UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                --------------

                                   FORM 10-KSB
(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the fiscal year ended December 31, 2001
                                       OR

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934

For the transition period from _______ to _______

                        Commission file number 000-21295
                                               ---------

                              THINKING TOOLS, INC.
                              --------------------
                 (Name of small business issuer in its charter)

           Delaware                                     77-0436410
           --------                               -------------------------
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)

200 Park Avenue, Suite 3900, New York, New York               10166
-----------------------------------------------       ------------------------
 (Address of principal executive offices)                   (Zip Code)

Issuer's telephone number, including area code : (212) 808-7474
                                                 --------------

Securities registered under Section 12(b) of the Exchange Act: None
                                                               ----

Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$.001 par value

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

Yes  [ ]   No  [X]

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained herein and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10- KSB or any
amendment to this Form 10-KSB.  [X]

The Registrant had no revenues in its most recent fiscal year.

As of January 31, 2004, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $158,856.

As of January 31, 2004, 10,204,637 shares of Common Stock, $.001 par value, were
outstanding.


Transitional Small Business Disclosure Format (Check one):   Yes ___  No  X
                                                                          ---

                       DOCUMENTS INCORPORATED BY REFERENCE
None.

<PAGE>

             CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This report on Form 10-KSB contains forward-looking statements relating to
future events and our future performance within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including, without limitation, statements
regarding our expectations, assumptions, estimates, projections, beliefs,
intentions or future strategies that are signified by the words "expects",
"anticipates", "intends", "believes" or similar language. Actual results could
differ materially from those anticipated in such forward-looking statements. All
forward-looking statements included in this document are based on information
available to us on the date hereof.

                                     PART I
                                     ------

Item 1. DESCRIPTION OF BUSINESS

General

      Thinking Tools, Inc., a Delaware corporation (the "Company" or "we") has
not had active business operations since December 2000. Since that time, our
activities have been limited to evaluating from time to time candidates with
which to enter into business combinations or strategic transactions.

History
-------

      The Company was incorporated in Delaware on August 8, 1996, as a
wholly-owned subsidiary of Thinking Tools, Inc., a California corporation (the
"Predecessor Corporation"). On August 28, 1996, the Predecessor Corporation
merged into the Company.

      The Predecessor Corporation was incorporated in California on December 30,
1993 with a business strategy of developing and marketing business simulation
software. In December 1993, the Predecessor Corporation purchased certain assets
of the Business Simulation Division of Maxis, Inc., a computer game company and
creator of the simulation game SimCity. The assets acquired from Maxis included
equipment, staff, work-in-progress, customers, prospects, software tools,
libraries and processes.

      In September 1997, we introduced Think 2000, a Year 2000 business
simulation software product. We invested significant resources and capital in
the development and commercialization of Think 2000, but changes in market
conditions and lack of demand for Year 2000 software products had an adverse
effect on the success of Think 2000 and our business, results of operations and
financial condition. On April 23, 1999, we eliminated substantially all of our
operations and terminated substantially all of our personnel with the exception
of certain executive and administrative personnel.

      On March 7, 2000, through a newly-formed and wholly-owned subsidiary,
StartFree.com, Inc. ("StartFree"), we acquired (the "Tritium Acquisition") the
business and substantially all of the assets and certain of the liabilities of
Tritium Network, Inc., a Delaware corporation ("Tritium") in exchange for
1,148,798.5 shares of our Series A Preferred Stock, par value $.001 per share
(the "Series A Preferred Stock").

      On December 18, 2000, due to the adverse changes in the Internet
environment and especially in the area of Internet service providers, and in
light of the fact that StartFree was not able to generate sufficient revenues to
support current operations, we discontinued the operations of StartFree. On
March 1, 2002, StartFree was dissolved and abandoned.

Plan of Business
----------------

      The Company intends to locate and enter into a transaction with an
existing, public or privately-held company that, in management's view, has
growth potential (a "Target Business"). To that end, the Company is currently
engaged in negotiations with several candidates. A transaction with a Target
Business may be structured as a merger, consolidation, exchange of the Company's
common stock for stock or assets of the Target Business or any other form which
will result in the combined enterprise remaining a publicly-held corporation.

      Acquisitions or business combinations may not be available at the times or
on terms acceptable to us, or at all. In addition, acquiring, or combining with,
a business involves many risks, including:

      -     unforeseen obligations or liabilities;

      -     difficulty assimilating the acquired operations and personnel;

      -     risks of entering markets in which we have little or no direct
            prior experience;

      -     potential impairment of relationships with employees or customers
            as a result of changes in management; and

      -     potential substantial dilutive issuances of equity, large and
            immediate write-offs, and the incurrence of debt.

      We cannot assure you that we will consummate any acquisitions or business
combinations or that we will be able to obtain additional financing for such
acquisitions or combinations, if necessary. If any acquisitions or combinations
are made, we cannot assure you that the acquired or combined business will
perform as expected.

       Furthermore, Federal and state tax laws and regulations may have a
significant impact upon the structuring of transactions. We will endeavor to
structure a transaction so as to achieve the most favorable tax treatment. There
can be no assurance that the Internal Revenue Service or relevant state tax
authorities will ultimately assent to our tax treatment of a particular
consummated transaction. To the extent the Internal Revenue Service or any
relevant state tax authorities ultimately prevail in recharacterizing the tax
treatment of a transaction, there may be adverse tax consequences to the
Company, a target business and their respective stockholders.

      Pending negotiation and consummation of a transaction, the Company
anticipates that it will have, aside from carrying on its search for a
transaction partner, no business activities, and, thus, no source of revenue.
Should the Company incur any significant liabilities prior to a combination with
a Target Business, it may not be able to satisfy without additional financing
such liabilities as are incurred.

Employees
---------

      The Company currently does not have any paid employees. Moshe Zarmi, our
President, Chief Executive Officer and Secretary, and Fred Knoll, our Chairman,
are our only officers.

Subsequent Event
----------------

      Pursuant to a letter of intent dated November 12, 2003, we have agreed
with GVI Security, Inc. to enter into definitive agreements providing for the
merger of GVI with and into a newly formed wholly-owned subsidiary of ours.
Approximately 38% of the outstanding common stock of GVI is held by a limited
liability company of which Europa International, Inc., our principal
stockholder, is a 50% member. Fred Knoll, our Chairman, is the principal of
Knoll Capital Management, L.P., which is the investment manager for Europa. GVI
is the exclusive distributor of Samsung Electronics security products in North
America, and distributes video surveillance and other security products to
wholesale distributors and consumers. The letter of intent provides that in such
merger, the stockholders of GVI would be issued shares of a new class of our
preferred stock that upon conversion would constitute 95% of our outstanding
shares of Common Stock on a fully-diluted basis, resulting in substantial
dilution to our current stockholders. The definitive agreements would contain
customary representations, warranties and closing conditions. There can be no
assurance that the merger with GVI will be consummated.

Item 2. DESCRIPTION OF PROPERTY

      The Company does not own or lease any real property.

Item 3. LEGAL PROCEEDINGS.

      We are not involved in any pending material legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      No matters were submitted to our security holders for a vote during the
year ended December 31, 2001.

                                     PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      During the period covered by this report, our Common Stock was quoted on
the OTC Bulletin Board under the symbol "TSIM" except during the period from
April 24, 2001 through May 2, 2001, when it was quoted on the OTC Bulletin Board
under the symbol "TSIME" to denote that the Company was not current in its
filing obligations with the Securities and Exchange Commission. The following
table sets forth the quarterly high and low bid prices of a share of Common
Stock as reported by the OTC Bulletin Board for the period commencing January 1,
2000, and ending on December 31, 2001. The quotations listed below reflect
inter-dealer prices, without retail mark-ups, mark-downs or commissions and may
not necessarily represent actual transactions.


         Period                         High         Low
         ------                         ----         ---
         Fiscal 2001
         -----------

         First Quarter                  .31          .09
         Second Quarter                 .25          .06
         Third Quarter                  .20          .10
         Fourth Quarter                 .23          .07

         Fiscal 2000
         First Quarter                  7.75         7.00
         Second Quarter                 1.75         1.19
         Third Quarter                  .50          .38
         Fourth Quarter                 .13          .06


      The number of holders of record for our Common Stock as of December 31,
2001 was approximately 45. This number excludes individual stockholders holding
stock under nominee security position listings.

      We did not pay any dividends on the Common Stock since our inception and
do not intend to pay any cash dividends to our stockholders in the foreseeable
future.

Item 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operation
-----------------

      We have not had active business operations since December 2000, when we
discontinued the operations of Startfree.com. Since that time, our activities
have been limited to evaluating from time to time candidates with which to enter
into business combinations or strategic transactions.

