U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]      Annual report under Section 13 or 15 (d) of the Securities Exchange Act
         of 1934 for the fiscal year ended June 30, 2001

[  ]     Transition report under Section 13 or 15 (d) of the Securities Exchange
         Act  of  1934  for  the  transition   period  from   _____________   to
         ____________

Commission File Number: 000-27869
                                AUTHORISZOR INC.
                 (Name of Small Business Issuer in its Charter)

         Delaware                                           75-2661571
-------------------------------                         -------------------
(State or Other Jurisdiction of                          (I.R.S. Employer
Incorporation or Organization)                          Identification No.)

Windsor House, Cornwall Road
Harrogate, North Yorkshire
HG1 2PW  United Kingdom                                     HG1 2PW
----------------------------------------                   ----------
(Address of Principal Executive Offices)                   (Zip code)
                               011-44-1423-730-300
                               -------------------
                (Issuer's Telephone Number, Including Area Code.)

Securities registered under Section 12(b) of the Exchange Act:

                                                     Name of Each Exchange
         Title of Each Class                          on Which Registered
         -------------------                          -------------------
               NONE                                           N/A

Securities registered under Section 12(g)
 of the Exchange Act:                          Common Stock, $0.01 par value
                                               -----------------------------
                                                      (Title of class)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 past 90 days.
                                                         Yes  X      No
                                                             -----      -----

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [  ]

State issuer's revenues for its most recent fiscal year:  $708,477

The  aggregate  market  value  of  the  voting  and  non-voting  stock  held  by
non-affiliates  of the  registrant  as of  October  17,  2001 was  approximately
$2,319,000. For purposes of this computation,  all executive officers, directors
and 10% stockholders were deemed affiliates.  Such a determination should not be
construed  as an  admission  that  such  executive  officers,  directors  or 10%
stockholders are affiliates.

As of October 17, 2001, there were 18,456,698 shares of the common stock,  $0.01
par value, of the Company issued and outstanding.

Transitional Small Business Disclosure Format:   Yes          No    X
                                                     ------      --------

                       DOCUMENTS INCORPORATED BY REFERENCE

The  Registrant's  definitive  Proxy  Statement  pertaining  to the 2001  Annual
Meeting of  Stockholders  (the "Proxy  Statement")  and filed or to be filed not
later than 120 days after the end of the fiscal year pursuant to Regulation  14A
is incorporated herein by reference into Part III.


<PAGE>

<TABLE>
<CAPTION>

                                Authoriszor Inc.


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<S>      <C>      <C>                                                                                            <C>

PART I
         ITEM 1:  DESCRIPTION OF BUSINESS.........................................................................1
         ITEM 2:  DESCRIPTION OF PROPERTIES......................................................................11
         ITEM 3:  LEGAL PROCEEDINGS..............................................................................11
         ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................11

PART II
         ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......................................12
         ITEM 6.  MANAGEMENT'S DISCUSSION AND PLAN OF OPERATIONS.................................................17
         ITEM 7.  FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...................22
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS..................................................24

PART III
         ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............................................24
         ITEM 10. EXECUTIVE COMPENSATION.........................................................................24
         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................24
         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................24

PART IV
         ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K...............................24

SIGNATURES

INDEX TO EXHIBITS

</TABLE>





<PAGE>
                                     PART I


         This report contains  forward-looking  statements within the meaning of
Section 27A of the  Securities Act of 1933, as amended (the  "Securities  Act"),
and  Section  21E of the  Securities  Exchange  Act of  1934,  as  amended  (the
"Exchange Act"). These  forward-looking  statements are subject to certain risks
and  uncertainties  that could cause actual  results to differ  materially  from
historical  results or  anticipated  results,  including  those set forth  under
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and elsewhere in, or incorporated by reference into, this report.

         Unless the context otherwise  requires,  "Authoriszor,"  the "Company,"
"we,"  "our," "us" and  similar  expressions  refers to  Authoriszor  Inc.,  its
subsidiaries and predecessors.

                         Item 1: Description of Business

History

         Our predecessor was  incorporated as a Colorado  corporation on January
20, 1989 under the name Starlight  Acquisitions Inc. On May 10, 1996,  Starlight
Acquisitions,  Inc.  acquired Toucan Mining Plc (then named Toucan Mining Ltd.),
incorporated in the Isle of Man, the holding company of a mining group operating
in South America.

         On July 29, 1996, Starlight Acquisitions,  Inc. was reincorporated as a
Delaware  corporation  on July 22, 1996 under the name Toucan Gold  Corporation.
Effective June 30, 1999, Toucan Mining Plc sold its sole operating subsidiary to
Minmet Plc, a company  listed on the Irish Stock  Exchange  and the London Stock
Exchange, in consideration for the issue of Minmet ordinary shares, the grant of
warrants  and  other  consideration.   Funding  of  the  consideration  for  the
transaction was completed on July 15, 1999. On July 22, 1999, we acquired all of
the  outstanding  capital stock of Authoriszor  Ltd.,  which was then named ITIS
Technologies Limited,  whose business consisted primarily of developing internet
security software. On August 25, 1999, our name was changed to Authoriszor Inc.,
and the name of our subsidiary was changed to Authoriszor Ltd.

         On January 12,  2000,  Authoriszor  Holdings  Ltd.,  our newly  created
wholly-owned  subsidiary,  acquired  the whole of the  issued  share  capital of
Authoriszor Ltd. as part of an intra-group reorganization.

         On January 27, 2000, we sold our wholly-owned subsidiary, Toucan Mining
Plc, to Golden Ridge Group  Limited for an aggregate  consideration  of $809,750
((pound)500,000) in cash. On the same date, Toucan Mining Plc agreed to transfer
to us the  beneficial  interest in  2,000,000  shares in Minmet and  warrants to
subscribe for ordinary  shares of Minmet at a price of (pound)0.08 per share for
a  further   7,700,000  shares  in  Minmet  for  a  consideration  of  (pound)1.
Subsequently,  we have exercised such warrants and sold all of the Minmet shares
beneficially owned by us.

Overview of Our Business

         We provide both technology  consulting services and a suite of security
software for companies in the e-commerce,  security and workflow  sectors of the
information  technology industry  internationally with the technology consulting
services being our primary business.  Our customers,  including the customers of
our majority-owned subsidiaries, WRDC Ltd. ("WRDC") and Logsys Solutions Limited
("Logsys"),  are global corporations and local and central government bodies who
require expert advice and guidance on the  implementation  of their  information
systems,  and the  resources to carry out those  implementations.  Our customers
include  financial  services,  telecommunications,   manufacturing,  information
technology and health organizations and various UK government departments.

Our Technology Consulting Services

         With respect to our  technology  services unit, we seek to discover the
competitive  advantages  that are available in an  increasingly  competitive and
rapidly  changing  world for our  customers.  We emphasize  functional  business
solutions and enterprise  electronic business  (e-business)  transformation that
incorporates   business  processes  and  leading-edge   internet   technologies,
including a focus on highly  specialized areas of the e-business arena where our
majority-owned   subsidiaries   have  a   demonstrable   record  of   successful
implementation  of  such  applications.  We  then  seek  to  leverage  our  core
competencies  in  the  areas  of  IT  project  management  discipline,  delivery
methodologies  and  business  process  transformation  to provide  change to our

                                       1
<PAGE>

customers'  businesses.  We create value for our clients through our combination
of broad  skills,  flexible  pricing  options,  speed  and  reliability  and the
implementation of our people centered solutions.

         Our primary  focus is to  understand  the  business  problems  that our
clients are facing and provide  the  solutions  that enable our clients to solve
those  problems.  We believe  that the  solutions  we provide  deliver  tangible
business value to clients in the form of increased revenues and decreased costs.
Our  service   model  takes  a  client   efficiently   from   strategy   through
implementation.  Our approach identifies and prioritizes  initiatives,  delivers
and implements  the technology  solutions to defined  markets,  captures  market
experience and feedback following then  implementation,  and immediately applies
this feedback to further  refine the  technology  solutions.  This service model
also allows us to  identify,  capture and reuse the  frameworks  that we design,
process and implement for specific  projects,  allowing us to further refine and
reuse the techniques for other client projects.

         We believe  that the  following  elements  of our  approach  are key to
providing effective solutions for our clients:

         o        our teams and our  approach  are  designed to help our clients
                  efficiently  identify  where  value,  in the form of increased
                  revenue and  decreased  costs,  can be  achieved,  and then to
                  deliver the value to our clients;
         o        we  discover,  assess,  plan and  deliver our  solutions  in a
                  timely  manner.   Our  service  model  revolves  around  rapid
                  delivery  and  implementation,  as  evidenced  by WRDC's Rapid
                  Project Implementation system;
         o        our culture is defined by  individuals  that are  creative and
                  determined  to take  whatever  action is  required  to deliver
                  value to our clients; and
         o        our understanding of complex technology allows us to merge the
                  best of advanced  technology with the legacy components of our
                  clients' systems.

         Through Logsys, we have also developed a more people-centered  approach
to providing consulting services to our clients. Logsys specializes in providing
the following areas of service:  application  access  control,  security/network
architecture,  object-based  directories,  object based  workflow and messaging.
These service niches add to the general technology services that we provide, and
combines  well  with our prior  history  of  designing  and  producing  security
software solutions for our clients.

Our Security Software Solution

         Though a substantially  smaller part of our current  business,  we also
provide a patent-pending  security solution that is designed to secure corporate
information  while  enabling  businesses  to  provide  secure  access  to  their
corporate  website and  applications and to conduct secure  communications  over
computer networks and the internet. Our product suite and processes are designed
to enable a corporation to provide  secure access to the  information on its web
server to its  customers,  suppliers,  employees  and public  visitors  from the
internet, according to their pre-determined security profile.

         Our suite of  security  solution  software  is  designed  to ensure the
integrity  of the  information  received  by an  end-user  after a  request  for
corporate  information  is  submitted to the server.  By using  silent  security
verification not apparent to the user, the Authoriszor product suite identifies,
authenticates,  and, if authenticated,  authorizes the request to proceed. To be
authenticated by a server that has our product suite installed, the end-user and
the user's  computer  or terminal  must be  validated.  Our profile  selector is
designed to ensure that the person requesting  information is only provided with
information  to  which  such  person  is  authorized.   Validated  requests  for
information  are handled by the protected  server,  which creates pseudo uniform
resource  locators that  disconnect the name of the data source and the location
of the data on the corporate Web server.

         Our virtual  publisher then creates a response in the form of a virtual
web page,  and, after verifying that no changes have occurred in the environment
or device of the person requesting  information since the request was submitted,
our product  suite sends the  requestor  the web page of  information  off-line,
publishing it through a virtual page publishing system. The process of verifying
that no changes have occurred prior to publishing the  information  off-line has
the added benefit of making certain that the now secured  transmissions have not
been intercepted or impersonated, and that the requestor's identity is still the
original  requestor that commenced the session.  Our product suite then destroys
the  virtual  web  page  response  that  was  sent  to  the  person   requesting
information.

                                       2
<PAGE>

Industry Background

         The   continued   growth  of  the  internet  and  advances  in  network
technologies  have  fundamentally  changed the way business is conducted.  These
developments,  as well as advances in broadband and wireless technologies,  have
allowed  organizations to make available their corporate  computer  networks and
applications to a wide range of users.

         E-business  has become  critical  for many  organizations.  Examples of
e-business  applications  include  supply  chain  management,   online  banking,
document sharing, both inside and outside the organization, order-entry systems,
government tax filing systems,  marketing on the internet,  inventory management
and internet-based commerce-known as e-commerce.

         As  businesses  implement  and  extend  their  information   technology
infrastructures  to provide  increased  access to their networks,  databases and
applications,  they face significant new challenges.  These  challenges  include
management of distributed computing environments, functionality of applications,
implementation  of  new  technologies,  and  the  security  of  information  and
networks.

         The market for  consulting  services and the  technologies  used in the
consulting  services arena have been changing rapidly over the last three years,
and we  expect  this  level of change  to  continue.  The  market  for  advanced
technology  consulting  skills  expanded  rapidly  during the  period  from 1999
through  mid-2000,  but has both shifted and declined  significantly  since such
period.  Our success will  depend,  in part,  on our ability to develop  service
offerings  and  products  that keep pace with  rapid and  continuing  changes in
technology, evolving industry needs and changing client preferences. Our success
will also depend on our ability to develop and implement ideas that successfully
apply existing and new technologies to deliver tangible value to our clients. We
may not be successful in addressing  these  developments on a timely basis or in
selling our services and products in the marketplace.

         Our company has responded to these shifts in the industry by creating a
business  capable  of  providing  an  end-to-end  solution.  We have  consulting
resources that we believe are capable of identifying  and  quantifying  need, we
have  implementation  resources  that  we  believe  are  capable  of  developing
solutions  based  upon new  developments  and  incorporating  standard  software
products,  and we have our own technology  which is designed to provide security
of information for networks, as exemplified by the Authoriszor suite of security
software.

Our Strategy

         Our original concept and strategy, conceived by the founding management
team, had been the invention, manufacture and sale of a single internet security
software product,  Authorizsor  2000(TM),  to major  corporations and government
agencies  internationally.  While we have successfully  created some proprietary
technology  components,  our ability to exploit these inventions was limited due
to the following factors:

         o        The Competitive  Nature of the Market. The market for internet
                  security  technologies is both highly opportunistic and highly
                  competitive.   While  we  have  demonstrated  our  ability  to
                  conceive  proprietary  technology,  we have not  been  able to
                  compete  successfully  with  established  market players.  See
                  "Item 1. Competition" in this Annual Report on Form 10-KSB.

         o        Market  Leadership and  Opportunity.  We believe that in order
                  for   internet-centric   technologies   to   be   commercially
                  successful,  it is  necessary  to  achieve a measure of market
                  leadership as  exemplified  through  achieving a larger market
                  share than  one's  competitors.  We were  unable to obtain the
                  market  leadership  recognition  that was  required  to make a
                  significant  impact on the  existing  status quo for  internet
                  security software.

         o        Product  Acceptance.  We were  unable to  achieve  significant
                  commercial  acceptance  of our product.  While our product has
                  some unique  technologies,  our potential  customers preferred
                  less unique but more mature  features  in  competing  products
                  that met more of such customer's perceived requirements.

         o        Market  Conditions.  We recognized that at the end of 2000 and
                  in early 2001 the generic  internet  industry was undergoing a
                  correction.   In  addition,  global  economies  have  recently
                  contracted  with the  result  that  more  pressures  have been
                  imposed on vendors within the internet industry.

                                       3
<PAGE>



         o        Lack of Profound  Industry  Partnerships.  We were not able to
                  establish  a  sufficient  number of industry  partnerships  to
                  leverage  our  product,  as a number  of our  competitors  had
                  already established fundamental relationships with established
                  industry leaders.

         As a result of detailed  analysis  and  research of our  products,  our
financial  position  and our  prospective  business,  the new  management  team,
appointed by the Board of Directors, in January 2001, and in connection with the
resignation  of  our  Chief  Executive  Officer,  President  and  Interim  Chief
Financial  Officer,  made the  decision to change the strategy of the Company to
become a "full service" supplier of IT solutions.

         We have revised our  business  plan  accordingly  to operate as a "full
service" solution provider,  providing products,  technological inventions and a
wide range of services to our customers.  While the Authoriszor 2000(TM) product
remains an element of our strategy, it is increasingly apparent that a number of
the components of the product can be sold as "stand alone" technologies to other
software  vendors.  As a  result,  we  will  now  seek  to  provide  some of our
patent-pending  technologies to other software vendors that may be able to embed
our technologies into their own. Our strategy, therefore, has changed and is now
focused on two strategic directions:

         o        to  become  a  full  service  vendor  of  consulting,  systems
                  integration   and   systems   development   services   to  the
                  e-commerce,  security and work flow sectors of the information
                  technology industry,  embodied by the creation of two distinct
                  business units; and
         o        to license  our  products  and the  underlying  technology  to
                  companies that have an established  sales channel and route to
                  market.

         We  intend  to  become  one  of the  leading  providers  of  technology
consulting  services  through our policy of providing  full  service  technology
solutions for our customers and licensing our technology. The principal elements
of our  strategy to achieve  this  involved an  organizational  and  operational
restructuring of our business consistent with our new focus.

Operational Restructuring

         In  connection  with  the  change  in our  business  strategy,  we have
restructured  our business to operate through two business units: the Consulting
and  Implementation  Services  Business  Unit  and  the  Authoriszor  Technology
Business Unit.  Each of these distinct  business units have their own individual
product and service strategies targeted specifically on precisely defined market
segments.  However,  we believe that at the outset of  implementing  our revised
strategy,  the  Consulting  and  Implementation  Services  Business Unit will be
central to the successful implementation of our current business plan; though we
believe there exists opportunities for cross-selling between the business units,
thereby leading to increased revenue prospects.

     The basis for our decision to operate  through two distinct  business units
was based primarily on our perceived need to reduce the "cash burn" rate that we
had historically  experienced,  the projected growth for consulting  services in
the internet security and associated markets,  the need to produce revenues that
did not  require  large  initial  up-front  cash  expenditures,  and the need to
compliment technology with implementation services.

     As a result of the  foregoing,  the  management  team  decided to develop a
consulting services capability through acquisition with specific emphasis in the
following  vertical   commercial  sectors:   financial   services,   healthcare,
government agencies, high technology and large commercial enterprises.

     Consulting and Implementation Services Business Unit

     In order to most  efficiently and  effectively  realize the creation of the
Consulting and  Implementation  Services Business Unit, we acquired two existing
consulting   services   companies:   WRDC  and  Logsys.   The   Consulting   and
Implementation  Services  Business  Unit  generally  sells  consulting,   system
integration  and managed  services to London Times 1000  companies and local and
central  governments.  The service segment of this business is entirely  focused
upon service-oriented  product sales based on outsourced technology  components.
For more  information  concerning  the  terms  and  conditions  upon  which  the
acquisitions  of WRDC and  Logsys  were  consummated,  please  refer to "Item 1.
Acquisitions" in this Annual Report on Form 10-KSB.

                                       4
<PAGE>


         WRDC Ltd.

         WRDC, established in 1994, provides a broad array of strategic services
and a number of key strategic  technologies  and concepts to its clients.  These
key technologies  currently include electronic  messaging,  directory  services,
security  architectures  and internet  technologies and the combination of these
technologies.  Providing  services  in these  areas  enables  WRDC to  deliver a
complete  "end-to-end"  business  solution  that  integrates  into any  existing
system. The methodology employed by WRDC to deliver successful projects is based
on a Rapid Project Implementation  philosophy.  This implementation  methodology
initially identifies the client requirements through WRDC Consulting, a specific
business  unit of  WRDC.  This  results  in the  identification  of the  project
requirements and potential  technologies to be employed.  Following agreement on
the strategic requirements, the implementation can be passed to the WRDC Systems
Integration  business unit that will then  implement  the project  within agreed
financial constraints and timetables.  Once successfully  implemented,  the WRDC
Managed  Services  function takes over the long-term  management of the solution
and, with additional support available through the WRDC Helpdesk.

         WRDC's Rapid Project  Implementation  philosophy provides a disciplined
and  structured  approach  that we  believe  delivers  business  benefit  to our
clients.  WRDC believes that the human element of the project is vital.  To that
end, WRDC seeks to ensure that the project teams maintain  technical  competence
with respect to project requirements. For more information concerning the number
of employees  employed by WRDC,  please see "Item 1.  Employees"  of this Annual
Report on Form 10-KSB.

         Logsys Solutions Limited

         On July 3, 2001, we consummated an agreement  whereby our  wholly-owned
subsidiary,  Authoriszor Holdings Ltd., acquired approximately a 68% interest in
Logsys.  Subsequently,  as the result of a tender offer made by Logsys,  we have
increased  our ownership  interest to  approximately  99.75% of the  outstanding
capital stock of Logsys.  Logsys has supplied  software  solutions to public and
private sector organizations for more than 20 years.

         Logsys' technology focus consists primarily of providing e-business and
business  process  automation  solutions.  Each  of the  solutions  utilizes  an
established set of interrelated technologies.  Each of these technologies,  when
implemented,  are designed to improve the customer's e-business capabilities and
business automation processing.

         With respect to business process  automation,  Logsys offers a range of
development  services using packaged  solutions and Logsys' own workflow  engine
component,  QuickFlow.  Logsys' experience and capability includes the following
technologies:

         o        production workflow;
         o        document management; and
         o        case management

Logsys also partners with  specialist  organizations  to  incorporate  companion
technologies such as document management,  image processing and routing into its
business process automation solutions.

