<PAGE>
                                                                      EXHIBIT 13



CINTECH
SOLUTIONS, INC.

Financial Statements for the Years Ended
June 30, 2002 and 2001 and Independent
Auditors' Report







<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
  Cintech Solutions, Inc.

We have audited the accompanying balance sheets of Cintech Solutions, Inc. (the
"Company") as of June 30, 2002 and 2001 and the related statements of
operations, stockholders' equity and cash flows for the years then ended (all
expressed in U.S. dollars) which, as described in Note 1, have been prepared on
the basis of accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of June 30, 2002 and 2001 and
the results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Deloitte & Touche LLP

August 23, 2002









<PAGE>

CINTECH SOLUTIONS, INC.

BALANCE SHEETS
JUNE 30, 2002 AND 2001
-------------------------------------------------------------------------

<TABLE>
<CAPTION>

ASSETS                                                           2002                 2001
<S>                                                          <C>                 <C>
CURRENT ASSETS:
  Cash and cash equivalents (Note 1)                         $   224,893          $   641,883
  Marketable securities held to maturity (Note 2)              2,443,024            6,284,141
  Marketable securities available for sale (Note 2)              102,030
  Accounts receivable, trade - (Net of
    allowance of $4,824 and $94,958
     in 2002 and 2001, respectively) (Note 1)                    657,372              301,389
  Inventory (Note 1)                                              19,976               21,387
  Prepaid expenses                                               133,451               73,845
  Income tax receivable                                          144,000
  Deferred income taxes (Note 6)                                 418,712              497,671
                                                             -----------         ------------
           Total current assets                                4,143,458            7,820,316
                                                             -----------         ------------

FIXED ASSETS (Note 1):

  Equipment                                                    1,367,897            1,198,675
  Furniture and fixtures                                          19,424              325,756
                                                             -----------         ------------
           Total                                               1,387,321            1,524,431
  Less accumulated depreciation                               (1,042,997)          (1,208,086)
                                                             -----------         ------------
           Total fixed assets - net                              344,324              316,345
                                                             -----------         ------------

SOFTWARE DEVELOPMENT COSTS-
  Net (Note 1)                                                 1,927,993            1,807,357
DEFERRED INCOME TAXES (Note 6)                                 1,332,190              186,580
                                                             -----------         ------------
           Total other assets - net                            3,260,183            1,993,937
                                                             -----------         ------------

TOTAL                                                        $ 7,747,965         $ 10,130,598
                                                             ===========         ============


LIABILITIES AND STOCKHOLDERS'
  EQUITY                                                         2002                 2001

  CURRENT LIABILITIES:
    Accounts payable                                         $   154,631         $    134,919
    Accrued liabilities:
      Accrued wages and compensation                             361,519              505,310
      Other                                                      298,996              197,997
    Deferred maintenance revenue (Note 1)                        649,330              638,193
                                                             -----------         ------------
             Total current liabilities                         1,464,476            1,476,419
                                                             -----------         ------------




  STOCKHOLDERS' EQUITY (Notes 1,4,5):

    Common stock                                               9,008,724            9,008,289
    Contributed capital                                          675,757              675,757
    Treasury stock                                                (2,290)              (2,290)
    Accumulated deficit                                       (3,422,859)          (1,027,577)
    Accumulated other comprehensive income                        24,157
                                                             -----------         ------------
             Total stockholders' equity                        6,283,489            8,654,179





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

  TOTAL                                                      $ 7,747,965         $ 10,130,598
                                                             ===========         ============

</TABLE>

See notes to financial statements.