      We intend to locate and enter into a transaction with a Target Business.
To that end, the Company is currently engaged in negotiations with several
candidates. A transaction with a Target Business may be structured as a merger,
consolidation, exchange of the Company's common stock for stock or assets of the
Target Business or any other form which will result in the combined enterprise
remaining a publicly-held corporation.

      Pending negotiation and consummation of a transaction with a Target
Business, the Company anticipates that it will have, aside from carrying on its
search for a transaction partner, no business activities, and, thus, no source
of revenue. Should the Company incur any significant liabilities prior to a
combination with a Target Business, it may not be able to satisfy without
additional financing such liabilities as are incurred.

      We anticipate that our expenses will increase as we continue to locate and
enter into transactions with Target Businesses, and we expect to continue to
incur losses for the foreseeable future.

      The Company currently does not have sufficient cash to meet its cash
requirements. The Company expects that it will be required to continue to borrow
from stockholders and affiliates of its stockholders to meet such requirements.

      Our continued existence is dependent on our ability to negotiate
additional acquisitions, to raise additional financing and to develop successful
operations.

Item 7.  FINANCIAL STATEMENTS

      The Financial Statements and Notes thereto can be found beginning on page
F-1, "Index to Financial Statements" at the end of this Form 10-KSB.


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

      Not Applicable.


                                      PART III
                                      --------

Item  9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

      The executive officers and directors of the Company as of January 30,
2004 are as follows:
NAME                       AGE     POSITION
----                       ---     --------
Mr. Fred Knoll             48      Chairman of the Board, Director
Mr. Moshe Zarmi            65      President, Chief Executive Officer, Director
Mr. Frederick Gluck        68      Director


      Fred Knoll has been Chairman of the Board and a member of the board of
directors since September 1994.  Mr. Knoll has also been the principal, from
1987 to the present, of Knoll Capital Management, a private investment
management company.  Mr. Knoll is the portfolio manager of two hedge funds;
Knoll Capital Fund I and Knoll Capital Fund II, and manages a private account
for ABN Amro Inc.  Mr. Knoll holds a B.S. in Electrical Engineering and
Computer Science from M.I.T., a B.S. in Management from the Sloan School at
M.I.T., and a M.B.A. from Columbia University in Finance and International
Business.

      Moshe Zarmi has been President, Chief Executive Officer, and a director
of Thinking Tools, Inc. since February 12, 1998.  From July 1997 to December
1997, Mr. Zarmi was a consultant to us.  Mr. Zarmi has 30 years experience,
primarily in high technology industries.  From February 1993 to January 1997,
Mr. Zarmi was CEO of Geotest, a leading Automated Test Equipment company
based in Southern California.  His extensive business experience includes a
tenure at Israel Aircraft Industries ("IAI"), where he held various positions
in finance and administration, as well as head of US marketing and sales.
Mr. Zarmi also served as President of ATG, the Canadian subsidiary of IAI.
Additionally, Mr. Zarmi headed his own company which specialized in
technology transfer and worked mainly with Israeli high technology companies
doing business in the United States.  Mr. Zarmi attended Tel Aviv University
and holds an M.B.A. from Columbia University.

      Frederick W. Gluck has been a member of the board of directors since
October 1994.  He is currently serving as a consultant to McKinsey & Company,
Inc.  Mr. Gluck served as vice-chairman and a director of Bechtel Group, Inc.
and as a member of the Board of Directors of Bechtel Enterprises, Inc. from
1995 to 1998.  He also served as a member of both companies' executive
committees.  Prior to joining Bechtel, Mr. Gluck spent more than 25 years
with McKinsey & Company, and was ultimately its managing director.  Mr. Gluck
serves on the Harvard Business School Board of Directors of the Associates,
the Management Education Council of the Wharton School, the U.S./ Hong Kong
Economic Cooperation Committee, the Council on Foreign Relations and the
Board of the International Executive Service Corps.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our Directors, executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of our shares and other equity securities. Directors, officers and
greater than 10% shareholders are required to furnish us with copies of all
Section 16(a) forms that they file. To the Company's knowledge, based solely on
a review of the Forms 3, 4, and 5 submitted to the Company during and with
respect to the year ended December 31, 2001 ("Fiscal 2001"), there were no known
failures to file a required Form 3, 4 or 5 and no known late filings of a
required Form 3, 4 or 5 during Fiscal 2000 by any person required to file such
forms with respect to the Company pursuant to Section 16 of the Exchange Act.

ITEM 10. EXECUTIVE COMPENSATION

      The following table sets forth compensation paid for the last three fiscal
years ended December 31, 2001 to our chief executive officer (the "Named
Executive Officer"). No officer or employee of the Company received $100,000 in
compensation from the Company during Fiscal 2001.
                           SUMMARY COMPENSATION TABLE
                            Annual Compensation          Long-Term Compensation
                            -------------------          ----------------------
   Name and     Year  Salary($)  Bonus($)  Other Annual  Securities   All Other
                ----  ---------  --------
   Principal                               Compensation  Underlying Compensation
   ---------                               ------------             ------------
   Position                                    ($)      Options/SARs
   --------                                    ---      ------------
Moshe Zarmi    2001   ----       --      --            --               --
CEO and        2000   ----       --      --            --               --
President      1999   $22,000    --      --            750,000 (1)      --


(1) In December 1999, Mr. Zarmi received options to purchase an aggregate of
   200,000 shares of Common Stock at a purchase price of $.50 per share; 100,000
   of these options vested immediately, and the remaining 100,000 of these
   options vested one year from the date of issuance. In December 1999, Mr.
   Zarmi received five year warrants to purchase 550,000 shares of Common Stock
   at an exercise price of $.50 per share.

STOCK OPTION GRANTS

      The Company did not award any stock options during Fiscal 2001.

AGGREGATED OPTION EXERCISES IN FISCAL 2001 AND FY-END OPTION VALUES

     Name        Shares    Value          Number of             Value of
     ----
                Acquired   Realized  Unexercised Options      Unexercised
               on Exercise   ($)    at Fiscal Year End (#) In-the-Money Options
                             ---
                   (#)                   Exercisable/     at Fiscal Year End ($)
                   ---                                        Exercisable/
                                        Unexercisable         Unexercisable
                                        -------------         -------------
Moshe Zarmi        --        --        750,000/750,000         $0.00/$0.00


Arrangements with Directors and Executive Officers
--------------------------------------------------

      Our Directors do not receive any cash compensation for their participation
on the board.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth as of January 30, 2004, certain information
known to us with respect to the beneficial ownership of our voting securities by
(i) each person who is known by us to own of record or beneficially more than 5%
of the outstanding Common Stock, (ii) each of our directors and Named Executive
Officer, and (iii) all our directors and executive officers as a group. Except
as otherwise indicated, the stockholders listed in the table have sole voting
and investment powers with respect to the shares indicated.

                                         AMOUNT AND NATURE OF     PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER     BENEFICIAL OWNERSHIP     OF CLASS (1)

(i)Beneficial Owners of more than 5% of
---------------------------------------
   Common Stock (other than directors and
   --------------------------------------
   executive officers)
   -------------------
Bruce Galloway (2)                          603,708(3)             5.9%
Digital Creative Development Corp. (4)      569,500                5.6%
Engage, Inc.(5)                             984,799(6)             9.1%
Europa International, Inc. (7)          111,682,820(8)            91.6%
Gem Management Limited (9)                  777,518                7.6%
Global e-Markets, Inc. (10)               2,450,000 (11)          19.3%
Thinking Technologies, L.P. (12)          4,743,722 (13)          42.7 %
Michael Lee (14)                          6,772,246 (15)          39.9%
(ii) Directors and Executive Officers
-------------------------------------
Mr. Fred Knoll (16)                     117,529,442 (17)          94.9%
Mr. Frederick Gluck (18)                    235,000 (19)           2.3%
Mr. Moshe Zarmi (20)                        750,000 (21)           6.8%

(iii) All directors and executive       118,514,442(17)(19)(21)   94.9%
---------------------------------
      officers as a group (three persons)
      -----------------------------------
(1)   Percentage of ownership is based on 10,204,637 shares of Common Stock
      outstanding and has been determined in accordance with Rule 13d-3 under
      the Securities Exchange Act of 1934, as amended. All information is as of
      January 30, 2004 and is based upon information furnished by the persons
      listed or contained in filings made by them with the Securities and
      Exchange Commission.

(2)   The address of Mr. Galloway is c/o Burnham Securities, 1325 Sixth Avenue,
      New York, New York 10019.

(3)   Includes (i) 200,000 shares of Common Stock held by the Bruce Galloway IRA
      and (ii) 200,000 shares owned by Jacombs Investments, Inc., of which Mr.
      Galloway is the principal shareholder and President.

(4)   The address of Digital Creative Development Corp. is 200 East 82nd Street,
      New York, New York 10028.