         Logsys'  most  important  contribution  to our services  business  unit
relates to  providing  people-centered  technology  solutions,  which  allow for
efficient and wide-ranging  communication  opportunities  for those clients that
have a wide and disparate network. A description of the particular solutions for
which Logsys has developed  particular  expertise  follows: o application access
control - allows  companies  to target  various  sets of users with  appropriate
information,  such  that  users  are able to see only  what  they are  otherwise
allowed to, and should, see;

         o        security and network  architecture  - permits  Logsys to be an
                  integral  part of the design  and  operation  of all  internal
                  systems,  networks and  applications of a particular  client's
                  network system;
         o        object based  directories - as directories  are a key enabling
                  technology in both the integration of internal  systems and in
                  the support of web solutions,  Logsys  develops and implements
                  these directories for those clients that have such a need;

                                       5
<PAGE>

         o        object  based  workflow -  typically  these  applications  are
                  developed in isolation,  however,  Logsys  provides a solution
                  that allows the integration of applications across and between
                  businesses; and
         o        messaging - where  required,  Logsys  ensures  that  efficient
                  communication  can take place across  diverse and  distributed
                  organizations.

         Logsys'  experience  and history  enables us to offer a  full-lifecycle
service  across  Unix  and  NT  platforms  from  inception  through  design  and
development  and on to maintenance and on-going  support,  including a choice of
coverage from normal business hours to full 24 hour support as required,  across
a range of  platforms.  In  addition,  Logsys is currently  undertaking  several
skills  programs.  These  include  internal  courses on  facilitation  training,
presentation  skills courses and time management.  We also provide the necessary
training materials to cross train into different software development  languages
as appropriate.  Some of our consultants are enrolled in the Microsoft Certified
Practitioner  course and others are upgrading the current  Oracle  Certification
that we already hold at Logsys.

         We, through our majority-owned subsidiary,  Logsys, have the capability
to deliver internet-based applications, intranet and extranet-based applications
and traditional client/server  applications.  Our dedicated systems support team
can  provide a  tailored  support  service  that is  designed  to suit  specific
requirements.  In addition,  Logsys is also able to assist with tasks associated
with  the  deployment  of  these  systems  such as  back-end  integration,  data
cleansing  and data  migration  and other  support  services.  Finally,  through
Logsys, we can offer our customers comprehensive systems support and maintenance
services backed by service level guarantees.

         In summary,  with the acquisitions of both WRDC and Logsys successfully
concluded,  our management team is now focused on the successful  integration of
these businesses into our group. Specifically,  it is our strategy to centralize
corporate  support  functions,  including  finance,  legal,  human resources and
information systems,  thereby seeking to achieve significant cost reductions and
marked improvements in efficiency of the individual businesses.

Authoriszor Technology Business Unit

         We believe that our patent-pending technologies, embodied in its latest
form as Authoriszor  2000(TM),  are  commercially  viable.  To this end, we have
established  a  small  business  unit,   Authoriszor  Technology  Business  Unit
("ATBU").  The  purpose  of ATBU  is to  continue  our  business  as  originally
conceived  through  the  sale  of  modular   components  of  Authoriszor's  core
technology  product to organizations  that have an established sales channel and
route  to  market,  such  as  Original  Equipment  Manufacturers,   Value  Added
Re-sellers,  and other  distributors and sales agents.  This team has a staff of
seven employees and operates from our UK headquarters in Harrogate, England.

         ATBU is solely  focused on the sales and  licensing of our  proprietary
technologies.   ATBU  provides   various   components   of  our   patent-pending
technologies  to  hardware  vendors,   software  infrastructure   providers  and
operating  system  vendors and  distributors.  Other than  training  and product
maintenance  contracts,  this  particular  business unit does not sell services;
rather it focuses on becoming a pure-play software  technology business segment.
However,  we  believe  that the  sale of our  stand-alone  technologies  will be
accompanied  by  significant  services  revenues  that will be  delivered by our
Consulting and Implementation Services Business Unit.

Organizational Restructuring

         In connection  with the  resignation of our President,  Chief Executive
Officer and Interim Chief Financial Officer, effective January 31, 2001, our new
management team, appointed by our Board of Directors, began a detailed review of
the business plan and the scalability of our business plan for the future.  As a
result of a detailed  review of the business  undertaken  by the new  management
team, a series of cost-cutting measures were initiated.

         We had previously  sought to grow organically in the U.S. by recruiting
field staff in 6 major cities in the U.S. to provide  local sales and  technical
support to the  marketplace  and  customer  base.  We  established  home  office
locations  in  Providence,  Washington,  St.  Louis,  Phoenix,  Los  Angeles and
Chicago.  As of  March  31,  2001,  there  were 67  people  employed  by us on a
full-time  basis.  However,  on May 8, 2001 and in connection with  management's
review of our  business,  we announced a reduction in our staffing  levels to 38
permanent staff, comprised of five employees in the U.S. and 33 employees in the
UK,  in  addition  to 51  employees  at  WRDC.  Also,  in  connection  with  our
restructuring,  we  closed  all of the  field  offices,  consolidating  all U.S.
operations in the Burlington,  Massachusetts  office.  Subsequently,  we entered
into a sub-lease agreement with Directech, Inc. to lease the entire office space

                                       6
<PAGE>

that previously functioned as our U.S. headquarters,  moving our headquarters to
our Harrogate,  England office. For further information  concerning the terms of
the sub-lease agreement entered into by us and the U.S. employees located in the
U.S. office, please see Item 1. Employees and Item 2. Facilities. These measures
were undertaken to enable the business to operate at financial  levels that were
in line  with our  expected  revenues  in the  future.  Moreover,  though we had
developed a  significant  presence in the U.S.  over the last 15 months,  we had
failed to attract sufficient prospective customers to sustain our investments in
the U.S. As a result,  the decision  was taken to reduce the staffing  levels in
the U.S. and move our  headquarters to the United Kingdom.  For more information
concerning our U.S.  employees,  please see "Item 1.  Employees"  referred to in
this Annual Report on Form 10-KSB.

Develop strategic partnerships and customer relationships

         We are  working  to  establish  strategic  relationships  with  leading
partners to broaden  and  accelerate  the market  acceptance  of our  technology
consulting  services and web security  solutions.  We will strategically  target
relationships  with companies and other  organizations  that we expect to play a
critical role in the future of  electronic  business.  We anticipate  that these
relationships   should  help  to  facilitate  broad  market  acceptance  of  our
solutions.

Pursue selective growth opportunities.

         We intend to grow through both  organic  expansion,  as well as through
selected  strategic  acquisitions  that  we  believe  will  accelerate  product,
customer and geographic penetration,  as evidenced by our recent acquisitions of
WRDC and Logsys.  The management team will continue to review the opportunity to
make further  acquisitions based on a number of key indicators,  including:  the
availability of funding for both acquisition and working capital; a demonstrable
track record of the target companies  demonstrating  specifically  rich customer
bases and significant  repeat  revenues;  strong  technical  skills and vertical
market knowledge of the target companies,  and a high degree of similarity to us
of  the  target   companies  and  potential   cross-fertilisation   of  business
opportunities throughout other companies within our group.

Clients

         Following the change in our business plan from security  software sales
to providing  technology  consulting  services,  we have performed  professional
services for a variety of clients. We are currently focused on serving companies
in   the   following   industries:   financial   services,   telecommunications,
manufacturing,  information  technology and health  organizations and various UK
government  departments.  For the one-year  period ended June 30, 2001, our five
largest accounts  accounted for  approximately  45% of our revenues,  with three
clients each accounting for more than 10% of our revenues during such period.

         With  respect to our primary  business,  the  provision  of  consulting
services,  we enter into contracts with our clients on both a time and materials
basis and a fixed fee basis.  Performing  contracts on a fixed fee basis enables
us to deliver a solution at a specific  price and within the  timeframe  we have
promised  to our  client.  However,  our  failure to  complete  our  contractual
obligations in a manner  consistent with the project plan could adversely affect
our  business,  in that we may be required  to commit  additional  resources  to
complete such a project at an additional, unanticipated cost to us.

Sales and Marketing

         Although we have  instituted  certain  cost-cutting  measures that have
directly affected our sales and marketing strategy,  our overall sales objective
has remained  constant -- to maximize  sales growth,  develop a global brand and
achieve a global  capability by  continuing to develop the necessary  technology
consulting infrastructure and establishing sales channels worldwide.

         With respect to our Consulting  and  Implementation  Business  Services
Unit,  we have  attempted to create and sustain  preference  and loyalty for our
services  in  the  field  of  technology  consulting.  Our  marketing  personnel
undertake a variety of marketing activities,  including sponsoring  multi-client
events to demonstrate our technological capabilities, media and industry analyst
outreach, sponsoring and participating in targeted conferences holding briefings
with  individual  companies  that may require our  services and  publishing  our
website,  www.authoriszor.com  (materials  contained  on  our  website  are  not
incorporated by reference into this Annual Report on Form 10-KSB).

                                       7
<PAGE>


         We are also seeking to build relationships and strategic alliances with
other  technology  companies and package  technology  vendors.  We believe these
relationships will include working jointly on client engagements, evaluating and
recommending each companies'  technology solutions to potential  customers,  and
training and knowledge transfer regarding each companies' solutions.  We believe
that by  establishing  these  relationships  we will be able to  provide  better
delivery and value to our  existing  customers  and will  attract new  customers
through referrals and other joint engagements.

         With respect to the Authoriszor  Technology Business Unit, we intend to
develop  relationships  with other entities to market and sell our product suite
and services to those that already have an  established  route to market.  These
sales channels can be categorized as follows:

         o        Application    Service    Provider   Vendors   and   Services.
                  Conventional  internet service  provider  services provide web
                  servers  and  email   services   connected  to  the  internet.
                  Application service providers extend these services to include
                  offering  software  programs,  from payroll or human resources
                  applications   to  a   full   enterprise   resource   planning
                  application.  Our  product  suite is  designed  to  provide an
                  essential  fail-safe  security   environment  for  application
                  service provider web services and applications;

         o        Product   Re-Sellers,   Distributors  and  Sales  Agents.  The
                  companies  and  individuals  in this  category that we seek to
                  work with are,  typically,  geographically  focused  and offer
                  local market knowledge and contacts and sales skills;

         o        Original  Equipment   Manufacturers,   including   Application
                  Development   Companies.   These  companies  tend  to  operate
                  worldwide and embed security  solutions into their own product
                  offerings.  They  tend  to  offer  developed  sales  channels,
                  established customer bases and brand recognition; and

         o        Consultants,  Value Added Re-Sellers,  Systems Integrators and
                  Worldwide Information  Technology Vendors. These are companies
                  and individuals  that may sell or recommend some or all of the
                  elements of our product suite to enhance their own solution.

         All of these types of sales channels will assist us by providing access
to new  geographic  areas and markets and the capacity to further  penetrate our
existing markets.

Acquisitions

         With respect to the terms and conditions of the acquisition of WRDC, on
May 8, 2001, we purchased an additional equity interest in WRDC,  increasing our
ownership  interest  from 27.2% (25.1% on a fully  diluted  basis) to 66.4%.  We
issued approximately  930,000 shares of common stock, paid cash of approximately
$1,716,000  and issued  237,000  stock options (fair valued at $248,900) to WRDC
employees  for  the  additional  equity  interest.  We  committed  to  issue  an
additional  195,000  shares of our  common  stock to the  shareholders  of WRDC,
subject to the  realization of certain of WRDC's  accounts  receivable.  Also on
this date, we committed to acquire the  remaining  33.6%  ownership  interest in
WRDC not already owned by us upon the  occurrence of certain  events,  but in no
event later than January 1, 2002. The purchase price for the remaining  interest
is approximately  $3,100,000. We are required to pay approximately $1,564,000 in
cash, of which $1,260,000 is in an escrow account,  and the remaining portion in
common  stock.  However,  in the event that the  exchange  ratio set forth would
require us to issue more than 19.9% of the issued and outstanding  shares of our
common stock, we will instead pay to the shareholders of WRDC the amount in cash
equal to the  aggregate  market value of the excess  shares.  Moreover,  when we
acquire the remainder of shares of outstanding  capital stock of WRDC, we may be
obligated to make such payment entirely in cash if:

         o        we  declare,  or  otherwise  seek,  or  are  forced  to  seek,
                  protection from creditors under the federal  bankruptcy  laws;
                  or
         o        if, after 30 days following the date we are otherwise required
                  to purchase the remaining  outstanding shares of capital stock
                  of WRDC,  we are not  listed  on  Nasdaq  or the OTC  Bulletin
                  Board,  or  otherwise  quoted  on a  public  market  in  North
                  America.



                                       8
<PAGE>


         In connection with the  transaction  whereby we increased our ownership
interest in WRDC,  our Board of Directors  appointed  Garcia Hanson as our Chief
Operating Officer. In addition,  Mr. Hanson has joined the Board of Directors of
Authoriszor  Holdings Ltd. and  Authoriszor  Ltd., and has been appointed as the
Operations  Director of  Authoriszor  Ltd. Mr.  Hanson will also continue in his
capacity as Managing  Director of WRDC. For further  information  concerning the
terms and conditions upon which we acquired WRDC,  please see our Current Report
on Form 8-K/A that was filed with the  Securities  and  Exchange  Commission  on
September 17, 2001.

         With respect to our acquisition of Logsys, our wholly owned subsidiary,
Authoriszor  Holdings Ltd.,  initially acquired  approximately a 68% interest in
Logsys in exchange for a cash payment of approximately $237,000, and, if certain
conditions  are met, the issuance of 186,453  shares of our common stock.  These
shares have not currently been issued.  In addition,  our ownership  interest in
Logsys has increased to approximately 99.75% of the outstanding capital stock of
Logsys as a result of the  solicitation  by Logsys  of  holders  of its  capital
stock,  other than shares of capital  stock already owned by us, to tender their
respective shares of capital stock in exchange for cash consideration payable by
us at the same price per share as our initial  acquisition  of capital  stock of
Logsys. For further  information  concerning the terms and conditions upon which
we acquired  Logsys,  please see our  Current  Report on Form 8-K that was filed
with the Securities and Exchange Commission on July 16, 2001.

Competition

         The markets for the technology  consulting services that we provide are
highly competitive.  We believe that we currently compete principally with large
accounting and consulting firms and systems consulting and implementation firms.
We  also  compete  with  specialized   e-business   consulting  firms,  strategy
consulting firms, other package technology vendors and our clients' own internal
information systems groups.

         There  are  relatively  low  barriers  to entry  into the  professional
services market. As a result, new market entrants pose a threat to our business.
Existing or future competitors may develop or offer services that are comparable
or superior to ours at a lower price, which could have a material adverse effect
on our business, financial condition and results of operations.

         We believe that the  principal  competitive  factors in the  technology
consulting markets include:  ability to solve business  problems;  expertise and
talent  with  advanced  technologies;  quality and speed of  delivery;  price of
solutions; industry knowledge; and sophisticated project and program management.

         We believe  that we compete  favorably  when  considering  the  factors
described  above and that our  experience  in delivering  business  value to our
clients through technology solutions distinguishes us from our competitors.

         The  markets  for  our  suite  of  security  products  is  also  highly
competitive.  We  believe  that our  largest  competitors  are  large  corporate
organizations that have been in the business of developing security software for
some time, in addition to a large number of smaller  businesses  that specialize
in various niches of the security software business.

         We believe  that the  principal  competitive  factors  in the  security
software include: the ability to gain market acceptance during the initial stage
of development of the software products, the conditions of the software security
market during  implementation,  the ability to enter into strategic partnerships
with other  vendors  that have  established  routes to market,  and the seamless
integration of the technology into other compatible software.

         We believe that we have not  competed  favorably  with our  competitors
with respect to our suite of security software products as a result of the sheer
size of the  market  share  commanded  by our  larger  and  more  well  financed
competitors,  our  inability  to  establish  a  sufficient  number  of  industry
partnerships  to leverage  our  security  products,  and because our  technology
offerings were not perceived by the market place as being sufficiently unique or
well  advanced to demand  market  attention.  As a result,  we have  shifted our

                                       9
<PAGE>

business model to emphasizing a service-oriented approach and to selling modular
components of our  technology  product to  organizations  that have  established
sales channels and routes to market.

         We expect to face  further  competition  from new market  entrants  and
possible alliances between competitors in the future. Certain of our current and
potential  future  competitors have longer  operating  histories,  larger client
basis, longer relationships with clients,  greater name or brand recognition and
have significantly greater financial, technical, market and other resources than
we do. As a result, these competitors may be able to respond more quickly to new
or emerging technologies and changes in client requirements or to devote greater
resources to the development, promotion and sales of their services and products
than we  can.  There  can be no  assurance  that  we  will  be  able to  compete
successfully  with existing or new competitors or that competition will not have
a material  adverse  effect on our business,  financial  condition and operating
results.

Intellectual Property Rights

         We rely on a combination of patent, copyright,  trademark, service mark
and trade secret laws, together with confidentiality  procedures and contractual
restrictions to establish and protect the proprietary rights in our software and
services.  However, we will not be able to protect our intellectual  property if
we are unable to enforce our rights or if we do not detect  unauthorized  use of
our intellectual property. In addition,  these legal protections only provide us
with protection in certain  countries.  If we litigate to enforce our rights, it
would be  expensive,  divert  management  resources  and may not be  adequate to
protect our business.  Our inability to protect our proprietary technology could
have a material adverse effect on our business,  prospects,  financial condition
and results of operations.

         We  have  five  patent  applications   pending  in  the  U.S.  for  our
Authoriszor product suite. However,  because patent applications in the U.S. are
confidential,   we  cannot  rule  out  the  existence  of  earlier-filed  patent
applications  for technology  similar or identical to our product suite,  or the
possibility   that  another  party  may  first  secure   patent   protection  in
substantially similar technology. Therefore, we cannot guarantee that our patent
applications will be successful.  In addition,  we have received objections from
certain patent offices in the U.S. and UK with respect to our patents, though we
believe that we will be able to  successfully  resolve such  objections.  We are
attempting  to extend  our  patent  protection  into the UK and other  countries
pursuant to the processes and  procedures  provided by the Paris  Convention and
the Patent Cooperation treaties;  however,  patent applications for software may
be more  difficult to obtain in some  countries  outside the U.S.  Patent search
reports  by the UK  Patent  Office  and  the  European  Patent  Office  (as  the
international  searching  authority),  however,  indicate  that  we do not  face
significant  relevant  earlier  disclosures.  Even where  patent  protection  is
obtained,  we cannot  guarantee  that third parties will not oppose or otherwise
challenge the patents  granted.  If we do not succeed in securing patents in the
U.S.,  UK  and  other  countries,  or if  any  granted  patent  is  successfully
challenged, we may not be able to prevent the manufacturing,  use and/or sale of
similar products based on the underlying technology by others in that country.

         We have  copyrights on all literary,  artistic and software  aspects of
the  Authoriszor  product  suite.  In the  UK  and  Australia  we  have  secured
registered  trademark  protection in respect of the key  Authoriszor  trademarks
used for branding.  We are in the process of obtaining registered protection for
our trademarks in the U.S., the European community and Hong Kong. We are also in
the  process  of   implementing   confidentiality   procedures  and  contractual
provisions to further protect our proprietary rights.  Additional protection for
the software,  documentation  and other  written  materials is afforded by trade
secret laws and, in the U.S., by unfair competition laws. In the UK, we are also
able to protect our trademarks  through  common law actions,  and we can rely on
European anti-competitive  legislation in the UK and other European countries to
protect  aspects of our  business  beyond that  afforded by our  registered  and
pending  intellectual  property rights.  "AUTHORISZOR",  "AUTHORISZOR  2000", SZ
Logo, "A Logo" and "SECURES THE WEB" are trademarks or registered  trademarks of
Authoriszor or its subsidiaries in the United States and other countries.

Research and Development

         We believe our future  success will depend in large part on our ability
to enhance and leverage our  technologies.  We intend to continue to develop new
and innovative solutions to respond to the needs of our customers.

         For the one year period ending June 30, 2001, we incurred approximately
$2,500,000, including professional services, in expenses related to research and

                                       10
<PAGE>

development.  We  expect to  continue  to commit  significant  resources  to our
research and  development  team in the future,  including over the course of the
next 12 months,  although  we do not expect  expenditures  to be as high as they
have been during the year ended June 30, 2001.