                                      - 2 -

<PAGE>

CINTECH SOLUTIONS, INC.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                     2002               2001

<S>                                                             <C>                <C>
NET SALES (Note 1):
   Product sales                                                $ 4,714,598        $ 6,261,891
   Services and other sales                                       1,525,719          2,093,824
                                                                -----------        -----------
      Total net sales                                             6,240,317          8,355,715
                                                                -----------        -----------

COST OF PRODUCTS SOLD AND SERVICES PROVIDED (Note 1):
   Cost of products sold                                          1,726,944          2,080,365
   Cost of services and other sales                                 218,923            446,998
                                                                -----------        -----------
      Total cost of products sold and services provided           1,945,867          2,527,363
                                                                -----------        -----------

GROSS PROFIT                                                      4,294,450          5,828,352

RESEARCH AND DEVELOPMENT                                          1,138,052            999,532

SELLING, GENERAL AND ADMINISTRATIVE (Notes 1,3)                   6,911,046          6,492,097
                                                                -----------        -----------

LOSS FROM OPERATIONS                                             (3,754,648)        (1,663,277)

OTHER INCOME                                                        130,245            465,970
                                                                -----------        -----------

LOSS BEFORE INCOME TAX BENEFIT                                   (3,624,403)        (1,197,307)

INCOME TAX BENEFIT (Note 6)                                      (1,229,121)          (522,904)
                                                                -----------        -----------

NET LOSS                                                        $(2,395,282)        $ (674,403)
                                                                ===========        ===========

BASIC AND DILUTED LOSS PER COMMON SHARE (Note 4)                $     (0.19)        $    (0.05)
                                                                ===========        ===========

</TABLE>

See notes to financial statements.

                                     - 3 -

<PAGE>

CINTECH SOLUTIONS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                        COMMON
                                                        STOCK         CONTRIBUTED     TREASURY     ACCUMULATED
                                                     NO PAR VALUE       CAPITAL         STOCK        DEFICIT


<S>                                                   <C>               <C>            <C>           <C>
BALANCE AT JUNE 30, 2000                              $ 9,005,433       $ 675,757      $(2,290)     $  (353,174)

STOCK OPTIONS EXERCISED (4,399 shares)                      2,856

NET LOSS                                                                                               (674,403)
                                                      -----------       ---------      -------     -----------

BALANCE AT JUNE 30, 2001                                9,008,289         675,757       (2,290)      (1,027,577)

STOCK OPTIONS EXERCISED (1,500 shares)                        435

NET LOSS                                                                                             (2,395,282)

UNREALIZED GAINS ON SECURITIES, net of tax
                                                      -----------       ---------      -------      -----------


BALANCE AT JUNE 30, 2002                              $ 9,008,724       $ 675,757      $(2,290)     $(3,422,859)
                                                      ===========       =========      =======      ===========

</TABLE>

<TABLE>
<CAPTION>

                                                     ACCUMULATED
                                                        OTHER               TOTAL
                                                    COMPREHENSIVE       STOCKHOLDERS'       COMPREHENSIVE
                                                       INCOME               EQUITY        NET INCOME (LOSS)


<S>                                                      <C>              <C>                <C>
BALANCE AT JUNE 30, 2000                                                  $ 9,325,726

STOCK OPTIONS EXERCISED (4,399 shares)                                          2,856

NET LOSS                                                                     (674,403)
                                                         --------         -----------

BALANCE AT JUNE 30, 2001                                                    8,654,179

STOCK OPTIONS EXERCISED (1,500 shares)                                            435

NET LOSS                                                                   (2,395,282)         (2,395,282)

UNREALIZED GAINS ON SECURITIES, net of tax                24,157               24,157              24,157
                                                         --------         -----------        ------------


BALANCE AT JUNE 30, 2002                                 $ 24,157         $ 6,283,489        $ (2,371,125)
                                                         ========         ===========        ============

</TABLE>

See notes to financial statements.