(5)   The address of Engage, Inc. as 100 Brickstone Square, Andover,
      Massachusetts 01810

(6)   Includes warrants to purchase 584,399 shares of Common Stock at an
      exercise price of $.01 per share.

(7)   The address of Europa International, Inc. ("Europa") is P.O. Box 146, Road
      Town, Tortola, British Virgin Islands. Fred Knoll is the principal of
      Knoll Capital Management, L.P., which is the investment manager for
      Europa.

(8)   All such shares are issuable upon conversion of that certain Demand
      Convertible Grid Note (the "Note") in the principal amount of up to
      $1,000,000, which was originally issued to Thinking Technologies, L.P. and
      transferred to Europa on January 4, 2002.

(9)   The address of Gem Management Limited is PO Box 860, 11 Bath Street,
      St. Helier, Jersey, JE4  0YZ.

(10)  The address of Global e-Markets, Inc. is 12-14 Finch Road, Douglas, Isle
      of Man IM99 1TT.

(11)  All of these shares are issuable upon exercise of warrants with an
      exercise price of $.50 per share.

(12)  The address of Thinking Technologies, L.P. is 200 Park Avenue, Suite 3900,
      New York, New York 10016. Fred Knoll is the principal of Knoll Capital
      Management, L.P., which is the general partner of Thinking Technologies,
      L.P.

(13)  Includes (i) 3,850,414 shares of Common Stock; (ii) 468,242 shares of
      Common Stock issuable upon the exercise of warrants with an exercise price
      of $1.07 per share; and (iii) 425,066 shares of Common Stock issuable upon
      exercise of warrants with an exercise price of $0.375 per share.

(14)  Mr. Lee's address is 1008 Celestial Street, Cincinnati, Ohio 45202.

(15)  All such shares are issuable upon conversion of 677,224.6 shares of Series
      A Convertible Preferred Stock beneficially held by Mr. Lee.

(16)  The address of Mr. Knoll is c/o Knoll Capital Management, 200 Park Avenue,
      Suite 3900, New York, New York 10166.

(17)  Includes (i) the 4,743,722 shares beneficially owned by Thinking
      Technologies, L.P.; (ii) 111,682,820 beneficially owned by Europa; (iii)
      warrants to purchase 549,800 shares of Common Stock with an exercise price
      of $.50 per share; (iv) options to purchase 352,900 shares of Common Stock
      exercisable at $.50 per share; (v) options to purchase 200,000 shares of
      Common Stock exercisable at $.50 per share; and (vi) 200 shares of Series
      B Preferred Stock, $.001 par value per share, which are convertible into
      200 shares of Common Stock.

(18)  The address of Mr. Gluck is c/o McKinsey & Co., 400 South Hope Street, Los
      Angeles, California 90071.

(19)  Includes (i) options to purchase 210,000 shares of Common Stock
      exercisable at $.50 per share, (ii) options to purchase 14,741 shares of
      Common Stock exercisable at $.79 per share, and (iii) options to purchase
      10,259 shares of Common Stock exercisable at $1.00 per share.

(20)  The address of Mr. Zarmi is 215 Frankel Boulevard, Merrick, New York
      11566.

(21)  Consists of (i) warrants to purchase 550,000 shares of Common Stock with
      an exercise price of $.50 per share, and (ii) options to purchase 200,000
      shares of Common Stock exercisable at $.50 per share.

Change In Control
-----------------

      We anticipate that a "change in control" of Thinking Tools will occur in
the event the merger with GVI Security, Inc. contemplated by the letter of
intent described above is consummated.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      On March 7, 2000, in connection with the Tritium Acquisition, we issued
(i) 1,148,798.5 shares of Series A Preferred Stock to Tritium and (ii) 200
shares of Series B Preferred Stock to Mr. Knoll. Mr. Knoll, as the holder of the
Series B Preferred Stock, has the exclusive right to elect seven directors to
our Board of Directors during the period ending March 7, 2002, and to elect five
directors to the Board or such number as will constitute a majority of the Board
during the period from March 8, 2002 through March 7, 2005.

      In November 2000, in consideration of advances made by Technologies to the
Company, Technologies was issued a Demand Convertible Grid Note (the "Note") in
the principal amount of up to $1,000,000, bearing interest at the rate of 10%
per year. The Note was subsequently transferred by Technologies to Europa. Fred
Knoll is the principal of Knoll Capital Management, L.P., which (i) is the
general partner of Technologies, and (ii) is the investment manager for Europa.
The principal and interest outstanding under the Note was originally convertible
into shares of Common Stock at a price of $.375 per share, and in February 2001,
the Note was amended to change the conversion price to $.12 per share. On
January 4, 2002, in consideration of Technologies' agreement not to demand
payment on the Note for a period of six months, the Board of Directors of the
Company approved a resolution further reducing the conversion price of the Note,
so that upon conversion, the Note will convert into 80% of the outstanding
Common Stock of the Company on a fully-diluted basis. At December 31, 2001, the
principal amount outstanding under the Note was approximately $1,082,400,
consisting of principal of $967,260 and interest of $115,140. In connection with
the loans evidenced by the Note, Technologies was issued five-year warrants to
purchase 425,066 shares of Common Stock at a price of $.375 per share. In
February 2001, the warrant was amended to change the exercise price to $.12 per
share.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

(a) The following documents are filed as part of this report:
Exhibit      Description
No.

3.1          Certificate of Incorporation of Thinking Tools, Inc. (1)
3.2          By-Laws of Thinking Tools, Inc. (1)
4.1          1996 Stock Option Plan (1)
4.2          Form of Stock Certificate (2)
4.3          Technologies Warrant (2)
4.4          Certificate of the Designations, Powers, Preferences and Rights
             of the Series A Convertible Preferred Stock of Thinking Tools,
             Inc. (3)
4.5          Certificate of the Designations, Powers, Preferences and Rights
             of the Series B Convertible Preferred Stock of Thinking Tools,
             Inc. (3)
4.6          1997 Stock Option Plan (4)
10.1         Demand Convertible Grid Note (as amended)(5)
31           Certification pursuant to Rule 13a-14(a) of the Exchange Act
32           Certification pursuant to Rule 13a-14(b) of the Exchange Act and
             18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002

--------------------------
(1) Incorporated herein by reference to our Registration Statement on Form SB-2
    (Registration No. 33-11321), as filed with the Securities and Exchange
    Commission (the "Commission") on September 3, 1996 (the "Registration
    Statement").

(2) Incorporated herein by reference to Amendment No. 1 to the Registration
    Statement, as filed with the Commission on October 11, 1996.

(3) Incorporated herein by reference to our Current Report on Form 8-K, as filed
    with the Commission on March 21, 2000.

(4) Incorporated herein by reference to Exhibit A of our Proxy Statement, dated
    November 13, 1997.

(5) Incorporated herein by reference to our Annual Report on Form 10-KSB for our
    fiscal year ended December 31, 2000, as filed with the Commission on May 2,
    2001.

(b) Reports on Form 8-K

      None.

<PAGE>

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders of
         Thinking Tools, Inc.:

We have audited the accompanying  balance sheets of Thinking Tools,  Inc. as of
December  31,  2001  and  2000,  and  the  related  statements  of  operations,
shareholders'  deficiency  and cash  flows  for the  years  then  ended.  These
financial  statements are the responsibility of the Company's  management.  Our
responsibility is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements referred to above present fairly, in
all material  respects,  the financial  position of Thinking Tools,  Inc. as of
December  31,  2001 and 2000,  and the results of its  operations  and its cash
flows  for the  years  then  ended in  conformity  with  accounting  principles
generally accepted in the United States of America.

MERCADIEN, P.C., CPAs


Hamilton, New Jersey

February 4, 2004

<PAGE>


                              THINKING TOOLS, INC.

                     YEARS ENDED DECEMBER 31, 2001 and 2000

<Page>


                              THINKING TOOLS, INC.

                          INDEX TO FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2001 and 2000


                                                                          Page
                                                                         Number
                                                                         ------

INDEPENDENT AUDITORS' REPORT................................................F-1

FINANCIAL STATEMENTS

         Balance Sheets.....................................................F-2

         Statements of Operations...........................................F-3

         Statements of Shareholders' Deficiency...........................F-4-5

         Statements of Cash Flows...........................................F-6

         Notes to Financial Statements...................................F-7-20



<Page>


                              THINKING TOOLS, INC.