Employees

         As of  September  30,  2001  there were 22 people  employed  by us on a
full-time  basis. Of these, 5 employees were primarily  involved in research and
development,  5 employees  were  involved in sales and  marketing,  9 in general
administration and support and 3 engaged in professional  services. In addition,
we employ 44 employees and 27 employees at WRDC and Logsys,  respectively.  Each
of the  employees,  with the exception of one based in the U.S. and two based in
Switzerland,  are located in England. We also employ free-lance consultants from
time to time to assist various specific projects.

         Our employees are not  represented by any collective  bargaining  unit,
and we have never experienced a work stoppage. We believe our relations with our
employees to be good. From time to time we also employ  independent  contractors
to support our professional services, product development,  sales, marketing and
business development organizations.

         Our future  success  will depend,  in part,  on our ability to attract,
retain and motivate highly qualified technical and management personnel for whom
competition is intense.  As part of our retention  efforts,  we seek to minimize
turnover  of key  employees  by  emphasizing  the  nature of our work,  our work
environment,  our  encouragement  of technical  enhancements and our competitive
compensation packages.

                        Item 2: Description of Properties

Facilities

         Our executive offices are currently located in Harrogate,  England.  In
May,  2001,  we  subleased  the  office  space  of  our  prior  headquarters  in
Burlington,  Massachusetts to Directech,  Inc. as a result of the  restructuring
undertaken by management.  The sublease calls for monthly payments to be made to
us in the amount of $31,368.75 per month,  which is  substantially  equal to the
amount that we paid in monthly  rent under our prior  lease.  In  addition,  the
sublease is  effective  until April 28, 2005,  the length of the original  lease
that we entered into in May 2000.

         Our headquarters  are currently  located on the first floor of a leased
facility in Harrogate,  England consisting of approximately 3,132 square feet of
office space.  The rent and service  charge for this  facility is  approximately
$72,000  per year.  We  maintain  additional  UK offices in a 3,174  square foot
leased  facility  in  Bradford,  England.  The rent for these  office  spaces is
approximately $48,000 in the aggregate per year.

         WRDC maintains  office space in Leeds England of 2,370 square feet at a
rent of $22,450  per annum,  and also  leases  office  space in London  England,
consisting of 2,210 square feet, at a cost of $63,400 per annum.

         Logsys  maintains  office space in Wokingham,  England that consists of
9,400 square feet at a cost of $103,000 per annum.

         In the  opinion of our  management,  our UK  properties  in  Harrogate,
London, Leeds, Wokingham and Bradford are adequately covered by insurance.

                            ITEM 3: LEGAL PROCEEDINGS

         We are not currently a party to any pending material legal proceedings,
nor is any of our property the subject of any pending legal proceedings.


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

         There have been no matters  submitted for vote to the security  holders
through the  solicitation  of proxies or otherwise in the fourth  quarter of the
fiscal year covered by this report.

                                       11
<PAGE>



                                     PART II


        Item 5. Market for Common Equity and Related Stockholder Matters

         Our common stock is quoted on the NASDAQ  National  Market System under
the symbol "AUTH." The following  table sets forth,  for the periods  indicated,
the range of high and low  closing  price  information  per share of our  common
stock. These quotations  reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission and may not represent actual transactions.

                                                      Closing Price
Calendar Period                                     High ($)   Low ($)
---------------                                     --------   -------

1999
Third Quarter................................         2.00       0.63
Fourth Quarter...............................        17.00       1.31
2000
First Quarter................................        40.88       7.50
Second Quarter...............................        22.50       8.88
Third Quarter................................        11.63       6.44
Fourth Quarter...............................        10.75       1.56
2001
First Quarter................................         2.88       0.94
Second Quarter...............................         1.18       0.44
Third Quarter................................         0.38       0.13

         On October  17,  2001,  the  closing  price of our common  stock on the
Nasdaq National Market was $0.18 per share.

         As of October 17, 2001,  there were  18,456,698  shares of common stock
outstanding, held by approximately 407 holders of record.

Dividend Policy

         We have not declared or paid any  dividends on our capital  stock since
our  inception  and do not  anticipate  declaring  or  paying  dividends  in the
foreseeable future. Our current policy is to retain earnings, if any, to finance
the expansion of our business.  The future  payment of dividends  will depend on
the results of operations,  financial  condition,  capital expenditure plans and
other  factors that we deem  relevant and will be at the sole  discretion of our
Board of Directors.

Recent Sales Of Unregistered Securities

         On July 3, 2001, we, through our wholly owned  subsidiary,  Authoriszor
Holdings Ltd., consummated an agreement to initially acquire approximately a 68%
interest in Logsys in exchange  for a cash  payment of  approximately  $237,000,
and, if certain conditions are met, the issuance of 186,453 shares of our common
stock  to the  parent  company  of  Logsys,  Logsys  Holdings  Limited  ("Logsys
Holdings").  These  shares have not  currently  been issued.  In  addition,  our
ownership  interest  in Logsys  has  increased  to  approximately  99.75% of the
outstanding capital stock of Logsys as a result of the solicitation by Logsys of
holders of its capital  stock,  other than shares of capital stock already owned
by us, to tender their  respective  shares of capital stock in exchange for cash
consideration  payable  by us at  the  same  price  per  share  as  our  initial
acquisition of capital stock of Logsys.

         The shares of common stock that will be issued to Logsys  Holdings will
not be registered  under the Securities  Act, in reliance upon an exemption from
registration  set forth in  Section  4(2) of the  Securities  Act.  Logsys was a
closely  held  company,  and the  acquisition  of Logsys  by us was a  privately
negotiated  transaction without any general solicitation or advertising in which
Logsys  Holdings was represented by counsel.  Logsys Holdings  represented to us
that it was a  "sophisticated  investor"  that  was  acquiring  the  shares  for
investment and not with a view towards a public  distribution,  and further that
it had access to all material  information  concerning  us that was necessary to
make an informed decision with respect to the transaction.  Logsys Holdings also

                                       12
<PAGE>

acknowledged that the shares were restricted securities under the Securities Act
and were subject to  restrictions  set forth in Rule 144  thereunder.  The share
certificates  with respect to the shares  issuable by us to Logsys Holdings will
contain a Rule 144 legend.

          In  connection  with the  acquisition  of WRDC,  on May 8,  2001,  in
exchange for certain  shares of capital  stock of WRDC held by  shareholders  of
WRDC,  Garcia  Hanson  and Brian  Edmondson,  we issued  to our  transfer  agent
irrevocable  instructions to issue,  in the aggregate,  929,914 shares of common
stock to Messrs. Hanson and Edmondson,  in addition to consideration in the form
of a cash  payment.  We are  also  obligated  to  issue to  Messrs.  Hanson  and
Edmondson  up to 195,555  additional  shares of common  stock  (the  "Contingent
Shares"), subject to the realization of certain accounts receivables of WRDC.

         Upon the  occurrence  of  certain  events,  but in no event  later than
January 1, 2002, we are obligated to acquire the remaining capital stock of WRDC
not then owned by us. Subject to certain exceptions,  the consideration  payable
in  connection  with the second step of the  acquisition  will consist of 55% in
shares of common stock and 45% in cash; provided, however, that in no event will
we be required to issue more than 19.9% of the issued and outstanding  shares of
common  stock as of the  date of the  initial  closing.  In the  event  that the
exchange ratio set forth in the acquisition  agreements would otherwise  require
us to issue  more than  19.9% of the  issued  and  outstanding  shares of common
stock, as of the initial closing,  whether due to changes in the market price of
the Common Stock or currency fluctuations during the interim between the initial
closing  and the second  closing or  otherwise,  we will  instead pay to Messrs.
Hanson and Edmondson an amount in cash equivalent to the aggregate  market value
of the shares of our common stock over the threshold of 19.9% of our outstanding
common stock.

         The shares of common  stock issued to Messrs.  Hanson and  Edmondson at
the initial  closing were,  and the  Contingent  Shares and the shares of common
stock  issuable to the Messrs.  Hanson and Edmondson at the second  closing will
not be,  registered under the Securities Act, in reliance upon an exemption from
registration set forth in Section 4(2) of the Securities Act. WRDC was a closely
held  company,  and the  acquisition  of WRDC by us was a  privately  negotiated
transaction  without any general  solicitation  or advertising in which WRDC and
Messrs. Hanson and Edmondson were represented by counsel. Each of Messrs. Hanson
and Edmondson who represented to us that he was a  "sophisticated  investor" who
was  acquiring  the shares for  investment  and not with a view towards a public
distribution,  and  further  that each had  access to all  material  information
concerning  us that was  necessary to make an informed  decision with respect to
the transaction. Each of Messrs. Hanson and Edmondson also acknowledged that the
shares were restricted  securities  under the Securities Act and were subject to
restrictions  set  forth in Rule 144  thereunder.  The share  certificates  with
respect to the shares initially issued to Messrs.  Hanson and Edmondson contain,
and the share  certificates  with respect the  Contingent  Shares and the shares
issuable by us at the second closing will contain, a Rule 144 legend.

         On July 21, 2000, we entered into a Consulting Agreement with Edward F.
Rogers pursuant to which Mr. Rogers would provide a broad array of financial and
other business-related  consulting services for us. In accordance with the terms
of the Consulting Agreement,  a portion of the daily compensation to the paid to
Mr.  Rogers was  comprised of such number of  restricted  shares of common stock
equal to $1,000 per consulting  day,  which was  calculated  weekly for the days
worked in such week at the last reported  sales price of our common stock at the
close of  business  on the last  business  day of the week in which  Mr.  Rogers
performed such  consulting  services.  The Consulting  Agreement with Mr. Rogers
expired according to its terms on January 20, 2001.

         Pursuant to the terms of the Consulting Agreement, we issued Mr. Rogers
12,703 shares of common  stock.  However,  in  accordance  with the terms of the
Consulting Agreement, the 12,703 shares cannot be sold or exchanged for a period
of 12 months following the expiration of the Consulting Agreement.

         The issuance of these shares was not  registered  under the  Securities
Act, are restricted  securities  under the Securities Act and are subject to the
restrictions  on  transfer  set  forth in Rule 144  thereunder.  The  Consulting
Agreement with Mr. Rogers was a privately negotiated transaction without general
solicitation  or  advertising  with  a  consultant  that  was  a  "sophisticated
investor"  within the  meaning of the  Securities  Act and who had access to all
information  concerning  us that such  consultant  deemed  necessary  to make an
informed  decision  with  respect  to  the  Consulting   Agreement.   The  share
certificates  issued to the  consultant  contained a legend with  respect to the
restrictions  on  transfer  of the  shares  issued  pursuant  to the  Consultant
Agreement.

                                       13
<PAGE>

         On May 10, 1996,  Starlight  Acquisitions,  Inc., our  predecessor,  in
accordance with that certain Share Exchange Agreement, dated as of May 10, 1996,
received  warrants to purchase  100,000  shares of common stock,  at an exercise
price of $4.00 per  share.  The  warrants  were  issued to former  officers  and
directors of Starlight in  consideration  of, among other  things,  each persons
agreement to indemnify our predecessors with respect to certain  representations
contained in the Share Exchange  Agreement.  In October 2000, each holder of the
warrants  exercised his  respective  warrant to acquire  25,000 shares of common
stock for an aggregate of 100,000 shares of common stock. The shares issued upon
exercise of the warrants were issued pursuant to the exemption from registration
under the Securities  Act set forth in Section 4(2) of the  Securities  Act. The
Share Exchange Agreement with the holders of warrants was a privately negotiated
transaction  without general  solicitation or advertising  with  individuals who
were "sophisticated  investors" within the meaning of the Securities Act and who
had  access  to all  information  concerning  us  that  such  individual  deemed
necessary  to make an  informed  decision  with  respect  to the Share  Exchange
Agreement.  Upon exercise of the warrants,  the share certificates issued to the
holders of  warrants  contained  a legend with  respect to the  restrictions  on
transfer of the shares.

         On February  18,  2000,  we sold  2,727,273  shares of common  stock at
$11.00 per share.  The  placement  was made  pursuant to  Regulation S under the
Securities  Act in the United  Kingdom  and  Europe.  The gross  proceeds of the
placement were $30,000,003.  In addition, we granted an option to Beeson Gregory
Limited,  the placement  agent, to purchase 136,363 shares of common stock at an
exercise price of $11.00 per share for a term of two years.  Beeson Gregory also
received a commission of 5% of the total gross proceeds,  the  reimbursement  of
certain of its expenses and has been  appointed as our  financial  advisor at an
annual advisory fee of approximately $40,000.

         The offering of the  securities  in the  placement  was not  registered
under the  Securities  Act  pursuant  to  Regulation  S, and the shares were not
offered,  sold,  or delivered in the United States or for the account or benefit
of any United States  Person (as such terms are defined in  Regulation  S). Such
securities  may not be  reoffered  or resold in the United  States,  among other
requirements,  absent  registration  under the  Securities Act or pursuant to an
applicable exemption from such registration requirements.  The share certificate
issued to the purchasers in the placement contained a Regulation S legend.

         A  Registration  Statement on Form S-1 was filed with the SEC under the
Securities  Act on March 20,  2000,  relating to the offer and sale from time to
time of shares issued in the Placement by certain  purchasers of such shares and
certain   additional   shares  from  time  to  time  pursuant  to  an  effective
registration  statement and the prospectus  contained therein.  The Registration
Statement, as amended (the "Registration Statement"),  was declared effective by
the SEC on May 18, 2000 under the  Securities  Act. The  Registration  Statement
ceased to be  effective on February  16,  2001.  We have filed a post  effective
amendment to the Registration Statement, but it has not been declared effective.

         We issued 120,000 shares of common stock to Nicholas and Ronald Reeves,
collectively,  as compensation  for consulting  services  rendered  beginning in
August 1999 and  continuing  for a six month term  thereafter.  The  issuance of
these shares was not registered under the Securities Act. The Reeves' consulting
agreement was a privately negotiated transaction without general solicitation or
advertising with consultants who represented to us that they were "sophisticated
investors"  within  the  meaning  of the  Securities  Act and had  access to all
information  concerning us that each such consultant deemed necessary to make an
informed  decision with respect to the consulting  agreement.  Each of the stock
certificates  issued to the  consultants  contained  a  securities  legend  with
respect to the securities restrictions on transfer of the shares.

         On October 6, 1999, we repaid a $41,415 loan from James L. Jackson with
$16,566  in cash  consideration  and  15,000  shares of common  stock,  at a 20%
discount  from  the  then  current  market  price.  James  Jackson  subsequently
transferred 7,500 shares of common stock to an assignee.  These shares of common
stock  were  issued  pursuant  to the  exemption  from  registration  under  the
Securities  Act set  forth  in  Section  4(2)  of the  Securities  Act,  as such
transaction  was  privately  negotiated  between Mr.  Jackson and us and did not
involve any general solicitation or advertising.  In addition,  Mr. Jackson, one
of our directors and the then principal  executive  officer of Authoriszor Ltd.,
our  principal   operating   subsidiary,   represented  to  us  that  he  was  a
"sophisticated investor" within the meaning of the Securities Act and had access
to all  information  concerning us that he deemed  necessary to make an informed
decision with respect to the issuance of shares as repayment  for his loan.  The
stock  certificate  issued to Mr.  Jackson  contained a  securities  legend with
respect to the securities restrictions on transfer of the shares.

                                       14
<PAGE>


         On July 22,  1999,  we  issued  4,680,375  shares  of  common  stock in
exchange for all of the issued and  outstanding  shares of capital stock of ITIS
Technologies Limited pursuant to a Share Sale Agreement, dated July 22, 1999, by
and among David J.  Blanchfield,  James L. Jackson,  David R. Wray, Barry Jones,
Ian  McNeill  (the "ITIS  Shareholders")  and us. The  issuance of the shares of
common stock to the ITIS  Shareholders  was not registered  under the Securities
Act, in reliance on the exemption from registration set forth in Section 4(2) of
the  Securities  Act. ITIS was a closely held company,  and the shares of common
stock were issued to the ITIS Shareholders in a privately negotiated transaction
without  any  general  solicitation  or  advertising  in which ITIS and the ITIS
Shareholders  were  represented by counsel.  The ITIS  Shareholders who received
shares  of common  stock  represented  to us that  they were all  "sophisticated
investors"  who were acquiring the shares of common stock for investment and not
with a view towards a public  distribution,  and further that each had access to
all material  information  concerning  us that was necessary to make an informed
decision  with  respect  to  the   transaction.   Each  ITIS   Shareholder  also
acknowledged  that there would be  restrictions  under the  Securities  Act with
respect  to  the  transfer  of  the  shares  of  common  stock  received  in the
transaction.  The stock certificates issued to the ITIS Shareholders contained a
securities legend with respect to the securities  restriction or transfer of the
shares.

         On June 9, 1999, we entered into an Agreement of Settlement and Release
(the  "Settlement  Agreement")  with Joseph J.  Haraoui  and related  parties to
resolve  certain  disputes   relating  to  the  claims  agreement  (the  "Claims
Agreement")  reached in 1996 with Mr. Haraoui with respect to the acquisition by
Mineradora de Bauxita Ltda.  ("MBL"),  our then principal mining subsidiary,  of
certain  mining  claims in the Cuiaba  Basin of Brazil.  Pursuant  to the Claims
Agreement,  MBL  agreed  to  acquire  from Mr.  Haraoui  from time to time up to
twenty-five  (25) claims.  By April 1, 1997,  Mr.  Haraoui had  delivered to MBL
fifteen  (15)  claims.  Subsequently,  there was a dispute  between  MBL and Mr.
Haraoui  relating to the claims not then  delivered and the amount and nature of
the  consideration  that was to be paid by us to Mr. Haraoui in connection  with
the delivery of the remaining  claims.  Pursuant to the terms of the  Settlement
Agreement,  Mr. Haraoui released MBL and certain related parties,  including us,
from all claims and liabilities relating to the claims. In addition, pursuant to
the terms of the Settlement  Agreement,  Mr. Haraoui  delivered to Toucan Mining
Ltd.  ("TML"),  our former  subsidiary that owned MBL, one additional  claim and
agreed to use its best efforts to deliver to MBL six (6) additional  claims. The
Settlement  Agreement  acknowledged that Haraoui was entitled to receive,  as of
April 1, 1997,  210,000  shares of our common stock pursuant to the terms of the
Claims Agreement with respect to the fifteen (15) claims delivered by such date.
Pursuant to the terms of the Settlement  Agreement,  TML paid Mr. Haraoui a cash
payment of $50,000 and agreed to pay to Mr.  Haraoui an additional  cash payment
of $20,000 for each additional claim that was transferred by Mr. Haraoui to TML,
and we issued to Mr.  Haraoui an  aggregate of 250,000  shares of common  stock.
This transaction was privately negotiated  transaction,  and we believe that Mr.
Haraoui was a sophisticated  investor who had access to all material information
concerning  us that was  necessary to make an informed  decision with respect to
the  transaction and who was acquiring the shares of common stock for investment
and not with a view  towards  public  distribution.  These  shares  were  issued
pursuant to the exemption from  registration  under the Securities Act set forth
in Section 4(2) of the Securities Act.

         On April 27, 1999, we approved the issuance of 300,000 shares of common
stock to Roy Williams  upon the exercise by Minmet Plc of its option to purchase
the outstanding  capital stock of MBL as payment of his finder's fee pursuant to
his finder's fee agreement with us. These shares were valued for such purpose at
$.20 per share,  which was the current  market  price of common stock on the OTC
Bulletin  Board as of April 27,  1999,  the date we approved the  issuance.  The
issuance of the shares of common stock to Roy Williams was not registered  under
the Securities Act in reliance upon the exemption from registration  afforded by
Section 4(2) of the  Securities  Act. The finder's fee agreement was a privately
negotiated  transaction  without  general  solicitation  or advertising  with an
individual  that was our then largest  stockholder and represented to us that he
was a "sophisticated  investor" within the meaning of the Securities Act and had
access to all  information  concerning  us that he deemed  necessary  to make an
informed  decision  with  respect  to the  finder's  fee  agreement.  The  stock
certificate issued to Mr. Williams contained a securities legend with respect to
the securities restrictions on transfer of the shares.