                                     - 4 -

<PAGE>

CINTECH SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    2002               2001
<S>                                                                            <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                      $(2,395,282)      $  (674,403)
                                                                                -----------       -----------
  Adjustments to reconcile net loss to net cash used in
    operating activities:

    Income from stock received in demutualization                                   (64,865)
    Depreciation                                                                    153,709           295,855
    Amortization of software development costs                                      617,044           504,280
    Deferred income taxes                                                        (1,079,659)         (184,006)
    Provision for doubtful accounts                                                 (90,134)           70,449
    Changes in assets and liabilities:
      Decrease (increase) in accounts receivable                                   (265,849)          497,597
      Increase in income tax receivable                                            (144,000)
      Decrease in inventory                                                           1,411            24,582
      Increase in other assets                                                      (59,606)          (42,714)
      Increase (decrease) in accounts payable                                        19,712          (212,745)
      Decrease in accrued expenses                                                  (42,792)         (330,326)
      Increase (decrease) in deferred maintenance revenue                            11,137          (194,335)
                                                                                -----------       -----------
           Total adjustments                                                       (943,892)          428,637
                                                                                -----------       -----------
           Net cash used in operating activities                                 (3,339,174)         (245,766)
                                                                                -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Redemption (purchase) of marketable securities                                  3,841,117          (455,947)
  Expenditures for software development costs                                      (737,680)       (1,061,489)
  Purchase of fixed assets                                                         (216,688)         (118,810)
  Proceeds on disposal of fixed assets                                               35,000                 0
                                                                                -----------       -----------
           Net cash provided by (used in) investing activities                    2,921,749        (1,636,246)
                                                                                -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES-
  Proceeds from exercise of stock options                                               435             2,856
                                                                                -----------       -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                          (416,990)       (1,879,156)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                                                 641,883         2,521,039
                                                                                -----------       -----------

  End of year                                                                   $   224,893       $   641,883
                                                                                ===========       ===========

SUPPLEMENTAL CASH FLOW INFORMATION-Taxes paid                                   $    14,516       $    16,512
                                                                                ===========       ===========

</TABLE>

See notes to financial statements.

                                     - 5 -

<PAGE>

CINTECH SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001
--------------------------------------------------------------------------------


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF BUSINESS - Cintech Solutions, Inc. (the "Company") develops and
     markets interaction management software to help businesses manage voice and
     data contacts with their customers, partners, and associates. In concert
     with the interaction management software, the Company also provides
     services, such as installation, training, project management, consulting
     and maintenance support.

     FINANCIAL STATEMENT PRESENTATION - These financial statements have been
     prepared in accordance with accounting principles generally accepted in the
     United States of America and are expressed in United States dollars.

     USE OF ESTIMATES - The preparation of the 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 disclosure
     of contingent assets and liabilities at the date of the financial
     statements and the reported amounts of revenues and expenses during the
     reporting period. Actual results could differ from those estimates.

     REVENUE - Generally, the Company records product and service revenue when
     the product is shipped and the service is provided. Also, the Company
     records an estimate of potential future returns of product sold at the time
     of sale.

     DEFERRED MAINTENANCE REVENUE - The Company sells product maintenance
     agreements which provide for no-cost upgrade of software. These agreements
     normally cover periods ranging from 1-5 years with revenue being recognized
     on a straight-line basis over the maintenance period.

     WARRANTY RESERVE - At the time of sale, the Company accrues for warranty
     costs relating to software replacement or on site support to be provided
     during the first twelve months following the sale. Costs associated with
     supporting product under warranty are charged to the reserve instead of
     current period cost. The reserve is adjusted periodically based upon actual
     experience.

     DEPRECIATION - Fixed assets are carried at cost. Depreciation is computed
     using a straight line method over the following useful lives:

         Equipment                                           3-5 years
         Furniture and fixtures                              2-10 years


     During 2002, the Company changed its method of accounting for depreciation
     from an accelerated method. The effects of such change were not material to
     the financial statements.

