<PAGE>   1
CINTECH SOLUTIONS, INC.
(FORMERLY CINTECH TELE-
MANAGEMENT SYSTEMS, INC.)
Financial Statements for the Years Ended
June 30, 2001 and 2000 and
Independent Auditors' Report












<PAGE>   2







[DELOITTE & TOUCHE LETTERHEAD]





INDEPENDENT AUDITORS' REPORT


To the Stockholders of
  Cintech Solutions, Inc.

We have audited the accompanying balance sheets of Cintech Solutions, Inc.
(formerly Cintech Tele-Management Systems, Inc.) (the "Company") as of June 30,
2001 and 2000 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, 2001 and 2000 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 24, 2001





<PAGE>   3



CINTECH SOLUTIONS, INC.

BALANCE SHEETS
JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



ASSETS                                                              2001                       2000

<S>                                                           <C>                         <C>
CURRENT ASSETS:
  Cash and cash equivalents (Note 1)                          $    641,883                $  2,521,039
  Marketable securities (Note 2)                                 6,284,141                   5,828,194
  Accounts receivable, trade - (Net of
    allowance of $94,958 and $24,509
     in 2001 and 2000, respectively) (Note 1)                      301,389                     869,435
  Inventory (Note 1)                                                21,387                      45,969
  Prepaid expenses                                                  73,845                      31,131
  Deferred income taxes (Note 6)                                   497,671                     584,067
                                                              ------------                ------------
           Total current assets                                  7,820,316                   9,879,835
                                                              ------------                ------------


FIXED ASSETS (Note 1):
  Equipment                                                      1,198,675                   1,178,783
  Furniture and fixtures                                           325,756                     288,773
                                                              ------------                ------------
           Total                                                 1,524,431                   1,467,556
  Less accumulated depreciation                                 (1,208,086)                   (974,166)
                                                              ------------                ------------
           Total fixed assets - net                                316,345                     493,390
                                                              ------------                ------------

SOFTWARE DEVELOPMENT COSTS-
  Net (Note 1)                                                   1,807,357                   1,250,148
DEFERRED INCOME TAXES (Note 6)                                     186,580
                                                              ------------                ------------
           Total other assets - net                              1,993,937                   1,250,148
                                                              ------------                ------------


TOTAL                                                         $ 10,130,598                $ 11,623,373
                                                              ============                ============



LIABILITIES AND STOCKHOLDERS'
  EQUITY

  CURRENT LIABILITIES:
    Accounts payable                                          $    134,919                $    347,664
    Accrued liabilities:
      Accrued wages and compensation                               505,310                     660,074
      Accrued income taxes                                          75,678
      Warranty reserve                                              82,382                     126,323
      Other                                                        115,615                     171,558
    Deferred maintenance revenue (Note 1)                          638,193                     832,528
                                                              ------------                ------------
             Total current liabilities                           1,476,419                   2,213,825
                                                              ------------                ------------

  DEFERRED INCOME TAXES (Note 6)                                                                83,822
                                                              ------------                ------------

  STOCKHOLDERS' EQUITY (Notes 1,4,5):
    Common stock                                                 9,008,289                   9,005,433
    Contributed capital                                            675,757                     675,757
    Treasury stock                                                  (2,290)                     (2,290)
    Accumulated deficit                                         (1,027,577)                   (353,174)
                                                              ------------                ------------
             Total stockholders' equity                          8,654,179                   9,325,726




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

  TOTAL                                                       $ 10,130,598                $ 11,623,373
                                                              ============                ============

</TABLE>




See notes to financial statements.







                                      - 2 -

<PAGE>   4

CINTECH SOLUTIONS, INC.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                             2001                     2000

<S>                                                                      <C>                      <C>
NET SALES (Note 1):
   Product sales                                                         $ 6,261,891              $ 9,915,210
   Services and other sales                                                2,093,824                2,704,293
                                                                         -----------              -----------
      Total net sales                                                      8,355,715               12,619,503
                                                                         -----------              -----------

COST OF PRODUCTS SOLD AND SERVICES
  PROVIDED (Note 1):
  Cost of products sold                                                    2,080,365                2,428,894
  Cost of services and other sales                                           446,998                  788,173
                                                                         -----------              -----------
      Total cost of products sold and services provided                    2,527,363                3,217,067
                                                                         -----------              -----------

