<PAGE>   1
                                 EXHIBIT NO. 19


                      REPORTS FURNISHED TO SECURITY-HOLDERS
<PAGE>   2
CINTECH TELE-MANAGEMENT SYSTEMS,
INC.


CONDENSED FINANCIAL STATEMENTS FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND INDEPENDENT ACCOUNTANTS' REPORT
<PAGE>   3
                      [DELOITTE & TOUCHE, LLP LETTERHEAD]



INDEPENDENT ACCOUNTANTS' REPORT


To the Directors of
  Cintech Tele-Management Systems, Inc.

We have reviewed the accompanying condensed balance sheets of Cintech
Tele-Management Systems, Inc. (the "Company") as of September 30, 1997 and 1996
and the related condensed statements of operations, stockholders' equity and
cash flows for the three 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 generally accepted auditing standards, 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 generally accepted auditing
standards, the balance sheet of the Company as of June 30, 1997, and the related
statement of operations, stockholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated August 29, 1997, we
expressed an unqualified opinion on the financial statements. In our opinion,
the information set forth in the accompanying condensed balance sheet as of June
30, 1997 is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.

/s/ Deloitte & Touche LLP

October 24, 1997
<PAGE>   4
CINTECH TELE-MANAGEMENT SYSTEMS, INC.

BALANCE SHEETS
SEPTEMBER 30, 1997, JUNE 30, 1997 AND SEPTEMBER 30, 1996


<TABLE>
<CAPTION>
                                                        SEPTEMBER 30,         JUNE 30,         SEPTEMBER 30,
ASSETS                                                      1997               1997                1996
                                                        (Unaudited)                             (Unaudited)
<S>                                                     <C>                 <C>                <C>
CURRENT ASSETS:
  Cash and cash equivalents (Note 2)                    $   378,167         $   440,500         $   296,341
  Marketable securities (Notes 3,5)                         595,381             363,095             770,391
  Accounts receivable, trade - (Net of allowance
    of $60,431, $37,604 and $51,543 at
    September 30, 1997, June 30, 1997, and
    September 30, 1996, respectively) (Note 2)            1,065,419             973,948             791,096
  Inventory (Note 2)                                         98,701             101,415           1,021,935
  Prepaid expenses                                           11,782              19,783              17,594
                                                        -----------         -----------         -----------
           Total current assets                           2,149,450           1,898,741           2,897,357
                                                        -----------         -----------         -----------

FIXED ASSETS (Note 2):
  Equipment                                                 636,985             632,489             587,879
  Furniture and fixtures                                    120,269             120,269             125,372
                                                        -----------         -----------         -----------
           Total                                            757,254             752,758             713,251
  Less accumulated depreciation                            (654,923)           (608,423)           (422,052)
                                                        -----------         -----------         -----------
           Total fixed assets - net                         102,331             144,335             291,199
                                                        -----------         -----------         -----------

  Software Development
    Costs - net (Note 2)                                    368,186             358,330             344,037
                                                        -----------         -----------         -----------



TOTAL                                                   $ 2,619,967         $ 2,401,406         $ 3,532,593
                                                        ===========         ===========         ===========
</TABLE>



<TABLE>
<CAPTION>
LIABILITIES AND                                        SEPTEMBER 30,         JUNE 30,           SEPTEMBER 30,                  
STOCKHOLDERS' EQUITY                                       1997                1997                1996                       
                                                        (Unaudited)                             (Unaudited)                   
<S>                                                    <C>                 <C>                 <C>
CURRENT LIABILITIES:                                
  Accounts payable                                      $   484,845         $   533,103         $   607,916
  Accrued liabilities:                              
    Accrued salaries                                        142,348             104,159             148,158
    Accrued payroll taxes                                     6,706               3,677              13,930
    Accrued vacation                                         89,349              82,699              66,563
    Other                                                   172,334             179,344             133,135
                                                    
  Current portion of note payable (Note 5)                   15,000              30,000             100,000
  Deferred maintenance revenue (Note 2)                     311,502             176,325             139,243
                                                        -----------         -----------         -----------
                                                    
