##### 



EXHIBIT 99

Cintech Solutions, Inc.

Condensed Financial Statements for the Three and
Nine-Months Ended March 31, 2002 and 2001 and
Independent Accountants Report





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##### 



INDEPENDENT ACCOUNTANTS REPORT

To the Directors of
    Cintech Solutions, Inc.

We have reviewed the accompanying condensed balance sheets of Cintech
Solutions, Inc. (the Company) as of March 31, 2002 and 2001 and the related
condensed statements of operations, stockholders equity and cash flows for the
three months and nine months then ended (all expressed in U.S. dollars). These
financial statements are the responsibility of the Companys management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytic procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed financial statements for them to be in
conformity with accounting principles generally accepted in the United States
of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of the Company as
of June 30, 2001, and the related statements of operations, stockholders
equity, and cash flows for the year then ended (not presented herein); and in
our report dated August 24, 2001, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of June 30, 2001 is fairly stated, in
all material respects, in relation to the balance sheet from which it has been
derived.

/s/ Deloitte & Touche LLP

April 16, 2002





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##### 



CINTECH SOLUTIONS, INC.

CONDENSED BALANCE SHEETS
MARCH 31, 2002, JUNE 30, 2001 AND MARCH 31, 2001

|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |   |           | 
|------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------------------------ | --------- | --------- | ----------- | ---------- | ---------- | - | --------- | ---------- | ---------- | - | --------- | 
|                               |                                                                                                                                                             |             |                          |           | March 31, |             |            |            |   |           | March 31, 
|ASSETS                         |                                                                                                                                                             | 2002        |                          | June 30,  |           | 2001       
|                               |                                                                                                                                                             | (Unaudited) |                          | 2001      |           | (Unaudited)
|CURRENT ASSETS:                |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |           
|                               | Cash and cash equivalents (Note 1)                                                                                                                          |             | $                        | 392,915   |           |             | $          | 641,883    |   |           | $          | 177,922    |  
|                               | Marketable securities (Note 2)                                                                                                                              |             |                          | 3,173,441 |           |             |            | 6,284,141  |   |           |            | 6,860,093  |  
|                               | Accounts receivable, trade  (Net of
allowance of $76,155, $94,958 and
$68,160 at March 31, 2002, June 30, 2001,
and March 31, 2001, respectively) (Note 1) |             |                          | 533,369   |           |             |            | 301,389    |   |           |            | 317,433    |  
|                               | Inventory (Note 1)                                                                                                                                          |             |                          | 20,327    |           |             |            | 21,387     |   |           |            | 15,763     |  
|                               | Prepaid expenses                                                                                                                                            |             |                          | 199,386   |           |             |            | 73,845     |   |           |            | 100,990    |  
|                               | Refundable income taxes                                                                                                                                     |             |                          |           |           |             |            |            |   |           |            | 15,506     |  
|                               | Deferred income taxes (Note 6)                                                                                                                              |             |                          | 427,338   |           |             |            | 497,671    |   |           |            | 542,271    |  
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|                               |                                                                                                                                                             |             | Total current assets     |           |           | 4,746,776   |            |            |   | 7,820,316 |            |            |   | 8,029,978 | 
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|FIXED ASSETS (Note 1):         |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |           
|                               | Equipment                                                                                                                                                   |             |                          | 1,340,286 |           |             |            | 1,198,675  |   |           |            | 1,263,403  |  
|                               | Furniture and fixtures                                                                                                                                      |             |                          | 8,677     |           |             |            | 325,756    |   |           |            | 297,855    |  
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|                               |                                                                                                                                                             |             | Total                    |           |           | 1,348,963   |            |            |   | 1,524,431 |            |            |   | 1,561,258 | 
|                               | Less accumulated depreciation                                                                                                                               |             |                          | (986,859  | )         |             |            | (1,208,086 | ) |           |            | (1,193,612 | )
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|                               |                                                                                                                                                             |             | Total fixed assets  net |           |           | 362,104     |            |            |   | 316,345   |            |            |   | 367,646   | 
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|SOFTWARE DEVELOPMENT           |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |           
|                               | COSTS-Net (Note 1)                                                                                                                                          |             |                          | 1,937,829 |           |             |            | 1,807,357  |   |           |            | 1,746,646  |  
|DEFERRED INCOME TAXES (Note 6) |                                                                                                                                                             |             | 1,154,418                |           |           |             | 186,580    |            |   |           | 157,093    |           
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|                               |                                                                                                                                                             |             | Total other assets       |           |           | 3,092,247   |            |            |   | 1,993,937 |            |            |   | 1,903,739 | 
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  
|TOTAL                          |                                                                                                                                                             | $           | 8,201,127                |           |           | $           | 10,130,598 |            |   | $         | 10,301,363 |           
|                               |                                                                                                                                                             |             |                          |           |           |             |            |            |   |           |            |            |  