                                 BALANCE SHEETS

                           DECEMBER 31, 2001 and 2000


<Table>
<Caption>
(In thousands, except share amounts)
                                                          2001           2000
                                                      --------       --------
<S>                                                   <C>            <C>
ASSETS

CURRENT ASSET:
  Cash                                                $      1       $      3

                                                      --------       --------
TOTAL ASSETS                                          $      1       $      3
                                                      ========       ========


LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Note payable, related party, net of beneficial
    conversion feature of $0 and $127                 $    967       $    758
  Accounts payable                                       1,158          1,079
  Accrued expenses                                         323            213
                                                      --------       --------
       Total current liabilities                         2,448          2,050
                                                      --------       --------
       Total liabilities                                 2,448          2,050
                                                      --------       --------

SHAREHOLDERS' DEFICIENCY
  Preferred stock, Series A $.001 par value;
   3,000,000 shares authorized; 1,148,799
   shares issued and outstanding at 2001
   and 2000                                                  1              1
  Preferred stock, Series B $.001 par value;
   200 shares authorized; 200 shares issued
   and outstanding at 2001 and 2000                         --             --
  Preferred stock, Series C $.001 par value;
   400,000 shares authorized; none issued or
   outstanding                                              --             --
  Common stock, $.001 par value: 20,000,000
   shares authorized; shares issued and
   outstanding: 10,204,637 at 2001 and 2000                 10             10
  Additional paid-in capital                            20,778         20,778
  Deferred Stock Compensation                               --             --
  Accumulated deficit                                  (23,236)       (22,836)
                                                      --------       --------
       Total shareholders' deficiency                   (2,447)        (2,047)
                                                      --------       --------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY        $      1       $      3
                                                      ========       ========
</Table>






See notes to financial statements.                                          F-2

<Page>

                              THINKING TOOLS, INC.

                            STATEMENTS OF OPERATIONS

                     Years Ended December 31, 2001 and 2000


<Table>
<Caption>
(In thousands, except per share amounts)

                                                             2001           2000
                                                         --------       --------
<S>                                                          <C>            <C>
REVENUES                                                 $      -       $      -
                                                         --------       --------
OPERATING EXPENSES
 Selling, general and administrative                          182          1,526
                                                         --------       --------
  Total operating expenses                                    182          1,526
                                                         --------       --------
LOSS FROM OPERATIONS                                         (182)        (1,526)

OTHER EXPENSE
 Interest                                                    (218)          (514)
                                                         --------       --------
LOSS FROM CONTINUING OPERATIONS                              (400)        (2,040)
                                                         --------       --------
DISCONTINUED OPERATIONS
 Loss from discontinued operations                              -         (2,260)
 Estimated loss on disposal of operations including
 provision of $63 for shutdown costs in 2000
 during phase-out period                                        -         (3,040)
                                                         --------       --------
  Total discontinued operations                                 -         (5,300)
                                                         --------       --------
NET LOSS                                                 $   (400)      $ (7,340)
                                                         ========       ========

BASIC AND DILUTED LOSS PER SHARE
 Loss from continuing operations                         $  (0.04)      $  (0.22)
 Loss from discontinued operations                              -          (0.24)
 Estimated loss on disposal of discontinued
  operations                                                    -          (0.32)
                                                         --------       --------

BASIC AND DILUTED NET LOSS PER SHARE                     $  (0.04)      $  (0.78)
                                                         ========       ========
SHARES USED IN CALCULATION OF NET LOSS
 PER SHARE                                                 10,205          9,439
                                                         ========       ========
</Table>









See notes to financial statements.                                          F-3

<Page>


                              THINKING TOOLS, INC.
                     STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                     Years Ended December 31, 2001 and 2000

<Table>
<Caption>
(In thousands, except share amounts)
                                                                                     Preferred Stock
                                                                  -----------------------------------------------------------------
                                                Common Stock                Series A                Series B            Series C
                                        ------------------------- ------------------------- ------------------- -------------------
                                             Shares      Amount      Shares        Amount    Shares    Amount    Shares    Amount
                                        -------------- ---------- -------------  ---------- --------- --------- --------- ---------
<S>                                     <C>            <C>        <C>            <C>        <C>       <C>       <C>       <C>
BALANCES,
 January 1, 2000                          7,384,237        $ 7             -         $ -         -       $ -         -       $ -
Issuance of preferred
 stock related to
 acquisition                                      -          -     1,148,799           1       200         -         -         -
Proceeds from sales of
 common stock                             2,320,000          2             -           -         -         -         -         -
Issuance of warrants for
 prepaid advertising                              -          -             -           -         -         -         -         -
Interest attributable to
 beneficial conversion
 feature and warrants                             -          -             -           -         -         -         -         -
Conversion of warrants to
 common stock                               500,400          1             -           -         -         -         -         -
Amortization of deferred
 stock compensation                               -          -             -           -         -         -         -         -
Net Loss                                          -          -             -           -         -         -         -         -
                                        -------------- ---------- -------------  ---------- --------- --------- --------- ---------

BALANCES,
 January 1, 2001                         10,204,637         10     1,148,799           1       200         -         -         -
Net Loss                                          -          -             -           -         -         -         -         -
                                        -------------- ---------- -------------  ---------- --------- --------- --------- ---------
BALANCES,
December 31,2001                         10,204,637       $ 10     1,148,799         $ 1       200       $ -         -       $ -
                                        ============== ========== =============  ========== ========= ========= ========= =========
</Table>






See notes to financial statements.                                          F-4



<Page>


                              THINKING TOOLS, INC.
                     STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                     Years Ended December 31, 2001 and 2000



<Table>
<Caption>
                                                 Deferred                        Total
                                 Additional       Stock                       Shareholders'
                                   Paid-in        Compen-       Accumulated      Equity
                                   Capital        sation          Deficit     (Deficiency)
                                -------------  -------------  -------------- --------------
<S>                              <C>             <C>           <C>             <C>
 BALANCES,
 January 1, 2000                 $    16,010     $     (875)   $    (15,496)   $      (354)
Issuance of preferred stock
 related to acquisition                2,598              -               -          2,599
Proceeds from sales of
 common stock                          1,157              -               -          1,159
Issuance of warrants for
 prepaid advertising                     391              -               -            391
Interest attributable to
 beneficial conversion
 feature and warrants                    617              -               -            617
Conversion of warrants to
 common stock                              5              -               -              6
Amortization of deferred
 stock compensation                        -            875               -            875
Net Loss                                   -              -          (7,340)        (7,340)
                                -------------  -------------  -------------- --------------
BALANCES,
 January 1, 2001                      20,778              -         (22,836)        (2,047)
Net Loss                                   -              -            (400)          (400)
                                -------------  -------------  -------------- --------------
BALANCES,
 December 31, 2001               $    20,778    $         -    $    (23,236)   $    (2,447)
                                =============  =============  ============== ==============
</Table>










See notes to financial statements.                                          F-5

<Page>


                              THINKING TOOLS, INC.

                            STATEMENTS OF CASH FLOWS

                     Years Ended December 31, 2001 and 2000

<Table>
<Caption>
(In thousands, except share amounts)
                                                                  2001            2000
                                                              ------------    -----------
<S>                                                              <C>             <C>
CASH FLOWS FROM (USED) IN OPERATING ACTIVITIES

 Net Loss                                                        $  (400)        $(7,340)
 Adjustments to reconcile net loss to net cash used in
 operating activities
 Depreciation and amortization                                        --             767
 Estimated loss on disposal of operations                             --           3,040
 Stock compensation expense                                           --             875
 Interest expense and accretion of interest expense
  attributable to notes payable beneficial conversion
  features and to warrants issued                                    218             514
 Changes in current assets and liabilities:
  Accounts receivable                                                 --              27
  Prepaid expenses and other assets                                   --              77
  Accounts payable                                                    78             732
  Accrued expenses                                                    (5)              5
                                                                  -------         -------
 Net cash used by operating activities                              (109)         (1,303)
                                                                  -------         -------
CASH FLOWS FROM (USED) IN INVESTING ACTIVITIES
  Purchases of property and equipment                                 --             (24)
  Direct costs of Tritium acquisition                                 --            (207)
                                                                  -------         -------
  Net cash provided (used) by investing activities                    --            (231)
                                                                  -------         -------
CASH FLOWS FROM (USED) IN FINANCING ACTIVITIES
  Proceeds from notes payable                                         107            860
  Proceeds from issuance of common stock                               --            565
                                                                  -------         -------
  Net cash provided by financing activities                           107          1,425
                                                                  -------         -------
  Net (decrease) increase in cash                                      (2)          (109)
CASH, beginning of year                                                 3            112
                                                                  -------         -------
CASH, end of year                                                 $     1         $    3
                                                                  =======         =======
SUPPLEMENTAL SCHEDULE OF NONCASH OPERATING,
 INVESTING AND FINANCING ACTIVITIES:
  Conversion of investor advances to common stock                 $    --         $   600
  In March 2000, the Company acquired substantially               =======         =======
   all the assets and assumed
  specific liabilities of Tritium Network, Inc. ("Tritium").
  The specified liabilities included the $500,000 investor bridge
  note to Tritium. The consideration for the acquisition was
  paid by the Company through the issuance of 1,148,798.5 shares
  of Series A preferred convertible stock as follows:
   Fair value of assets acquired                                  $    --         $ 3,150
   Liabilities assumed                                                 --            (552)
                                                                  -------         -------
   Series A preferred convertible stock issued                    $    --         $ 2,598
                                                                  =======         =======
  Warrants given for prepaid advertising                          $    --         $   391
                                                                  =======         =======
  Discount on note payable beneficial conversion feature
   and warrants given and additional paid-in-capital              $    --         $   617
                                                                  =======         =======
</Table>



See notes to financial statements.                                          F-6

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


1. NATURE OF BUSINESS

         Thinking Tools,  Inc. (the "Company") was incorporated in Delaware on
         August 8, 1996, as a wholly-owned subsidiary of Thinking Tools, Inc.,
         a California corporation (the "Predecessor  Corporation").  On August
         28, 1996, the  Predecessor  Corporation  was merged with and into the
         Company.  References  herein to the "Company" include the Predecessor
         Corporation and the  subsidiary,  StartFree.com,  Inc.  ("StartFree")
         (see Note 12.).