           Total current liabilities                      1,222,084           1,109,307           1,208,945
                                                        -----------         -----------         -----------
                                                    
NOTE PAYABLE (less current portion) (Note 5)                                                         15,000
                                                        -----------         -----------         -----------
                                                    
                                                    
STOCKHOLDERS' EQUITY (Notes 1, 6, 7):               
  Common stock                                            8,982,842           8,982,842           8,982,580
  Contributed capital                                       675,757             675,757             675,757
  Treasury stock                                             (2,290)             (2,290)             (2,290)
  Accumulated deficit                                    (8,258,426)         (8,364,210)         (7,347,399)
                                                        -----------         -----------         -----------
           Total stockholders' equity                     1,397,883           1,292,099           2,308,648
                                                        -----------         -----------         -----------
                                                    
TOTAL                                                   $ 2,619,967         $ 2,401,406         $ 3,532,593
                                                        ===========         ===========         ===========
</TABLE>

See notes to financial statements.       

                                      -2-
<PAGE>   5
CINTECH TELE-MANAGEMENT SYSTEMS, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

<TABLE>
<CAPTION>
                                                             1997               1996
<S>                                                       <C>               <C>
NET SALES (Note 2)                                         $2,056,750        $ 1,521,197

COST OF PRODUCTS SOLD                                         305,455            221,067

INCREASE IN RESERVE FOR OBSOLETE INVENTORY (Note 2)             7,000              4,500

AMORTIZATION AND WRITE-OFF OF DEFERRED SOFTWARE
  DEVELOPMENT COSTS (Note 2)                                   36,000             11,164

LICENSING FEES (Note 2)                                       333,074            258,830
                                                           ----------        -----------

GROSS PROFIT                                                1,375,221          1,025,636

RESEARCH AND DEVELOPMENT                                      132,307             95,403

SELLING, GENERAL AND ADMINISTRATIVE (Notes 2, 4)            1,145,090          1,185,314
                                                           ----------        -----------

INCOME/(LOSS) FROM OPERATIONS                                  97,824           (255,081)

OTHER INCOME                                                    7,960              7,985
                                                           ----------        -----------


NET INCOME/(LOSS)                                          $  105,784        $  (247,096)
                                                           ==========        ===========


NET INCOME/(LOSS) PER COMMON SHARE (Note 6)                $     0.01        $     (0.02)
                                                           ==========        ===========
</TABLE>

See notes to financial statements.

                                      -3-
<PAGE>   6
CINTECH TELE-MANAGEMENT SYSTEMS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


<TABLE>
<CAPTION>
                                             COMMON                                                               TOTAL
                                             STOCK           CONTRIBUTED    TREASURY        ACCUMULATED        STOCKHOLDERS'
                                          NO PAR VALUE          CAPITAL       STOCK           DEFICIT              EQUITY
<S>                                       <C>                <C>            <C>            <C>                 <C>
BALANCE AT JUNE 30, 1996                   $8,982,580          $675,757      $(2,290)       $(7,100,303)         $2,555,744


NET LOSS                                                                                       (247,096)           (247,096)
                                           ----------          --------      -------        -----------          ----------

BALANCE AT SEPTEMBER 30, 1996              $8,982,580          $675,757      $(2,290)       $(7,347,399)         $2,308,648
                                           ==========          ========      ========       ============         ==========


BALANCE AT JUNE 30, 1997                   $8,982,842          $675,757      $(2,290)       $(8,364,210)         $1,292,099

NET INCOME                                                                                      105,784             105,784
                                           ----------          --------      -------        -----------          ----------


BALANCE AT SEPTEMBER 30, 1997              $8,982,842          $675,757      $(2,290)       $(8,258,426)         $1,397,883
                                           ==========          ========      ========       ============         ==========
</TABLE>

See notes to financial statements.

                                      -4-
<PAGE>   7
CINTECH TELE-MANAGEMENT SYSTEMS, INC.