|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |         |           | 
|------------------------------------- | ------------------------------------- | ---------------------------------------- | -------------------------- | ---------- | --------- | ----------- | ---------- | ---------- | ------- | --------- | ---------- | --------- | ------- | --------- | 
|                                      |                                       |                                          |                            |            | March 31, |             |            |            |         |           | March 31, 
|LIABILITIES AND                       |                                       | 2002                                     |                            | June 30,   |           | 2001       
|STOCKHOLDERS' EQUITY                  |                                       | (Unaudited)                              |                            | 2001       |           | (Unaudited)
|CURRENT LIABILITIES:                  |                                       |                                          |                            |            |           |             |            |            |         |           |            |          
|                                      | Accounts payable                      |                                          | $                          | 138,614    |           |             | $          | 134,919    |         |           | $          | 61,939    |        
|                                      | Accrued liabilities:                  |                                          |                            |            |           |             |            |            |         |           |            |           |        
|                                      |                                       | Accrued wages and compensation           |                            |            | 251,059   |             |            |            | 505,310 |           |            |           | 355,479 |          
|                                      |                                       | Warranty reserve                         |                            |            | 66,460    |             |            |            | 82,382  |           |            |           | 92,730  |          
|                                      |                                       | Accrued lease termination costs (Note 3) |                            |            | 28,341    |             |            |            |         |           |            |           |         |          
|                                      |                                       | Other                                    |                            |            | 174,791   |             |            |            | 115,615 |           |            |           | 137,384 |          
|                                      | Deferred maintenance revenue (Note 1) |                                          |                            | 611,784    |           |             |            | 638,193    |         |           |            | 710,330   |        
|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |        
|                                      |                                       |                                          | Total current liabilities  |            |           | 1,271,049   |            |            |         | 1,476,419 |            |           |         | 1,357,862 | 
|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |        
|STOCKHOLDERS EQUITY (Notes 1, 4, 5): |                                       |                                          |                            |            |           |             |            |            |         |           |            |          
|                                      | Common stock                          |                                          |                            | 9,008,724  |           |             |            | 9,008,289  |         |           |            | 9,008,289 |        
|                                      | Contributed capital                   |                                          |                            | 675,757    |           |             |            | 675,757    |         |           |            | 675,757   |        
|                                      | Treasury stock                        |                                          |                            | (2,290     | )         |             |            | (2,290     | )       |           |            | (2,290    | )      
|                                      | Accumulated deficit                   |                                          |                            | (2,752,113 | )         |             |            | (1,027,577 | )       |           |            | (738,255  | )      
|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |        
|                                      |                                       |                                          | Total stockholders equity |            |           | 6,930,078   |            |            |         | 8,654,179 |            |           |         | 8,943,501 | 
|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |        
|TOTAL                                 |                                       | $                                        | 8,201,127                  |            |           | $           | 10,130,598 |            |         | $         | 10,301,363 |          
|                                      |                                       |                                          |                            |            |           |             |            |            |         |           |            |           |        

See notes to condensed financial statements and independent accountants report.

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##### 



CINTECH SOLUTIONS, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE-MONTHS AND NINE-MONTHS ENDED MARCH 31, 2002 AND 2001

|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |           |           | 
|----------------------------------------------------- | -------------------------------- | ------------------------------------------------- | --------------- | --------- | -------------------------- | --------- | ------------------------- | ------- | ------- | --------- | ---------- | --------- | --------- | --------- | ---------- | --------- | --------- | --------- | 
|                                                      |                                  |                                                   |                 |           | For the Three-Months Ended |           | For the Nine-Months Ended
|                                                      |                                  |                                                   |                 |           | March 31,                  |           | March 31,                
|                                                      |                                  |                                                   |                 |           |                            |           |                          
|                                                      |                                  |                                                   |                 |           | 2002                       |           | 2001                      |         | 2002    |           | 2001      
|NET SALES (Note 1):                                   |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |          
|                                                      | Product sales                    |                                                   | $               | 1,011,503 |                            |           | $                         | 760,588 |         |           | $          | 3,631,240 |           |           | $          | 4,888,659 |          
|                                                      | Services and other sales         |                                                   |                 | 393,202   |                            |           |                           | 492,031 |         |           |            | 1,150,396 |           |           |            | 1,638,701 |          
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|                                                      |                                  |                                                   | Total net sales |           |                            | 1,404,705 |                           |         |         | 1,252,619 |            |           |           | 4,781,636 |            |           |           | 6,527,360 | 
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|COST OF PRODUCTS SOLD AND
SERVICES PROVIDED (Note 1): |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |          
|                                                      | Cost of products sold            |                                                   |                 | 373,218   |                            |           |                           | 398,354 |         |           |            | 1,285,815 |           |           |            | 1,571,983 |          
|                                                      | Cost of services and other sales |                                                   |                 | 72,289    |                            |           |                           | 122,572 |         |           |            | 207,422   |           |           |            | 355,466   |          
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|                                                      |                                  | Total cost of products sold and services provided |                 |           | 445,507                    |           |                           |         | 520,926 |           |            |           | 1,493,237 |           |            |           | 1,927,449 |          
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|GROSS PROFIT                                          |                                  |                                                   | 959,198         |           |                            |           | 731,693                   |         |         |           | 3,288,399  |           |           |           | 4,599,911  |          
|RESEARCH AND DEVELOPMENT                              |                                  |                                                   | 265,288         |           |                            |           | 232,801                   |         |         |           | 846,294    |           |           |           | 744,687    |          
|LEASE TERMINATION COSTS (Note 3)                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           | 104,397    |           |           |           |            |          
|SELLING, GENERAL AND
ADMINISTRATIVE (Notes 1, 3)      |                                  |                                                   | 1,711,170       |           |                            |           | 1,551,344                 |         |         |           | 5,072,501  |           |           |           | 4,884,873  |          
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|LOSS FROM OPERATIONS                                  |                                  |                                                   | (1,017,260      | )         |                            |           | (1,052,452                | )       |         |           | (2,734,793 | )         |           |           | (1,029,649 | )        
|OTHER INCOME                                          |                                  |                                                   | 31,543          |           |                            |           | 122,532                   |         |         |           | 112,752    |           |           |           | 355,843    |          
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|LOSS BEFORE INCOME TAX BENEFIT                        |                                  |                                                   | (985,717        | )         |                            |           | (929,920                  | )       |         |           | (2,622,041 | )         |           |           | (673,806   | )        
|INCOME TAX BENEFIT (Note 6)                           |                                  |                                                   | (334,548        | )         |                            |           | (368,612                  | )       |         |           | (897,505   | )         |           |           | (288,725   | )        
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|NET LOSS                                              |                                  | $                                                 | (651,169        | )         |                            | $         | (561,308                  | )       |         | $         | (1,724,536 | )         |           | $         | (385,081   | )        
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          
|BASIC AND DILUTED LOSS
PER COMMON SHARE (Note 4)      |                                  | $                                                 | (0.05           | )         |                            | $         | (0.05                     | )       |         | $         | (0.14      | )         |           | $         | (0.03      | )        
|                                                      |                                  |                                                   |                 |           |                            |           |                           |         |         |           |            |           |           |           |            |           |          

