Finet.com in place of this agreement and agreed to
dissolve the LLC. At June 30, 1999 the  investment in the LLC had been accounted
for as an offset to stockholders' equity as the primary asset of the LLC was the
Company's common stock.

         During the year ended June 30, 2000,  the Company sold its 50% interest
in the LLC to Finet.com  for 600,000  common  shares of  Finet.com.  The Company
recorded  its  investment  based on the  Finet.com  quoted  market  price less a
discount  of 15%,  as the  shares  were  unregistered.  The offset to equity was
eliminated as a result of the sale of the Company's interest.  In addition,  the
Company entered into a settlement  agreement and release with Finet.com  whereby
both parties are effectively released from the licensing agreement.  The Company
received  total cash  payments of  $753,000,  which was  recorded as $410,000 in
revenue associated with click-throughs provided and $343,000 for a refund of the
unamortized  portion of purchased  technology  acquired  from  Finet.com  during
fiscal  1999.  The  Company  sold the 600,000  common  shares of  Finet.com  and
recognized  a loss of  $822,000  during the year ended June 30,  2001,  which is
included in other  expense on the  accompanying  statement  of  operations,  and
substantially  all  of  which  was  included  as a  part  of  accumulated  other
comprehensive loss at June 30, 2000.

Common stock, related party

         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, 2002,  the Company  owned
500,000 shares of common stock with no net realizable value.



                                      F-18
<PAGE>

         During the year ended December 31, 2002, the six-months  ended December
31,  2001 and the years  ended  June 30,  2001 and 2000,  the  Company  recorded
revenues from the above related party of $0, $0, $0 and $370,000,  respectively,
related to the technology licensing and custom programming fees.

Investment in non-public company-related party

         The Company owns common stock of BuySellBid.com; a company considered a
related  party as a former  Company  officer  and former  member of the Board of
Directors is also on the BuySellBid.com board.

         During the year ended June 30, 2000,  the Company  entered into certain
agreements with BuySellBid.com, a non-public company. These agreements consisted
of  an  exclusive  provider  arrangement  where  the  Company  provides  all  of
BuySellBid.com's  real estate  information,  and certain  advertising  contracts
whereby the Company  and  BuySellBid.com  provide  banner  advertising  on their
respective  websites.  As a result of these  agreements,  the Company received a
total of 2,000,000 shares of BuySellBid.com common stock in exchange for 507,615
shares of the Company's common stock and a $1,000,000 cash payment. Valuation of
the common stock  acquired was based on the offering  price of shares being sold
in a private  placement  offering at the time the agreements  were entered into,
resulting in a total value of $5,000,000 for  BuySellBid.com  common stock.  The
advertising  agreements were treated as a non-monetary exchange resulting in the
advertising  revenue being netted with advertising expense over their respective
terms.  At June 30, 2000,  the Company  reserved  $2,500,000 of the value of the
investment  due  to  the  impairment   resulting  from   continuing   losses  of
BuySellBid.com and the uncertainties of recovery.

         During the year ended June 30, 2001, the Company sold 310,800 shares of
BuySellBid.com  common stock for proceeds of $777,000,  which was recorded as an
offset to the carrying  value of the  remaining  investment in the common stock.
Because of continuing  losses of  BuySellBid.com  and uncertainties of recovery,
the remaining  investment in the common stock of BuySellBid.com was written off,
resulting in a loss of $1,723,000,  of which $861,000 was written off during the
fourth quarter.


NOTE 4--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 the 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.

         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.