                                     - 6 -


<PAGE>

     INVENTORY - Inventories are valued at the lower of cost or market, with
     cost being computed using the first-in, first-out method. Inventories
     consist of:

                                                        2002           2001

         Literature and other documentation          $ 13,563       $ 13,195
         Computer hardware                             10,780         12,205
         Allowance for obsolete inventory              (4,367)        (4,013)
                                                     --------        -------

         Total inventory                             $ 19,976       $ 21,387
                                                     ========       ========

     SIGNIFICANT CUSTOMERS - Most of the Company's sales are to distributors in
     the voice-centric call center solutions market. The Company had sales to a
     major distributor of $4,298,299 (69%) and $5,584,548 (67%) for the years
     ended June 30, 2002 and 2001, respectively.

     The Company had gross accounts receivable from two major distributors of
     75% and 71% of total accounts receivables as of June 30, 2002 and 2001,
     respectively.

     INTERNATIONAL SALES - The Company's international sales to Canada were
     approximately 2% of total sales for the fiscal years ended June 30, 2002
     and 2001, respectively.

     SOFTWARE DEVELOPMENT COSTS - Costs incurred internally for creation of the
     computer software product are charged to research and development expense
     when incurred until technological feasibility has been established for the
     product. Thereafter, until general release, all software production costs
     are capitalized and subsequently reported at the lower of amortized cost or
     net realizable value. The capitalized costs are amortized on a
     straight-line basis over the estimated economic life of the product.

     Costs capitalized were $737,680 and $1,061,489 and related amortization was
     $617,044 and $504,280 for 2002 and 2001, respectively. The Company
     periodically evaluates the capitalized cost relative to potential sales and
     accelerates the write-off when appropriate.

     LICENSING FEE - The Company has agreements with distributors which require
     the payment of a license fee on certain software sales made by the
     distributors. This license fee is for the distribution of the Company's
     products. License fee expense was $949,923 and $1,327,027 for 2002 and
     2001, respectively.

     FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying value of certain of the
     Company's financial instruments, such as cash, trade accounts receivable
     and trade accounts payable, approximate their fair values.

     ACCOUNTING PRONOUNCEMENTS - In June 2001, the Financial Accounting
     Standards Board ("FASB") issued Statement of Financial Accounting Standards
     ("SFAS") No. 141, "Business Combinations." SFAS No. 141 requires the
     purchase method of accounting for business combinations initiated after
     June 30, 2001 and eliminates the pooling-of-interests method. This
     statement had no impact on the Company's financial statements.

     In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
     Assets." This statement applies to intangibles and goodwill acquired after
     June 30, 2001, as well as goodwill and intangibles previously acquired.
     Under this statement goodwill, as well as other intangibles determined to
     have an indefinite life will no longer be amortized; however these assets
     will be reviewed for impairment on a periodic basis. This statement had no
     impact on the Company's financial statements.

                                     - 7 -

<PAGE>

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
     Retirement Obligations." This statement applies to legal obligations
     associated with the retirement of tangible long-lived assets. SFAS No. 143
     requires the recognition of the fair value of a liability for an asset
     retirement obligation in the period in which it is incurred if a reasonable
     estimate of fair value can be made. This statement had no impact on the
     Company's financial statements.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
     Impairment or Disposal of Long-Lived Assets." This statement addresses
     financial accounting and reporting for the impairment or disposal of
     long-lived assets and applies to recognized long-lived assets of an entity
     to be held and used or to be disposed of. This statement had no impact on
     the Company's financial statements.

     In April 2002, the FASB issued SFAS No. 145, "Recision 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. This Statement also rescinds 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. This statement
     will have no impact on the Company's financial statements.

     In June 2002, the FASB issued SFAS 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 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)."
     This Statement requires recognition of a liability for a cost associated
     with an exit or disposal activity when the liability is incurred, as
     opposed to being recognized at the date an entity commits to an exit plan
     under EITF No. 94-3. This Statement also establishes that fair value is the
     objective for initial measurement of the liability. This statement is
     effective for exit or disposal activities that are initiated after December
     31, 2002, with earlier application encouraged. This statement will have no
     impact on the Company's financial statements.

     CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows, the
     Company considers all money market instruments to be cash equivalents.