See notes to condensed financial statements and independent accountants report.

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CINTECH SOLUTIONS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY (UNAUDITED)
FOR THE NINE-MONTHS ENDED MARCH 31, 2002 AND 2001

|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   |            |  
|-------------------------------------- |  | ------------ | --------- | ----------- |  | -------- | ------- | ----------- |  | ------------- | ------ | - |  | - | ---------- | ----- |  | - | ---------- | -
|                                       |  | Common       |           |             |  |          |         |             |  |               |        |   |  |   |            | Total
|                                       |  | Stock        |           | Contributed |  | Treasury |         | Accumulated |  | Stockholders'
|                                       |  | No Par Value |           | Capital     |  | Stock    |         | Deficit     |  | Equity       
|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |      
|BALANCE AT JUNE 30, 2000               |  | $            | 9,005,433 |             |  | $        | 675,757 |             |  | $             | (2,290 | ) |  | $ | (353,174   | )     |  | $ | 9,325,726  |  
|STOCK OPTIONS EXERCISED (4,399 shares) |  |              | 2,856     |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   | 2,856      |  
|NET LOSS                               |  |              |           |             |  |          |         |             |  |               |        |   |  |   | (385,081   | )     |  |   | (385,081   | )
|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   |            |  
|BALANCE AT MARCH 31, 2001              |  | $            | 9,008,289 |             |  | $        | 675,757 |             |  | $             | (2,290 | ) |  | $ | (738,255   | )     |  | $ | 8,943,501  |  
|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   |            |  
|BALANCE AT JUNE 30, 2001               |  | $            | 9,008,289 |             |  | $        | 675,757 |             |  | $             | (2,290 | ) |  | $ | (1,027,577 | )     |  | $ | 8,654,179  |  
|STOCK OPTIONS EXERCISED (1,500 shares) |  |              | 435       |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   | 435        |  
|NET LOSS                               |  |              |           |             |  |          |         |             |  |               |        |   |  |   | (1,724,536 | )     |  |   | (1,724,536 | )
|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   |            |  
|BALANCE AT MARCH 31, 2002              |  | $            | 9,008,724 |             |  | $        | 675,757 |             |  | $             | (2,290 | ) |  | $ | (2,752,113 | )     |  | $ | 6,930,078  |  
|                                       |  |              |           |             |  |          |         |             |  |               |        |   |  |   |            |       |  |   |            |  

See notes to condensed financial statements and independent accountants report.

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CINTECH SOLUTIONS, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE-MONTHS ENDED MARCH 31, 2002 AND 2001