STATEMENTS OF CASH FLOWS  (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                                        1997              1996
<S>                                                                                   <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                   $ 105,784         $(247,096)
                                                                                      ---------         ---------
  Adjustments to reconcile net income (loss) to net cash provided by (used in)
    operating activities:
    Depreciation                                                                         46,500            27,868
    Amortization and write-off of software development costs                             36,000            11,164
    Reserve for obsolete inventory                                                        7,000             4,500
    Provision for doubtful accounts                                                      22,827            (2,183)
    Changes in assets and liabilities:
      (Increase) decrease in accounts receivable                                       (114,297)          362,558
      Increase in inventory                                                              (4,286)          (16,475)
      Decrease in prepaid expenses                                                        8,001               630
      Decrease in accounts payable                                                      (48,258)         (107,342)
      Increase in accrued expenses                                                       40,858           142,490
      Increase (decrease) in deferred maintenance revenue                               135,177            (1,424)
                                                                                      ---------         ---------
           Total adjustments                                                            129,522           421,786
                                                                                      ---------         ---------
           Net cash provided by operating activities                                    235,306           174,690
                                                                                      ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of marketable securities                                                    (232,287)
  Purchase of fixed assets                                                               (4,496)          (14,794)
  Expenditures for software development costs                                           (45,856)          (51,996)
                                                                                      ---------         ---------
           Net cash used in investing activities                                       (282,639)          (66,790)
                                                                                      ---------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES -
  Payment on notes payable                                                              (15,000)          (15,000)
                                                                                      ---------         ---------
           Net cash used in financing activities                                        (15,000)          (15,000)
                                                                                      ---------         ---------

NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                                           (62,333)           92,900

CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                   440,500           203,441
                                                                                      ---------         ---------

  End of period                                                                       $ 378,167         $ 296,341
                                                                                      =========         =========
</TABLE>

See notes to financial statements.

                                      -5-
<PAGE>   8
CINTECH TELE-MANAGEMENT SYSTEMS, INC.


NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1997 (AUDITED) AND AS OF SEPTEMBER 30, 1997 AND 1996 AND FOR THE
TWO THREE MONTH PERIODS THEN ENDED


1.    INITIAL PUBLIC OFFERING

      In January 1994, Cintech Tele-Management Systems, Inc. (the "Company")
      completed its initial public offering of 2,181,820 shares of common stock.
      The Company's shares are traded on the Toronto Stock Exchange (TSE) under
      the symbol "CTM".

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      NATURE OF BUSINESS - The Company develops and markets computer software in
      the emerging Computer-to-Telephone Integration (CTI) industry which
      integrates the voice functions of the telephone with the data functions of
      the computer to provide various business applications. This provides the
      means for small to mid-sized offices to take advantage of the rapid
      advances and emerging capabilities of CTI. Cintech has key strategic
      product partnerships with Nortel and NEC America, and extensive
      distribution capabilities with product sold through Nortel and NEC's
      direct sales organizations as well as their authorized distributors
      throughout North America.

      BASIS OF PRESENTATION - The financial statements have been prepared in
      accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-QSB and Rule
      10-01 of Regulation S-X. 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, 1997 has not changed materially unless
      otherwise disclosed herein. Financial information as of June 30, 1997
      included in these 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 generally accepted accounting principles 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.

      FINANCIAL STATEMENT PRESENTATION - These financial statements have been
      prepared in accordance with accounting principles generally accepted in
      the United States of America and are expressed in United States dollars.
      The differences in accounting principles generally accepted in the United
      States of America and Canada are described in Note 9.

      REVENUE - Generally, the Company records revenue from product sales when
      the product is shipped. Contracts with certain distributors may have terms
      which cause the Company to record revenue when the product is sold to
      third parties. Also, the Company records an estimate of potential future
      returns of product sold at the time of sale.