GROSS PROFIT                                                               5,828,352                9,402,436

RESEARCH AND DEVELOPMENT                                                     999,532                  672,847

SELLING, GENERAL AND ADMINISTRATIVE (Notes 1,3)                            6,492,097                5,761,836
                                                                         -----------              -----------

INCOME (LOSS) FROM OPERATIONS                                             (1,663,277)               2,967,753

OTHER INCOME                                                                 465,970                  327,218
                                                                         -----------              -----------

INCOME (LOSS) BEFORE INCOME TAX PROVISION/
  (BENEFIT)                                                               (1,197,307)               3,294,971

INCOME TAX PROVISION /(BENEFIT) (Note 6)                                    (522,904)                 582,827
                                                                         -----------              -----------

NET INCOME (LOSS)                                                        $  (674,403)             $ 2,712,144
                                                                         ===========              ===========

BASIC EARNINGS (LOSS) PER COMMON SHARE (Note 4)                          $     (0.05)             $      0.22
                                                                         ===========              ===========

DILUTED EARNINGS (LOSS) PER COMMON SHARE (Note 4)                        $     (0.05)             $      0.21
                                                                         ===========              ===========

</TABLE>
See notes to financial statements.









                                      - 3 -
<PAGE>   5
CINTECH SOLUTIONS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                     COMMON                                                              TOTAL
                                                      STOCK        CONTRIBUTED       TREASURY        ACCUMULATED     STOCKHOLDERS'
                                                  NO PAR VALUE       CAPITAL           STOCK           DEFICIT           EQUITY

<S>                                               <C>              <C>              <C>              <C>              <C>
BALANCE AT JUNE 30, 1999                          $ 8,993,777      $   675,757      $    (2,290)     $(3,065,318)     $ 6,601,926

STOCK OPTIONS EXERCISED (20,143 shares)                11,656                                                              11,656

NET INCOME                                                                                             2,712,144        2,712,144
                                                  -----------      -----------      -----------      -----------      -----------

BALANCE AT JUNE 30, 2000                            9,005,433          675,757           (2,290)        (353,174)       9,325,726

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

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


BALANCE AT JUNE 30, 2001                          $ 9,008,289      $   675,757      $    (2,290)     $(1,027,577)     $ 8,654,179
                                                  ===========      ===========      ===========      ===========      ===========
</TABLE>


See notes to financial statements.













                                      - 4 -

<PAGE>   6

CINTECH SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                               2001                  2000

<S>                                                                        <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                        $  (674,403)           $ 2,712,144
                                                                           -----------            -----------
  Adjustments to reconcile net income (loss) to net cash (used in)
    provided by operating activities:
    Depreciation                                                               295,855                207,219
    Amortization of software development costs                                 504,280                121,815
    Deferred income taxes                                                     (184,006)                73,711
    Provision for doubtful accounts                                             70,449                (26,092)
    Changes in assets and liabilities:
      Decrease in accounts receivable                                          497,597                178,810
      Decrease (increase) in inventory                                          24,582                (20,188)
      Increase in other assets                                                 (42,714)                  (959)
      (Decrease) increase in accounts payable                                 (212,745)                77,230
      Decrease in accrued expenses                                            (330,326)               (82,110)
      (Decrease) increase in deferred maintenance revenue                     (194,335)               103,850
                                                                           -----------            -----------
           Total adjustments                                                   428,637                633,286
                                                                           -----------            -----------
           Net cash (used in) provided by operating activities                (245,766)             3,345,430
                                                                           -----------            -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for software development costs                               (1,061,489)              (793,807)
  Purchase of marketable securities                                           (455,947)              (963,347)
  Purchase of fixed assets                                                    (118,810)              (578,974)
                                                                           -----------            -----------
           Net cash used in investing activities                            (1,636,246)            (2,336,128)
                                                                           -----------            -----------

CASH FLOWS FROM FINANCING ACTIVITIES-
  Proceeds from exercise of stock options                                        2,856                 11,656
                                                                           -----------            -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (1,879,156)             1,020,958

CASH AND CASH EQUIVALENTS:
  Beginning of year                                                          2,521,039              1,500,081
                                                                           -----------            -----------

  End of year                                                              $   641,883            $ 2,521,039
                                                                           ===========            ===========

SUPPLEMENTAL CASH FLOW INFORMATION-Taxes paid                              $    16,512            $   491,778
                                                                           ===========            ===========
</TABLE>

See notes to financial statements.