         On April 27,  1999,  we approved the issuance of shares of common stock
to the following  persons in lieu of paying such persons  salary or fees owed to
such  persons.  Such shares of common stock were valued for such purpose at $.20
per share,  the price of shares of common stock on the OTC Bulletin  Board as of
April 27, 1999:

         Name                                                 Number of Shares

         Robert P. Jeffcock                                   250,000
         Robert A. Pearce                                     187,500
         Don Box                                               20,000
         Igor Mousasticoshvily                                 50,000

                                       15
<PAGE>

         These shares were issued  pursuant to the exemption  from  registration
under the Securities Act set forth in Section 4(2) of the Securities Act, as the
issuance  of the  shares  in  lieu of  payment  of fees  earned  were  privately
negotiated  between each of the  aforementioned  individuals  and us and did not
involve any general solicitation or advertising.  In addition, each of the above
individuals  (except  Igor  Mousasticoshvily   ("Mousasticoshvily"))   were  our
directors  and each  represented  to us that he was a  "sophisticated  investor"
within the  meaning  of the  Securities  Act and had  access to all  information
concerning us that he deemed necessary to make an informed decision with respect
to the issuance of shares in lieu of fees earned.  The stock certificate  issued
to each of these  individuals  contained a securities legend with respect to the
securities restrictions on transfer of the shares.

         In March 1999, we issued to  Mousasticoshvily  133,333 shares of common
stock  pursuant to an exemption from  registration  under the Securities Act set
forth in Section  4(2) as part of the  purchase  price for  certain  claims that
Mousasticoshvily owned in the Cuiaba Basin of Brazil. The shares of common stock
issued  to  Mr.   Mousasticoshvily  were  exempt  from  registration  under  the
Securities Act as the payment for such claims was privately  negotiated  between
Mr.  Mousasticoshvily  and us and did not involve any  general  solicitation  or
advertising.  In addition, Mr. Mousasticoshvily  represented to us that he was a
"sophisticated investor" within the meaning of the Securities Act and had access
to all  information  concerning us that he deemed  necessary to make an informed
decision  with respect to the issuance of shares in exchange for his transfer of
such  claims.  The share  certificate  issued to  Mousasticoshvily  contained  a
securities legend with respect to the securities restrictions on transfer of the
shares.

             Item 6. Management's Discussion and Plan of Operations

         The  following   description  of   "Management's   Plan  of  Operation"
constitutes  forward-looking  statements  for purposes of the Securities Act and
the Exchange Act and as such involves known and unknown risks, uncertainties and
other factors that may cause the our actual results, performance or achievements
to be materially  different from future  results,  performance  or  achievements
expressed or implied by such  forward-looking  statements.  The words  "expect",
"estimate", "anticipate", "predict", "believes", "plan", "seek", "objective" and
similar  expressions  are  intended to identify  forward-looking  statements  or
elsewhere  in this  report.  Important  factors  that could cause the our actual
results,  performance or achievement to differ  materially from our expectations
include  the  following:  1) one or more of the  assumptions  or  other  factors
discussed in connection with particular  forward-looking statements or elsewhere
in this report prove not to be accurate;  2) we are  unsuccessful  in increasing
sales through our anticipated  marketing efforts;  3) mistakes in cost estimates
and cost  overruns  with respect to our products or services,  particularly  our
fixed  price  contracts;  4) our  inability  to  obtain  financing  for  general
operations  including the marketing of our  technology  consulting  services and
products,  and  acquisitions;  5)  non-acceptance,  generally of our  technology
consulting  services  or one or  more of our  products  in the  marketplace  for
whatever  reason;  6) our inability to supply any of our  technology  consulting
services or products to meet market demand;  7) generally  unfavorable  economic
conditions that would adversely effect purchasing decisions by purchasers of our
technology  consulting  services or distributors,  resellers or consumers of our
products;  8)  development  of a similar  competing  product at a similar  price
point; 9) the inability to negotiate a favorable  agreement for or to adequately
protect our intellectual property; (10) if we experience labor and/or employment
problems  such as the loss of key  personnel,  inability  to hire and/or  retain
competent  personnel,  etc.;  11) if the we  experience  unanticipated  problems
and/or force majeure events (including but not limited to accidents, fires, acts
of God  etc.),  or we are  adversely  affected  by  problems  of our  suppliers,
shippers, customers or others; (12) our revenues could be negatively affected by
the loss of a major client with respect to our technology  consulting  services;
(13) the inability to keep up with the internet's rapid  technological  changes,
evolving  industry  standards  and  changing  client   requirements;   (14)  the
reorientation of our business model to include providing  technology  consulting
services;  and (15) our risk factors as described in the section  entitled "Risk
Factors" contained in the Registration Statement on Form S-1, declared effective
May 18, 2000, as amended,  and the Prospectus  contained therein,  dated May 19,
2000,  as  supplemented.   All  written  or  oral   forward-looking   statements
attributable to us are expressly qualified in their entirety by such factors. We
undertake no obligation to publicly release the result of any revisions to these
forward-looking  statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

         The  following  discussion  should  be read  in  conjunction  with  the
Consolidated Financial Statements, including the notes thereto.

                                       16
<PAGE>

Overview

         In connection  with the  resignation of our President,  Chief Executive
Officer and Interim Chief Financial Officer, effective January 31, 2001, our new
management team began a detailed review of the business plan and the scalability
of our  business  plan for the future.  As a result of a detailed  review of the
business undertaken,  our new management team revised our previous business plan
to reduce  the focus  that had  previously  been  given to sales of our suite of
security software and to focus on the delivery of technology consulting services
to our customers. Our strategy, therefore, has changed and is now focused on two
strategic directions:

         o        becoming  a  full  service  vendor  of   consulting,   systems
                  integration   and   systems   development   services   to  the
                  e-commerce,  security and work flow sectors of the information
                  technology industry; and
         o        to a lesser degree,  licensing our suite of security  products
                  to companies who have an  established  sales channel and route
                  to market.

         A large  majority  of our  revenue is now  derived  from  business  and
technology  consulting  services,  and we expect that a our revenue  will,  to a
great  degree,  continue  to be derived  from such  consulting  services  in the
future.  Though we expect to  experience  growth in our  revenues  derived  from
business and technology consulting services,  the market for advanced technology
consulting skills has declined significantly over the last several months.

         We expect that our revenues will be driven  primarily by the number and
scope of our client engagements,  our professional  services headcount,  and our
ability to appropriately staff those engagements and price our services. For the
year ended June 30, 2001,  our five  largest  clients  accounted  for 45% of our
revenues,  with three clients each  accounting for more than 10% of our revenues
during such period.  While  revenues from any given client will vary from period
to period,  we anticipate that our top five clients will continue to account for
a  significant  percentage  of revenue  going  forward.  To the extent  that any
significant client uses less of our services or terminates its relationship with
us, our revenues could be adversely impacted.

Results Of Operations

Fiscal Year Ended June 30, 2001 Compared To Fiscal Year Ended June 30, 2000

     Revenues

         Revenues  for the year ended June 30,  2001 were  $708,477  compared to
$121,186 for the year ended June 30, 2000. This increase resulted primarily from
consolidating the operations of WRDC following our acquisition of WRDC on May 8,
2001. For the year ended June 30, 2001, our five largest customers accounted for
approximately 45% of our revenues. Three individual customers accounted for 16%,
10.8% and 10.6% of our revenues. One customer accounted for approximately 76% of
our revenues for the year ended June 30, 2000. No other  customer  accounted for
greater than 10% of our revenues for the years ended June 30, 2001 and 2000.

     Costs of Revenues

         Cost of  revenues  during  the year ended June 30,  2001  increased  to
$254,048  compared  to $6,116 for the year ended June 30,  2000.  This  increase
resulted from a change in revenue mix to lower margin consulting services.

     Operating Expenses

         Administrative expenses consist primarily of salaries and benefits paid
to our employees,  travel costs incurred by our employees,  occupancy and office
costs,  severance costs  associated with the resignation of our former President
and Chief Executive  Officer and severance costs associated with the termination
of UK employees as a result of the  implementation  of management's new business
plan.  Administrative  expenses  for the year ended June 30, 2001  increased  to
$16.4  million  compared to $6.7  million in the year ended June 30,  2000.  The
increase was attributable to the following expenses:

         o        Salary and benefits rose to $7,343,133 for the year ended June
                  30, 2001 compared to $1,540,127 at June 30, 2000. The increase
                  in primarily a result of our employee headcount  increasing to
                  a peak of 74 in February  2001 compared to 41 at June 30, 2000
                  before  it  declined  dramatically  to 23  at  June  30,  2001
                  (excluding WRDC employees);

                                       17
<PAGE>

         o        Travel  expenses  were  $1,062,988  in the year ended June 30,
                  2001  compared to $259,843 a year ago.  We  continued  to open
                  field offices  increasing the total to six before  deciding to
                  close them in the later part of the  fiscal  year.  Certain of
                  our  employees   were  required  to  travel   extensively   in
                  preparation for the opening of various field offices.  We also
                  held several  Trans-Atlantic  sales team  meetings  during the
                  year.  Finally,  with the restructuring of our management team
                  in the second half of the fiscal  year,  extensive  travel was
                  required for the new  management  team from the UK to the U.S.
                  to implement the restructuring initiative;

         o        Occupancy and office costs were  $1,313,634 for the year ended
                  June 30, 2001 compared to $103,877 a year ago. The increase is
                  primarily a result of twelve months of occupancy in our former
                  company  headquarters  in the  U.S.,  including  one  month in
                  fiscal year 2000), two new sales offices in the UK, additional
                  space in an existing UK office and an additional  sales office
                  in the U.S;

         o        Severance  costs   associated  with  the  resignation  of  our
                  President  and Chief  Executive  Officer were $841,754 for the
                  year ended June 30, 2001. There were no such costs a year ago.
                  Effective  January 31, 2001, our President and Chief Executive
                  Officer  resigned  from  his  various  executive  officer  and
                  director  positions with us. This amount  represents cash paid
                  to the  our  former  President  and  Chief  Executive  Officer
                  excluding $250,000 which is payable in January 2002;

         o        Severance  costs  associated  with UK employees was $1,433,677
                  for the year ended June 30,  2001.  There were no such costs a
                  year ago. These costs are associated with the closure of sales
                  offices  in  December  and  June  and the  termination  of the
                  respective  employees.  We  also  terminated  portions  of our
                  leased  space  at our UK  corporate  offices,  along  with the
                  employees that occupied that space; and

         o        We also  incurred  costs of  $749,000 in  connection  with the
                  granting of stock options and restricted stock to a consultant
                  and recruiting fees of $610,000,  as we steadily increased our
                  employee headcount throughout the first 10 months of the year.
                  We also experienced an increase in our professional fees.


     Marketing and Advertising

         Marketing and  advertising  expenses were $1,569,869 for the year ended
June 30, 2001  compared to $851,856 a year ago.  This  increase is  attributable
primarily to costs  incurred  during the first ten months of the year in setting
up  additional   sales  offices,   branding  of  our  products  through  website
construction and other promotional activities and hiring new sales and marketing
employees.

     Restructuring and Exit Costs

         We  incurred  restructuring  and exit costs of  $1,136,601  in the year
ended June 30, 2001 as a result of our  decision  to close our U.S.  operations.
See Note E to our financial statements.

     Other Income and Expense

         Interest  income  was  $1,056,979  for the year  ended  June  30,  2001
compared to $611,299 a year ago. The increase is a result of holding larger cash
balances  for an  entire  year as a result  of the  private  placement  offering
completed in February 2000.

         We incurred losses on foreign  exchange  transactions of $1,774,696 for
the year ended June 30,  2001  compared to $94,957 a year ago.  The  increase in
2001 was due primarily to (i) entering into foreign currency option transactions
that resulted in an exchange loss of  approximately  $500,000,  (ii) maintaining
the  majority  of our  operating  cash at our  parent  company  level in a pound
sterling bank account  through  December 31, 2000, and (iii) making U.S.  dollar
denominated  loans to our UK subsidiary.  The British pound has declined against
the U.S. dollar throughout the year ended June 30, 2001.

Fiscal Year Ended June 30, 2000 Compared To Fiscal Year Ended June 30, 1999

         We were in the  development  stage and had no material  revenues during
this time period.

                                       18
<PAGE>


Financing Management's Plan of Operation

         At the time of the acquisition of Authoriszor Ltd. in July 1999, we had
approximately  $1,600,000 in cash and other liquid assets,  including securities
of Minmet. Following the acquisition of Authoriszor Ltd., we sold in the quarter
ended September 30, 1999 10.5 million Minmet shares with Minmet's consent at the
price of 8 pence (sterling) per share. These  transactions  resulted in net cash
proceeds to the Company of approximately $1,360,000.

         In January 2000, in an effort to raise capital, we reduced the exercise
price of certain  options to purchase  350,000 shares of common stock from $1.00
to $.66 per share if such stock options were  exercised by January 31, 2000. All
of such stock options were exercised by January 31, 2000.

         In addition, in January 2000 we sold the stock of our subsidiary Toucan
Mining for $809,750  ((pound)500,000)  in cash. This  transaction was undertaken
because of our need to dispose of our mining interests  (except for the retained
Minmet securities) in a timely fashion to be able to pursue our current business
and to facilitate the Regulation S private  placement that was being arranged by
Beeson Gregory.  Prior to the sale, Toucan Mining  transferred to us warrants to
purchase 7.7 million shares of Minmet at an exercise price of 8 pence (sterling)
per share and 2 million  Minmet  shares.  In May 2000, we exercised the warrants
and sold the underlying 7.7 million shares of Minmet for sales proceeds,  net of
the exercise price, of approximately $2,078,000.  Subsequently, we have sold the
remaining   Minmet  shares  owned  by  us.

         On February  18,  2000,  we sold  2,727,273  shares of common  stock at
$11.00 per share.  The  placement  was made  pursuant to  Regulation S under the
Securities  Act in the United  Kingdom  and  Europe.  The gross  proceeds of the
placement were $30,000,003.  In addition, we granted an option to Beeson Gregory
Limited,  the placement  agent, to purchase 136,363 shares of common stock at an
exercise price of $11.00 per share for a term of two years.  Beeson Gregory also
received a commission of 5% of the total gross proceeds,  the  reimbursement  of
certain of its expenses and has been  appointed as our  financial  advisor at an
annual advisory fee of approximately $40,000.

         Beeson Gregory received a commission of 5% of the total gross proceeds.
The Company has also appointed  Beeson Gregory as its financial  advisor and has
agreed  to pay  Beeson  Gregory  an annual  financial  advisory  fee of  $40,000
((pound)25,000).  The proceeds of the offering,  net of  commissions  payable to
Beeson  Gregory  and  reimbursement  of  Beeson  Gregory's  expenses  and  other
expenses,   resulted  in  cash   available  to  the  Company  of   approximately
$28,015,000.  Pursuant to the applicable placing documents, on March 20, 2000 we
filed a Registration  Statement  under the Securities Act to register the resale
of the placement  shares and made application to list the Company's common stock
on the Nasdaq National Market System.  The Registration  Statement,  as amended,
was subsequently declared effective under the Securities Act on May 18, 2000. As
of such date,  we had incurred a cost of  approximately  $375,000 in  connection
with the resale of the Placing Shares and for payment of the Nasdaq listing fee.
Thereafter, we incurred additional expenses in connection with the resale of the
placement  shares under the  Registration  Statement,  including the filing of a
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3. In the
future  we may  incur  additional  costs  related  to the  effectiveness  of the
Post-Effective  Amendment and the resale of the placement shares thereunder.  We
have used, and expect to continue using,  the net proceeds from the placement to
provide  working  capital  to the  Company  and  its  subsidiaries  and to  fund
strategic investments, acquisitions and research and development.

         Upon  completion of the  placement,  we, through  Authoriszor  Holdings
Limited,  acquired  27.2% of the stock of WRDC (25.1% on a fully diluted  basis)
for an aggregate subscription price of $604,800  ((pound)378,000).  In addition,
on making the subscription,  AHL made a loan in the principal amount of $195,200
((pound)122,000)  to WRDC,  repayable  (with  interest)  over a five year period
beginning on the second anniversary date of the first drawdown. Authoriszor Ltd.
has  converted  the  terms of the  existing  interest  free  loan to WRDC in the
principal  amount of $160,800  ((pound)100,000)  to a loan to WRDC with  similar
terms.

         Prior to changing  our  business  model to the  delivery of  consulting
services,  we had  intended  to grow our  internet  security  software  business
through the opening of our  headquarters  in Burlington,  Massachusetts,  hiring
employees in the U.S. and U.K. and  recruiting  field staff in 6 major cities in
the U.S. to provide  local sales and  technical  support to the market place and
customer  base for our suite of security  software  products.  In  addition,  we
established home office locations in these 6 cities.  As of January 31, 2001 our
employee headcount stood at 74.

                                       19
<PAGE>


         The Company  entered into and announced  several  contracts  with third
parties that had agreed to purchase the Company's  technologies and/or services.
These contracts did not represent  material contracts with such third parties in
terms of the amount of revenue received by the Company.

         Effective January 31, 2001, our then current President, Chief Executive
Officer and Interim  Chief  Financial  Officer  resigned  the various  executive
officer and director  positions that he had previously  held with us and entered
into a severance  agreement with the Company. As a result, a new management team
was  appointed to executive  positions in the Company.  Paul Ayres was appointed
the our Chief Executive Officer and President,  and Andrew Cussons was appointed
our  Chief  Financial  Officer  and  Secretary.  Pursuant  to the  terms  of the
severance  agreement with our former President and Chief Executive  Officer,  we
have incurred severance costs of approximately  $840,000 for the year ended June
30, 2001. This amount  represents  cash paid or benefits  provided to our former
President and Chief  Executive  Officer,  including  $250,000 that is payable in
January 2002 but has been accrued as of June 30, 2001.

         James L. Jackson resigned from his position as Chairman of the Board of
Authoriszor  Ltd. and from his  position as our Vice  President  and  Secretary,
effective  January 29, 2001,  and Ian McNeill  stepped down from his position as
Chairman of the Board of  Authoriszor  Holdings Ltd. at that time.  Mr.  Jackson
continues as a member of our Board of Directors, and Mr. McNeill continues as an
active  consultant to our Board of Directors.  We have agreed to continue to pay
Mr.  Jackson for a period of 12 months  following his  resignation in accordance
with the notice provisions contained in his service agreement with the Company.

         Upon taking office our new management  team began a detailed  review of
our past business plan and the  scalability of our business plan for the future.
As a  result  of a  detailed  review  of the  business  undertaken  by  the  new
management  team, a series of cost-cutting  measures were  initiated.  On May 8,
2001, as part of a company-wide  restructuring  designed to fully  implement our
changed  business  model,  we announced a reduction in our staffing levels to 38
permanent staff, comprised of five employees in the U.S. and 33 employees in the
UK,  in  addition  to 51  employees  at  WRDC.  Also,  in  connection  with  our
restructuring,  we  closed  all of the  field  offices,  consolidating  all U.S.
operations in the Burlington,  Massachusetts  office.  Subsequently,  management
made the decision to close the U.S.  office,  and in May 2001, we entered into a
sub-lease  agreement with  Directech,  Inc. to lease the entire office space tht
previously functioned as our U.S.  headquarters,  moving our headquarters to our
Harrogate,  England office. The sublease calls for payments in an amount that is
substantially equal to the amount that we are obligated to pay in rent under our
lease that we entered into in May 2000.  In addition,  the sublease is effective
until April 28, 2005, the term of our lease.  Management has further reduced the
employee  headcount to 22 as of September 30, 2001.  (excluding 44 employees and
27 employees at WRDC and Logsys).  Of these, 5 employees were primarily involved
in research and development, 5 employees were involved in sales and marketing, 9
in general  administration  and support and 3 engaged in professional  services.
These  measures  were  undertaken  to enable  the  business  to  operate at more
realistic  financial levels that were in line with our expected  revenues in the
future.  Moreover,  as a result of the  restructuring and series of cost-cutting
measures  imposed,   we  terminated  or  failed  to  renew  certain   consulting
agreements.

         In addition,  several executive  officers have resigned.  Effective May
18,  2001,  Barry  Jones  resigned  from his  position  as Director of Sales and
Marketing from Authoriszor Ltd.  Effective July 1, 2001, Alec Karys resigned his
position as our Vice  President-Engineering.  The Company has agreed to continue
to pay  each of these  former  executive  officers  for a  period  of 12  months
following their respective resignations in accordance with the notice provisions
contained  in  their  respective  employment  agreements.   The  severance  cost
associated  with the  resignations  of  Messrs.  Jackson,  Jones  and  Karys was
approximately $850,000 for the fiscal year ended June 30, 2001.