                                      F-19
<PAGE>

         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. On April 4, 2002 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 5-- PROPERTY AND EQUIPMENT

         Property and equipment consisted of the  following at December 31, 2002
         and 2001:

                                                  December 31,    December 31,
                                                      2002            2001
                                                  ------------    ------------

Computer equipment............................... $  2,954,663    $  3,029,965
Computer software................................      224,698         266,821
Furniture and office equipment...................      255,761         258,126
Leasehold improvements...........................      307,168         307,169
                                                  ------------    ------------

                                                     3,742,290       3,862,081
Less: accumulated depreciation and amortization..   (3,345,813)     (2,524,629)
                                                  ------------    ------------

                                                  $    396,477    $  1,337,452
                                                  ============    ============

         The Company has computer  equipment  and software with a net book value
of $98,831 and $141,404,  respectively (accumulated depreciation of $184,390 and
$110,730, respectively) under capital leases at December 31, 2002 and 2001.

         The Company recorded  depreciation  expense for the year ended December
31, 2002,  the  six-months  ended December 31, 2001 and for the years ended June
30,  2001  and  2000  of   $1,075,000,   $685,000,   $1,670,000   and  $793,000,
respectively.


NOTE 6 -- PURCHASED INTANGIBLE ASSETS

         Purchased  intangible  assets  consist of the following at December 31,
2002 and 2001:

                                    Estimated      December 31,    December 31,
                                   Useful Lives        2002            2001
                                   ------------    ------------    ------------

Trademark........................    1-2 years                -           9,651
                                                   ------------    ------------

                                                              -           9,651
Less: accumulated amortization...                             -          (4,633)
                                                   ------------    ------------

                                                   $          -    $      5,018
                                                   ============    ============

         Amortization  expense on purchased  intangible assets was $0, $972,767,
$7,734,956  and  $4,209,218 for the year ended December 31, 2002, the six-months
ended   December  31,  2001  and  the  years  ended  June  30,  2001  and  2000,
respectively.  During the year ended December 31, 2002, the Company adopted SFAS
No. 144,  "Accounting  for the Impairment or Disposal of Long-Lived  Assets." In
accordance with SFAS No. 144, the Company recorded  impairment  losses of $5,018
during the year ended December 31, 2002.

         During the six-months ended December 31, 2001, 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  during April 2001 and  consolidation and
restructuring  of other acquired  businesses  primarily during June of 2001, the
Company wrote down $1,033,982 and $13,307,860 of impaired  purchased  intangible
assets for the  six-months  ended  December 31, 2001 and the year ended June 30,
2001.  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.


                                      F-20
<PAGE>


NOTE 7 -- LONG-TERM DEBT

         Long-term debt consisted of the following at December 31, 2002 and
2001:
<TABLE>
<CAPTION>
                                                          December 31,    December 31,
                                                              2002            2001
                                                          ------------    ------------
<S>                                                       <C>             <C>
Note payable to Fidelity National Financial,  Inc.
("Fidelity"),   net  of  unamortized  discount  of
$165,000 and $689,000,  respectively,  with stated
interest  at  prime  plus 2%  (totaling  6.25%  at
December 31, 2002),  secured by certain  assets of
the Company, due April 24, 2003,  convertible into
shares of the Company's  common stock at $0.10 per
share at the option of the holder........................ $  2,835,000    $  2,311,000


Note payable to a former  Director of the Company,
with interest at 9%,  secured by certain assets of
the Company, subordinate to the Fidelity note, due
April 9,  2001,  convertible  into  shares  of the
Company's common stock at $0.10 per share................      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, subordinate to the Fidelity
note,  payable  in four  equal  installments,  due
December 31, 2002........................................      110,000         200,000

Notes payable to individuals, with interest at 9%,
unsecured, due December 13, 2002.........................       72,000         162,000

Capital lease obligations (Note 10)......................       72,956         180,907

Other....................................................       25,698          90,793
                                                          ------------    ------------

Total....................................................    3,615,654       3,444,700
Less current portion.....................................   (3,610,110)     (1,045,679)
                                                          ------------    ------------

Long-term portion........................................ $      5,544    $  2,399,021
                                                          ============    ============
</TABLE>

Future  maturities  of long-term  debt at December 31, 2002 are as follows:


Years ending December 31:

2003....................................................  $  3,610,110
2004....................................................         5,544
2005....................................................             -
2006....................................................             -
                                                          ------------
Total                                                     $  3,615,654
                                                          ============


                                      F-21
<PAGE>


         The Company entered into a Warrant Purchase Agreement simultaneous 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 warrants are not
dependent on conversion of the note and are detachable  from the note.  Based on
the current  outstanding  number of common shares, the warrants can be exercised
for  up to  12,238,640  shares.  The  Company  has  recorded  the  value  of the
detachable  warrant,  totaling  $768,000 to debt discount and is amortizing that
amount over the life of the note.  For the year ended  December 31, 2002 and the
six-months  ended December 31, 2001,  $524,376 and $97,592,  respectively,  have
been amortized to interest expense.

         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.  In accordance  with this
late payment  penalty  clause,  the Company is obligated  under the terms of the
note to issue warrants to purchase a total of 9,100,000  shares of the Company's
common  stock at exercise  prices  ranging  from $0.03 to $0.80 per share to the
former  Director as of  December  31,  2002.  The former  director  was 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 $349,000, $631,000 and $605,169 attributable to the value of
these  warrants  (under  SFAS 123) for the year ended  December  31,  2002,  the
six-months   ended  December  31,  2001  and  the  year  ended  June  30,  2001,
respectively.  Any warrants issued vest  immediately and expire three years from
the date of issuance.

         The Company issued warrants to purchase 100,000 shares of the Company's
common stock on November 22,  2000,  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, 2002 was $110,000 and the Company was in
default of the payment  terms of the note at December 31,  2002.  The Company is
making  periodic  payments  on the  note  as  cash  flows  permit.  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 year ended  December 31, 2002 and 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, 2002 was $72,000 and the Company was
in default of the payment terms of the note at December 31, 2002. The Company is
making  periodic  payments  on the  notes  as cash  flows  permit.  The  Company
recognized  interest  expense of $0,  $241,000 and $72,500  attributable  to the
warrants for the year ended December 31, 2002, the six-months ended December 31,
2001 and the year ended June 30, 2001,  respectively.  These notes  payable also
include a late  payment  penalty  clause  whereby  the  Company  issued  100,000
warrants  per week for each note payable  (with a cap of one million  warrants),
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 8  -- 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, 2002 and
2001, there were no outstanding shares of preferred stock.


                                      F-22
<PAGE>

Common Stock

         As of December 31, 2002 the Company had 48,954,561 common shares issued
and outstanding,  2,538,582 outstanding options issued pursuant to the Company's
Amended and Restated  1996 Stock  Option Plan,  as amended (the "1996 Plan") and
36,761,096  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 (see Note 1).

         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.  No options
or warrants were exercised during the year ended December 31, 2002.

         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.  Subsequent to this issuance,  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 $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.

         In addition,  the Company issued a total of 788,130 unrestricted shares
of its common stock to former  officers and directors as part of separation  and
settlement agreements, including 600,000 shares issued to three such individuals
in July and August 2001 (See Note 13).

Common Stock Warrants

         Warrants  for the  purchase  of  common  shares  that were  issued  and
outstanding as of December 31, 2002 are summarized below:


         Number of        Exercise
         Warrants           Price         Expiration
        ----------       -----------      ----------

        23,785,140       $0.03-$0.12       2003-2005
         8,207,371         0.13-0.49       2003-2006
         3,808,075         0.50-0.80       2003-2004
           233,334              1.50            2003
           607,899         2.38-2.50       2003-2004
           119,277              3.00       2003-2004
        ----------
        36,761,096