     RECLASSIFICATIONS - Certain fiscal 2001 amounts have been reclassified to
     conform to fiscal 2002 presentations.

2.   MARKETABLE SECURITIES

     HELD TO MATURITY - The Company maintains various investments in federal
     agency notes which are classified as held-to-maturity and are reported at
     amortized cost in accordance with FASB Statement No. 115 "Accounting for
     Certain Investments in Debt and Equity Securities". All items mature within
     one year. The cost and market value of the investments are summarized
     below:

                                     - 8 -

<PAGE>

<TABLE>
<CAPTION>

                                                                                         NET
                                                     AMORTIZED                       UNREALIZED
         DESCRIPTION                                   COST           MARKET        (LOSS) GAIN
<S>                                                <C>             <C>               <C>
         June 30, 2002 - Federal Agency Notes      $2,443,024      $ 2,404,501       $ (38,523)
                                                   ==========      ===========       =========

         June 30, 2001 - Federal Agency Notes      $6,284,141      $ 6,284,163       $      22
                                                   ==========      ===========       =========

</TABLE>

     AVAILABLE FOR SALE - During 2002, the Company received stock with a fair
     value of $64,865 through the demutualization of an insurance company. The
     fair value of this stock as of June 30, 2002 was $102,030. Management has
     classified the securities as available for sale. The unrealized gain of
     $24,157 (net of tax of $13,008) related to these shares was recorded in
     Accumulated Other Comprehensive Income as of June 30, 2002.

3.   OPERATING LEASES

     During the second quarter of 2002, the Company accrued $104,397 for costs
     associated with terminating its Norwood, Ohio lease and relocating its
     office facility. This operating lease expired during the fourth quarter of
     2002.

     In fiscal 2001, the Company signed a lease agreement for a new office
     facility in Blue Ash, Ohio. This operating lease, which began in December
     2001 and expires in November 2011, calls for escalating lease payments over
     the term of the lease. The Company records lease expense on a straight-line
     basis over the life of the lease.

     In fiscal 2002, the Company signed lease agreements for office equipment
     and furniture. These operating leases began in December 2001 and expire in
     November 2005 and November 2006, respectively.

     The annual minimum rent to be paid under the operating lease agreements is
     as follows:

     Year Ending June 30:

       2003                                                $ 1,046,320
       2004                                                  1,069,389
       2005                                                  1,069,389
       2006                                                    970,431
       2007                                                    857,929
       2008 & After                                          3,657,265

     Rent expense for the leased office space was $708,746 and $328,242 for 2002
     and 2001, respectively. The lease expense for the equipment and furniture
     was $180,184 for 2002.

                                     - 9 -

<PAGE>

4.   CAPITAL STOCK AND INCOME PER SHARE

     The following schedule is a summary of the Company's shares of capital
     stock.

<TABLE>
<CAPTION>

                                                         COMMON                       IN
                                        AUTHORIZED       ISSUED      OUTSTANDING   TREASURY

<S>                                   <C>            <C>            <C>           <C>
        Balance at June 30, 2002        15,000,000     12,329,227     12,327,227    2,000
                                        ==========     ==========     ==========    =====

        Balance at June 30, 2001        15,000,000     12,327,727     12,325,727    2,000
                                        ==========     ==========     ==========    =====

</TABLE>

     Income per common share was based on the weighted average number of common
     shares outstanding during each period. Accordingly, the sum of the
     individual quarters may not equal the year to date total.

     The Company's basic and diluted loss per share were determined as follows:

<TABLE>
<CAPTION>

                                                            2002                                      2001
                                        ------------------------------------------  ----------------------------------------
                                           INCOME          SHARES       PER SHARE      INCOME        SHARES       PER SHARE
        BASIC AND DILUTES EPS            (NUMERATOR)    (DENOMINATOR)    AMOUNT      (NUMERATOR)  (DENOMINATOR)    AMOUNT

<S>                                      <C>               <C>            <C>          <C>           <C>            <C>
        Loss available to

          common stockholders            $ (2,395,282)     12,326,352     $ (0.19)     $ (674,403)   12,324,528     $ (0.05)

</TABLE>

     Stock options representing 1,551,848 shares in 2002 and 1,362,562 shares in
     2001 were not included in computing diluted loss per share because their
     effects were antidilutive.