          We have, therefore,  consolidated  substantially all of our operations
out of our Harrogate,  England office,  with a view to achieving  growth through
acquisition, rather than organic growth.

         To this end, on May 8, 2001, we consummated an agreement that increased
our ownership of WRDC from 27.1% (25.1% on a fully diluted  basis) to 66.4%.  At
the initial  closing,  in exchange for certain  shares of capital  stock of WRDC
held by shareholders of WRDC, Garcia

                                       20
<PAGE>


Hanson and Brian  Edmondson,  we issued,  in the  aggregate,  929,914  shares of
common stock to Messrs.  Hanson and Edmondson,  and paid them approximately $1.7
million in cash.  We are also  obligated  with  respect to the first step of the
acquisition  to issue to Messrs.  Hanson and Edmondson up to 195,555  additional
shares  of  common  stock,  subject  to  the  realization  of  certain  accounts
receivables of WRDC.

         Upon the  occurrence  of  certain  events,  but in no event  later than
January 1, 2002, we are obligated to acquire the remaining capital stock of WRDC
not  then  owned  by  us  in a  second  step  transaction.  Subject  to  certain
exceptions,  the consideration payable in connection with the second step of the
acquisition  will consist of $1.6 million in cash and the  remaining  portion in
shares of common stock;  provided,  however, that in no event will we issue more
than 19.9% of the issued and  outstanding  shares of common stock as of the date
of the initial  closing.  In the event that the exchange  ratio set forth in the
acquisition  agreements  would otherwise  require us to issue more than 19.9% of
the issued and outstanding  shares of common stock,  as of the initial  closing,
whether  due to  changes in the market  price of the  common  stock or  currency
fluctuations  during the  interim  between  the  initial  closing and the second
closing or  otherwise,  we will instead pay to Messrs.  Hanson and  Edmondson an
amount in cash  equivalent  to the  aggregate  market value of the shares of our
common stock over the threshold of 19.9% of our outstanding  common stock. Under
the terms of our agreement with WRDC,  assuming that the currency  exchange rate
remains at or near $1.43 per  (pound)1.00,  and further assuming that the market
price  of our  common  stock  remains  at or  near  $.18  per  share,  we may be
obligated,  upon the  consummation of the acquisition of the remaining shares of
WRDC we do not  already  own, we may be  obligated  to make an  additional  cash
payment to the WRDC  shareholders of approximately  $1.2 million (such sum is in
addition to the cash payment representing 45% of the total consideration payable
to WRDC shareholders).

         On July 3, 200, our wholly owned subsidiary, Authoriszor Holdings Ltd.,
initially acquired approximately a 68% interest in Logsys in exchange for a cash
payment of  approximately  $237,000,  and, if certain  conditions  are met,  the
issuance of 186,453 shares of our common stock.  These shares have not currently
been issued.  In addition,  our  ownership  interest in Logsys has  increased to
approximately  99.75% of the outstanding  capital stock of Logsys as a result of
the solicitation by Logsys of holders of its capital stock, other than shares of
capital stock already owned by us, to tender their respective  shares of capital
stock in  exchange  for cash  consideration  payable by us at the same price per
share as our initial acquisition of capital stock of Logsys.

         During the fiscal year ended June 30,  2001,  we realized  $117,000 net
proceeds from the sale of Minmet shares. Subsequent to such fiscal year, we sold
our remaining Minmet shares and realized $794,000 in net proceeds.

         We have primarily  funded our operations from the net proceeds from the
private  placement of our common stock to investors of approximately $28 million
and the proceeds of the sale of Minmet securities.  We believe that our existing
cash,  cash  equivalents and short-term  investments  remaining for such sources
will be sufficient  to meet our working  capital  requirements  for at least the
next 12 months;  however, we will likely need additional financing to effectuate
any future material acquisitions.

Quantitative and Qualitative Disclosure of Market Risk

         We had market risk  exposure  with  respect to the  fluctuation  in the
value of our investment in the common stock of Minmet Plc. These securities have
been  classified as  available-for-sale,  which requires that they be carried at
the market  price.  At June 30,  2001,  these  securities  had a market value of
approximately  $876,000.  Subsequent  to June 30,  2001,  we sold the  remaining
shares of Minmet owned by us.

         We have risk  related to  currency  exchange  rate  fluctuations  and a
majority of our cash flows will be received in pound sterling.  A portion of our
cash flows are expected to be received in non-U.S.  currencies.  In addition, as
of June 30, 2001, we had deposited cash in pound sterling  denominated  accounts
in the amount of  $10,272,000,  including  $1,500,000 in restricted  cash. A ten
(10%) percent  fluctuation in currency  rates would have a $1,027,200  effect on
our  stockholders'  equity.  Also,  as of June 30, 2001,  there are U.S.  dollar
denominated  loans  outstanding  from us to our UK subsidiaries of approximately
$750,000  that are not of a long-term  investment  nature.  A ten (10%)  percent
fluctuation in currency rates would have a $75,000 effect on income. Although we
may  choose to do so in the  future,  to date,  we have not  engaged  in foreign
exchange hedging transactions.

                                       21

<PAGE>



                   ITEM 7. FINANCIAL STATEMENTS AND REPORTS OF
                   INDEPENDENT CERTIFICATE PUBLIC ACCOUNTANTS



                                    CONTENTS


                                                                      Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.....................F-1

CONSOLIDATED FINANCIAL STATEMENTS:

         BALANCE SHEETS................................................F-2

         STATEMENTS OF OPERATIONS......................................F-3

         STATEMENT OF STOCKHOLDERS' EQUITY.............................F-5

         STATEMENTS OF CASH FLOWS......................................F-7

NOTES TO FINANCIAL STATEMENTS..........................................F-9






                                       22
<PAGE>


AUTHORISZOR INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Authoriszor Inc. and Subsidiaries

         We  have  audited  the  accompanying  consolidated  balance  sheets  of
Authoriszor  Inc. and Subsidiaries as of June 30, 2001 and 2000, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the years 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 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, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Authoriszor  Inc.  and  Subsidiaries  as of  June  30,  2001  and  2000  and the
consolidated  results of their operations and their  consolidated cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.


GRANT THORNTON


Leeds, England

August 3, 2001

                                      F-1
<PAGE>
<TABLE>
<CAPTION>

AUTHORISZOR INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

                                                                                     June 30,        June 30,
                                                                                         2001            2000
            <S>                                                                      <C>             <C>

            Cash and cash equivalents                                                $ 9,340,029     $27,095,762
            Receivables
              Trade                                                                    1,912,158          42,103
              Interest                                                                   489,783         246,832
              Other                                                                      119,215         188,201
            Prepaid expenses                                                             677,912          76,568
            Restricted cash                                                            1,728,276               -
                                                                                  ------------------------------
            Total current assets                                                      14,267,373      27,649,466

            Investment in securities, available-for-sale                                 875,655       1,992,769
            Property and equipment at cost, net of accumulated depreciation              612,527         681,094
            Restricted cash                                                                    -         408,000
            Note receivable from WRDC                                                          -         336,086
            Investment in WRDC at net cost, adjusted for equity in earnings or
              losses                                                                           -         506,880
            Intangible assets, net of accumulated amortization of $156,660             6,000,252               -
            Other                                                                        233,270          70,643
                                                                                  ------------------------------
                                                                                       7,721,704       3,995,472
                                                                                  ------------------------------
                                                                                      21,989,077      31,644,938
                                                                                  ==============================

            LIABILITIES AND STOCKHOLDERS' EQUITY

            Accounts payable                                                           1,060,688         798,809
            Accrued liabilities                                                        2,915,460         373,033
            Deferred revenue                                                           1,882,387          22,179
            Payable related to WRDC acquisition                                        3,121,292               -
            Current maturities of long term obligations                                   99,304          58,990
            Total current liabilities                                             ------------------------------
                                                                                       9,079,131       1,253,011

            Long term obligations, less current maturities                               127,546         133,442

            Stockholders' equity

            Preferred stock, par value $.01 per share; authorized: 2,000,000
              shares; issued:  none

            Common stock, $.01 par value per share; authorized: 30,000,000
              shares; issued and outstanding: 18,456,698 shares at June 30, 2001
              and 17,414,081 shares at June 30, 2000                                     184,567         174,141
            Additional paid-in capital                                                36,174,317      33,948,976
            Accumulated other comprehensive income
                  Cumulative foreign exchange translation adjustment
                  Unrealized gains on available-for-sale securities                      982,753         195,514
            Accumulated deficit                                                      (24,923,962)     (5,485,215)
                                                                                  ------------------------------
                                                                                      12,782,400      30,258,485
                                                                                  ------------------------------
                                                                                      21,989,077      31,644,938
                                                                                  ==============================
The accompanying notes are an integral part of these financial statements.
</TABLE>

                                      F-2
<PAGE>

<TABLE>
<CAPTION>

AUTHORISZOR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS


                                                                                       Year Ended June 30,
                                                                                --------------------------------
                                                                                     2001              2000
                                                                               ---------------    -------------
        <S>                                                                       <C>               <C>

        Revenues                                                                     $ 708,477        $ 121,186
        Cost of revenues                                                               254,048            6,116
                                                                               ---------------    -------------
        Gross profit                                                                   454,429          115,070

        Operating expenses
                 Administrative                                                     16,376,814        6,741,416
                 Marketing and advertising                                           1,569,869          851,856
                 Restructuring and exist costs                                       1,136,601               --
                                                                               ---------------    -------------

                 Total operating expenses                                           19,083,284        7,593,272
                                                                               ---------------    -------------
                 Operating loss                                                   (18,628,855)      (7,478,202)

        Other income (expense)
                 Interest income                                                     1,056,979          611,299
                 Loss on sale of subsidiary                                                 --        (291,448)
                 Gain on sale of investments                                            60,529        1,892,003
                 Loss on foreign exchange transactions                             (1,774,694)         (94,957)
                 Equity in loss of WRDC                                               (29,663)         (45,175)
                 Loss on equipment sales                                             (123,043)               --
                                                                               ---------------    -------------
                 Total other (expense) income, net                                   (809,892)        2,071,722
                                                                               ---------------    -------------
                 Net loss                                                         (19,438,747)      (5,406,480)
                                                                                ===============    =============

                 Weighted average shares outstanding
                          Basic and diluted                                         17,625,101       15,198,167
                                                                                ===============    =============

                 Loss per common share
                          Basic and diluted                                            $(1.10)          $(0.36)
                                                                                ===============    =============



The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-3
<PAGE>

<TABLE>
<CAPTION>



AUTHORISZOR INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


                                                                                                   Accumulated              Compre-
                                                                     Additional                      Compre-                hensive
                                                 Common stock           paid-in     Accumulated      hensive                  income
                                              Shares      Amount        Capital      deficit     Income (loss)   Total      (loss)
                                              --------------------------------------------------------------------------------------
   <S>                                    <C>           <C>        <C>              <C>           <C>         <C>        <C>

   Balance at July 1, 1999                        60    $      9   $        -       $  (78,735)   $   2,846   $  (75,880)$
   Recapitalization                       13,747,913     134,821     3,097,172               -            -    3,231,993
   Net proceeds from sale of common stock
      through private placement, net of
      expenses of $2,340,965               2,727,273      27,273    27,631,765               -            -   27,659,038
   Other sales of common stock                17,835       2,828             -               -            -        2,828
   Issuance of common stock upon exercise
      of warrants and options                786,000       7,860       665,940               -            -      673,800

   Issuance of common stock for services     135,000       1,350       612,599               -            -      613,949

   Compensation expense resulting from
      issuance of stock options                   -            -     1,773,500               -            -    1,773,500

   Issuance of stock options for services         -            -       168,000               -            -      168,000

   Comprehensive income (loss):
      Foreign currency translation adjustment                                                -      192,668      192,668    192,668
      Unrealized gain on available-for-sale
      securities                                                                                  1,425,069    1,425,069  1,425,069
      Net loss during the year                                                      (5,406,480)           -   (5,406,480)(5,406,480)
   Total comprehensive loss                                                                                              -----------
                                                                                                                         (3,788,743)
                                          ----------  -----------   -----------     -----------   ----------  ---------- ===========

The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-5

<PAGE>


<TABLE>
<CAPTION>

AUTHORISZOR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONTINUED)


                                                                                                Accumulated              Compre-
                                                                       Additional                  Compre-               hensive
                                                  Common stock          paid-in   Accumulated      hensive                income
                                                Shares      Amount      Capital     deficit     Income (loss)   Total     (loss)
                                               ------------------------------------------------------------------------------------
   <S>                                         <C>          <C>       <C>         <C>           <C>          <C>        <C>

   Balance at June 30, 2000                    17,414,081   174,141   33,948,976  (5,485,215)   1,620,583    30,258,485

   Issuance of common stock upon
      exercise of warrants                        100,000     1,000     399,000            -            -       400,000

   Issuance of common stock for
      services                                     12,703       127      59,873            -            -        60,000

   Issuance of common stock for
      acquisition of WRDC                         929,914     9,299     828,554            -            -       837,853

   Issuance of stock options for
      services                                          -         -     689,014            -            -       689,014

   Issuance of stock options in
      connection with WRDC acquisition                  -         -     248,900            -            -       248,900

   Comprehensive income (loss):
     Foreign currency translation adjustment                                                        787,239     787,239     787,239
     Unrealized losses on avaiable-for-sale
       securities                                                                                  (999,815)   (999,815)   (999,815)
     Reclassification of gains on sale                                                    -         (60,529)    (60,529)    (60,529)
     Net loss during the year                                                    (19,438,747)             - (19,438,747)(19,438,747)
   Total comprehensive loss                                                                                             ------------
                                                                                                                        (19,711,852)
   Balance at June 30, 2001                    ---------- -----------  --------- ------------    ---------- ----------- ------------
                                               18,456,698     184,567 36,174,317 (24,923,962)     1,347,478  12,782,400
                                               ========== ===========  ========= ============    ========== ===========

The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-6
<PAGE>


<TABLE>
<CAPTION>
AUTHORISZOR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                      Year Ended June 30,
                                                                     2001            2000
                                                               ----------------------------------
                                                                      $               $

 <S>                                                             <C>              <C>

 Cash flows used in operating activities
  Net loss during the period                                     (19,438,747)      (5,406,480)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
     Issuance of stock and stock options in exchange for             689,014          781,949
     services
     Non-cash compensation expense                                    60,000        1,773,500
     Equity loss in WRDC                                              29,663           45,175
     Loss on writedown and sale of fixed assets                      596,881                -
     Loss on sale of subsidiary                                            -          291,448
     Gain on sale of investments                                     (60,529)      (1,892,003)
     Depreciation and amortization                                   481,693          101,192
     Changes in operating assets and liabilities
       Receivables                                                  (354,489)        (461,261)
       Prepaid expenses and other assets                            (205,261)        (174,828)
       Accounts payable                                              169,626          780,558
       Accrued liabilities                                         4,376,012          314,396
       Deferred revenue                                               96,312           24,526
                                                                 ------------     ------------
Net cash used in operating activities                            (13,559,825)      (3,821,828)

Cash flows (used in) provided by investing activities
  Proceeds from sale of subsidiary                                         -          809,750
  Acquisition of fixed assets                                       (214,841)        (552,854)
  Sale of investment in securities                                   117,298        4,415,909
  Exercise of warrants                                                     -         (977,608)
  Investment in WRDC, net of cash acquired                        (1,308,598)        (604,800)
  Advances to WRDC                                                         -         (356,000)
  Increase in restricted cash                                     (1,323,362)        (408,000)
                                                                -------------    -------------

Net cash flows (used in) provided by investing
  activities                                                      (2,729,503)       2,326,397
                                                                -------------    ------------

Cash flows provided by financing activities
Payment of long-term obligations                                    (353,504)               -
Proceeds from issuance of common stock                               400,000       28,332,838
Recapitalization
                                                                           -              711
                                                                -------------    ------------

Net cash flows provided by financing activities                       46,496       28,333,549

Effect of exchange rate changes on cash                           (1,512,901)         256,946
                                                                -------------    ------------

Net (decrease) increase in cash and cash equivalents             (17,755,733)      27,095,064

Cash and cash equivalents at beginning of year                    27,095,762              698
                                                                -------------    ------------
Cash and cash equivalents at end of year                           9,340,029       27,095,762
                                                                =============    ============

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

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

</TABLE>


                                      F-7
<PAGE>

<TABLE>
<CAPTION>

AUTHORISZOR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

                                                                      Year Ended June 30,
                                                                     2001            2000
                                                                      $               $
<S>                                                             <C>              <C>

Supplemental  disclosure of cash flow  information:
Cash paid during the period
for:
  Interest                                                      $       25,000   $       1,900
  Income taxes                                                               -               -

Noncash investing and financing activities
Fair value of assets acquired, including cash of 401,960        $    8,843,426   $           -
Cash paid                                                           (1,710,558)              -
Value of stock and stock options issued                             (1,086,756)              -
Commitment of cash and stock for remaining shares of WRDC           (3,121,292)              -
                                                                ---------------  -------------
Liabilities assumed                                             $    2,924,820   $           -
                                                                ==============    ============
-------------------------------------------------------------------------------------------------

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

</TABLE>




                                      F-8
<PAGE>


AUTHORISZOR INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         A summary of significant  accounting policies  consistently  applied in
the preparation of the accompanying  consolidated  financial statements follows.
Prior to  fiscal  year  2001,  the  Company  was in the  development  stage  and
presented its financial statements as a development stage company.

NOTE A - NATURE OF BUSINESS

         Authoriszor  Inc. and  Subsidiaries  (the Company)  provide  technology
consulting services and a suite of security software in the e-commerce, security
and workflow sectors of the information technology industry internationally.

NOTE B - RECAPITALIZATION TRANSACTION

         On  July  22,  1999,   Toucan  Gold   Corporation   (a  public  company
incorporated under the laws of the State of Delaware,  United States of America,
in  July  1996)  (Toucan)  acquired  all of the  outstanding  capital  stock  of
Authoriszor  Limited ("AL") (formerly known as ITIS  Technologies Ltd, a company
incorporated  pursuant  to  English  Law  in  January  1997),  in  exchange  for
restricted  shares of common stock of Toucan (the Exchange)  pursuant to a Share
Exchange  Agreement between Toucan and AL. Toucan exchanged  4,680,375 shares of
common stock for all of AL's issued and  outstanding  shares of common stock. At
June 30, 1999,  Toucan had  disposed of all of its  operations.  For  accounting
purposes,  the  Exchange  has been  treated as a  recapitalization  of AL. Also,
Toucan changed its name to Authoriszor  Inc. and its fiscal year end to June 30,
that of AL.

Note C - summary of significant accounting policies

Principles of Consolidation

         The  consolidated   financial   statements  include  the  accounts  and
operations  of  Authoriszor,   Inc.,  and  its  subsidiaries.   All  significant
intercompany accounts and transactions have been eliminated in consolidation.

Software development costs

         Software  development  costs are  expensed as  incurred.  Statement  of
Financial  Accounting  Standard  No. 86  "Accounting  for the Costs of  Computer
Software to be Sold,  Leased, or Otherwise  Marketed" (SFAS No. 86) requires the
capitalization  of  certain  software   development  costs  once   technological
feasibility is  established,  which the Company  defines as  establishment  of a
working  model.  The working model  criteria  used as the  Company's  process of
creating software  (including  enhancements) does not include a detailed program
design. To date, the period between achieving technological  feasibility and the
general  availability  of such software has been short and software  development
costs qualifying for capitalization  have been insignificant.  Accordingly,  the
Company has not capitalized any software development costs.

Property and equipment

         Property and equipment are stated at cost.  Depreciation is provided in
amounts  sufficient to relate the cost of depreciable  assets to operations over
their estimated services lives, using the straight line method. The useful lives
range from three to ten years.

         Expenditures  for  repairs  and  maintenance  are charged to expense as
incurred and additions and improvements that  significantly  extend the lives of
assets are  capitalized.  Upon sale or retirement of depreciable  property,  the
cost and accumulated  depreciation are removed from the related accounts and any
gain or loss is reflected in the results of operations.

                                      F-9
<PAGE>

AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



Cash and Cash Equivalents

         For the purposes of the financial statements, the Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.

         Restricted  cash  consists  of i) a deposit in the  amount of  $220,000
maintained  as security for a standby  letter of credit  which  matures in April
2002,  ii) a deposit in a trust  account in the amount of $250,000 to be paid in
January 2002 to a former  executive as part of a severance  agreement and iii) a
cash  portion of the  commitment  to purchase  the  remaining  shares in WRDC as
discussed in Note D.