                                       -6-
<PAGE>   9
      DEFERRED MAINTENANCE REVENUE - The Company sells product maintenance
      agreements which provide for repair of hardware and no-cost upgrade of
      software. These agreements normally cover a one-year period with revenue
      being recognized on a straight-line basis over the maintenance period.

      DEPRECIATION - Fixed assets are carried at cost. Depreciation is based on
      the estimated useful lives of the assets and is computed using an
      accelerated method. Prior to April, 1997 depreciation was computed using
      the following useful lives:

<TABLE>
<CAPTION>
<S>         <C>                                           <C>    
            Equipment                                     5 years
            Furniture and Fixtures                        7 years
</TABLE>

      Effective April 1, 1997, the Company adopted a three-year amortization
      period for all computer equipment. The change in service life was applied
      on a prospective basis.

      INVENTORY - Inventories are valued at the lower of cost or market, with
      cost being computed using the first-in, first-out method. In Fiscal 1997,
      due to slower than expected sales, the Company decided to record a reserve
      for OCTUS PCTA inventory. This reserve represents essentially the entire
      cost of the OCTUS PCTA-related retail product inventory. Inventories
      consist of:

<TABLE>
<CAPTION>
                                                  SEPT 30,          JUNE 30,          SEPT 30,
                                                    1997              1997              1996
<S>                                              <C>               <C>               <C>        
       Literature and other documentation        $  39,985         $  39,176         $    53,802
       Computer hardware                           961,449           958,173           1,006,773
       Allowance for obsolete inventory           (902,733)         (895,934)            (38,640)
                                                 ---------         ---------         -----------
       
       Total inventory                           $  98,701         $ 101,415         $ 1,021,935
                                                 =========         =========         ===========
</TABLE>
       
      SIGNIFICANT CUSTOMERS - Most of the Company's sales are to distributors in
      the telephony industry. The Company had sales to major distributors, as
      follows:


<TABLE>
<CAPTION>
                              SALES FOR THE THREE MONTHS ENDED SEPT 30,
                                     1997                       1996
                            ---------------------        -------------------
                             AMOUNT           %          AMOUNT          %
<S>                         <C>               <C>        <C>             <C>
       Distributor A        $1,101,427        54%        $706,819        46%
       Distributor B           258,793        13%
                            ----------        ---        --------        --
       
       Total                $1,360,220        67%        $706,819        46%
                            ==========        ==         ========        ==
</TABLE>
       
      The Company had gross accounts receivable from major distributors, each of
      which was in excess of 10% of the Company's total accounts receivable, as
      follows:

<TABLE>
<CAPTION>
                                                         PERCENT
                                                           OF
                                                          GROSS
                                                         ACCOUNTS
                                     DISTRIBUTORS       RECEIVABLE
<S>                                  <C>               <C>
       September 30, 1997                 2                 66%
       June 30, 1997                      2                 74%
       September 30, 1996                 1                 61%
</TABLE>
       
                                       -7-
<PAGE>   10
      INTERNATIONAL SALES - The Company had international sales as follows:


<TABLE>
<CAPTION>
                                       SALES FOR THE THREE MONTHS ENDED SEPT 30,
                                           1997                     1996
                                      ----------------         ----------------  
                                       AMOUNT      %            AMOUNT      %
<S>                                   <C>          <C>         <C>          <C>
         Canada                       $55,729      3%          $55,654      4%
         Other                         22,103      1%           23,385      2%
                                       ------      --           ------      --
         
         Total                        $77,832      4%          $79,039      6%
                                      =======      ==          =======      ==
</TABLE>

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

      Costs capitalized were $45,856 and $51,996 and related amortization was
      $36,000 and $11,164 for the three months ended September 30, 1997 and
      1996, respectively.

      LICENSING FEE - The Company has agreements with distributors which require
      the payment of a license fee on all software sales made by the
      distributors. This license fee is for the distribution of the Company's
      products.

      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. The Company's
      notes payable also approximate fair value based on the borrowing rates
      currently available to the Company for notes with similar terms and
      average maturities.