         During the year ended December 31, 2002, a total of 8,300,000  warrants
expiring on various dates in 2005 to purchase  common shares at exercise  prices
of $0.03 to $0.17  were  issued to  officers  of the  Company,  consultants  and
investors.  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 9 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 year  ended  December  31,  2002 and the  six-months  ended
December  31,  2001, a total of 523,100 and  1,270,000  warrants,  respectively,
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  to  purchase  up  to
approximately 12,238,640 shares (included in the table above), or the equivalent
of 25% of the outstanding  shares of the Company's  common stock,  calculated by
applying Fidelity's right to acquire 25% of the Company's  outstanding shares to
the total of 48,954,561  shares  currently  issued and  outstanding.  The actual
number of shares  issuable to Fidelity is likely to be greater  than  12,238,640
because of the dilutive effect of exercising the note and warrant.  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-23
<PAGE>

NOTE 9 -- STOCK OPTIONS

         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 December  31, 2002 and December 31, 2001 was $0.05 and $0.06 per share,
respectively,  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  option plan and warrants  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.  During the  six-months  ended  December 31,  2001,  the Company
recorded $1.8 million of compensation  expense to reflect the differences in the
warrant exercise price and the market value on the date of issuance attributable
to warrants issued to three former officers under  separation  agreements  which
were voided during the following year and new agreements entered into. (See Note
13.) No  similar  compensation  expense  was  recorded  during  the years  ended
December 31, 2002, 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,   December 31,     June 30,       June 30,
                                              2002           2001           2001           2000
                                          ------------   ------------   ------------   ------------
<S>                                       <C>            <C>            <C>            <C>
Net Income (loss)
   As reported........................... $      2,814   $    (11,966)  $    (51,627)  $    (25,034)
                                          ============   ============   ============   ============

   Pro forma............................. $      2,654   $    (12,456)  $    (61,201)  $    (28,280)
                                          ============   ============   ============   ============
Basic and Diluted Loss Per Share
   As reported........................... $       0.06   $      (0.25)  $      (1.66)  $      (1.47)
                                          ============   ============   ============   ============

   Pro forma............................. $       0.05   $      (0.26)  $      (1.96)  $      (1.66)
                                          ============   ============   ============   ============
</TABLE>


                                      F-24
<PAGE>

         The  pro  forma  amounts  were   estimated   using  the   Black-Scholes
option-pricing model with the following  assumptions for the year ended December
31, 2002,  the  six-months  ended  December 31, 2001and the years ended June 30,
2001 and 2000:
<TABLE>
<CAPTION>
                                          December 31,   December 31,     June 30,       June 30,
                                              2002           2001           2001           2000
                                          ------------   ------------   ------------   ------------
<S>                                       <C>            <C>            <C>            <C>
 Dividend Yield.........................           0%             0%              0%            0%

 Risk-Free Interest Rate................         4.0%           4.0%            5.0%      5.5-6.9%

 Expected Life..........................    3-4 years      3-4 years       3-4 years     3-7 years

 Expected Volatility....................      293.95%        227.20%    121.1-166.4%        121.1%
</TABLE>

         Expected lives are equal to the remaining option terms for each period.

         Following is a summary of the status of options  outstanding during the
year ended  December 31, 2002,  the  six-months  ended December 31, 2001 and the
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

 Outstanding at January 1, 2002.........      3,004,493       0.07-1.04            0.34
 Granted................................      2,000,000            0.08            0.08
 Canceled...............................    (2,465,911)       0.08-1.04            0.29
 Exercised..............................              -               -               -
                                            ------------

 Outstanding at December 31, 2002             2,538,582       0.07-1.04            0.18
                                            ============

 Options exercisable December 31, 2002        2,428,989                            0.17

</TABLE>


                                      F-25
<PAGE>

         The weighted  average  grant date fair value of options  granted in the
year ended  December 31, 2002,  the  six-months  ended December 31, 2001 and the
years  ended  June 30,  2001  and  2000  was  $0.08,  $0.11,  $1.49  and  $5.57,
respectively.