Income taxes

         The Company  utilizes the  liability  method of  accounting  for income
taxes.  Under the  liability  method,  deferred tax assets and  liabilities  are
provided on differences  between financial reporting and tax bases of assets and
liabilities  and are measured  using the enacted tax rates and laws that will be
in effect when the  differences  are expected to reverse.  An allowance  against
deferred  tax assets is  recorded  when it is more likely than not that such tax
benefits will not be realized.

Use of estimates in financial statements

         In preparing financial statements in conformity with generally accepted
accounting  principles,  management  makes 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,  as well as the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.

Loss per share

         The Company computes basic loss per share based on the weighted average
number of common shares outstanding. Diluted loss per common share is also based
upon the weighted average number of common shares outstanding, because inclusion
of stock options and warrants would be antidilutive.

Fair Value of Financial Instruments

         The Company's financial instruments consists of cash, cash equivalents,
and trade  receivables,  for which the  carrying  amount  approximates  the fair
values  because of their short  maturity,  and investment  securities  which are
carried at market value.

Investment in securities

         At June 30, 2001, the Company held 4,500,000 shares  (5,000,000  shares
at June 30,  2000) of stock in an Irish  publicly  traded  company,  Minmet  Plc
(Minmet).    The   Company   has   classified   these   equity   securities   as
available-for-sale.  Available-for-sale  securities  are measured at fair value,
with net unrealized  gains and losses reported in equity.  The cost,  unrealized
gains and fair values of the  Company's  available-for-sale  securities  held at
June 30, 2001 and 2000, is summarized as follows:

                                                       Gross          Estimated
                                                    Unrealized          Fair
                                         Cost          Gains            Value
                                      -------       ----------        ----------
           June 30, 2000             $567,700       $1,425,069        $1,992,769
           June 30, 2001             $510,930         $364,725          $875,655

Subsequent to June 30, 2001, the Company sold the remaining 4,500,000 shares for
approximately $794,000.

                                      F-10
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Revenue Recognition

         The Company  recognizes  revenue in accordance  with the  provisions of
Statements  of Position  97-2 and 98-9  issued by the  American  Institution  of
Certified Public Accountants.  It recognizes revenues from software sales at the
time of  product  shipment,  or in  accordance  with the terms of the  licensing
contracts,  when  collectability  is probable and the Company has no significant
obligations  remaining  under  the  licensing  agreement.   In  instances  where
significant  obligations  remain,  revenue  recognition  is  delayed  until such
obligations have been satisfied. The Company also provides training, consulting,
on-going  support  and  maintenance  to certain  customers.  Revenue  from these
activities is recognized over the terms of the contract.

Foreign Currency Translation and Transaction Losses

         Assets and liabilities of the Company's  subsidiaries are translated at
the rate of exchange in effect at the close of the period. Revenues and expenses
are  translated at the weighted  average of exchange  rates in effect during the
period.  The  effects of  exchange  rate  fluctuations  on  translating  foreign
currency  assets and  liabilities  into US dollars  are  included as part of the
accumulated other  comprehensive  income component of stockholders'  equity. The
Company incurred currency transaction losses of approximately  $1,775,000 during
the year  ended  June 30,  2001.  The  losses  are a result of the  Company  (i)
entering  into  foreign  currency  option  transactions  for other than  hedging
purposes,   resulting  in  exchange  losses  of  approximately   $500,000,  (ii)
maintaining  the majority of its operating  cash in the U.S.  parent  company in
pound sterling  denominated accounts through December 31, 2000, and (iii) making
U.S. dollar  denominated loans to its  subsidiaries.  The British pound declined
against the US dollar  throughout the year ended June 30, 2001. The  transaction
losses have been reflected in the statement of operations.

Goodwill

         Goodwill  which resulted from the WRDC  acquisition is being  amortized
using the straight-line method over a period of ten years.

Stock-Based Compensation

         The Company  accounts for  stock-based  compensation to employees using
the intrinsic value method.  Accordingly,  compensation  cost for employee stock
options is  measured as the excess,  if any, of the quoted  market  price of the
Company's stock at the date of the grant over the amount an employee must pay to
acquire that stock.  Stock options granted to non-employees are recorded at fair
value at the time of grant.

Accounting for Impairment of Long-Lived Assets

         The Company evaluates  long-lived assets and intangibles for impairment
whenever events or changes in  circumstances  indicate that the carrying amounts
may not be  recoverable.  Impairment is recognized  when the  undiscounted  cash
flows  estimated  to be  generated  by those  assets are less than the  carrying
amounts of such assets.

New Accounting Standards not yet adopted

         In July 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting  Standards No. 141 (SFAS 141), "Business  Combinations".
This  standard   eliminates  the  pooling  method  of  accounting  for  business
combinations initiated after June 30, 2001. In addition,  SFAS 141 addresses the
accounting   for  intangible   assets  and  goodwill   acquired  in  a  business
combination.  This  portion of SFAS 141 is effective  for business  combinations
completed  after June 30,  2001.  The Company does not expect SFAS 141 to have a
material effect on the Company's financial position or results of operations.

         In July 2001, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 142 (SFAS 142), "Goodwill and Intangible
Assets",  which revises the  accounting  for purchased  goodwill and  intangible
assets.  Under SFAS 142,  goodwill and intangible  assets with indefinite  lives
will no longer be amortized,  but will be tested for  impairment  annually,  and
also in the event of an impairment  indicator.  SFAS 142 is effective for fiscal
years  beginning  after  December 15, 2001,  with early  adoption  permitted for

                                      F-11
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


companies  with  fiscal  years  beginning  after  March 15,  2001 if their first
quarter  financial  statements have not previously been issued.  The adoption of
SFAS 142 will reduce annual expenses by approximately  $600,000. The Company has
not yet determined when it will adopt SFAS 142.

Reclassifications

Certain 2000 amounts have been reclassified to conform to the 2001 presentation.

NOTE D - ACQUISITIONS

         On February  22, 2000,  the Company  acquired a 27.2% (25.1% on a fully
diluted  basis)  interest in WRDC Limited  (WRDC),  a private UK company,  for a
purchase price of $604,800.  The Company has accounted for its 27.2% interest in
WRDC under the equity method.  The purchase price of WRDC exceeded the Company's
proportionate  share of the net  assets  acquired  by  $584,400,  which is being
amortized on a straight  line basis over ten years.  WRDC provides a broad array
of  strategic  services  and  a  number  of  strategic  technologies,  such  as,
electronic messaging,  directory services,  security  architectural and interest
technologies,  and the  combination  of these  technologies  and concepts to its
customers.

         On May 8, 2001, the Company  purchased an additional equity interest in
WRDC,  increasing its ownership interest from 27.2% to 66.4%. The Company issued
approximately  930,000  shares  of  common  stock,  paid  cash of  approximately
$1,716,000  and issued  237,000  stock options (fair valued at $248,900) to WRDC
employees for the additional equity interest.  The Company committed to issue an
additional  195,000  shares  of its  common  stock to the  shareholders  of WRDC
subject to the  realization of certain of WRDC's  accounts  receivable.  Also on
this date, the Company committed to acquire the remaining 33.6% interest in WRDC
upon the  occurrence  of certain  events,  but in no event later than January 1,
2002. The purchase price for the remaining interest is approximately $3,100,000.
The  Company is  required  to pay  approximately  $1,564,000  in cash,  of which
$1,260,000 is in an escrow account,  and the remaining  portion in common stock.
However,  in the event  that the  exchange  ratio set forth  would  require  the
Company to issue more than  19.9% of the  issued and  outstanding  shares of its
common  stock,  the Company  will  instead pay to the  shareholders  of WRDC the
amount  in cash  equal  to the  aggregate  market  value of the  excess  shares.
Although the Company has not paid the  consideration due for the purchase of the
remaining  33.6%  interest  in WRDC,  it has  recorded  the  transaction  in the
accompanying   financial   statements  because  it  has  a  binding  obligation.
Accordingly,  it has recorded a liability  as of June 30, 2001 of  approximately
$3,100,000  to the  shareholders  of WRDC.  The purchase  price for the interest
acquired  in May 2001  exceeded  the  Company's  proportionate  share of the net
assets acquired by approximately $5,600,000.

         As of May 8, 2001,  the Company  changed from the equity  method to the
consolidation method to account for its ownership of WRDC.

NOTE E - RESTRUCTURING AND EXIT CHARGES

Closure of U.S. Headquarters and Operations

         During 2000, the Company established its U.S. Corporate Headquarters in
Boston,  Massachusetts to facilitate  expansion in the U.S. However, the Company
was not  successful in  penetrating  the U.S.  market.  Because of the Company's
declining  sales,  a management  reorganization  in the third  quarter,  and the
acquisition of WRDC, a European based services provider,  a decision was made in
the fourth quarter to close the U.S.  Headquarters  and Operations and establish
the  corporate  headquarters  in the UK.  As a result of the U.S.  closure,  the
Company  has  accrued  liabilities  at June 30,  2001 for  severance  costs  and
termination  benefits for  terminated  employees,  and lease and other  contract
obligations.  In addition, the Company has written off U.S. assets consisting of
leasehold  improvements  and computer and office equipment with a net book value
of $473,838.

         The  components  of the fourth  quarter  2001  charges  and the accrued
liability at June 30, 2001 are as follows:


                                      F-12
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                          Accrued
                                                                          Total         Noncash          June 30,
                                                                         charge         portion            2001
                                                                        --------------- --------          ------
           <S>                                                        <C>             <C>                <C>

           Asset impairments                                          $  473,838      $473,838           $      -
           Employee severance and
                termination benefits                                     559,793            -             559,793
           Leased facilities and related
                termination costs                                        102,970            -             102,970
                                                                        --------           ---            -------

                                                                      $1,136,601      $473,838           $662,763
                                                                       =========       =======            =======
</TABLE>

NOTE F - SALE OF SUBSIDIARY

         On January 28, 2000, the Company completed the sale of all of the share
capital of Toucan Mining Plc (Toucan Mining) for an aggregate  consideration  of
$809,750 in cash. The sale resulted in a loss of $291,448.

         Prior  to the  aforementioned  sale of  Toucan  Mining,  Toucan  Mining
transferred to the Company,  2 million shares of Minmet,  (the "Minmet  Shares")
and warrants to purchased 7.7 million  shares of Minmet.  The Company  exercised
the 7.7  million  warrants in April 2000 and sold the  underlying  shares in May
2000. The Company received $3,055,000 in proceeds from the sale and recognized a
gain of $1,693,000.

NOTE G - COMMITMENTS

Capital leases

         The Company  leases  office  equipment and vehicles  under  capitalized
leases.
<TABLE>
<CAPTION>

                                                                                      June 30,       June 30,
                                                                                          2001           2000
                                                                                             $              $
            <S>                                                                         <C>            <C>

            Equipment and vehicles                                                      211,333        202,772
            Less accumulated depreciation                                               (87,245)        (5,304)
                                                                                  -------------     -----------
                                                                                        124,088        197,468
                                                                                  =============     ===========

</TABLE>

Operating leases

         The Company leases office space, vehicles and equipment under operating
lease   agreements   which  expire  through  May  2009.   Rent  expense  totaled
approximately $681,000 the year ended June 30, 2001 ($103,000 in 2000).

         The future minimum rental commitments under operating leases as of June
30, 2001 are as follows:

                                      F-13
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                                               Vehicles and
                                              Office space        equipment
            Period ending June 30,                       $                $

            2002                                   667,800           59,900
            2003                                   590,800           27,800
            2004                                   547,800           27,800
            2005                                   501,400           27,800
            2006                                   156,000           27,800
            Thereafter                             262,000                -
            Less sublease rentals               (1,475,800)               -
                                            ---------------  ---------------
                                                 1,250,000          171,100
                                            ===============  ===============

         In May 2001, the Company began subleasing the office space of its prior
U.S.  headquarters.  The  sublease  calls for monthly  payments in the amount of
$31,400 per month through April 2005, which is equal to the monthly payments and
term of the underlying lease.

         The  leases  generally  provide  that  property  taxes,  insurance  and
maintenance expenses are obligations of the Company.

Chief Executive Officer Severance Obligation

         On January 31, 2001, the Company's  Chief Executive  Officer  resigned.
The Executive and representatives of the Board of Directors negotiated the terms
of a Severance  and  Release  Agreement  (the  "Severance  Agreement")  with the
Executive.

         In accordance  with the terms of the Severance  Agreement,  the Company
agreed to pay the  Executive  $842,000  in  January  2001.  The  balance  due of
$250,000 has been accrued at June 30, 2001.

NOTE H - ACCRUED LIABILITIES

                                                       June 30,      June 30,
                                                           2001          2000
                                                              $             $

Accrued compensation and other                        1,596,770        209,160
Accrued restructuring and exit costs                    662,763              -
Taxes other than income                                 243,718        157,061
Other                                                   412,209          6,812
                                                      ----------     ---------
                                                      2,915,460        373,033
                                                      ==========     =========

                                      F-14
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


<TABLE>
<CAPTION>

NOTE I - LONG TERM OBLIGATIONS

                                                                             June 30,   June 30, 2000
                                                                                 2001
                                                                                    $               $

<S>                                                                            <C>            <C>

Note payable to a finance  company,  with interest at 2% above lenders
base rate (5.25% at June 30, 2001), collateralized by substantially
all of WRDC's assets, due in monthly installments of $3,965 through             12,611              -
September 2001
Note payable to a finance company, with interest at 2.5% above lenders
base rate (5.25% at June 30, 2001) collateralized by substantially all
of WRDC's assets, due in monthly installments of $3,200 through                 89,174              -
November 2003
Capital lease obligations due through November 2003                            125,065        192,432
                                                                               226,850        192,432
Less current maturities                                                         99,304         58,990
                                                                           -----------    -----------
                                                                               127,546        133,442
                                                                           ===========    ===========
</TABLE>


NOTE J - STOCK OPTIONS, WARRANTS AND STOCK BASED COMPENSATION

Stock and Stock Options

         The  Company's  1999 Stock Plan (the 1999 Plan)  provides for grants of
options up to  1,000,000  shares of common  stock,  and the 2000 Stock Plan (the
2000 Plan)  provides for grants of options up to 1,700,000  shares.  Pursuant to
the Plans,  the Company may grant  Incentive  Stock  Options to any  employee or
officer  of the  Company  or of any  subsidiary  of the  Company,  and may grant
Non-qualified  Stock Options to any person  eligible to receive  Incentive Stock
Options,  and also to directors,  consultants  or advisors of the Company or its
subsidiaries.  As of June 30, 2001,  there were 775,284  options  available  for
grant.

         In July 2000, the Company entered into a six-month consulting agreement
with  an  individual.  In  accordance  with  the  terms  of the  agreement,  the
individual  agreed  to  provide a  minimum  of 10 days per  month of  consulting
services for the Company at the rate of $3,000 per day.  The daily  compensation
paid to the  individual  was  comprised  of  $2,000  in cash and such  number of
restricted  shares of the Company's  common stock equal to $1,000 per consulting
day,  calculated  weekly for the days  worked in such week at the last  reported
sales price of the  Company's  common stock at the close of business on the last
business  day of the week in  which  the  individual  performed  the  consulting
services.  In January  2001,  the Company  issued  12,703 shares of stock to the
consultant  for his services.  The market value of the shares  earned  ($60,000)
under the agreement  has been charged to expense.  In addition,  the  individual
received an option to  purchase  100,002  shares of Company  common  stock.  The
options vested on a monthly pro-rata basis and are exercisable over a three-year
period. The options granted have an exercise price of $7.75 per share, which was
the market  price of the stock on the date of grant.  The options  granted  were
recorded  by the  Company at fair value  resulting  in an  accounting  charge of
approximately $689,000 for the year ended June 30, 2001.

         The Company also  recorded  expense in the year ended June 30, 2000 for
(1) 80,000  options  granted to  consultants  (charge of $168,000  based on fair
value) and (2) 476,000  options granted to employees at less than market (charge
of $79,500  based on intrinsic  value).  In February  2000,  the Company  issued
136,364  options for fees in  connection  with the private  placement  of common
stock.

         There  were  options  outstanding  at the time of the  recapitalization
transaction  discussed in Note B. At that date, Toucan Gold Corporation (Toucan)
had 350,000 employee  options  outstanding to purchase common stock at $1.00 per
share.  In January 2000, the Company  offered an exercise  incentive to the then
President and a current  director of the Company  holding  200,000 options along

                                      F-15
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


with three other  individuals  holding  150,000 options by reducing the exercise
price from $1.00 to $0.66 per share. The Company recorded  compensation  expense
of $1,694,000. Each of the 350,000 options was exercised in January 2000.

         The Company has adopted only the disclosure  provisions of Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation"  (SFAS 123). Had  compensation  cost for stock options  granted to
employees been  determined  consistent with SFAS 123, the Company's net loss and
loss per share would have been the following pro forma amounts:


                                                 June 30, 2001     June 30, 2000
                                                             $                 $
Net loss as reported                               (19,438,747)      (5,406,480)
Net loss - proforma                                (23,142,163)      (6,859,975)
Loss per share-basic and diluted as reported             (1.10)           (0.36)
Loss per share - proforma                                (1.31)           (0.45)

         The fair value of these  options  were  estimated  at the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions; expected volatility of 196% - 207%; average risk-free interest rate
of 5.6 to 6.3 percent;  average  expected life of 3.7 - 5 years.  Dividends were
assumed not to be paid during the terms of the options.  Option  pricing  models
require the input of highly subjective  assumptions including the expected stock
price volatility.  Management believes the best assumptions  available were used
to value the options and warrants and the resulting values are reasonable.

         Following  is a  summary  of stock  option  activity  including  grants
outside of the Plans:

<TABLE>
<CAPTION>

                                                                                                   Weighted
                                                                                                   average       Weighted
                                                                                Exercise           exercise       Average
                                                           Options                price              price       fair value
                                                              $                     $                  $             $

           <S>                                            <C>                      <C>                 <C>           <C>

           Outstanding at July 1, 1999                                 -                    -               -            -
           Toucan Gold Corporation employee options
           outstanding at July 22, 2000                          350,000                 1.00            1.00          .23
           Granted to employees:
              Exercise price equals market price at
              date of grant                                      853,714           2.00-10.31            6.51         6.40
              Exercise price exceeds market price
              at date of grant                                   125,000                 2.50            2.50         1.52
              Exercise price is less than market
              price at date of grant                             476,000            1.00-7.10            2.62         3.05
            Exercised                                           (350,000)                 .66             .66          .66

           Granted to non employees:
              Exercise price equals market at date
              of grant                                           136,364                11.00           11.00         7.90
              Exercise price is less than market at
              date of grant                                       80,000            1.00-3.00            2.00         2.10
                                                      ---------------------
           Outstanding at June 30, 2000                        1,671,078                                 4.85         4.84
                                                      ---------------------
           Granted to employees:
               Exercise price equals market price
               at date of grant                                1,602,500           1.01-22.50            6.17         5.90
               Exercise price exceeds market price
               at date of grant                                  572,000           1.01-10.13            5.92         5.59
            Forfeited                                         (1,004,500)          1.50-22.50            7.13         7.34
           Granted to non-employees:
               Exercise price equals market at date
               of grant                                          100,002                 7.75            7.75         6.89
           Outstanding at June 30, 2001               ------------------                                 4.97         4.95
                                                               2,941,080
                                                      ==================
           Exercisable at June 30, 2000                          616,364                                 2.00         2.10
           Exercisable at June 30, 2001                        1,767,917                                 3.52         3.20



</TABLE>

                                      F-16
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
<CAPTION>

         Following is additional information regarding stock options outstanding at June 30, 2001

                                       Outstanding                                              Exercisable
            -----------------------------------------------------------------       ------------------------------
                                                   Weighted       Weighted                             Weighted
               Range of                             average        average                              average
               exercise           Number          remaining       exercise                 Number      exercise
               prices        outstanding   contractual life          price            exercisable         price

             <S>               <C>                    <C>              <C>             <C>                 <C>

             1.00-1.75         1,042,000              6.3               1.27              1,002,000         1.25
             2.00-5.03           406,214              5.6               2.83                268,249         2.39
             6.75-7.75           725,002              7.5               7.05                350,002         7.32
             8.75-22.50          767,864              5.5              10.24                147,666        10.95
                            ------------                                              -------------
                               2,941,080                                                  1,767,917
                            ============                                              =============

</TABLE>


Warrants

         At July 22, 1999, the date of the  recapitalization  transaction  (Note
B), Toucan had 533,333  outstanding  warrants issued in connection with sales of
common stock, to purchase common stock at $1.50 per share. In December 1999, the
Company needed capital and offered an incentive to parties  holding the warrants
by reducing the exercise price from $1.50 to $1.00. Warrants to purchase 436,000
shares of common stock were exercised during December 1999. The remaining 97,333
warrants expired during 2001.