|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |          |          |            |  
|--------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------------- | --------------------------------------------------- | -------- | -------- | ---------- | ---------- | -------- | -------- | ---------- | -
|                                              |                                                                             |                                            |                                             |                                                     |          | 2002     |            | 2001      
|CASH FLOWS FROM OPERATING ACTIVITIES:         |                                                                             |                                            |                                             |                                                     |          |          |            |           
|                                              | Net loss                                                                    |                                            | $                                           | (1,724,536                                          | )        |          | $          | (385,081   | )       
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|                                              | Adjustments to reconcile net loss to net cash used in
operating activities: |                                            |                                             |                                                     |          |          |            |            |         
|                                              |                                                                             | Depreciation                               |                                             |                                                     | 97,572   |          |            |            | 219,446  |         
|                                              |                                                                             | Amortization of software development costs |                                             |                                                     | 455,205  |          |            |            | 322,878  |         
|                                              |                                                                             | Deferred income tax benefit                |                                             |                                                     | (897,505 | )        |            |            | (199,119 | )       
|                                              |                                                                             | Provision for doubtful accounts            |                                             |                                                     | (18,803  | )        |            |            | 43,651   |         
|                                              |                                                                             | Changes in assets and liabilities:         |                                             |                                                     |          |          |            |            |          |         
|                                              |                                                                             |                                            | (Increase) decrease in accounts receivable  |                                                     |          | (213,177 | )          |            |          | 508,351  |           
|                                              |                                                                             |                                            | Decrease in inventory                       |                                                     |          | 1,060    |            |            |          | 30,206   |           
|                                              |                                                                             |                                            | Increase in other assets                    |                                                     |          | (125,541 | )          |            |          | (69,859  | )         
|                                              |                                                                             |                                            | Increase (decrease) in accounts payable     |                                                     |          | 3,695    |            |            |          | (285,725 | )         
|                                              |                                                                             |                                            | Decrease in accrued expenses                |                                                     |          | (210,997 | )          |            |          | (463,546 | )         
|                                              |                                                                             |                                            | Increase in accrued lease termination costs |                                                     |          | 28,341   |            |            |          |          |           
|                                              |                                                                             |                                            | Decrease in deferred maintenance revenue    |                                                     |          | (26,409  | )          |            |          | (122,198 | )         
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|                                              |                                                                             |                                            |                                             | Total adjustments                                   |          |          | (906,559   | )          |          |          | (15,915    | )
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|                                              |                                                                             |                                            |                                             | Net cash used in operating activities               |          |          | (2,631,095 | )          |          |          | (400,996   | )
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|CASH FLOWS FROM INVESTING ACTIVITIES:         |                                                                             |                                            |                                             |                                                     |          |          |            |           
|                                              | Redemption (purchase) of marketable securities                              |                                            |                                             | 3,110,700                                           |          |          |            | (1,031,899 | )       
|                                              | Purchase of fixed assets                                                    |                                            |                                             | (178,331                                            | )        |          |            | (93,702    | )       
|                                              | Proceeds on disposal of fixed assets                                        |                                            |                                             | 35,000                                              |          |          |            |            |         
|                                              | Expenditures for software development costs                                 |                                            |                                             | (585,677                                            | )        |          |            | (819,376   | )       
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|                                              |                                                                             |                                            |                                             | Net cash provided by (used in) investing activities |          |          | 2,381,692  |            |          |          | (1,944,977 | )
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|CASH FLOWS FROM FINANCING ACTIVITIES -        |                                                                             |                                            |                                             |                                                     |          |          |            |           
|                                              | Proceeds from exercise of stock options                                     |                                            |                                             | 435                                                 |          |          |            | 2,856      |         
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|NET DECREASE IN CASH AND CASH EQUIVALENTS     |                                                                             |                                            | (248,968                                    | )                                                   |          |          | (2,343,117 | )         
|CASH AND CASH EQUIVALENTS:                    |                                                                             |                                            |                                             |                                                     |          |          |            |           
|                                              | Beginning of period                                                         |                                            |                                             | 641,883                                             |          |          |            | 2,521,039  |         
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|                                              | End of period                                                               |                                            | $                                           | 392,915                                             |          |          | $          | 177,922    |         
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         
|SUPPLEMENTAL CASH FLOW INFORMATION-Taxes paid |                                                                             | $                                          | 14,516                                      |                                                     |          | $        | 16,512     |           
|                                              |                                                                             |                                            |                                             |                                                     |          |          |            |            |         

See notes to condensed financial statements and independent accountants report.

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CINTECH SOLUTIONS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2001 AND AS OF MARCH 31, 2002 AND 2001 AND FOR THE THREE-MONTH
AND NINE-MONTH PERIODS THEN ENDED (INFORMATION RELATED TO THE THREE AND
NINE-MONTHS ENDED MARCH 31, 2002 AND 2001 IS UNAUDITED)