                                      - 5 -
<PAGE>   7



CINTECH SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      NATURE OF BUSINESS - Cintech Solutions, Inc. (formerly Cintech
      Tele-Management Systems, Inc.) (the "Company") develops and markets
      Internet technology solutions to manage and analyze interactions with
      customers, partners, and associates for improved relationships and
      informed decision-making. In concert with the Internet technology
      solutions, 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.
      The differences in accounting principles generally accepted in the United
      States of America and Canada are described in Note 7.

      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 - 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 an accelerated method over the following useful lives:

         Equipment                                    3-5 years
         Furniture and fixtures                       2-7 years







                                      - 6 -
<PAGE>   8



      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:


                                                            2001       2000

          Literature and other documentation             $ 13,195    $ 40,318
          Computer hardware                                12,205       9,068
          Allowance for obsolete inventory                 (4,013)     (3,417)
                                                         --------    --------

          Total inventory                                $ 21,387    $ 45,969
                                                         ========    ========


      SIGNIFICANT CUSTOMERS - Most of the Company's sales are to distributors in
      the voice-centric call center solutions market. The Company had sales to
      major distributors, as follows:
<TABLE>
<CAPTION>


                                                                  Sales for the Years Ended June 30,
                                                                 2001                           2000
                                                       --------------------------     ------------------------
                                                          Amount           %             Amount           %

<S>                                                      <C>            <C>            <C>            <C>
          Distributor A                                  $5,584,548        67 %        $8,548,116        68 %
          Distributor B                                     643,594       8.0 %         1,234,124      10.0 %
                                                         ----------     ------         ----------     ------

          Total                                          $6,228,142      75.0 %        $9,782,240      78.0 %
                                                         ==========     ======         ==========     ======
</TABLE>


      The Company had gross accounts receivable from major distributors, each of
      which was in excess of 10% of the Company's total accounts receivable, as
      follows:


                                                                      PERCENT OF
                                                                         GROSS
                                                                       ACCOUNTS
                                                       DISTRIBUTORS   RECEIVABLE
          JUNE 30, 2001                                      2             71 %
          June 30, 2000                                      1             74 %






      INTERNATIONAL SALES - The Company had international sales as follows:

<TABLE>
<CAPTION>

                                                                      Sales for the Years Ended June 30,
                                                                     2001                          2000
                                                         ----------------------------  --------------------------
                                                             AMOUNT           %            AMOUNT          %

<S>                                                        <C>              <C>          <C>            <C>
          Canada                                           $145,276         2 %          $134,648       1 %
</TABLE>



      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 $1,061,489 and $793,807 and related amortization
      was $504,280 and $121,815 for 2001 and 2000, respectively. The Company
      periodically evaluates the capitalized cost relative to potential sales
      and accelerates the write-off when appropriate.





                                      - 7 -


<PAGE>   9

      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 $1,327,027 and $1,977,347 for 2001 and
      2000, 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 July 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 will have no impact on the Company's financial statements.

      In July 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 will
      have no impact on the Company's financial statements.

      In July 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 will have no
      impact on the Company's financial statements.

      In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
      Instruments and Hedging Activities." This statement, as amended, was
      adopted on July 1, 2000 and had no impact on the Company's reported
      financial position, results of operations or cash flows.

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

2.    MARKETABLE SECURITIES

      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 SFAS 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:

<TABLE>
<CAPTION>

                                                                                                 NET
                                                        AMORTIZED                            UNREALIZED
          DESCRIPTION                                      COST              MARKET             GAIN

<S>                                                     <C>                <C>                <C>
          June 30, 2001 - Federal Agency Notes          $6,284,141         $6,284,163         $       22
                                                        ==========         ==========         ==========

          June 30, 2000 - Federal Agency Notes          $5,828,194         $5,831,140         $    2,946
                                                        ==========         ==========         ==========
</TABLE>








                                      - 8 -
<PAGE>   10


3.    OPERATING LEASES

      The Company leases its office facility in Norwood, Ohio. This operating
      lease, which began in March 1995 and expires in April 2002, 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.