         There are also warrants  outstanding as a result of a  recapitalization
transaction  involving Toucan's  predecessor.  These warrants were issued on May
10, 1996 to purchase  100,000  shares of the Company common stock at an exercise
price of $4.00 per share. The holders of these warrants have certain  piggy-back
registration  rights with  rights to the shares of the  Company's  common  stock
underlying the warrants. All of these warrants were exercised during 2001.

NOTE K - INCOME TAXES

         At June 30, 2001, the Company has a net operating loss  carryforward of
approximately  $24,000,000  available to offset future taxable income.  Deferred
tax assets consist  primarily of the net operating loss  carryforward.  Deferred
tax liabilities are not significant.

         The Company's net deferred tax asset of  approximately  $8,000,000  has
been offset by a valuation allowance of an equal amount at June 30, 2001, due to
the  uncertainty  of  realizing  the  net  deferred  tax  asset  through  future
operations.  Utilization of net loss  carryforwards in the future may be limited
if  changes  in the  Company's  stock  ownership  create a change in  control as
provided in Section 382 of the Internal Revenue Code.

NOTE L - MAJOR CUSTOMERS

        Three  individual  customers  accounted for 16%, 10.8% and 10.6% of the
Company's revenues for the year ended June 30, 2001. No other customer accounted
for greater than 10% of revenues. One customer accounted for 76% of revenues for
the year ended June 30, 2000. No other  customer  accounted for greater than 10%
of revenues.


NOTE M - BUSINESS SEGMENTS AND FOREIGN OPERATIONS

         The Company has two reportable segments:  Consulting and Implementation
Services and Technology  Business.  The Consulting and  Implementation  Services
segment provides  functional  business  solutions and e-business  transformation
services  incorporating  business  processes  and  interest  technologies.   The
Technology  Business segment sells security  software and solutions  designed to
secure corporate  information while enabling businesses to provide secure access
to their corporate website and applications and to conduct secure communications
over computer networks and the internet.

                                      F-17
<PAGE>
AUTHORISZOR INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


         The accounting policies of the segments are the same as those described
in the summary of significant  accounting policies. The Company measures segment
profit  or loss as  operating  income  (loss).  The  Company  does not  allocate
expenditures  for assets on a segment  basis for internal  management  reporting
and, therefore, such information is not presented. Information on segments is as
follows:

<TABLE>
<CAPTION>


                                                                          June 30, 2001
                                              ---------------------------------------------------------------------
                                                    Consulting
                                                           And
                                                Implementation         Technology     Unallocated
                                                      Services           Business       Corporate            Total
                                                 -------------         ----------    ------------          -------
         <S>                                       <C>                 <C>              <C>             <C>


         Revenue                                    $ 647,658           $   60,819        $     -         $ 708,477
         Depreciation and amortization                 33,234              197,566         250,893          481,693
         Operating loss                               135,997            8,330,113      10,162,745       18,628,855
         Assets                                    $2,433,527          $10,388,517      $9,167,033      $21,989,077




                                                                          June 30, 2000
                                              ---------------------------------------------------------------------

         Revenue                                     $     -             $ 121,186            $ -         $ 121,186
         Depreciation and amortization                     -                93,390           7,802          101,192
         Operating loss                                    -             5,018,078       2,460,124        7,478,202
         Assets                                       $    -           $ 5,734,290     $25,910,648      $31,644,938


</TABLE>

                     Information  regarding  foreign  operations  for the  years
            ended  June 30,  2001 and 2000  follows.  Sales  are  attributed  to
            countries based upon the location of the customer.
<TABLE>
<CAPTION>


                                                                                               Year ended June 30,
                                                                                           2001               2000
                                                                                          ------             ------
         <S>                                                                           <C>                <C>

         Revenue
               United States                                                           $      -           $      -
               United Kingdom                                                            708,477            121,186
                                                                                        --------           --------

                                                                                       $ 708,477          $ 121,186
                                                                                        ========           ========

         Long-lived assets
               United States                                                          $6,000,252          $ 805,647
               United Kingdom                                                            612,527            382,326
                                                                                        --------           --------

                                                                                      $6,612,779         $1,187,973
                                                                                       =========          =========
</TABLE>


NOTE N - SUBSEQUENT EVENT

         In September  2001,  the Company,  though its  wholly-owned  subsidiary
Authoriszor  Holdings  Ltd.  ("AHL"),   acquired   approximately  99.8%  of  the
outstanding capital stock of Logsys Solutions Limited, a company incorporated in
the United  Kingdom  ("Logsys"),  and a subsidiary  of Logsys  Holdings  Limited
("LHL")  for  cash of  approximately  $396,000.  In  addition,  the  Company  is
obligated to issue to LHL up to 186,453  shares of common  stock  subject to the
realization by Logsys of certain  outstanding trade debt receivables and certain
itemized works in progress identified by Logsys.


                                      F-18

<PAGE>


                    ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         We have no disagreements on accounting or financial  disclosure matters
with its independent accountants to report under this Item 8.

                                    PART III


           ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Executive Officers

         Information contained under the captions "Election of Directors" in the
Proxy Statement is incorporated herein by reference in response to this Item 9.

                         ITEM 10. EXECUTIVE COMPENSATION

         Information  contained under the captions "Executive  Compensation" and
"Election  of  Directors"  in the  Proxy  Statement  is  incorporated  herein by
reference in response to this Item 10.

     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information contained under the caption "Principal Stockholders" in the
Proxy Statement is incorporated herein by reference in response to this Item 11.

             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information  contained  under the caption  "Certain  Relationships  and
Related Transactions" in the Proxy Statement is incorporated herein by reference
in response to this Item 12.

                                     PART IV


    ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as part of this report:

         (a)      Financial Statements:
                  --------------------

                  The  response  to this  portion of Item 14 is  submitted  as a
                  separate  section  of this  report.  See  Index  to  Financial
                  Statements at page F-1.

         (b)      Financial Statement Schedules:
                  -----------------------------

                  All  schedules  have been  omitted as the  information  is not
required for small business issuers.

        (c)      Exhibits:
                 --------

         The  following  documents  are  filed as a part of this  report.  Those
exhibits  previously filed and  incorporated  herein by reference are identified
below. Exhibits not required for this report have been omitted.


                                       24

<PAGE>

   Exhibit No.                 Description


       2.1        Agreement and Plan of Merger,  dated July 29, 1996,  and among
                  Toucan  Gold  Corporation  and  Starlight  Acquisitions,  Inc.
                  (incorporated by reference from the Current Report on Form 8-K
                  dated July 29, 1996, Exhibit 2.1).
       2.2        Share  Exchange  Agreement,  dated May 10, 1996,  by and among
                  Starlight   Acquisitions,   Inc.  and  Toucan  Mining  Limited
                  (incorporated by reference from the Current Report on Form 8-K
                  dated May 13, 1996, Exhibit 2).
       2.3(4)     Share Sale Agreement  regarding ITIS Technologies  Ltd., dated
                  July 22,  1999,  by and among David J.  Blanchfield,  James L.
                  Jackson,  David R. Wray,  Barry Jones,  Ian McNeill and Toucan
                  Gold Corporation. (Exhibit 10.1)
       2.4(12)    Stock  Purchase  Agreement,  dated as of May 8,  2001,  by and
                  among  Authoriszor  Inc.,  Authoriszor  Holdings  Ltd. and the
                  Shareholders named therein (Exhibit 2.1).
       2.5(12)    Subscription Agreement,  dated as of May 8, 2001, by and among
                  Authoriszor Inc.,  Authoriszor Holdings Ltd., WRDC Limited and
                  the Shareholders named therein (Exhibit 2.2).
       2.6(12)    Articles of  Association  of WRDC Limited,  dated as of May 8,
                  2001 (Exhibit 2.3).
       2.7(12)    Deed of  Mortgage,  dated as of May 8,  2001,  by and  between
                  Authoriszor Inc.,  Garcia Hanson and Brian Edmondson  (Exhibit
                  2.4)
       2.8(14)    Stock  Purchase  Agreement,  dated as of July 3, 2001,  by and
                  among  Authoriszor  Holdings Ltd., Logsys Holdings Limited and
                  Stewart Leslie Ashton (Exhibit 2.1)
       3.1        Certificate of Incorporation of Toucan Gold Corporation  filed
                  on July 22, 1996 with the  Secretary  of State of the State of
                  Delaware (incorporated by reference from the Current Report on
                  Form 8-K dated July 29, 1996, Exhibit 4.1).
       3.2        Amendment to our Certificate of Incorporation  filed on August
                  25,   1999,   with  the   Secretary   of  State  of   Delaware
                  (incorporated  by  reference to our  Quarterly  Report on Form
                  10-QSB for the quarter ended September 30, 1999, Exhibit 3.1)
       3.3(13)    Bylaws of Authoriszor Inc., as amended March 21, 2001 (Exhibit
                  3.1).
       4.1(3)     Option Agreement,  dated September 27, 1997, by and between L.
                  Clark  Arnold and Toucan  Gold  Corporation  (incorporated  by
                  reference to Exhibit 10.2 to our Annual  Report on Form 10-KSB
                  for the period ended December 31, 1997)
       4.2(3)     Amendment  Number One to Stock Option  Agreement,  dated as of
                  April 27, 1999, by and between L. Clark Arnold and Toucan Gold
                  Corporation (Exhibit 4.2)
       4.3(3)     Amended and Restated Stock Option Agreement, dated as of April
                  1, 1999,  by and between  Robert P.  Jeffcock  and Toucan Gold
                  Corporation (Exhibit 4.4)
       4.4(3)     Option  Agreement,  dated  February  2, 1998,  by and  between
                  Robert A. Pearce and Toucan Gold Corporation  (incorporated by
                  reference to Exhibit 10.4 to our Annual  Report on Form 10-KSB
                  for the period ended December 31, 1997)
       4.5(3)     Amendment  Number One to Stock Option  Agreement,  dated as of
                  April 27,  1999,  by and  between  Robert A. Pearce and Toucan
                  Gold Corporation (Exhibit 4.6)
       4.6(3)     Amended and Restated Stock Option Agreement, dated as of April
                  1, 1999,  by and  between  David  Carmichael  and Toucan  Gold
                  Corporation (Exhibit 4.8)
       10.1(1)    Warrant Agreement,  dated July 29, 1996, by and between Toucan
                  Gold Corporation and R. Haydn Silleck (Exhibit 10.1).
      10.2(1)     Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and John B. Marvin (Exhibit 10.2).
       10.3(1)    Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and Peter S. Daley (Exhibit 10.3).
       10.4(1)    Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and Jay Lutsky (Exhibit 10.4).
       10.5(2)    Agreement for the sale and purchase of the whole of the issued
                  share  capital of Anagram  Limited,  dated  December  3, 1998,
                  among Toucan Mining Limited, Toucan Gold Corporation, Inc. and
                  Minmet Plc (Exhibit 10.1).
       10.6(2)    Supplemental  Agreement,  dated  December 3, 1998 among Toucan
                  Mining Limited,  Toucan Gold Corporation,  Inc. and Minmet Plc
                  (Exhibit 10.2).
       10.7(2)    Option Agreement  Regarding  Mineradora De Bauxita Ltda, dated
                  December 3, 1998,  among Toucan  Mining  Limited,  Toucan Gold
                  Corporation, Inc. and Anagram Limited (Exhibit 10.3).
       10.8(2)    Agreement  for the  purchase of the whole of the issued  share
                  capital of Mineradora de Bauxita Ltda,  dated December 3, 1998
                  among Toucan Mining Limited, Toucan Gold Corporation, Inc. and
                  Anagram Limited (Exhibit 10.4).
       10.9(2)    Form of Minmet Plc Warrant Instrument (Exhibit 10.5).
       10.10(4)   Deed of Indemnity,  dated July 22, 1999, by and among David J.
                  Blanchfield, James L. Jackson, David R. Wray, Barry Jones, Ian
                  McNeill and Toucan Gold Corporation. (Exhibit 10.2)
       10.11(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  David J. Blanchfield and ITIS Technologies Ltd. (Exhibit 10.3)
       10.12(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  James L. Jackson and ITIS Technologies Ltd. (Exhibit 10.4)
       10.13(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  David R. Wray and ITIS Technologies Ltd. (Exhibit 10.5)
       10.14(4)   Engagement  Letter,  dated July 22,  1999,  by and between CCM
                  Ventures Ltd. and ITIS Technologies Ltd. (Exhibit 10.7)
       10.15(4)   Engagement Letter,  dated July 22, 1999, by and between Robert
                  Jeffcock and Toucan Gold Corporation. (Exhibit 10.8)
       +10.16     Consulting Agreement,  dated September 23, 1999 by and between
                  Sir Malcolm  Rifkind and  Authoriszor  Ltd.  (incorporated  by
                  reference  to our  Quarterly  Report  on Form  10-QSB  for the
                  quarter ended September 30, 1999, Exhibit 10.9)
       +10.17(5)  Executive Employment  Agreement,  dated as of January 1, 2000,
                  by and  between  Authoriszor  Inc.  and  Richard A.  Langevin.
                  (Exhibit 10.1)
       +10.18(5)   Authoriszor Inc. 1999 Stock Plan. (Exhibit 10.2)
       +10.19(7)  Form of  Agreement  under the 1999 Stock Plan and  Schedule of
                  Agreements
       +10.20(5)  Agreement,   dated   November   12,   1999,   by  and  between
                  Authoriszor Inc. and Raymond G. H. Seitz (Exhibit 10.4)
       +10.21(5)  Consulting  Agreement,   dated  September  23,  1999,  by  and
                  between  Authoriszor  Inc.  and Sir Malcolm  Rifkind  (Exhibit
                  10.5)
       +10.22(5)  Stock Option  Agreement,  dated as of September  23, 1999,  by
                  and between Authoriszor Inc. and Sir Malcolm Rifkind. (Exhibit
                  10.6)
       10.23(5)   Placing Agreement,  dated as of January 28, 2000, by and among
                  Authoriszor Inc., Beeson Gregory Limited and certain Directors
                  of Authoriszor Inc. (Exhibit 10.7)
       10.24(5)   Supplemental Placing Agreement,  dated as of February 9, 2000,
                  by and among  Authoriszor  Inc.,  Beeson  Gregory  Limited and
                  certain Directors of Authoriszor Inc. (Exhibit 10.8)
       10.25(5)   Registration Rights Agreement, dated February 16, 2000, by and
                  between Authoriszor Inc. and Beeson Gregory Limited.  (Exhibit
                  10.9)
       10.26(5)   Lock-up   Agreement,   dated   January   2000,  by  and  among
                  Authoriszor Inc., Beeson Gregory Limited and Raymond Seitz and
                  others. (Exhibit 10.10)
       10.27(5)   Deed of Covenant,  dated as of February 22, 2000, by and among
                  Authoriszor  Holdings Ltd.,  WRDC Limited and certain  persons
                  named in Schedule 1 to the Deed. (Exhibit 10.11)
       10.28(5)   Shareholders' Agreement,  dated as of January 27, 2000, by and
                  among   Authoriszor   Holdings   Ltd.,   WRDC   Limited,   the
                  shareholders of WRDC Limited and Authoriszor Inc., relating to
                  WRDC Limited. (Exhibit 10.12)
       10.29(5)   Letter  Agreement,  dated  February 22,  2000,  by and between
                  Authoriszor  Holdings Ltd. and WRDC Limited  regarding  credit
                  facility. (Exhibit 10.13)
       10.30(5)   Letter  Agreement,  dated  February 22,  2000,  by and between
                  Authoriszor  Holdings Ltd. and WRDC Limited  regarding  credit
                  facility. (Exhibit 10.14)
       10.31(6)   Share Sale  Agreement,  dated as of January 28,  2000,  by and
                  between  Authoriszor  Inc.  and Golden  Ridge  Group  Limited.
                  (Exhibit 2.1)
       +10.32(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.33).
       +10.33(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.34).
       +10.34(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.35)
       +10.35(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.36).
       +10.36(7)  Stock Option Agreement,  dated as of November 1, 1999, between
                  Authoriszor Inc. and Raymond Seitz (Exhibit 10.37).
       10.37(7)   Lease  Agreement,   dated  as  of  April  28,  2000,   between
                  Authoriszor  Inc.  and  Massachusetts  Mutual  Life  Insurance
                  Company (Exhibit 10.38).
       10.38(7)   Consulting   Agreement,   dated  as  of  April  2000,  between
                  Authoriszor Inc. and Fred Sawin (Exhibit 10.39).
       10.39(7)   Employment  Agreement,  dated as of March  15,  2000,  between
                  Authoriszor Inc. and Ed Vasko (Exhibit 10.40).
       10.40(8)   Consulting Agreement,  dated July 1, 2000, between Authoriszor
                  Inc. and Commercial Technology Ltd (Exhibit 10.40).
       10.41(8)   Reimbursement   Agreement,   dated   September  28,  2000  and
                  effective as of October 1, 1999, between  Authoriszor Inc. and
                  Authoriszor Ltd. (Exhibit 10.41).
       +10.42(9)  Letter  Agreement,   dated  as  of  September  30,  2000,  and
                  executed as of October 31,  2000,  by and between  Authoriszor
                  Inc. and Godfrey S. Shingles (Exhibit 10.1).
       +10.43(9)  Letter of  Employment,  dated October 16, 2000, by and between
                  Authoriszor Inc. and Alec P. Karys (Exhibit 10.2).
       +10.44(9)  Letter of  Employment,  dated  October 4, 2000, by and between
                  Authoriszor Inc. and Paul Ayres (Exhibit 10.3).
       10.45(9)   Consulting  Agreement,  dated July 21,  2000,  by and  between
                  Authoriszor Inc. and Edward F. Rogers (Exhibit 10.4).
      +10.46(10)  Authoriszor Inc. 2000 Omnibus Stock and Incentive Plan.
       +10.47(7)  Letter  of  Employment,  dated  May 1,  2000,  by and  between
                  Authoriszor Inc. and Fred Sawin (Exhibit 10.39)
       +10.48(11) Severance  and Release  Agreement,  dated as of January 29,
                  2001, by and between Authoriszor Inc. and Richard A. Langevin.
       +10.49(11) Stock Option Agreement, dated as of January 31, 2000, by and
                  between Authoriszor Inc. and Richard A. Langevin.
       +10.50(12) Service  Agreement,  dated as of May 8,  2001,  by and among
                  Authoriszor  Inc.  and  Garcia  Hanson.  Form of Stock  Option
                  Agreement,  dated  as of  May 8,  2001,  by  and  between  the
                  Authoriszor  Inc.  and  each  of the  former  holders  of WRDC
                  Options (Exhibit 10.1).
       +10.51(12) Form of Stock Option Agreement,  dated as of May 8, 2001, by
                  and  between  the  Authoriszor  Inc.  and  each of the  former
                  holders of WRDC Options (Exhibit 10.2).
       10.52+     Sublease  Agreement,  effective  as of  July 1,  2001,  by and
                  between Authoriszor Inc. and Directech, Inc.
       +10.53+    Stock Option  Agreement,  dated as of October 7, 2000,  by and
                  between Authoriszor Inc. and Paul Ayres.
       +10.54+    Stock Option  Agreement,  dated as of October 16, 2000, by and
                  between Authoriszor Inc. and Alec Karys.
       +10.55+    Stock Option Agreement,  dated as of November 10, 2000, by and
                  between Authoriszor Inc. and Don Box.
       +10.56+    Stock Option  Agreement,  dated as of October 18, 2000, by and
                  between Authoriszor Inc. and Geoff Shingles.
       +10.57+    Form of Stock Option Agreement by and between Authoriszor Inc.
                  and various  employees  with respect to the  Authoriszor  Inc.
                  2000 Omnibus Stock and Incentive Plan.
       +10.58+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Paul Ayres.
       +10.59+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Andrew Cussons.
       +10.60+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Alec Karys.
       23.1+      Consent of Grant Thornton


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

+        Filed herewith.
+        Compensation plan, benefit plan or employment contract or arrangement.
(1)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Annual  Report on Form 10-KSB for the period ended  December 31,
         1996, filed by us with the Securities and Exchange Commission.
(2)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Current Report on Form 8-K, filed January 5, 1999 by us with the
         Securities and Exchange Commission.
(3)      Incorporated  by reference to the exhibit shown in  parenthesis  to our
         Registration  Statement  on Form  S-8  filed  with the  Securities  and
         Exchange Commission on January 10, 2000.
(4)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Current  Report on Form 8-K, filed by us with the Securities and
         Exchange Commission on August 6, 1999.
(5)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly  Report on Form 10-QSB for the  quarter  ended  December  31,
         1999.
(6)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Current  Report on Form 8-K,  filed by us on February 14, 2000 with the
         Securities and Exchange Commission.
(7)      Incorporated by reference to the Exhibit shown in parenthesis  from our
         Registration  Statement  on Form S-1,  filed by us on May 18, 2000 with
         the Securities and Exchange Commission.
(8)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Annual  Report on Form 10-KSB,  filed by us on September  29, 2000 with
         the Securities and Exchange Commission.
(9)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly Report on Form 10-QSB,  filed by us on November 14, 2000 with
         the Securities and Exchange Commission.
(10)     Incorporated  by reference  to Appendix A contained  in our  definitive
         Proxy  Statement  pertaining to the 2000 Annual Meeting of Stockholders
         filed with the Securities  and Exchange  Commission on October 10, 2000
         pursuant to Regulation 14A.
(11)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on January 30, 2001.
(12)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on May 9, 2001.
(13)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly  Report on Form 10-QSB  filed by us with the  Securities  and
         Exchange Commission on February 14, 2001.
(14)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on July 16, 2001.
(d)      Reports on Form 8-K.
----------------------------

                  (1) We filed a Current  Report on Form 8-K with the Securities
and Exchange Commission on May 9, 2001, reporting the execution and consummation
of the acquisition by us of all of the issued and  outstanding  capital stock of
WRDC.  We also  filed a Current  Report on Form 8-K/A  with the  Securities  and
Exchange Commission on September 17, 2001 with respect to the WRDC acquisition.