         The Company  was formed on December  30,  1993,  to purchase  certain
         assets of the Business Simulation Division (the "Division") of Maxis,
         Inc., a leading  computer game company and creator of the  simulation
         game SimCityTM.  Through the purchase agreement with Maxis, Inc., the
         Company acquired the Division's equipment,  staff,  work-in-progress,
         customers,  prospective  customers,  software  tools,  libraries  and
         processes.  The Company's products included  SimRefinery,  a refinery
         simulation  product,  SimHealth,  a  health  care  reform  simulation
         product and TelSim, a local telephone exchange simulation product.

         The Company  commenced  operations  in  December  1993 to develop and
         market business simulation  software.  From its inception until March
         1999, the Company was engaged in research and development  activities
         and organizational efforts,  including the development of its initial
         products,   recruiting  personnel,  and  establishing  marketing  and
         manufacturing capabilities and raising capital. The Company commenced
         commercial  activities in January 1994, but to date has not generated
         substantial revenues from the sale of its products.

         The Company through its subsidiary, StartFree, acquired substantially
         all of  the  assets  and  assumed  specific  liabilities  of  Tritium
         Network,  Inc.  ("Tritium") on March 7, 2000, through the issuance of
         preferred stock.  Concurrently,  financing was provided from proceeds
         of the sales of the Company's common stock to investors.  In December
         2000, the Company  discontinued the operations of StartFree (see Note
         12.). In March 2002, the Company  abandoned  StartFree (see Note 14).
         During 2001 and 2000, the Company received approximately $107,000 and
         $860,000, respectively from proceeds of a secured convertible note to
         Thinking Technologies, L.P. ("Technologies") (see Note 6.)










                                                                           F-7

<Page>


                             THINKING TOOLS, INC.
                        NOTES TO FINANCIAL STATEMENTS
                    Years Ended December 31, 2001 and 2000


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Principles of consolidation - The accompanying  consolidated financial
         statements include the accounts of Thinking Tools, Inc. and its wholly
         owned subsidiary,  StartFree.  Intercompany  transactions and balances
         have been eliminated in consolidation.

         Use  of  Estimates  -  The  preparation  of  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.

         Product  Revenues  - The  Company  generally  recognizes  revenue  for
         software  product  sales upon delivery of the software and at the time
         at  which  all  criteria  for  revenue  recognition  have  been met in
         accordance  with American  Institute of Certified  Public  Accountants
         Statement  of  Position  97-2  "Software  Revenue   Recognition."  For
         multiple-element  arrangements involving either licensing of a product
         or post-delivery customer support, a portion of the revenue based upon
         the fair value of the  respective  element is deferred and  recognized
         ratably over the life of the license or technical support period.

         Cash - The  Company  considers  all  highly  liquid  debt  instruments
         purchased with an original maturity date of three months or less to be
         cash equivalents.

         Concentration of Credit Risk - Financial  instruments that potentially
         subject  the  Company  to  concentration  of credit  risk are cash and
         equivalents.  Risks associated with cash and equivalents are mitigated
         by banking with credit-worthy institutions.

         Property and  Equipment - Property and  equipment  are stated at cost,
         reduced  for   impairment.   Depreciation   is   provided   using  the
         straight-line  method over the estimated useful lives of the assets of
         three to seven years.  Leasehold  improvements  are amortized over the
         shorter of the estimated  useful lives or the  underlying  lease term.
         The Company  evaluates the  recoverability  of long-lived assets on an
         on-going  basis.  In  December  2000,  the  Company  discontinued  the
         operations  of StartFree  and  abandoned  its  remaining  property and
         equipment approximating $39,000 (see Note 12.).

         Beneficial  Conversion Features - Where the Company issues convertible
         debt, and the terms of conversion of the stock are such that the value
         of the stock at the date of issuance of the debt exceeds the amount of
         the debt, such excess is considered a beneficial  conversion  feature.
         The Company accounts for the beneficial  conversion  feature as a debt
         discount and a  corresponding  credit to equity.  The debt discount is
         amortized as additional interest expense over the term of the debt.












                                                                            F-8

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Software development costs - The Company follows the guidance provided
         by the American Institute of Certified Public  Accountants'  Statement
         of Position  98-1 ("SOP 98-1")  "Accounting  for the Costs of Computer
         Software   Developed  or  Obtained  for  Internal  Use."  The  Company
         considers  the  accounting  for the  software it  developed to provide
         Internet services and  advertisement  connections to meet the criteria
         of SOP 98-1,  subject to the guidance  provided by the  provisions  of
         Financial  Accounting Standard No. 121, "Accounting for the Impairment
         of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

         Software  development costs that are deemed to be impaired are written
         down to their fair value in the period the  impairment is  determined.
         For 2000, an impairment loss  approximating  $271,000 has been charged
         to loss from discontinued operations (see Note 12.).

         Income  Taxes - The Company  records  income taxes using the asset and
         liability  approach,  whereby  deferred  tax assets,  net of valuation
         allowances,   and   liabilities   are  recorded  for  the  future  tax
         consequences of temporary  differences between financial statement and
         tax  bases  of  assets  and  liabilities  and for the  benefit  of net
         operating loss carry forwards.

         Stock  Compensation  - The Company  accounts  for  stock-based  awards
         granted to directors and employees based on the intrinsic value method
         in accordance with Accounting  Principles  Board (APB) Opinion No. 25,
         "Accounting for Stock Issued to Employees."

         Net  Loss Per  Share - The  Company  follows  Statement  of  Financial
         Accounting  Standards  (SFAS) No. 128 "Earnings Per Share." Due to the
         Company's net loss, all convertible  securities,  options and warrants
         are  antidilutive;  hence  both basic and  diluted  loss per share are
         computed  based on the  weighted  average  number  of shares of common
         stock outstanding during the period.

3.       ACCRUED EXPENSES

         Accrued  expenses  at  December  31,  2001 and 2000 are as follows (in
         thousands):




<Table>
<Caption>
                                                         2001                   2000
                                                 ------------------     -----------------
<S>                                              <C>                    <C>
       Disposal costs                            $              63      $             63
       Legal and professional fees                             139                   143
       Interest                                                115                    --
       Payroll and related benefits                              5                     6
       Other                                                     1                     1
                                                 ------------------     -----------------
                                                  $             323      $            213
                                                 ==================     =================
</Table>






                                                                            F-9

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

4.       LEASES

         The  Company  leased  office  space in San  Jose,  California  under a
         non-cancelable  operating  lease,  which  expired in March  2001.  The
         Company  sub-leased  the San  Jose  office  in  March  1998,  prior to
         expiration of the lease. The sub-lease expired in June 2001, therefore
         there are neither  future  minimum  rental  commitments  nor  sublease
         rentals to be  received  in the future  for the San Jose  facility  at
         December 31, 2001.

         Total rent  expense  was  approximately  $0 and  $35,000 for the years
         ended  December  31,  2001 and 2000,  respectively.  Included  in rent
         expense  for the year  ended  December  31,  2000,  was  approximately
         $29,000 allocated to loss from discontinued operations (see Note 12.).