      The annual minimum rent to be paid under the operating lease agreement for
      the facility in Norwood, Ohio is $194,850 for the year ending June 30,
      2002.

      Rent expense for the leased office facility in Norwood was $328,242 and
      $308,729 for 2001 and 2000, respectively.

      In fiscal 2001, the Company signed a lease agreement for a new office
      facility in Blue Ash, Ohio. This operating lease, which begins in December
      2001 and expires in November 2011, calls for escalating lease payments
      over the term of the lease. The Company will record lease expense on a
      straight-line basis over the life of the lease. No lease payments are due
      until occupancy in December 2001.

      The annual minimum rent to be paid under the operating lease agreement for
      the facility in Blue Ash, Ohio, is as follows:


        Year Ending June 30:
          2002                                                     $  431,368
          2003                                                        739,493
          2004                                                        739,493
          2005                                                        739,493
          2006                                                        739,493
          2007 and after                                            4,448,394




4.    CAPITAL STOCK AND INCOME (LOSS) 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, 2001          15,000,000      12,327,727      12,325,727           2,000
                                            ==========      ==========      ==========      ==========

          Balance at June 30, 2000          15,000,000      12,323,328      12,321,328           2,000
                                            ==========      ==========      ==========      ==========
</TABLE>


      Income (loss) 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.





                                      - 9 -
<PAGE>   11

      The Company's basic and diluted earnings (loss) per share were determined
as follows:
<TABLE>
<CAPTION>

                                                                      2001                                     2000
                                                   ----------------------------------------   -------------------------------------
                                                      INCOME         SHARES       PER SHARE     INCOME         SHARES     PER SHARE
          BASIC EPS                                 (NUMERATOR)   (DENOMINATOR)     AMOUNT    (NUMERATOR)  (DENOMINATOR)   AMOUNT

<S>                                                 <C>             <C>          <C>          <C>            <C>          <C>
          Income (loss) available to
            common stockholders                     $ (674,403)     12,324,528   $  (0.05)    $2,712,144     12,311,524   $   0.22

          EFFECT OF DILUTIVE SECURITIES

          Stock options                                                                                         697,899
                                                    ----------      ----------   --------     ----------     ----------   --------

          DILUTED EPS

          Income (loss) available to
            common stockholders
            and assumed conversions                 $ (674,403)     12,324,528   $  (0.05)    $2,712,144     13,009,423   $   0.21
                                                    ==========      ==========   ========     ==========     ==========   ========
</TABLE>




      Stock options representing 1,362,562 shares in 2001 and 20,000 shares in
      2000 were not included in computing diluted earnings (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 2001 and
      2000 been determined using the fair value method consistent with SFAS No.
      123, the Company's net income (loss) and net income (loss) per share would
      have been effected as follows:
<TABLE>
<CAPTION>

                                                                                2001                   2000

<S>                                                                        <C>                   <C>
          For the year ended June 30:
            Net income (loss) - as reported                                $  (674,403)          $   2,712,144
            Net income (loss) - proforma                                      (986,467)              2,653,137
          Basic earnings (loss) per share - as reported                          (0.05)                   0.22
          Basic earnings (loss) per share - proforma                             (0.08)                   0.22
          Diluted earnings (loss) per share - as reported                        (0.05)                   0.21
          Diluted earnings (loss) per share - proforma                           (0.08)                   0.20
</TABLE>





                                     - 10 -
<PAGE>   12


      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:


                                                        2001             2000

          Expected volatility                           235 %             223 %
          Risk-free interest rate                      4.97 %            6.18 %
          Expected term of options                    5 years           5 years
          Expected dividend yield                        0%                 0%




      Information regarding the Company's stock option plan for the years ended
      June 30, 2001 and 2000 is as follows:
<TABLE>
<CAPTION>
                                                                2001                             2000
                                                  -------------------------------- -------------------------------
                                                                      WEIGHTED                         WEIGHTED
                                                                       AVERAGE                         AVERAGE
                                                                      EXERCISE                         EXERCISE
                                                       OPTIONS          PRICE          OPTIONS          PRICE
                                                  ----------------- -------------- ----------------- -------------