                  (2) We filed a Current  Report on Form 8-K with the Securities
and  Exchange  Commission  on  July  16,  2001,   reporting  the  execution  and
consummation  of the acquisition by us of  approximately  68% of the outstanding
capital stock of Logsys.



<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on October, 19, 2001.

                                AUTHORISZOR INC.

                                By:      /s/ Paul Ayres
                                   -----------------------------------
                                   Paul Ayres
                                   Chief Executive Officer and President
                                   (Principal Executive Officer)

                                By:      /s/ Andrew Cussons
                                   -----------------------------------
                                   Andrew Cussons
                                   Chief Financial Officer
                                   (Principal Financial Officer)

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated. Each person whose signature to
this report appears below hereby appoints Paul Ayres and Andrew Cussons and each
of them, any one of whom may act without the joinder of the other, as his or her
attorney-in-fact to sign on his behalf, individually and in each capacity stated
below, and to file all amendments to this report,  which amendment or amendments
may  make  such   changes   in  and   additions   to  the  report  as  any  such
attorney-in-fact may deem necessary or appropriate.

<TABLE>
<CAPTION>


               Signature                                    Title                                 Date
<S>                                         <C>                                             <C>


                                            Chairman of the Board and Chairman              October __, 2001
------------------------------------        of Authoriszor Inc.
Raymond G.H. Seitz

/s/Paul Ayres                               Chief Executive Officer (Principal              October 19, 2001
------------------------------------        Executive Officer), President and
Paul Ayres                                  Director

/s/Don Box                                  Director                                        October 19, 2001
------------------------------------
Don. D. Box

 /s/Andrew Cussons                          Chief Financial Officer (Principal              October 19, 2001
------------------------------------        Financial Officer), Secretary  and
Andrew Cussons                              Director

/s/James L. Jackson                         Director                                        October 19, 2001
------------------------------------
James. L. Jackson

                                            Director                                        October __, 2001
------------------------------------
Sir Malcolm Rifkind

/s/ Godfre S. Shingles                      Director                                        October 19, 2001
------------------------------------
Godfrey S. Shingles

/s/David R. Wray                            Director                                        October 19, 2001
------------------------------------
David R. Wray


</TABLE>

<PAGE>

                                INDEX TO EXHIBITS

The  following  documents  are filed as a part of this  report.  Those  exhibits
previously  filed and  incorporated  herein by reference are  identified  below.
Exhibits not required for this report have been omitted.

    Exhibit No.                       Description


       2.1        Agreement and Plan of Merger,  dated July 29, 1996,  and among
                  Toucan  Gold  Corporation  and  Starlight  Acquisitions,  Inc.
                  (incorporated by reference from the Current Report on Form 8-K
                  dated July 29, 1996, Exhibit 2.1).
       2.2        Share  Exchange  Agreement,  dated May 10, 1996,  by and among
                  Starlight   Acquisitions,   Inc.  and  Toucan  Mining  Limited
                  (incorporated by reference from the Current Report on Form 8-K
                  dated May 13, 1996, Exhibit 2).
       2.3(4)     Share Sale Agreement  regarding ITIS Technologies  Ltd., dated
                  July 22,  1999,  by and among David J.  Blanchfield,  James L.
                  Jackson,  David R. Wray,  Barry Jones,  Ian McNeill and Toucan
                  Gold Corporation. (Exhibit 10.1)
       2.4(12)    Stock  Purchase  Agreement,  dated as of May 8,  2001,  by and
                  among  Authoriszor  Inc.,  Authoriszor  Holdings  Ltd. and the
                  Shareholders named therein (Exhibit 2.1).
       2.5(12)    Subscription Agreement,  dated as of May 8, 2001, by and among
                  Authoriszor Inc.,  Authoriszor Holdings Ltd., WRDC Limited and
                  the Shareholders named therein (Exhibit 2.2).
       2.6(12)    Articles of  Association  of WRDC Limited,  dated as of May 8,
                  2001 (Exhibit 2.3).
       2.7(12)    Deed of  Mortgage,  dated as of May 8,  2001,  by and  between
                  Authoriszor Inc.,  Garcia Hanson and Brian Edmondson  (Exhibit
                  2.4)
       2.8(14)    Stock  Purchase  Agreement,  dated as of July 3, 2001,  by and
                  among  Authoriszor  Holdings Ltd., Logsys Holdings Limited and
                  Stewart Leslie Ashton (Exhibit 2.1)
       3.1        Certificate of Incorporation of Toucan Gold Corporation  filed
                  on July 22, 1996 with the  Secretary  of State of the State of
                  Delaware (incorporated by reference from the Current Report on
                  Form 8-K dated July 29, 1996, Exhibit 4.1).
       3.2        Amendment to our Certificate of Incorporation  filed on August
                  25,   1999,   with  the   Secretary   of  State  of   Delaware
                  (incorporated  by  reference to our  Quarterly  Report on Form
                  10-QSB for the quarter ended September 30, 1999, Exhibit 3.1)
       3.3(13)    Bylaws of Authoriszor Inc., as amended March 21, 2001 (Exhibit
                  3.1).
       4.1(3)     Option Agreement,  dated September 27, 1997, by and between L.
                  Clark  Arnold and Toucan  Gold  Corporation  (incorporated  by
                  reference to Exhibit 10.2 to our Annual  Report on Form 10-KSB
                  for the period ended December 31, 1997)
       4.2(3)     Amendment  Number One to Stock Option  Agreement,  dated as of
                  April 27, 1999, by and between L. Clark Arnold and Toucan Gold
                  Corporation (Exhibit 4.2)
       4.3(3)     Amended and Restated Stock Option Agreement, dated as of April
                  1, 1999,  by and between  Robert P.  Jeffcock  and Toucan Gold
                  Corporation (Exhibit 4.4)
       4.4(3)     Option  Agreement,  dated  February  2, 1998,  by and  between
                  Robert A. Pearce and Toucan Gold Corporation  (incorporated by
                  reference to Exhibit 10.4 to our Annual  Report on Form 10-KSB
                  for the period ended December 31, 1997)
       4.5(3)     Amendment  Number One to Stock Option  Agreement,  dated as of
                  April 27,  1999,  by and  between  Robert A. Pearce and Toucan
                  Gold Corporation (Exhibit 4.6)
       4.6(3)     Amended and Restated Stock Option Agreement, dated as of April
                  1, 1999,  by and  between  David  Carmichael  and Toucan  Gold
                  Corporation (Exhibit 4.8)
       10.1(1)    Warrant Agreement,  dated July 29, 1996, by and between Toucan
                  Gold Corporation and R. Haydn Silleck (Exhibit 10.1).
      10.2(1)     Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and John B. Marvin (Exhibit 10.2).
       10.3(1)    Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and Peter S. Daley (Exhibit 10.3).
       10.4(1)    Warrant  Agreement  dated July 29, 1996, by and between Toucan
                  Gold Corporation and Jay Lutsky (Exhibit 10.4).
       10.5(2)    Agreement for the sale and purchase of the whole of the issued
                  share  capital of Anagram  Limited,  dated  December  3, 1998,
                  among Toucan Mining Limited, Toucan Gold Corporation, Inc. and
                  Minmet Plc (Exhibit 10.1).
       10.6(2)    Supplemental  Agreement,  dated  December 3, 1998 among Toucan
                  Mining Limited,  Toucan Gold Corporation,  Inc. and Minmet Plc
                  (Exhibit 10.2).
       10.7(2)    Option Agreement  Regarding  Mineradora De Bauxita Ltda, dated
                  December 3, 1998,  among Toucan  Mining  Limited,  Toucan Gold
                  Corporation, Inc. and Anagram Limited (Exhibit 10.3).
       10.8(2)    Agreement  for the  purchase of the whole of the issued  share
                  capital of Mineradora de Bauxita Ltda,  dated December 3, 1998
                  among Toucan Mining Limited, Toucan Gold Corporation, Inc. and
                  Anagram Limited (Exhibit 10.4).
       10.9(2)    Form of Minmet Plc Warrant Instrument (Exhibit 10.5).
       10.10(4)   Deed of Indemnity,  dated July 22, 1999, by and among David J.
                  Blanchfield, James L. Jackson, David R. Wray, Barry Jones, Ian
                  McNeill and Toucan Gold Corporation. (Exhibit 10.2)
       10.11(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  David J. Blanchfield and ITIS Technologies Ltd. (Exhibit 10.3)
       10.12(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  James L. Jackson and ITIS Technologies Ltd. (Exhibit 10.4)
       10.13(4)   Letter of  Appointment,  dated July 22,  1999,  by and between
                  David R. Wray and ITIS Technologies Ltd. (Exhibit 10.5)
       10.14(4)   Engagement  Letter,  dated July 22,  1999,  by and between CCM
                  Ventures Ltd. and ITIS Technologies Ltd. (Exhibit 10.7)
       10.15(4)   Engagement Letter,  dated July 22, 1999, by and between Robert
                  Jeffcock and Toucan Gold Corporation. (Exhibit 10.8)
       +10.16     Consulting Agreement,  dated September 23, 1999 by and between
                  Sir Malcolm  Rifkind and  Authoriszor  Ltd.  (incorporated  by
                  reference  to our  Quarterly  Report  on Form  10-QSB  for the
                  quarter ended September 30, 1999, Exhibit 10.9)
       +10.17(5)  Executive Employment  Agreement,  dated as of January 1, 2000,
                  by and  between  Authoriszor  Inc.  and  Richard A.  Langevin.
                  (Exhibit 10.1)
       +10.18(5)   Authoriszor Inc. 1999 Stock Plan. (Exhibit 10.2)
       +10.19(7)  Form of  Agreement  under the 1999 Stock Plan and  Schedule of
                  Agreements
       +10.20(5)  Agreement,   dated   November   12,   1999,   by  and  between
                  Authoriszor Inc. and Raymond G. H. Seitz (Exhibit 10.4)
       +10.21(5)  Consulting  Agreement,   dated  September  23,  1999,  by  and
                  between  Authoriszor  Inc.  and Sir Malcolm  Rifkind  (Exhibit
                  10.5)
       +10.22(5)  Stock Option  Agreement,  dated as of September  23, 1999,  by
                  and between Authoriszor Inc. and Sir Malcolm Rifkind. (Exhibit
                  10.6)
       10.23(5)   Placing Agreement,  dated as of January 28, 2000, by and among
                  Authoriszor Inc., Beeson Gregory Limited and certain Directors
                  of Authoriszor Inc. (Exhibit 10.7)
       10.24(5)   Supplemental Placing Agreement,  dated as of February 9, 2000,
                  by and among  Authoriszor  Inc.,  Beeson  Gregory  Limited and
                  certain Directors of Authoriszor Inc. (Exhibit 10.8)
       10.25(5)   Registration Rights Agreement, dated February 16, 2000, by and
                  between Authoriszor Inc. and Beeson Gregory Limited.  (Exhibit
                  10.9)
       10.26(5)   Lock-up   Agreement,   dated   January   2000,  by  and  among
                  Authoriszor Inc., Beeson Gregory Limited and Raymond Seitz and
                  others. (Exhibit 10.10)
       10.27(5)   Deed of Covenant,  dated as of February 22, 2000, by and among
                  Authoriszor  Holdings Ltd.,  WRDC Limited and certain  persons
                  named in Schedule 1 to the Deed. (Exhibit 10.11)
       10.28(5)   Shareholders' Agreement,  dated as of January 27, 2000, by and
                  among   Authoriszor   Holdings   Ltd.,   WRDC   Limited,   the
                  shareholders of WRDC Limited and Authoriszor Inc., relating to
                  WRDC Limited. (Exhibit 10.12)
       10.29(5)   Letter  Agreement,  dated  February 22,  2000,  by and between
                  Authoriszor  Holdings Ltd. and WRDC Limited  regarding  credit
                  facility. (Exhibit 10.13)
       10.30(5)   Letter  Agreement,  dated  February 22,  2000,  by and between
                  Authoriszor  Holdings Ltd. and WRDC Limited  regarding  credit
                  facility. (Exhibit 10.14)
       10.31(6)   Share Sale  Agreement,  dated as of January 28,  2000,  by and
                  between  Authoriszor  Inc.  and Golden  Ridge  Group  Limited.
                  (Exhibit 2.1)
       +10.32(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.33).
       +10.33(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.34).
       +10.34(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.35)
       +10.35(7)  Stock Option Agreement,  dated as of January 1, 2000,  between
                  Authoriszor Inc. and Richard A. Langevin (Exhibit 10.36).
       +10.36(7)  Stock Option Agreement,  dated as of November 1, 1999, between
                  Authoriszor Inc. and Raymond Seitz (Exhibit 10.37).
       10.37(7)   Lease  Agreement,   dated  as  of  April  28,  2000,   between
                  Authoriszor  Inc.  and  Massachusetts  Mutual  Life  Insurance
                  Company (Exhibit 10.38).
       10.38(7)   Consulting   Agreement,   dated  as  of  April  2000,  between
                  Authoriszor Inc. and Fred Sawin (Exhibit 10.39).
       10.39(7)   Employment  Agreement,  dated as of March  15,  2000,  between
                  Authoriszor Inc. and Ed Vasko (Exhibit 10.40).
       10.40(8)   Consulting Agreement,  dated July 1, 2000, between Authoriszor
                  Inc. and Commercial Technology Ltd (Exhibit 10.40).
       10.41(8)   Reimbursement   Agreement,   dated   September  28,  2000  and
                  effective as of October 1, 1999, between  Authoriszor Inc. and
                  Authoriszor Ltd. (Exhibit 10.41).
       +10.42(9)  Letter  Agreement,   dated  as  of  September  30,  2000,  and
                  executed as of October 31,  2000,  by and between  Authoriszor
                  Inc. and Godfrey S. Shingles (Exhibit 10.1).
       +10.43(9)  Letter of  Employment,  dated October 16, 2000, by and between
                  Authoriszor Inc. and Alec P. Karys (Exhibit 10.2).
       +10.44(9)  Letter of  Employment,  dated  October 4, 2000, by and between
                  Authoriszor Inc. and Paul Ayres (Exhibit 10.3).
       10.45(9)   Consulting  Agreement,  dated July 21,  2000,  by and  between
                  Authoriszor Inc. and Edward F. Rogers (Exhibit 10.4).
      +10.46(10)  Authoriszor Inc. 2000 Omnibus Stock and Incentive Plan.
       +10.47(7)  Letter  of  Employment,  dated  May 1,  2000,  by and  between
                  Authoriszor Inc. and Fred Sawin (Exhibit 10.39)
       +10.48(11) Severance  and Release  Agreement,  dated as of January 29,
                  2001, by and between Authoriszor Inc. and Richard A. Langevin.
       +10.49(11) Stock Option Agreement, dated as of January 31, 2000, by and
                  between Authoriszor Inc. and Richard A. Langevin.
       +10.50(12) Service  Agreement,  dated as of May 8,  2001,  by and among
                  Authoriszor  Inc.  and  Garcia  Hanson.  Form of Stock  Option
                  Agreement,  dated  as of  May 8,  2001,  by  and  between  the
                  Authoriszor  Inc.  and  each  of the  former  holders  of WRDC
                  Options (Exhibit 10.1).
       +10.51(12) Form of Stock Option Agreement,  dated as of May 8, 2001, by
                  and  between  the  Authoriszor  Inc.  and  each of the  former
                  holders of WRDC Options (Exhibit 10.2).
       10.52+     Sublease  Agreement,  effective  as of  July 1,  2001,  by and
                  between Authoriszor Inc. and Directech, Inc.
       +10.53+    Stock Option  Agreement,  dated as of October 7, 2000,  by and
                  between Authoriszor Inc. and Paul Ayres.
       +10.54+    Stock Option  Agreement,  dated as of October 16, 2000, by and
                  between Authoriszor Inc. and Alec Karys.
       +10.55+    Stock Option Agreement,  dated as of November 10, 2000, by and
                  between Authoriszor Inc. and Don Box.
       +10.56+    Stock Option  Agreement,  dated as of October 18, 2000, by and
                  between Authoriszor Inc. and Geoff Shingles.
       +10.57+    Form of Stock Option Agreement by and between Authoriszor Inc.
                  and various  employees  with respect to the  Authoriszor  Inc.
                  2000 Omnibus Stock and Incentive Plan.
       +10.58+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Paul Ayres.
       +10.59+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Andrew Cussons.
       +10.60+    Stock Option  Agreement,  dated as of February 9, 2001, by and
                  between Authoriszor Inc. and Alec Karys.
       23.1+      Consent of Grant Thornton

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

+        Filed herewith.
+        Compensation plan, benefit plan or employment contract or arrangement.
(1)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Annual  Report on Form 10-KSB for the period ended  December 31,
         1996, filed by us with the Securities and Exchange Commission.
(2)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Current Report on Form 8-K, filed January 5, 1999 by us with the
         Securities and Exchange Commission.
(3)      Incorporated  by reference to the exhibit shown in  parenthesis  to our
         Registration  Statement  on Form  S-8  filed  with the  Securities  and
         Exchange Commission on January 10, 2000.
(4)      Incorporated by reference to the exhibit shown in parenthesis  included
         in our Current  Report on Form 8-K, filed by us with the Securities and
         Exchange Commission on August 6, 1999.
(5)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly  Report on Form 10-QSB for the  quarter  ended  December  31,
         1999.
(6)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Current  Report on Form 8-K,  filed by us on February 14, 2000 with the
         Securities and Exchange Commission.
(7)      Incorporated by reference to the Exhibit shown in parenthesis  from our
         Registration  Statement  on Form S-1,  filed by us on May 18, 2000 with
         the Securities and Exchange Commission.
(8)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Annual  Report on Form 10-KSB,  filed by us on September  29, 2000 with
         the Securities and Exchange Commission.
(9)      Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly Report on Form 10-QSB,  filed by us on November 14, 2000 with
         the Securities and Exchange Commission.
(10)     Incorporated  by reference  to Appendix A contained  in our  definitive
         Proxy  Statement  pertaining to the 2000 Annual Meeting of Stockholders
         filed with the Securities  and Exchange  Commission on October 10, 2000
         pursuant to Regulation 14A.
(11)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on January 30, 2001.
(12)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on May 9, 2001.
(13)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Quarterly  Report on Form 10-QSB  filed by us with the  Securities  and
         Exchange Commission on February 14, 2001.
(14)     Incorporated by reference to the exhibit shown in parenthesis  from our
         Current Report on Form 8-K filed by us with the Securities and Exchange
         Commission on July 16, 2001.