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | SUMMARY OF
        SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Nature of
        Business- Cintech Solutions, Inc. (the Company) develops
        and markets interaction management software to help businesses manage
        voice and data contacts with their customers, partners, and associates.
        In concert with the interaction management software, the Company also
        provides services, such as installation, training, project management,
        consulting and maintenance support.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Basis of
        Presentation- The condensed financial statements have been prepared
        in accordance with accounting principles generally accepted in the United
        States of America for interim financial information and with the instructions
        to Form 10-QSB and Rule 10-01 of Regulation S-X and are
        expressed in United States dollars. There are no significant differences
        in accounting principles generally accepted in the United States of America
        and Canada. The information disclosed in the notes to the financial statements
        included in the Companys Annual Report on Form 10-KSB for the
        year ended June 30, 2001 has not changed materially unless otherwise
        disclosed herein. Financial information as of June 30, 2001 included
        in these condensed financial statements has been derived from the audited
        financial statements included in that report. In managements opinion
        all adjustments (consisting of normal recurring accruals) necessary for
        a fair presentation of the interim periods have been made.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Results of operations
        are not necessarily indicative of the results that may be expected for
        future interim periods or for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Use of Estimates- The preparation of the financial statements in conformity with
        accounting principles generally accepted in the United States of America
        requires management to make estimates and assumptions that affect the
        reported amounts of assets and liabilities and disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Revenue- Generally, the Company records product and service revenue when
        the product is shipped and the service is provided. Also, the Company
        records an estimate of potential future returns of product sold at the
        time of sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Deferred
        Maintenance Revenue- The Company sells product maintenance agreements
        which provide for no-cost upgrade of software. These agreements normally
        cover periods ranging from 1-5 years with revenue being recognized
        on a straight-line basis over the maintenance period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Warranty
        Reserve- At the time of sale, the Company accrues for warranty
        costs relating to software replacement or on site support to be provided
        during the first twelve months following the sale. Costs associated with
        supporting product under warranty are charged to the reserve instead of
        current period cost. The reserve is adjusted periodically based upon actual
        experience.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  | Depreciation- Fixed assets are carried at cost. Depreciation is computed using
        a straight line method over the following useful lives:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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##### 



|                       |  |           
|---------------------- |  | ----------
|Equipment              |  | 3-5 years 
|Furniture and Fixtures |  | 2-10 years

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

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

|                                   |  |           |        |          |  |           |        |   |  |   |        |  
|---------------------------------- |  | --------- | ------ | -------- |  | --------- | ------ | - |  | - | ------ | -
|                                   |  | March 31, |        | June 30, |  | March 31,
|                                   |  | 2002      |        | 2001     |  | 2001     
|                                   |  |           |        |          |  |          
|Literature and other documentation |  | $         | 16,414 |          |  | $         | 13,195 |   |  | $ | 8,898  |  
|Computer hardware                  |  |           | 12,007 |          |  |           | 12,205 |   |  |   | 11,334 |  
|Allowance for obsolete inventory   |  |           | (8,094 | )        |  |           | (4,013 | ) |  |   | (4,469 | )
|                                   |  |           |        |          |  |           |        |   |  |   |        |  
|Total inventory                    |  | $         | 20,327 |          |  | $         | 21,387 |   |  | $ | 15,763 |  
|                                   |  |           |        |          |  |           |        |   |  |   |        |  

Significant Customers- Most of the Companys sales are to distributors in
the voice-centric call center solutions market. The Company had sales to
major distributors, as follows:

|              |  |                                            |           |                                           |  |        |    |      |  |        |         |   |  |        |    |   |  |   |           |  |  |  |    |   |  |   |           |  |  |  |    |  
|------------- |  | ------------------------------------------ | --------- | ----------------------------------------- |  | ------ | -- | ---- |  | ------ | ------- | - |  | ------ | -- | - |  | - | --------- |  |  |  | -- | - |  | - | --------- |  |  |  | -- | -
|              |  | Sales for the Three-Months Ended March 31, |           | Sales for the Nine-Months Ended March 31,
|              |  | 2002                                       |           | 2001                                      |  | 2002   |    | 2001
|              |  |                                            |           |                                           |  |        |    |     
|              |  | Amount                                     |           | %                                         |  | Amount |    | %    |  | Amount |         | % |  | Amount |    | %
|Distributor A |  | $                                          | 893,944   |                                           |  |        | 64 | %    |  | $      | 615,507 |   |  |        | 49 | % |  | $ | 3,292,448 |  |  |  | 69 | % |  | $ | 4,350,997 |  |  |  | 67 | %
|Distributor B |  |                                            | 169,816   |                                           |  |        | 12 | %    |  |        | 156,330 |   |  |        | 13 | % |  |   | 323,718   |  |  |  | 7  | % |  |   | 547,399   |  |  |  | 8  | %
|              |  |                                            |           |                                           |  |        |    |      |  |        |         |   |  |        |    |   |  |   |           |  |  |  |    |   |  |   |           |  |  |  |    |  
|Total         |  | $                                          | 1,063,760 |                                           |  |        | 76 | %    |  | $      | 771,837 |   |  |        | 62 | % |  | $ | 3,616,166 |  |  |  | 76 | % |  | $ | 4,898,396 |  |  |  | 75 | %
|              |  |                                            |           |                                           |  |        |    |      |  |        |         |   |  |        |    |   |  |   |           |  |  |  |    |   |  |   |           |  |  |  |    |  

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

|               |  |              |   |            |  |            |    |  
|-------------- |  | ------------ | - | ---------- |  | ---------- | -- | -
|               |  |              |   |            |  | Percent of
|               |  |              |   |            |  | Gross     
|               |  |              |   |            |  | Accounts  
|               |  | Distributors |   | Receivable
|March 31, 2002 |  |              | 2 |            |  |            | 77 | %
|June 30, 2001  |  |              | 2 |            |  |            | 71 | %
|March 31, 2001 |  |              | 2 |            |  |            | 60 | %

International Sales- The Companys international sales to Canada were
approximately 2% and 3% of total sales for the three-months ended March 31,
2002 and 2001, and approximately 2% of total sales for the nine-months ended
March 31, 2002 and 2001, respectively.