5.   STOCK OPTION PLAN

     During 1994, the Board of Directors approved a plan providing for the
     granting of options, to employees, for the purchase of a maximum of
     1,500,000 shares of common stock. In 1996, the plan was amended to provide
     for non-employee eligibility. In 1999, the plan was amended and restated to
     include in one document all previous amendments and other non-material
     changes designed to improve the operation of the plan and to reserve an
     additional 1,000,000 shares for issuance under the plan. Excluding the
     options granted in February 1994, all options have been granted at an
     exercise price equal to the fair market value at the date of grant and
     become exercisable equally over a period ranging from one to four years.
     The February 1994 options were granted at a price below fair market value
     at the date of grant and were subsequently adjusted to market. The 1994
     options granted became exercisable equally over a two-year period. All
     options expire at the end of ten years from the date of grant or are
     subject to the performance provisions of specific grants.

     The Company has adopted the disclosure only provision of SFAS No. 123 and
     applies APB Opinion No. 25 in accounting for its stock options. Had
     compensation cost for stock option grants made in fiscal years 2002 and
     2001 been determined using the fair value method consistent with SFAS No.
     123, the Company's net loss per share would have been effected as follows:

                                     - 10 -

<PAGE>

<TABLE>
<CAPTION>

                                                                    2002            2001
<S>                                                            <C>              <C>
        For the year ended June 30:
          Net loss  - as reported                              $ (2,395,282)    $ (674,403)
          Net loss  - proforma                                   (2,510,691)      (986,467)
        Basic and diluted loss per share - as reported                (0.19)         (0.05)
        Basic and diluted loss per share - proforma                   (0.20)         (0.08)

</TABLE>

     The fair value of each option is estimated on the date of grant using the
     Black-Scholes option pricing model with the following weighted average
     assumptions:

<TABLE>
<CAPTION>

                                                                    2002            2001
<S>                                                            <C>              <C>

        Expected volatility                                      268 %             235 %
        Risk-free interest rate                                 4.09 %            4.97 %
        Expected term of options                               5 years           5 years
        Expected dividend yield                                   0%                0%

</TABLE>

     Information regarding the Company's stock option plan for the years ended
     June 30, 2002 and 2001 is as follows:

<TABLE>
<CAPTION>
                                                                 2002                             2001
                                                   -------------------------------  ------------------------------
                                                                       WEIGHTED                        WEIGHTED
                                                                       AVERAGE                          AVERAGE
                                                                       EXERCISE                        EXERCISE
                                                       OPTIONS          PRICE           OPTIONS          PRICE
                                                   ----------------- -------------  ----------------- ------------

<S>                                                    <C>              <C>             <C>              <C>
        Outstanding at beginning of year                  1,362,562        $ 1.21          1,079,463        $1.01
        Granted                                             523,500          0.49            392,600         1.84
        Forfeited                                          (332,714)         1.40           (105,102)        1.53
        Exercised                                            (1,500)         0.29             (4,399)        0.41
                                                          ---------                        ---------

        Outstanding at end of year                        1,551,848        $ 0.93          1,362,562        $1.21
                                                          =========                        =========

        Options exercisable at end of year                  778,807        $ 0.89            722,077        $0.88
                                                          =========                        =========

        Weighted average fair value of options
          granted during year                            $     0.48                       $     1.80