<S>                                                    <C>              <C>            <C>               <C>
          Outstanding at beginning of year             1,079,463        $1.01          900,623           $0.82
          Granted                                        392,600         1.84          242,190            1.71
          Forfeited                                     (105,102)        1.53          (43,207)           1.29
          Exercised                                       (4,399)        0.04          (20,143)           0.58
                                                      ----------                    ----------

          Outstanding at end of year                   1,362,562        $1.21        1,079,463           $1.01
                                                      ==========                    ==========

          Options exercisable at end of year             722,077        $0.88          539,649           $0.81
                                                      ==========                    ==========

          Weighted average fair value of options
            granted during year                       $     1.80                    $     0.45

<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                          241,578          5.98         $0.40           194,797         $0.43
          .71 - .80                         258,914          7.04          0.72           202,070          0.72
          .88 - 1.47                        339,805          6.05          1.10           264,805          1.13
          1.50 - 3.90                       522,265          8.70          1.90            60,405          1.73
                                          ---------                                     ---------

                                          1,362,562          7.24         $1.21           722,077         $0.88
                                          =========                                     =========
</TABLE>



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.





                                     - 11 -
<PAGE>   13
<TABLE>
<CAPTION>

      Deferred taxes consist of the following:

                                                                          JUNE 30,            JUNE 30,
                                                                           2001                 2000
<S>                                                                     <C>                  <C>
          Current deferred tax asset:
             Deferred revenue                                           $ 255,277            $ 333,011
             Accrued expenses                                              91,990              126,674
             Reserves and allowances                                      141,669              114,163
             State taxes                                                    8,735               10,219
                                                                        ---------            ---------

          Total current deferred tax asset                              $ 497,671            $ 584,067
                                                                        =========            =========

          Non-current deferred tax asset:
             Net operating loss carryforward                            $ 561,480
             Research and development credits                             188,774            $ 284,418
             Alternative minimum tax credit                                96,545               96,545
             Fixed assets basis difference                                 62,724               35,274
                                                                        ---------            ---------
                        Total                                             909,523              416,237
          Non-current deferred tax liability-
             Deferred software development costs                         (722,943)            (500,059)
                                                                        ---------            ---------

          Net non-current deferred tax asset/(liability)                $ 186,580            $ (83,822)
                                                                        =========            =========
</TABLE>



      The provision (benefit) for income taxes for the year ended June 30, 2001
      and 2000 consists of the following:

<TABLE>
<CAPTION>

                                                            2001                    2000

<S>                                                      <C>                     <C>
          Current provision (benefit)                    $ (338,898)             $  509,116
          Deferred provision (benefit)                     (184,006)                682,825
                                                         ----------              ----------
                     Total                                 (522,904)              1,191,941
          Decrease in the valuation allowance                                      (609,114)
                                                         ----------              ----------

          Income tax provision (benefit)                 $ (522,904)             $  582,827
                                                         ==========              ==========
</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, 2001, the Company has available net operating loss
      carryforwards for U.S. Federal tax purposes of approximately $1,651,000
      that will expire in 2021. Also at June 30, 2001, for U.S. Federal tax
      purposes, the Company has research and development credit carryforwards
      available to offset future income taxes of approximately $189,000, which
      will begin to expire in 2017.

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

      These financial statements have been prepared in accordance with
      accounting principles generally accepted in the United States of America.

      During the years ended June 30, 2001 and 2000, differences between
      Canadian GAAP and U.S. GAAP arose as a result of depreciation. For U.S.
      GAAP purposes, furniture and fixtures, equipment, leasehold



                                     - 12 -
<PAGE>   14

      improvements, and computer equipment are depreciated over useful lives of
      seven, five, two, and three years, respectively, using an accelerated
      method. For Canadian GAAP purposes, furniture and fixtures, equipment,
      leasehold improvements, and computer equipment are to be depreciated over
      useful lives of five, three, two, and three years, respectively, using a
      straight-line method. The difference in methodology results in additional
      depreciation expense under Canadian GAAP of $51,927 and $68,240 for the
      years ended June 30, 2001 and 2000, respectively. The difference does not
      have a material effect on the earnings (loss) per share calculation for
      either year.



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                                     - 13 -