         The following  table  summarizes  information  regarding  stock options
outstanding at December 31, 2002:

<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       2,001,500          2.00              $0.08          1,946,086        $0.08
  0.16-0.56          91,500          1.59               0.45             84,518         0.47
  0.59-1.04         445,582          0.59               0.59            398,385         0.59
                -----------     ---------------    --------------     ---------    --------------
                  2,538,582                            $0.18          2,428,989        $0.17
                ===========                        ==============     =========    ==============
</TABLE>

NOTE 10 -- 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.  The Company has an operating lease for its
facilities from a related party expiring in July 2004 unless terminated  earlier
with sixty-days  notice.  The Company also has service  agreements with Internet
access providers. Future minimum payments under all capital and operating leases
as of December 31, 2002 are as follows:

             Years Ending                     Operating        Capital
             December 31:                      Leases           Leases
             ------------                     ---------        --------
                 2003                         $ 292,380        $ 90,094
                 2004                           175,231           4,344
              Thereafter                              -               -
                                              ---------        --------

Total minimum lease payments                  $ 467,611          94,438
                                              =========
Less: amount representing interest                              (21,482)
                                                               --------
Present value of future minimum lease payments                   72,956
Less: current portion                                            68,743
                                                               --------
Long-term portion                                              $  4,213
                                                               ========

         During  the year  ended  December  31,  2002 and the  six-months  ended
December  31,  2001,  the Company  terminated  numerous  leased  facilities  and
recorded lease termination costs of approximately $0 and $75,000,  respectively.
The Company believes that any obligations  that might be remaining  attributable
to the closure of these  facilities  are minimal.  Rental expense for all leases
was $233,758, $583,461,  $1,229,834 and $559,370 for the year ended December 31,
2002, the  six-months  ended December 31, 2001 and the years ended June 30, 2001
and 2000, respectively.


                                      F-26
<PAGE>

Employment Agreements

         The Company has  employment  agreements  with  certain of its  officers
calling for annual  salaries and cash bonuses  attributable to the attainment of
certain performance  objectives.  Due to its limited cash reserves,  the Company
has  been  unable  to fully  fund the  salary  obligations  of these  agreements
totaling $423,924,  which were accrued at December 31, 2002. The officers waived
any bonuses that might otherwise have been earned during December 31, 2002 under
the terms of the agreements.  The Company is obligated to issue stock options to
the officers pursuant to the terms of the agreements, which it has not done. The
Company's  ability to issue these stock options is subject to the  approval,  by
the  stockholders of the Company,  of an amendment to the Company's  Articles of
Incorporation to increase the number of authorized common shares.

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   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  currently  reserved  $350,000  for
future possible claims and litigation.

Registration Rights Agreements

         The Company is in violation of registration rights agreements including
those associated with certain of its acquisition purchase agreements and certain
amendments  thereto.  The  required   registration  of  the  shares,  issued  as
additional  consideration to the former owners of these companies, is subject to
the approval by the stockholders of the Company of an amendment to the Company's
Articles of Incorporation to increase the number of authorized common shares.


NOTE 11 -- 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 at December 31, 2002 and 2001:

                                                December 31,     December 31,
                                                    2002             2001
                                                ------------     ------------
Deferred tax assets:
   Net operating loss carryforwards.......      $ 22,796,586     $ 23,098,985
   Deferred revenue.......................           440,501        1,123,743
   Accrued expenses and other.............           213,860        1,003,340
                                                ------------     ------------
                                                  23,450,947       25,226,068
Deferred tax liabilities:
   Depreciation...........................                 -           (5,081)
                                                ------------     ------------
                                                  23,450,947       25,220,987
Less: Valuation allowance.................       (23,450,947)     (25,220,987)
                                                ------------     ------------
   Net deferred taxes.....................      $          -     $          -
                                                ============     ============



                                      F-27
<PAGE>

         A  valuation  allowance  has  been  established  due to  the  Company's
accumulated  losses.  The increase  (decrease)  in the  valuation  allowance was
$(1,770,040),  $3,924,680, $9,559,612 and $6,898,526 for the year ended December
31, 2002,  the  six-months  ended December 31, 2001 and the years ended June 30,
2001 and 2000, respectively.  In addition, the Company has available at December
31, 2002,  approximately  $67 million of unused  Federal and State 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.