5.       INCOME TAXES

         Due to the  Company's  history of net  losses,  the  Company has fully
         reserved  its net  deferred  tax  assets  and,  consequently,  its tax
         provision  (benefit) is nil.  Calculations for deferred tax assets and
         liabilities  at  December  31,  2001  and  2000,  are as  follows  (in
         thousands):

<Table>
<Caption>
                                                              2001                  2000
                                                  -----------------     -----------------
<S>                                                <C>                  <C>
Deferred tax assets

      Net operating loss carry forwards            $          5,268     $          5,195
      Tax credits                                               261                  261
      Accruals and reserves not currently deductible             32                   32
      Stock compensation                                      1,886                1,799
                                                  -----------------     -----------------
Total deferred tax assets                                     7,447                7,287
Less valuation allowance                                     (7,447)              (7,287)
                                                  -----------------     -----------------
Net deferred tax assets                            $              -     $              -
                                                  =================     =================
</Table>

         As  of  December  31,  2001,   the  Company  has  net  operating  loss
         carryforwards  of $13,169,000  and  $13,298,000  for federal and state
         purposes,  respectively. As of December 31, 2001, the Company also has
         tax credit  carryforwards  of $261,000  and  $133,000  for federal and
         state  purposes.  The  losses  expire  beginning  in  2009  and  2002,
         respectively.   Federal  and  State  of  California  tax  laws  impose
         significant  restrictions  on the  utilization  of net operating  loss
         carryforwards  in the event of a change in ownership as defined by the
         Internal  Revenue  Service Code Section 382. In addition,  in order to
         realize the  benefits of the state net  operating  loss and tax credit
         carryforwards,  the Company  will have to  re-establish  its  business
         presence in the State of California.










                                                                           F-10

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

6.       NOTE PAYABLE

         In July 2000 the Company approved bridge  financing from  Technologies
         under  which the  Company  would  receive  an  aggregate  sum of up to
         $500,000 in  exchange  for (i) a demand  note  convertible  commencing
         February 2001 into shares of the Company's  common stock at $0.375 per
         share and (ii) a five year warrant to purchase  200,000  shares of the
         Company's  common  stock  at a price  of $0.50  per  share  commencing
         February  2001. In November 2000 the Board approved an increase in the
         bridge financing from Technologies to $1,000,000,  and the warrant was
         revised to the right to purchase 425,066 shares of common stock for up
         to five years at $.375 per share.  In February  2001,  the  conversion
         price  was  modified  for both the  note and the  warrant  to $.12 per
         share.  Both the note upon  conversion and the warrants are subject to
         anti-dilution adjustments. The note is secured by all of the Company's
         property up to the maximum of $1,000,000.  Interest accumulates at 10%
         per annum.  Through  December  31,  2001,  Technologies  advanced  the
         Company approximately $967,000 in principal, with accumulated interest
         accrued  thereupon of approximately  $115,000  (approximately  $82,000
         unsecured).

         For the year ended  December 31, 2001, the Company  recorded  non-cash
         interest  expense  approximating   $127,000  in  connection  with  the
         amortization of the discount on the beneficial  conversion  feature of
         the  convertible  note (the earliest  conversion date was February 12,
         2001).

         For the year ended  December 31, 2000, the Company  recorded  non-cash
         interest  expense  approximating   $235,000  in  connection  with  the
         amortization of the discount on the beneficial  conversion  feature of
         the debt for common stock and approximately $25,000 in connection with
         accumulated interest on the note (also see Note 7., warrants).

7.       SHAREHOLDERS' DEFICIENCY

         Stock

              In August 2000, a partner in Technologies liquidated his interest
              and received  69,628 shares of the Company's  common stock.  This
              distribution reduced the number of shares of the Company's common
              stock held outright by Technologies to 3,850,414.

              On March 7, 2000,  200 shares of Series B  Convertible  Preferred
              Stock,  $.001 par value per share,  were issued to the  Company's
              Chairman. The Series B Preferred Stock has certain voting control
              rights until March 7, 2005 (see Note 14.).

              In August  2000,  the Company  authorized  400,000  shares of new
              Series C preferred  stock.  At  December  31,  2000,  no Series C
              preferred stock has either been sold or distributed.











                                                                           F-11

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


              In  October  2000,  Engage,  Inc.,  a  successor  via a merger to
              Adsmart  Corp.,  exercised a warrant in part to purchase  500,400
              shares of the Company's Common Stock at $0.01 per share (see Note
              12.).

         Warrants

              The Company  consummated  a series of financing  transactions  in
              1996.  Warrants were issued to Technologies  to purchase  468,242
              shares of common  stock at an exercise  price of $1.07 per share,
              expiring  December 2006.  Warrants to purchase  456,250 shares of
              the  Company's  common  stock  at $3.90  per  share  (156,250  to
              Thinking  Technologies,  L. P. and  300,000 to its  Underwriter),
              were also  issued.  In August  2000,  a partner  in  Technologies
              liquidated  his  interest and received a warrant for 5,453 shares
              of  the  Company's  common  stock.  This   distribution   reduced
              Technologies'  warrants to purchase common shares from 156,250 to
              150,797.  The above 456,250  warrants all expired in August 2001.
              In addition,  in October and November 1996, the Company completed
              its initial public offering and issued 1,610,000 shares of common
              stock  at $6.50  per  share  for net  proceeds  of  approximately
              $8,470,000.  In connection with its initial public offering,  the
              Company sold  options to purchase  140,000  common  shares to its
              underwriter  for $.001 per option.  These options  expired during
              October and November of 2001.

              On December 10,  1999,  in  connection  with the  acquisition  of
              Tritium,  the  Company  issued  2,450,000  stock  warrants  at an
              exercise price of $.50 per share to an acquisition  consultant as
              compensation  for services  provided.  These  warrants  vested on
              March 7, 2000,  and expire in December 2004. At December 31, 2001
              and 2000,  these warrants had no value.  The warrants are subject
              to certain anti-dilution adjustments (See Note 12.).

              On  December  10,  1999,  the  Company's  Chairman  and its Chief
              Executive  Officer were granted  warrants to purchase 549,800 and
              550,000  shares of common  stock,  respectively,  at an  exercise
              price of $.50 per share. The warrants were issued as compensation
              for services  rendered in facilitating  the Tritium  acquisition.
              The  warrants   were  vested  on  December  10,  1999,   and  are
              exercisable  until  December  2004.  The  warrants are subject to
              certain anti-dilution adjustments.

              As  discussed in Note 7.,  pursuant to the 2000 bridge  financing
              from  Technologies,  the  Company  granted a warrant to  purchase
              425,066  shares of  common  stock at $.375  per  share,  expiring
              February  2006.  In  February  2001,  the  conversion  price  was
              modified  to $.12 per  share.  The  warrant is subject to certain
              anti-dilution  adjustments  (see  Note  7.).  For the year  ended
              December 31, 2000, the Company recorded non-cash interest expense
              approximating $254,000 resulting from these warrants.













                                                                           F-12

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

7.       SHAREHOLDERS' DEFICIENCY (CONTINUED)

         Stock Options

              Under  the  Company's  1996  and 1997  Stock  Option  Plans  (the
              "Plans"),  options  to  purchase  up to an  aggregate  of 976,000
              shares of common  stock may be  granted to  officers,  directors,
              employees  or  consultants.  The Plans  provide for issuing  both
              incentive  stock options and  nonqualified  stock options,  which
              must be granted  at fair  market  value at the date of grant,  as
              determined by the Plan  administrator.  Options granted under the
              Plans become  exercisable as determined by the Board of Directors
              and expire at the end of ten years. Options granted are forfeited
              90 days after an employee's separation from the Company.

              Outstanding  stock  options of 30,777 and 41,036 at December  31,
              2001 and 2000,  respectively,  were previously  granted under the
              Plans to four  Board  members at an  exercise  price of $1.00 per
              share.  During  2001,  one of the four  Board  members  resigned,
              forfeiting her respective options under the Plans.

              In 1995,  options  were issued  outside of the Plans to directors
              and an  unaffiliated  person to purchase 58,964 shares and 15,000
              shares  at an  exercise  price  of  $.79  and  $1.00  per  share,
              respectively.   During  2001,  one  of  the  directors  resigned,
              forfeiting her respective  options.  Options  outstanding for the
              above  were  59,223  and 73,964 at  December  31,  2001 and 2000,
              respectively.

              On December 10,  1999,  the Board of  Directors  granted  options
              outside of the Plans to Board  members and employees for purchase
              of 1,690,000  shares of common stock at an exercise price of $.50
              per share. In 1999,  990,000 options vested, and in December 2000
              the remaining 700,000 options vested. The Board of Directors also
              granted options outside of the Plans to the Company's Chairman to
              purchase  352,900  shares of common stock at an exercise price of
              $.50 per share in lieu of cash  compensation owed at December 31,
              1998 for services of approximately  $176,000.  These options were
              issued and vested as of December 10, 1999.

              For the years  ended  December  31,  2001 and 2000,  the  Company
              recorded  non-cash  compensation  expense  under APB 25 of $0 and
              $875,000, respectively, for the issuance and vesting of options.