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

- 7 -



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##### 



Costs capitalized were $160,444 and $398,968 and related amortization was
$153,876 and $213,000 for the three-months ended March 31, 2002 and 2001,
respectively. Costs capitalized were $585,677 and $819,376 and related
amortization was $455,205 and $322,878 for the nine-months ended March 31,
2002 and 2001, respectively. The Company periodically evaluates the
capitalized cost relative to potential sales and accelerates the write-off
when appropriate.

Licensing Fee- The Company has agreements with distributors which require
the payment of a license fee on certain software sales made by the
distributors. This license fee is for the distribution of the Companys
products. License fee expense was $184,969 and $162,096 for the
three-months ended March 31, 2002 and 2001, respectively. License fee
expense was $708,966 and $1,046,082 for the nine-months ended March 31, 2002
and 2001, respectively.

Fair Value of Financial Instruments- The carrying value of certain of the
Companys financial instruments, such as cash, trade accounts receivable and
trade accounts payable, approximate their fair values.

Accounting Pronouncements In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 141, Business Combinations. SFAS No. 141 requires the purchase method
of accounting for business combinations initiated after June 30, 2001 and
eliminates the pooling-of-interests method. This statement will have no
impact on the Companys financial statements.

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

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

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

Cash and Cash Equivalents- For purposes of reporting cash flows, the
Company considers all money market instruments to be cash equivalents.

- 8 -



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##### 



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | MARKETABLE
        SECURITIES                                                                                                                                                                                                                                                                                                                                                                              
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|   |  | The Company maintains
        various investments in federal agency notes which are classified as held-to-maturity
        and are reported at amortized cost in accordance with FASB Statement No. 115
        Accounting for Certain Investments in Debt and Equity Securities.
        All items mature within one year. The cost and market value of theses
        investments are summarized below:

|                                      |  |           |           |        |  |             |           |            |  |     |         |  
|------------------------------------- |  | --------- | --------- | ------ |  | ----------- | --------- | ---------- |  | --- | ------- | -
|                                      |  |           |           |        |  |             |           |            |  | Net
|                                      |  | Amortized |           |        |  |             |           | Unrealized
|Description                           |  | Cost      |           | Market |  | Gain (Loss)
|                                     
|March 31, 2002 - Federal Agency Notes |  | $         | 3,086,395 |        |  | $           | 3,038,260 |            |  | $   | (48,135 | )
|                                      |  |           |           |        |  |             |           |            |  |     |         |  
|June 30, 2001 - Federal Agency Notes  |  | $         | 6,284,141 |        |  | $           | 6,284,163 |            |  | $   | 22      |  
|                                      |  |           |           |        |  |             |           |            |  |     |         |  
|March 31, 2001 - Federal Agency Notes |  | $         | 6,860,093 |        |  | $           | 6,864,720 |            |  | $   | 4,627   |  
|                                      |  |           |           |        |  |             |           |            |  |     |         |  

| |                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During the third quarter of
        2002, the Company received 1,512 shares of stock through the demutualization
        of an insurance company. The value of this stock as of March 31,
        2002 was $87,046. Management has classified the securities as available
        for sale. The unrealized gain related to common stock was not material
        as of March 31, 2002.

|   |  |                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. |  | OPERATING LEASES                                                                                                                                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                                                                                  
|   |  | Operating
        Leases- During the second quarter of 2002, the Company accrued
        for costs associated with terminating its Norwood, Ohio lease and relocating
        its office facility.                                                                                                                                                                               
|   |  |                                                                                                                                                                                                                                                                                                                                                                                  
|   |  | In fiscal 2001,
        the Company signed a lease agreement for a new office facility in Blue
        Ash, Ohio. This operating lease, which began in December 2001 and expires
        in November 2011, calls for escalating lease payments over the term of
        the lease. The Company records lease expense on a straight-line basis
        over the life of the lease.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                  
|   |  | In fiscal 2001,
        the Company signed leased agreements for office equipment and furniture.
        These operating leases began in December 2001 and expire in November 2005
        and November 2006, respectively.                                                                                                                                                      
|   |  |                                                                                                                                                                                                                                                                                                                                                                                  
|   |  | The annual minimum
        rent to be paid under the operating lease agreements is as follows:                                                                                                                                                                                                                                                                                   

|                        |                |  |   |           | 
|----------------------- | -------------- |  | - | --------- | 
|Period Ending March 31: |                |  |   |          
|                        | 2003           |  | $ | 1,069,389 | 
|                        | 2004           |  |   | 1,069,389 | 
|                        | 2005           |  |   | 1,069,389 | 
|                        | 2006           |  |   | 1,012,842 | 
|                        | 2007           |  |   | 875,853   | 
|                        | 2008 and after |  |   | 3,864,280 | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Rent expense for the leased
        office space was $229,192 and $93,341 for the three-month periods ended
        March 31, 2002 and 2001. Rent expense for the leased office space
        was $456,882 and $249,942 for the nine-month periods ended March 31,
        2002 and 2001. The lease expense for the equipment and furniture was $87,422
        and $99,934 for the three-month and nine-month period ended March 31,
        2002.