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

<TABLE>
<CAPTION>
                                                         (Twelve Months)      (Six-Months)      (Twelve Months)     (Twelve Months)
                                                           December 31,        December 31,         June 30,            June 30,
                                                               2002               2001                2001                2000
                                                         ---------------     ---------------    ---------------     ---------------
<S>                                                      <C>                 <C>                <C>                 <C>
Federal utilization (benefit) expected at statutory
   rate..............................................    $       956,760     $    (4,068,440)   $   (17,552,559)    $    (8,511,560)
Valuation allowance..................................         (1,770,040)          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
Deferred revenue.....................................            440,501                   -                  -                   -
Accrued expenses and other...........................            352,779                   -                  -                   -
Goodwill amortization................................                  -             123,760          2,054,192             739,862
Non-deductible expenses..............................             20,000              20,000             15,099              23,172
                                                         ---------------     ---------------    ---------------     ---------------
                                                         $             -     $             -    $             -     $             -
                                                         ===============     ===============    ===============     ===============
</TABLE>

NOTE 12 -- 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.



                                      F-28
<PAGE>

         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.  HomeMark also advanced the Company an additional $920,000 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., 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 the 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.


NOTE 13 - 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 relating 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 $2.2 million,  which was recorded in the
quarter ended June 30, 2002.


                                      F-29
<PAGE>

NOTE 14 - 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. In return,  Fidelity  accepted (i) a convertible  revolving  promissory
note  (the  "Note")  and (ii) a stock  purchase  warrant  (the  "Warrant").  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 (see Note 7).

         The  purpose  of the  Fidelity  loan to the  Company  was to enable the
Company  to pay off  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 HomeMark, the repayment of an earlier secured promissory note of
$400,000, and for general working capital purposes.

         Short-term liabilities at December 31, 2002 include the $3,000,000 note
payable to Fidelity,  which  matured on April 24, 2003.  On April 25, 2003,  the
Company and Fidelity entered into a formal  standstill  agreement until June 30,
2003 to continue  negotiations  underway  concerning the note. Unless payment is
made in full, the terms of the note  re-negotiated,  or the note is satisfied by
some other means, Fidelity may enter into foreclosure procedures on the note.

         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.

         As a result of the  issuance to  Fidelity of the Note and the  Warrant,
Fidelity  has a currently  exercisable  right to  purchase  up to  approximately
12,238,640  shares,  or the equivalent of 25% of the  outstanding  shares of the
Company's common stock,  calculated by applying  Fidelity's right to acquire 25%
of the Company's  outstanding shares to the total of 48,954,561 shares currently
issued and  outstanding.  The actual  number of shares  issuable  to Fidelity is
likely  to be  greater  than  12,238,640  because  of  the  dilutive  effect  of
exercising  the Note and Warrant.  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.

         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 for unpaid licensing obligations of the Company.


                                      F-30
<PAGE>

NOTE 15 --TRANSITION PERIOD COMPARATIVE DATA

         The following table presents certain financial information for the year
ended  December  31,  2002  and  the  twelve-months   ended  December  31,  2001
(unaudited).

                                                (Amounts in Thousands)
                                        December 31, 2002     December 31, 2001
                                        -----------------     -----------------
                                                                 (Unaudited)
   Revenues............................ $          10,020     $          14,130

   Income (loss) from operations.......               532               (46,336)

   Other income (expense), net.........             2,282                (1,029)
                                        -----------------     -----------------

Net income (loss)...................... $           2,814     $         (47,365)
                                        =================     =================