      ACCOUNTING CHANGES - In 1997, the FASB issued Statement No. 130,
      "Reporting Comprehensive Income," and Statement No. 131, "Disclosures
      about Segments of an Enterprise and Related Information." These
      statements, which are effective for periods beginning after December 15,
      1997, expand or modify disclosures and, accordingly, will have no impact
      on the Company's reported financial position, result of operations or cash
      flows. Additionally, in 1997, FASB issued Statement No. 128, "Earnings Per
      Share," which revises the manner in which earnings per share is
      calculated. The statement is effective for the quarter ending December 31,
      1997 and is not expected to have a significant impact on the Company's
      earnings per share.

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

      RECLASSIFICATION - Certain 1996 amounts have been reclassified in order to
      conform to 1997 presentation.

                                      - 8 -
<PAGE>   11
3.    MARKETABLE SECURITIES

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

<TABLE>
<CAPTION>
                                                                                                                    NET
                                                                                 AMORTIZED                      UNREALIZED
         DESCRIPTION                                                                COST           MARKET           GAIN
<S>                                                                             <C>              <C>            <C>
         September 30, 1997 - U. S. Treasury Bills/Federal Bonds                  $595,381        $602,503         $7,122
                                                                                  ========        ========         ======
         
         June 30, 1997 - United States Treasury Bills                             $363,095        $372,677         $9,582
                                                                                  ========        ========         ======
         
         September 30, 1996 - United States Treasury Bills                        $770,391        $789,848        $19,457
                                                                                  ========        ========        =======
</TABLE>
           
4.    OPERATING LEASES

      OPERATING LEASES - The Company leases its office facility in Norwood,
      Ohio. This operating lease, which began in March 1995 and expires in April
      2002, calls for escalating lease payments over the term of the lease. The
      Company records lease expense on a straight-line basis over the life of
      the lease.

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

<TABLE>
<CAPTION>
        Period Ending September 30:
<S>     <C>                                               <C>
          1998                                              $192,188
          1999                                               205,000
          2000                                               213,750
          2001                                               220,000
          2002                                               128,331
</TABLE>
        
      Rent expense for the leased office space was $73,276 and $73,276 in the
      three month periods ended September 30, 1997 and 1996, respectively.

5.    NOTE PAYABLE

      Note Payable consisted of the following at September 30, 1997 and June 30,
      1997, respectively:

<TABLE>
<CAPTION>
                                                          SEPTEMBER 30,         JUNE 30,        SEPTEMBER 30,
                                                              1997                1997              1996
<S>                                                       <C>                  <C>              <C>
        Term Note Payable - Bank                            $15,000             $30,000           $ 75,000
        Term Note Payable - Third Party                                                             40,000
                                                            -------             -------           --------
                                                            $15,000             $30,000           $115,000
                                                            =======             =======           ========
</TABLE>
        
      The Term Note Payable - Bank bears interest at the prime lending rate
      (8.25% at September 30, 1997). The remaining term is 3 months. The note is
      secured by various securities on deposit with the bank.

                                       -9-
<PAGE>   12
      The Term Note Payable - Third Party bore interest at 6% and was paid in
      full, principal and interest, on May 13, 1997.

6.    CAPITAL STOCK AND INCOME (LOSS) PER SHARE

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

<TABLE>
<CAPTION>
                                                                        COMMON                              IN
                                                    AUTHORIZED          ISSUED          OUTSTANDING      TREASURY
<S>                                                 <C>               <C>               <C>              <C>
         Balance at September 30, 1997              15,000,000        12,281,751        12,279,751        2,000
                                                    ==========        ==========        ==========        =====
         
         Balance at June 30, 1997                   15,000,000        12,281,751        12,279,751        2,000
                                                    ==========        ==========        ==========        =====
         
         Balance at September 30, 1996              15,000,000        12,281,371        12,279,371        2,000
                                                    ==========        ==========        ==========        =====
</TABLE>

      Income (loss) per common share was based on the weighted average number of
      common shares outstanding during each period. Exercise of stock options is
      not assumed as the effect is antidilutive. The weighted average number of
      common shares outstanding was 12,279,751 and 12,279,371 at September 30,
      1997 and 1996, respectively.