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##### 



|   |  |                                                                                      
|-- |  | -------------------------------------------------------------------------------------
|4. |  | CAPITAL STOCK
        AND INCOME PER SHARE                                           
|   |  |                                                                                      
|   |  | The following
        schedule is a summary of the Companys shares of capital stock.

|                                    |  |            |            |        |  |             |            |          |  |  |            |    |  |  |       | 
|----------------------------------- |  | ---------- | ---------- | ------ |  | ----------- | ---------- | -------- |  |  | ---------- | -- |  |  | ----- | 
|                                    |  |            |            |        |  | Common      |            |          |  |  |            | In
|                                    |  | Authorized |            | Issued |  | Outstanding |            | Treasury
|                                    |  |            |            |        |  |             |            |          |  |  |            |    |  |  |       | 
|Balance
          at March 31, 2002 |  |            | 15,000,000 |        |  |             | 12,329,227 |          |  |  | 12,327,227 |    |  |  | 2,000 | 
|                                    |  |            |            |        |  |             |            |          |  |  |            |    |  |  |       | 
|Balance
          at June 30, 2001  |  |            | 15,000,000 |        |  |             | 12,327,727 |          |  |  | 12,325,727 |    |  |  | 2,000 | 
|                                    |  |            |            |        |  |             |            |          |  |  |            |    |  |  |       | 
|Balance
          at March 31, 2001 |  |            | 15,000,000 |        |  |             | 12,327,727 |          |  |  | 12,325,727 |    |  |  | 2,000 | 
|                                    |  |            |            |        |  |             |            |          |  |  |            |    |  |  |       | 

| |                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Loss per common share was based
        on the weighted average number of common shares outstanding during each
        period. Accordingly, the sum of the individual quarters may not equal
        the year to date total
|
| | The Companys basic and
        diluted loss per share were determined as follows:                                                                                                                                          

|                                                              |  |                    |                    |                |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|------------------------------------------------------------- |  | ------------------ | ------------------ | -------------- |  | --------- | ---------- | ----------- |  | ------------- | ----- | --------- |  | - | -------- | - |  |  | ---------- |  |  | - | ----- | -
|                                                              |  | Three-Months Ended | Three-Months Ended
|                                                              |  | March 31, 2002     |                    | March 31, 2001
|                                                              |  |                    |                    |               
|                                                              |  | Loss               |                    | Shares         |  | Per Share |            | Loss        |  | Shares        |       | Per Share
|                                                              |  | (Numerator)        |                    | (Denominator)  |  | Amount    |            | (Numerator) |  | (Denominator) |       | Amount   
|Basic EPS                                                     |  |                    |                    |                |  |           |            |             |  |               |       |          
|Loss available to
common stockholders                         |  | $                  | (651,169           | )              |  |           | 12,327,227 |             |  | $             | (0.05 | )         |  | $ | (561,308 | ) |  |  | 12,325,727 |  |  | $ | (0.05 | )
|Effect of Dilutive Securities                                 |  |                    |                    |                |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Stock options                                                 |  |                    |                    |                |  |           |            |             |  |               |       |           |  |  
|                                                              |  |                    |                    |                |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Diluted EPS                                                   |  |                    |                    |                |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Loss available to
common stockholders
and assumed conversions |  | $                  | (651,169           | )              |  |           | 12,327,227 |             |  | $             | (0.05 | )         |  | $ | (561,308 | ) |  |  | 12,325,727 |  |  | $ | (0.05 | )
|                                                              |  |                    |                    |                |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  

|                                                              |  |                   |            |                   |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|------------------------------------------------------------- |  | ----------------- | ---------- | ----------------- |  | --------- | ---------- | ----------- |  | ------------- | ----- | --------- |  | - | -------- | - |  |  | ---------- |  |  | - | ----- | -
|                                                              |  | Nine-Months Ended |            | Nine-Months Ended
|                                                              |  | March 31, 2002    |            | March 31, 2001   
|                                                              |  |                   |            |                  
|                                                              |  | Loss              |            | Shares            |  | Per Share |            | Loss        |  | Shares        |       | Per Share
|                                                              |  | (Numerator)       |            | (Denominator)     |  | Amount    |            | (Numerator) |  | (Denominator) |       | Amount   
|Basic EPS                                                     |  |                   |            |                   |  |           |            |             |  |               |       |          
|Loss available to
common stockholders                         |  | $                 | (1,724,536 | )                 |  |           | 12,327,227 |             |  | $             | (0.14 | )         |  | $ | (385,081 | ) |  |  | 12,324,128 |  |  | $ | (0.03 | )
|Effect of Dilutive Securities                                 |  |                   |            |                   |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Stock options                                                 |  |                   |            |                   |  |           |            |             |  |               |       |          
|                                                              |  |                   |            |                   |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Diluted EPS                                                   |  |                   |            |                   |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  
|Loss available to
common stockholders
and assumed conversions |  | $                 | (1,724,536 | )                 |  |           | 12,327,227 |             |  | $             | (0.14 | )         |  | $ | (385,081 | ) |  |  | 12,324,128 |  |  | $ | (0.03 | )
|                                                              |  |                   |            |                   |  |           |            |             |  |               |       |           |  |   |          |   |  |  |            |  |  |   |       |  

| |                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stock options representing 1,442,598
        shares and 991,513 shares for the three-months ended March 31, 2002
        and 2001, respectively, were not included in computing diluted loss per
        share because their effects were antidilutive. Stock options representing
        1,442,598 shares and 664,842 shares for the nine-months

|
|

- 10 -



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##### 



| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | ended March 31, 2002 and
        2001, respectively, were not included in computing diluted loss per share
        because their effects were antidilutive