</TABLE>

<TABLE>
<CAPTION>
                                                              OUTSTANDING                            EXERCISABLE
                                             ----------------------------------------------  ----------------------------
                                                                  WEIGHTED      WEIGHTED                      WEIGHTED
                                                                  REMAINING     AVERAGE                       AVERAGE
                                                                 CONTRACTUAL    EXERCISE                      EXERCISE
                                                  OPTIONS        LIFE (YEARS)    PRICE          OPTIONS        PRICE
<S>                                             <C>             <C>           <C>             <C>           <C>
Range of exercise price
        .29 - .69                                  701,493         7.99          $ 0.46          223,143       $ 0.41
        .71 - .80                                  237,914         6.05            0.72          237,915         0.72
        .88 - 1.47                                 214,676         4.52            1.02          170,926         1.03
       1.50 - 3.90                                 397,765         7.64            1.82          146,823         1.72
                                                  --------                                      --------

                                                 1,551,848         7.12          $ 0.93          778,807       $ 0.89
                                                 =========                                      ========

</TABLE>





                                     - 11 -
<PAGE>

6.   INCOME TAXES

     Deferred income tax assets and liabilities are computed for differences
     between the financial statement and tax basis of assets and liabilities
     that will result in taxable or deductible amounts in the future based on
     enacted tax laws and rates applicable to the periods in which the
     differences are expected to affect taxable income. Valuation allowances are
     established when necessary to reduce deferred tax assets to the amount
     expected to be realized. Income tax expense is the tax payable or
     refundable for the period plus or minus the change during the period in
     deferred tax assets and liabilities.

     Deferred taxes consist of the following:

<TABLE>
<CAPTION>
                                                                         JUNE 30,           JUNE 30,
                                                                           2002               2001
<S>                                                                     <C>               <C>
        Current deferred tax asset:
           Deferred revenue                                           $   259,731         $ 255,277
           Accrued expenses                                                91,657            91,990
           Reserves and allowances                                         48,802           141,669
           State taxes                                                     18,522             8,735
                                                                      -----------         ---------

        Total current deferred tax asset                              $   418,712         $ 497,671
                                                                      ===========         =========

        Non-current deferred tax asset:
           Net operating loss carryforward                            $ 1,644,079         $ 561,480
           Research and development credits                               464,492           188,774
           Alternative minimum tax credit                                                    96,545
           Fixed assets basis difference                                    7,824            62,724
                                                                      -----------         ---------
                      Total                                             2,116,395           909,523
                                                                      -----------         ---------
        Non-current deferred tax liability-
           Deferred software development costs                           (771,197)         (722,943)
           Unrealized gain on available for sale securities               (13,008)
                                                                      -----------         ---------
                      Total                                              (784,205)         (722,943)
                                                                      -----------         ---------

        Net non-current deferred tax asset                            $ 1,332,190         $ 186,580
                                                                      ===========         =========

</TABLE>

     The benefit for income taxes for the year ended June 30, 2002 and 2001
     consists of the following:

<TABLE>
<CAPTION>
                                                                         2002               2001
<S>                                                                   <C>                 <C>
        Current benefit                                               $  (149,462)        $(338,898)
        Deferred benefit                                               (1,079,659)         (184,006)
                                                                      -----------         ---------
                   Total                                              $(1,229,121)        $(522,904)
                                                                      ===========         =========

</TABLE>


      The primary differences between the statutory rate for federal income tax
      and the effective income tax rate are the benefits from research and
      development credits and state tax losses generated during the current
      year.  At June 30, 2002, the Company has available net operating loss
      carryforwards for U.S. Federal tax purposes of  approximately $4,836,000
      that will expire in 2021. Also at June 30, 2002, for U.S. Federal tax
      purposes, the Company has research and development credit carryforwards
      available to offset future income taxes of approximately $464,000, which
      will begin to expire in 2017.



                                     - 12 -
<PAGE>


7.   RECONCILIATION OF CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
     PRINCIPLES ("CANADIAN GAAP AND U.S. GAAP")

     During the years ended June 30, 2002 and 2001, there were no significant
     differences between Canadian GAAP and U.S. GAAP.


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