NOTE 16 --QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

         Summarized unaudited quarterly financial information for the year ended
December 31, 2002,  the  six-months  ended December 31, 2001 and the years ended
June 30, 2001 and 2000 are noted below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
                                                                            3rd Quarter     4th Quarter
                                            1st Quarter     2nd Quarter         (1)             (2)
                                            -----------     -----------     -----------     -----------
<S>                                         <C>             <C>             <C>             <C>
December 31, 2002
   Revenues                                 $     1,817     $     2,607     $     3,451     $     2,145
   Income (loss) from operations            $      (476)    $       220     $       584     $       204
   Net income (loss)                        $      (532)    $     2,479     $       884     $       (17)
   Basic and diluted net income
      (loss) per share                      $     (0.01)    $      0.05     $      0.02     $      0.00

December 31, 2001
   Revenues                                 $     3,403     $     2,632               -               -
   Income (loss) from operations            $    (5,512)    $    (6,026)              -               -
   Net income (loss)                        $    (6,115)    $    (5,851)              -               -
   Basic and diluted net income
      (loss) per share                      $     (0.13)    $     (0.12)              -               -

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

June 30, 2000
   Revenues                                 $     1,443     $     2,574     $     3,396     $     3,677
   Income (loss) from operations            $    (2,751)    $    (4,923)    $    (5,786)    $   (12,052)
   Net income (loss)                        $    (2,638)    $    (4,787)    $    (5,684)    $   (11,925)
   Basic and diluted net income
     (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.


                                      F-31
<PAGE>

NOTE 17 - RELATED PARTY TRANSACTIONS

         The Company subleases its computer-hosting site in Burbank,  California
through  Chaffee  Interactive,  a company  wholly owned by Thomas  Chaffee,  the
Company's  Chairman and Chief Executive  Officer for $30,000 on a month-to-month
basis.  Similarly,  the Company contracts with Chaffee  Interactive for web site
design and  marketing  services  for which the Company  does not have  available
in-house  expertise.  The  total  lease  expense  and  cost of  design  services
recognized  during  the  year  ended  December  31,  2002  attributable  to this
arrangement  was  $362,879  of which  $133,380  was unpaid and was  included  in
accounts payable at the end of the year.

<TABLE>
<CAPTION>
                                                                     SCHEDULE II

                  SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS

                                               Balance at    Charged to
                                               Beginning     Operating                  Balance at
                                                of Year       Expenses     Deductions   End of Year
                                               ----------    ----------    ----------   -----------
<S>                                            <C>           <C>           <C>          <C>
For the year ended June 30, 2000

   Allowance for doubtful accounts             $   37,896    $  554,091    $ (450,534)  $   141,453
                                               ==========    ==========    ==========   ===========
For the year ended June 30, 2001

   Allowance for doubtful accounts             $  141,453    $  429,715    $ (282,766)  $   288,402
                                               ==========    ==========    ==========   ===========

   Reserve for contingencies                   $     --      $  436,500    $     --     $   436,500
                                               ==========    ==========    ==========   ===========
For the six-months ended December 31, 2001

   Allowance for doubtful accounts             $  288,402    $  112,443    $ (210,555)  $   190,290
                                               ==========    ==========    ==========   ===========

   Reserve for contingencies                   $  436,500    $     --      $     --     $   436,500
                                               ==========    ==========    ==========   ===========
For the year ended December 31, 2002

   Allowance for doubtful accounts             $  190,290    $     --      $ (150,769)  $    39,521
                                               ==========    ==========    ==========   ===========

   Reserve for contingencies                   $  436,500    $     --      $  (86,500)  $   350,000
                                               ==========    ==========    ==========   ===========

</TABLE>



                                       F-32
<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       May 22, 2003
  -------------------      and Chief Executive Officer
  Thomas Chaffee


  /S/ Steven M. Crane      President, Chief Operating            May 22, 2003
  --------------------     Officer and Director
  Steven M. Crane




                                       58
<PAGE>

                                  CERTIFICATION



I, Thomas Chaffee,  Chairman of the Board and Chief Executive  Officer,  certify
that:

1.  I have  reviewed  this  Annual  Report  on  Form  10-K  of  HomeSeekers.com,
Incorporated;

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

3.  Based on my knowledge,  the  consolidated  financial  statements,  and other
financial  information  included in this Annual  Report,  fairly  present in all
material respects the financial condition,  results of operations and cash flows
of the Registrant as of, and for, the periods presented in this Annual Report;

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

         a) designed  such  disclosure  controls and  procedures  to ensure that
         material information relating to the Registrant, is made known to us by
         others within those entities,  particularly  during the period in which
         this annual report is being prepared;

         b) evaluated the effectiveness of the Registrant's  disclosure controls
         and  procedures as of a date within 90 days prior to the filing date of
         this Annual Report (the "Evaluation Date"); and

         c)  presented  in  this  Annual  Report  our   conclusions   about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

5.  The Registrant's  other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the Registrant's auditors and the audit committee
of  Registrant's  board of  directors  (or  persons  performing  the  equivalent
function):

         a) all significant  deficiencies in the design or operation of internal
         controls  which  could  adversely  affect the  Registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  Registrant's  auditors any material  weaknesses in
         internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  Registrant's
         internal controls; and

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


 Date: May 22, 2003

 /s/ Thomas Chaffee
 ---------------------
 Thomas Chaffee
 Chairman of the Board
 and Chief Executive Officer



                                       59
<PAGE>

                                  CERTIFICATION



I, Steven M. Crane,  President,  Chief Operating  Officer,  and Director certify
that:

1.  I have  reviewed  this  Annual  Report  on  Form  10-K  of  HomeSeekers.com,
Incorporated;

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

3.  Based on my knowledge,  the  consolidated  financial  statements,  and other
financial  information  included in this Annual  Report,  fairly  present in all
material respects the financial condition,  results of operations and cash flows
of the Registrant as of, and for, the periods presented in this Annual Report;

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

         a) designed  such  disclosure  controls and  procedures  to ensure that
         material information relating to the Registrant, is made known to us by
         others within those entities,  particularly  during the period in which
         this annual report is being prepared;

         b) evaluated the effectiveness of the Registrant's  disclosure controls
         and  procedures as of a date within 90 days prior to the filing date of
         this Annual Report (the "Evaluation Date"); and

         c)  presented  in  this  Annual  Report  our   conclusions   about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

5.  The Registrant's  other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the Registrant's auditors and the audit committee
of  Registrant's  board of  directors  (or  persons  performing  the  equivalent
function):

         a) all significant  deficiencies in the design or operation of internal
         controls  which  could  adversely  affect the  Registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  Registrant's  auditors any material  weaknesses in
         internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  Registrant's
         internal controls; and

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


 Date: May 22, 2003

 /s/ Steven M. Crane
 -------------------
 Steven M. Crane
 President and Chief Operating Officer



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                                  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.

     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.

     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.

     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).

     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")).


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<PAGE>

     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-K  (Commission  File
               No.  000-23825)  for the year  ended  June 30,  1999  (the  "1999
               10-K")).

     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-K).

     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-K).

     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-K).

     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-K).


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<PAGE>

     10.15     Promissory  Note between the Company and William  Tomerlin  dated
               November 22, 2000.

     10.16     Security Agreement between the Company and William Tomerlin dated
               November 22, 2000.

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

     23.1      Consent  of  Stonefield  Josephson,  Inc.,  Independent  Auditors
               (filed herewith)

     23.2      Consent of Corbin & Wertz, Independent Auditors (filed herewith)

     23.3      Consent  of  Ernst  &  Young  LLP,  Independent  Auditors  (filed
               herewith)

     24.1      Powers of Attorney  (contained in the signature page of this Form
               10-K).

     99.1(a) and 99.1(b)

               Certification  pursuant to 18 U.S.C. ss.1350, as adopted pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002.

     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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