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | STOCK OPTION
        PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | During 1994, the
        Board of Directors approved a plan providing for the granting, to employees,
        options for the purchase of a maximum of 1,500,000 shares of common stock.
        In 1996, the plan was amended to provide for non-employee eligibility.
        In 1999, the plan was amended and restated to include in one document
        all previous amendments and other non-material changes designed to improve
        the operation of the plan and to reserve an additional 1,000,000 shares
        for issuance under the plan. Excluding the options granted in February
        1994, all options have been granted at an exercise price equal to the
        fair market value at the date of grant and become exercisable equally
        over a period ranging from one to four years. The February 1994 options
        were granted at a price below fair market value at the date of grant and
        were subsequently adjusted to market. The 1994 options granted became
        exercisable equally over a two-year period. All options expire at the
        end of ten years from the date of grant or are subject to the performance
        provisions of specific grants.
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | The Company has
        adopted the disclosure only provision of SFAS No. 123 and applies
        APB Opinion No. 25 in accounting for its stock options. Proforma
        disclosure reflecting the financial impact of compensation cost for stock
        option grants made in fiscal years 2001 and 2000, determined using the
        fair value method consistent with SFAS No. 123, were presented in
        the footnotes to the 2001 annual report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6. |  | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |  | Deferred income
        tax assets and liabilities are computed for differences between the financial
        statement and tax basis of assets and liabilities that will result in
        taxable or deductible amounts in the future based on enacted tax laws
        and rates applicable to the periods in which the differences are expected
        to affect taxable income. Valuation allowances are established when necessary
        to reduce deferred tax assets to the amount expected to be realized. Income
        tax expense is the tax payable or refundable for the period plus or minus
        the change during the period in deferred tax assets and liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|
|

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---



##### 



|                                        
|----------------------------------------
|Deferred taxes consist of the following:

|                                                                                                       |  |           |           |          |  |           |          |   |  |   |          |  
|------------------------------------------------------------------------------------------------------ |  | --------- | --------- | -------- |  | --------- | -------- | - |  | - | -------- | -
|                                                                                                       |  | March 31, |           | June 30, |  | March 31,
|                                                                                                       |  | 2002      |           | 2001     |  | 2001     
|                                                                                                       |  |           |           |          |  |           |          |   |  |   |          |  
|Current
          deferred tax asset  Deferred revenue and other                                      |  | $         | 427,338   |          |  | $         | 497,671  |   |  | $ | 542,271  |  
|                                                                                                       |  |           |           |          |  |           |          |   |  |   |          |  
|Non-current
          deferred tax asset  Carryforwards and credits                                   |  | $         | 1,929,550 |          |  | $         | 909,523  |   |  | $ | 855,752  |  
|Non-current
          deferred tax liability  Deferred software development costs and
          other |  |           | (775,132  | )        |  |           | (722,943 | ) |  |   | (698,659 | )
|                                                                                                       |  |           |           |          |  |           |          |   |  |   |          |  
|Net non-current
          deferred tax asset                                                           |  | $         | 1,154,418 |          |  | $         | 186,580  |   |  | $ | 157,093  |  
|                                                                                                       |  |           |           |          |  |           |          |   |  |   |          |  

|                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------
|The benefit for income taxes for the three-months and nine-months ended
March 31, 2002 and 2001 consists of the following:

|                                     |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|------------------------------------ |  | -------------------- | -------- | ------------------- |  | ---- | -------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                     |  | For the Three-Months |          | For the Nine-Months
|                                     |  | Ended March 31,      |          | Ended March 31,    
|                                     |  |                      |          |                    
|                                     |  | 2002                 |          | 2001                |  | 2002 |          | 2001
|                                     |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|Current
          benefit            |  | $                    |         |                     |  | $    | (50,805  | )    |  | $ |         |   |  | $ | (72,747  | )
|Deferred
          benefit           |  |                      | (334,548 | )                   |  |      | (317,807 | )    |  |   | (897,505 | ) |  |   | (215,978 | )
|                                     |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|Income
          tax expense benefit |  | $                    | (334,548 | )                   |  | $    | (368,612 | )    |  | $ | (897,505 | ) |  | $ | (288,725 | )
|                                     |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The primary differences between the statutory rate for federal income tax
and the effective income tax rate are the benefits from research and
development credits and state tax losses generated during the current year.
At March 31, 2002, the Company has available net operating loss
carryforwards for U.S. Federal tax purposes of approximately $4,403,000 that
will expire in 2021. Also at March 31, 2002, for U.S. Federal tax purposes,
the Company has research and development credit carryforwards available to
offset future income taxes of approximately $280,000 which will begin to
expire in 2017.

******

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