                                                                           F-13

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


7.           SHAREHOLDERS' DEFICIENCY (CONTINUED)


         A summary of the status of the Company's stock options as of December
         31, 2001 and 2000, and the changes during the years ended December 31,
         2001 and 2000, is presented below:

<Table>
<Caption>
                                                      Number of           Range of
                                                      Shares            Exercise Prices
                                                  -----------------     -----------------
<S>                                               <C>                   <C>
      Outstanding at January 1, 2000                      2,157,900       $   .50 - 1.000
      Granted                                                    -        $             -
      Exercised                                                  -        $             -
      Forfeited                                                  -        $             -
                                                  -----------------
      Outstanding at December 31, 2000                    2,157,900       $   .50 - 1.000
      Granted                                                    -        $             -
      Exercised                                                  -        $             -
      Forfeited                                            (295,000)      $   .50 - 1.000
                                                  -----------------
      Outstanding at December 31, 2001                    1,862,900       $   .50 - 1.000
                                                  =================

      Weighted-average fair value of options remaining
        exercisable at December 31, 2001                           $          1.50
                                                                  =================
</Table>




























                                                                           F-14

<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

7.      SHAREHOLDERS' DEFICIENCY (CONTINUED)

The following table summarizes information about stock options outstanding as of
December 31, 2001:


<Table>
<Caption>
                          Outstanding Options                                   Exercisable Options
                    --------------------------------------------------    --------------------------------
                       Number           Weighted-
                     Outstanding         average          Weighted-          Number           Weighted-
                         at             Remaining          average        Outstanding at       average
   Exercise         December 31,       Contractual        Exercise        December 31,        Exercise
    Prices              2001              Life              Price             2001              Price
----------------    --------------    --------------    --------------    --------------    --------------
<S>                 <C>               <C>               <C>               <C>               <C>
         $ 1.00            45,777       4.6 years              $ 1.00            45,777            $ 1.00
           0.79            44,223       3.6 years                0.79            44,223              0.79
           0.50         1,772,900       7.9 years                0.50         1,772,900              0.50
                    --------------                                        --------------
                        1,862,900                                             1,862,900
                    ==============                                        ==============
</Table>


As discussed  in Note 2, the Company  accounts  for its  stock-based  awards to
directors and employees using the intrinsic value method in accordance with APB
Opinion No. 25,  "Accounting  for Stock Issued to  Employees,"  and its related
interpretations.

Statement  of  Financial   Accounting   Standards  No.  123,   "Accounting  for
Stock-Based  Compensation"  ("SFAS 123"),  requires the disclosure of pro forma
net income and  earnings  per share as if the  Company  adopted  the fair value
method for stock based awards to directors and employees as of the beginning of
fiscal  1995.  Under  SFAS 123,  the fair  value of the  stock-based  awards is
calculated through the use of the minimum value method for all periods prior to
the initial public offering, and subsequently through the use of option pricing
models,  even though such models were  developed  to estimate the fair value of
freely  tradeable,  fully  transferable  options without vesting  restrictions,
which significantly differ from the Company's stock option awards. These models
also  require  subjective  assumptions,  including  future  stock  option price
volatility  and expected time to exercise,  which greatly affect the calculated
values.   The   Company's   calculations   were  made  using  the  minimum  and
Black-Scholes  option  pricing  models  with  the  following  weighted  average
assumptions:  expected life of 30 to 40 months; 61% stock volatility subsequent
to the initial public offering in 1996; risk-free interest rates, approximately
6%; and no dividends  during the expected term. The Company's  calculations are
based on a multiple option valuation  approach,  and forfeitures are recognized
as they occur.  If the computed fair values of the awards had been amortized to
expense  over the vesting  period of the awards,  pro forma net loss would have
been $400,000 ($.04 per share) in 2001 and $8,255,000 ($.87 per share) in 2000.


                                                                           F-15
<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

8.      MAJOR CUSTOMERS

        The Company had no  revenues  during  2001.  Revenues  were  negligible
        during 2000 and arose from discontinued  operations (see Note 12.). One
        customer accounted for 100% of revenue in 2000.

9.      FAIR VALUE OF FINANCIAL INSTRUMENTS

        The carrying amounts reflected in the financial  statements at December
        31, 2001 and 2000 for cash  approximates  its respective fair value due
        to the short  maturity  of the  instrument.  The fair value of the note
        payable at December 31, 2001 is based on the current rates and terms at
        which the Company could borrow funds.

10.     ADVERTISING COSTS

        Advertising costs are charged to operations when incurred. There was no
        advertising  expense for the year ended  December  31,  2001.  All 2000
        advertising expense was incurred for the StartFree operations that were
        discontinued (see Note 12.).  Advertising  expense charged to loss from
        operations of discontinued  subsidiary  approximated $281,000.  Prepaid
        advertising  charged  to  estimated  loss  on  disposal  of  operations
        approximated $274,000.

11.     RELATED PARTY TRANSACTIONS

        The Company's  Chairman is the  principal of Knoll Capital  Management,
        L.P., which is the general partner of Technologies.  Technologies owned
        approximately  38% of the  Company's  outstanding  common  stock  as of
        December 31, 2001 and 2000, and as of December 31, 2001, has a right to
        convert the note  payable and accrued  interest  thereupon to 9,020,001
        shares  of the  common  stock and owns  warrants  to  purchase  893,308
        additional  shares of common stock. As of December 31, 2001, Mr. Knoll,
        as an  individual,  owns  options for 552,900  shares and  warrants for
        549,800  shares of common stock as  compensation  for his services (see
        Note 7.) and 200 shares of Series B Convertible  Preferred Stock, $.001
        par value per share.  The Series B Preferred  Stock has voting  control
        rights until March 7, 2005, and is  convertible  into 200 shares of the
        Company's common stock.

12.     BUSINESS ACQUISITION AND DISCONTINUED OPERATIONS

        On March 6,  2000,  the  Company  formed  a  wholly  owned  subsidiary,
        StartFree.com,  Inc., a Delaware corporation ("StartFree"). On March 7,
        2000,  StartFree  acquired  substantially all of the assets and assumed
        specified  liabilities  of  Tritium  Networks,  Inc.  ("Tritium").  The
        specified liabilities included the $500,000 bridge note to Tritium (see
        below).  The  consideration  for the  acquisition  was paid through the
        issuance of 1,148,798.5 shares of a new Series A convertible  preferred
        stock  valued  for  approximately   $2,598,000,  as  determined  by  an
        independent  appraisal.  The  preferred  stock  is  convertible  into a
        maximum of  11,487,985  shares of Thinking  Tools common stock when the
        Company  files with the  Secretary of State of the State of Delaware to
        increase the authorized number of shares to at least 35,000,000 shares.









                                                                           F-16
<Page>




                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


12.     BUSINESS ACQUISITION AND DISCONTINUED OPERATIONS (CONTINUED)

        Tritium was an internet service  provider based in Cincinnati,  Ohio at
        the time of the acquisition transaction. Tritium provided free internet
        service for  subscribers in exchange for the display of  advertisements
        on the lower portion of the subscriber's  screen.  AdSmart  Corporation
        agreed to provide  internet-based  advertising  and to pay royalties to
        Tritium based upon the number of individual  advertisements  viewed. In
        addition,  one supplier provided  connectivity for its internet network
        services.  These  agreements were assumed by StartFree and continued in
        effect until December 2000.

        The Company  accounted for the  acquisition of the assets and specified
        liabilities  of Tritium  under the purchase  method of  accounting  for
        business  combinations.  In  connection  with the  accounting  for this
        transaction,  goodwill  and  assets  assumed  totaling  $3,150,000  and
        liabilities  of  $552,000  were  recorded.  Goodwill  amortization  was
        provided using the straight-line  method over the estimated useful life
        of three years.  For 2000,  amortization  and loss from  impairment  of
        goodwill  charged to estimated  loss from  discontinued  operations was
        approximately $643,000.

        In  November  1999,  the  Company  entered  into an  agreement  with an
        investor to issue 2,000,000 shares of the Company's common stock to the
        investor  at  $.50 a  share.  Subsequently,  the  single  investor  was
        replaced by that investor and several others.  The Company received the
        $1,000,000 proceeds from the stock issuance in the following way:

              o       Upon approval of the  acquisition by the Company's  board
                      of directors  in December  1999,  the  investor  advanced
                      $100,000 to the Company.

              o       In December 1999, the investor  advanced $500,000 under a
                      bridge  note  to  Tritium.  On the  closing  date  of the
                      acquisition,  March 7, 2000, the bridge note was acquired
                      by  StartFree,  which had the  effect of  converting  the
                      bridge note into consideration of $500,000 for the common
                      stock.

              o       On the closing date,  the Company  received the remaining
                      balance of $400,000 in cash.

        Investors also purchased  320,000  additional shares of common stock at
        $.50 per share;  yielding an  additional  $160,000 of  financing to the
        Company.