7.    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. 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
      four - year period. 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 option granted become exercisable equally
      over a two-year period. All options expire at the end of ten years from
      the date of grant. On July 14, 1997, the Company granted an additional
      298,255 stock options at a price equal to the market value at the date of
      the grant. The options carry the same vesting and expiration terms as
      those defined above.

      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 1997 and 1996, determined using the
      fair value method consistent with SFAS No. 123, was presented in the
      footnotes to the 1997 annual report.

8.    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.

                                      -10-
<PAGE>   13
      Deferred taxes consist of the following:


<TABLE>
<CAPTION>
                                                   SEPTEMBER 30,          JUNE 30,          SEPTEMBER 30,
                                                       1997                 1997                1996
<S>                                                <C>                  <C>                 <C>
       Current deferred tax asset:
         Deferred revenue                           $   105,911         $    59,951         $    47,343
         Inventory reserve                              306,929             304,617                  --
         Accrued compensation                             7,581               7,581               8,086
         Reserves not currently deductible               20,546              12,785              17,525
         Accrued rent                                    25,231              23,629              17,014
                                                    -----------         -----------         -----------
                  Total                                 466,198             408,563              89,968
         Less valuation allowance                      (466,198)           (408,563)            (89,968)
                                                    -----------         -----------         -----------
       
       Net                                          $         -         $         -         $         -
                                                    ===========         ===========         ===========
       
       Non-current deferred tax asset:
         Net operating loss carryforward            $ 2,276,079         $ 2,312,046         $ 2,283,791
         Research and development credits               162,225             156,725             140,075
                                                    -----------         -----------         -----------
                  Total                               2,438,304           2,468,771           2,423,866
       Non-current deferred tax liability:
         Deferred software development costs           (116,973)           (121,832)           (116,973)
                                                    -----------         -----------         -----------
         Net non-current deferred tax asset           2,321,331           2,346,939           2,306,893
         Less valuation allowance                    (2,321,331)         (2,346,939)         (2,306,893)
                                                    -----------         -----------         -----------
       
       Net                                          $         -         $         -         $         -
                                                    ===========         ===========         ===========
</TABLE>

      The provision for income taxes for the three months ended September 30,
      1997 and 1996 consists of the following:


<TABLE>
<CAPTION>
                                              1997            1996
<S>                                        <C>             <C>     
          Current provision                $      -        $      -
          Deferred credit                    32,028          101,674
                                            -------         --------
                     Total                   32,028          101,674
          Less increase in
             the valuation allowance        (32,028)        (101,674)
                                            -------         --------
          
          Income tax expense               $      -        $       -
                                            =======         ========
</TABLE>
          
      At September 30, 1997, the Company has net operating loss carryforwards of
      approximately $6,525,064 for U.S. Federal tax purposes. Such loss
      carryforwards, if unused as offsets to future taxable income, will expire
      beginning in 2002 and continuing through 2011. Also at September 30, 1997,
      for U.S. Federal tax purposes, the Company has research and development
      credit carryforwards available to offset future income taxes of
      approximately $162,225 which will begin to expire in 2002.

                                      -11-
<PAGE>   14
9.    RECONCILIATION OF CANADIAN AND UNITED STATES GENERALLY ACCEPTED
      ACCOUNTING PRINCIPLES ("CANADIAN GAAP AND U.S. GAAP")

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

      During the periods presented, differences between Canadian GAAP and U.S.
      GAAP arose as a result of depreciation. For U.S. GAAP purposes, furniture
      and fixtures and equipment are depreciated over useful lives of seven and
      three years, respectively, using an accelerated method. For Canadian GAAP
      purposes, furniture and fixtures and equipment are to be depreciated over
      useful lives of five and three years, respectively, using a straight-line
      method. The difference does not have a material effect on the reported
      income (loss) nor the earnings per share calculation.




                                   * * * * * *

                                     -12-