        In connection with the Tritium acquisition, the Company issued warrants
        to an  acquisition  consultant  to  purchase  2,450,000  shares  of the
        Company's  common stock  exercisable at $.50 per share.  These warrants
        were issued on December 10, 1999, and vested on March 7, 2000, when all
        contractual  obligations  had been met.  The  warrants  are  subject to
        certain anti-dilution adjustments (see Note 7.).




                                                                           F-17
<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000


12.     BUSINESS ACQUISITION AND DISCONTINUED OPERATIONS (CONTINUED)

        In addition,  in connection with the Tritium  acquisition,  the Company
        contributed a warrant to purchase  1,262,275 shares of its common stock
        to the  capital of  StartFree  in order for  StartFree  to deliver  the
        warrant  to  AdSmart  Corporation  to  obtain  the  right to  Tritium's
        advertising  agreement with AdSmart.  As of March 7, 2000,  AdSmart was
        entitled to exercise  warrants for 500,400 shares of common stock.  The
        remainder will vest upon the occurrence of certain events. The warrants
        are exercisable at $.01 per share.  The warrants are subject to certain
        anti-dilution  adjustments.  The value of the advertising agreement was
        determined  by  independent   appraisal  to  approximate  $391,000  and
        represented a portion of the assets acquired. Amortization was provided
        using the straight-line method over the remaining  advertising contract
        period of 22.5  months.  For 2000,  amortization  charged  to loss from
        discontinued  operations was approximately  $117,000.  In October 2000,
        Engage,  Inc., a successor via a merger to AdSmart  Corp.,  exercised a
        warrant in part to  purchase  500,400  shares of the  Company's  common
        stock, which left a warrant for the remaining 761,875 shares.

        As a part of the Tritium  acquisition,  the Company has until  December
        2002  to  increase  the  authorized   common  and  preferred  stock  to
        75,000,000 and 5,000,000 shares, respectively.  In addition, as part of
        the Tritium acquisition,  200 shares of Series B Convertible  Preferred
        Stock, $.001 par value per share were issued to the Company's Chairman.
        The Series B Preferred  Stock has voting  control rights until March 7,
        2005.  The value of the Series B Preferred  stock of $22 was determined
        by independent appraisal.

        In December 2000, the Company discontinued the operations of StartFree.
        In 2000, StartFree earned revenues  approximating  $46,000 and incurred
        operating expenses approximating $2,306,000. Assets that were abandoned
        were property and equipment approximating $39,000,  prepaid advertising
        approximating  $274,000  and  goodwill  approximating  $2,664,000.  The
        Company has recorded shutdown costs approximating  $63,000,  which have
        been included in loss on disposal of  subsidiary.  Included in accounts
        payable and accrued  expenses at December 31, 2001, is $916,000 related
        to the remaining  obligations  and the shutdown costs of StartFree (see
        Note 14.).













                                                                           F-18
<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000

13.     NEW ACCOUNTING PRONOUNCEMENTS

        Standards Implemented

          In July 2001, the FASB issued SFAS No. 141, "Business  Combinations,"
          and SFAS No. 142,  "Goodwill and Other  Intangible  Assets." SFAS No.
          141  requires  the  use of the  purchase  method  of  accounting  for
          business  combinations  and  prohibits  the  use  of the  pooling  of
          interests  method.  Under the  previous  rules,  the company used the
          purchase  method  of  accounting.  SFAS  No.  141  also  refines  the
          definition  of  intangible  assets  acquired  in a purchase  business
          combination.  As a result,  the purchase price  allocation of current
          business combinations may be different than the allocation that would
          have  resulted  under the old rules.  Business  combinations  must be
          accounted for using SFAS No. 141 effective July 1, 2001.

          SFAS No. 142 eliminates the amortization of goodwill, requires annual
          impairment   testing  of  goodwill  and  introduces  the  concept  of
          indefinite life intangible  assets.  The company adopted SFAS No. 142
          on January 1, 2002. The new rules also prohibit the  amortization  of
          goodwill associated with business combinations that closed after June
          30,  2001.  The  adoption  of SFAS  No.  141  and 142 did not  have a
          material effect on the Company's Financial Statements.

        New Standard to be Implemented

          In October 2001,  the FASB issued SFAS No. 144,  "Accounting  for the
          Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 addresses
          significant  issues relating to the  implementation  of SFAS No. 121,
          "Accounting   for  the  Impairment  of  Long-Lived   Assets  and  for
          Long-Lived   Assets  to  Be  Disposed  Of,"  and  develops  a  single
          accounting model, based on the framework  established in SFAS No. 121
          for long-lived assets to be disposed of by sale,  whether such assets
          are or are not deemed to be a  business.  SFAS No. 144 also  modifies
          the accounting and disclosure rules for discontinued operations. SFAS
          144 is effective for fiscal years  beginning after December 15, 2001.
          The Company is currently  evaluating  the  possible  effect on future
          Financial Statements.

14.      SUBSEQUENT EVENTS

         On  January  4,  2002,  by   instrument   of  transfer,   Technologies
         transferred the convertible note (see Note 6.) to Europa International
         Inc.  ("Europa"),  also a related  party.  Europa agreed not to demand
         payment  on  the  note  for a  period  of six  months;  so  that  upon
         conversion, Europa will be issued the number of shares of common stock
         that shall constitute,  after giving full effect to such issuance, 80%
         of  the  outstanding  shares  of  common  stock  of the  Company  on a
         fully-diluted basis.


                                                                           F-19
<Page>


                              THINKING TOOLS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     Years Ended December 31, 2001 and 2000




14.     SUBSEQUENT EVENTS (continued)

        In January  2002,  Technologies  entered  into an amendment to a voting
        agreement  with a  shareholder  of the  Company's  Series A Convertible
        Preferred Stock, whereby Technologies agreed to convert their note (see
        Note 6), and, upon  conversion of the note,  cancel any and all pledges
        by the  aforementioned  shareholder to secure the note. The shareholder
        agreed  to  vote  for  the   following   amendments  to  the  Company's
        Certificate of Incorporation: (i) to eliminate the right of the holders
        of Preferred stock to receive  dividend  payments and/or (ii) to reduce
        the number of shares of common stock into which each share of Preferred
        Stock  is  convertible  from 10 (ten)  to 2.5  (two-and-one-half)  or a
        number greater than 2.5.  Pursuant to the agreement,  Technologies also
        agreed to vote in favor of increasing the  authorized  shares of common
        stock of the  Company  to a level that  would be  sufficient  to permit
        exercise of outstanding  stock options,  conversion of debt into common
        shares and the conversion of outstanding shares of Preferred Stock, and
        to vote in favor of the amendments described above.

        Effective March 1, 2002,  StartFree was dissolved due to the revocation
        of its charter by the State of Delaware, at which time it was abandoned
        by the Company.  In December  2000,  the Company had  discontinued  the
        operations  of  StartFree,  and, in February  2001,  creditors had been
        notified that  StartFree  had no available  assets with which to settle
        their  obligations.  Pursuant to APB Opinion No. 30, the resultant gain
        related to the  abandonment of StartFree was not  recognized  until the
        date of dissolution and abandonment by the Company in March 2002.

        Pursuant to a letter of intent dated November 12, 2003, the Company has
        agreed  with  GVI  Security,  Inc.  ("GVI")  to enter  into  definitive
        agreements providing for the merger of GVI with and into a newly formed
        wholly owned subsidiary of the Company.  A limited liability company of
        which Europa is a 50% member holds approximately 38% of the outstanding
        common stock of GVI.  Fred Knoll,  our  Chairman,  is the  principal of
        Knoll Capital Management, L.P., which manages Europa's investments. GVI
        is the exclusive  distributor of Samsung Electronics  security products
        in North America, and distributes video surveillance and other security
        products to wholesale distributors and consumers.  The letter of intent
        provides that in such merger,  the  stockholders of GVI would be issued
        shares of a new class of our preferred stock that upon conversion would
        constitute  95%  of  our  outstanding  shares  of  Common  Stock  on  a
        fully-diluted  basis,  resulting in substantial dilution to our current
        stockholders.   The  definitive   agreements  would  contain  customary
        representations,  warranties  and closing  conditions.  There can be no
        assurance that the merger with GVI will be consummated.


                                                                           F-20





<PAGE>


                                   SIGNATURES
      In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                          THINKING TOOLS, INC.
Dated:  February 12, 2004
                                          By: Moshe Zarmi
                                              -------------------------
                                          Name:  Moshe Zarmi
                                          Title: President and Chief
                                                 Executive Officer


      In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of Company in the
capacities and on the dates indicated.


                                          -----------------------------
                                          Frederick Gluck, Director

                                          Dated: February 12, 2004

                                          /s/ Fred Knoll
                                          -----------------------------
                                          Fred Knoll, Director

                                          Dated:  February 12, 2004

                                          /s/ Moshe Zarmi
                                          -----------------------------
                                          Moshe Zarmi, Director

                                          Dated:  February 12, 2004