SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED JULY 31, 2002

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

                         COMMISSION FILE NUMBER 0-24283

                        VOICEFLASH NETWORKS INCORPORATED
                         D/B/A THE DATAFLASH CORPORATION
                 (Name of Small Business Issuer in Its Charter)

                 FLORIDA                                      65-0623427
     -------------------------------                     -------------------
       (State or Other Jurisdiction of                     (I.R.S. Employer
        Incorporation or Organization)                      Identification No.)

                         6401 CONGRESS AVENUE, SUITE 250
                            BOCA RATON, FLORIDA 33487
                            -------------------------
               (Address of Principal Executive Offices)(Zip Code)

                                 (561) 994-3223
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Securities Exchange Act of
1934:

         Title of Each Class           Name of Each Exchange on Which Registered
         -------------------           -----------------------------------------
                  None                                   None

Securities registered under Section 12(g) of the Securities Exchange Act of
1934:

                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                         COMMON STOCK PURCHASE WARRANTS
                    ----------------------------------------
                                (Title of Class)

Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, 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. []

State registrant's revenues for the year ended July 31, 2002 were $4,227,923.

State the aggregate market value of the voting stock held by non-affiliates of
the registrant on October 15, 2002 computed by reference to the closing bid
price of the VoiceFlash Networks Incorporated Common Stock as reported by OTCBB
on that date $5,662,253.

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the registrant's Common Stock, par value
$.001 per share (the "Common Stock"), as of October 20, 2002, was 18,874,178.

Transitional Small Business Disclosure Format (check one):    Yes [ ] No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
None.



<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

INTRODUCTION


          VoiceFlash Networks, Inc. (D/B/A "The DataFlash Corporation" or the
"Company") was incorporated in Florida on October 11, 1995 and was originally
organized to design, develop, commercialize and market proprietary products and
services in speech recognition technologies. Subsequently, the Company began to
develop proprietary products and services in wireless area networks
technologies. The Company's products and services generated limited sales in
both speech recognition and wireless technologies and the Company was unable to
successfully create a substantial market. In an effort to establish distribution
capacity for its technologies, the Company sought a business combination with
Bristol Retail Solutions, Inc., a major distributor of point-of-sale equipment.

         In November 2000, the Company announced the execution of a merger
agreement with Bristol Retail Solutions, Inc. and, as of June 29, 2001, Bristol
Retail Solutions merged into a wholly owned subsidiary of the Company.

         The Company had incurred significant losses from inception and
continued to incur substantial losses. On July 7, 2001, the Company elected to
discontinue certain of its business operations. See "Discontinued Operations"
below, for more information about the Company's former businesses.

         In fiscal 2002, the Company's primary business focus shifted from a
technology development company to a financial service company. On October 19,
2001, the Company acquired United Capturdyne Technologies, Inc. ("UCT"), a
supplier of advance transaction processing and account management software for
enterprise retail and service oriented commercial clients. Under the terms of
the agreement, the Company acquired all of the issued and outstanding shares of
UCT in exchange for 1.2 million restricted shares of the Company's common stock.
On December 10, 2001 the Company incorporated, Value Stream Systems, Inc.
("VSS") to market, sell and service pre-paid (stored value) and debit card
products to consumer markets.

STRATEGY


         Since October 2001, the Company, through its subsidiaries, develops and
markets proprietary transaction processing products and services to traditional
retail and e-commerce merchants in North America. The Company offers a variety
of e-commerce technologies to its merchant clients, such as Automated Clearing
House (ACH), check processing and customized electronic payment software. The
Company plans to market pre-paid Mastercard(TM) and Visa(TM) card products to a
variety of clients, including company payroll programs, college students, people
with poor credit or with no access to a checking account. The Company plans to
be at the forefront of developing value added technological enhancements to
better service its merchant clients and stored value members.


PRINCIPAL PRODUCTS AND SERVICES

Advanced Transaction Processing and Customized Electronic Payment Software for
Commercial Businesses.

         Currently, the Company's primary source of revenue is service fees for
processing payments through the automated clearing house network (the "ACH
Network"). For the year ended July 31, 2002, approximately 93% of the Company's
revenues were generated from ACH transactions.

         The ACH Network provides for the inter-bank clearing of electronic
payments for participating depository financial institutions. The American
Clearing House Association, the United States Federal Reserve, the Electronic
Payments Network and Visa act as central clearing facilities ("ACH Operators")
through which participating depository financial institutions ("Financial
Institutions") transmit or receive ACH entries on behalf of their clients
("Originators"). The Company's subsidiary, UCT, has entered into arrangements
with a number of Financial Institutions pursuant to which UCT is able, on behalf
of an Originator, to submit and receive ACH entries directly to and from an ACH
Operator. UCT is commonly referred to as a Servicer.


<PAGE>

         Although the Originator's right to use the ACH Network is governed by a
contract between the Financial Institution and the Originator, the Company
offers its customers the ability to process ACH transactions without having to
deal directly with a Financial Institution on a day to day basis.

Electronic Payment Software Services


         The Company also provides customized electronic payment software and
proprietary transaction processing engines which provides merchants the ability
to accept a variety of electronic payments. To date, the marketing of customized
electronic payment software services has been limited. For the year ended July
31, 2002, only 1% of the Company's revenues were generated from software
services.


         The Company's customized electronic payment software products and
functionality of each product is as follows:

         CHECKMAX(TM). CHECKMAX(TM) is an automatic clearinghouse. The Company
is currently providing services to fulfillment centers and mail order companies.
The Company's technology facilitates all aspects of the collection and payment
process without a physical paper check ever being mailed. By processing check
orders electronically, the fulfillment center can fill orders faster, and the
immediate debiting of the check or savings account significantly reduces the
number of returns for reasons of non-sufficient funds or accounts closed.

         ACCOUNTMAX(TM). ACCOUNTMAX(TM) allows businesses to manage any type of
customer file. Property management companies and leasing companies can utilize
the Account Max software to manage their customer base, provide frequent
shopping programs, fleet cards, electronic gift certificates, effect payments
and facilitate collection activity where necessary.

         TRANSMAX(TM). TRANSMAX(TM) is a software switching program that allows
companies to accept credit card payment with a point of sale terminal and track
all credit card activity related to each customer account.

         INTERMAX(TM).  INTERMAX(TM)is a complete  Internet  billing  service.
This  program  provides the ability to accept any method of

payment for monthly service access to the Internet.

         SHARED ON-LINE RENTAL NETWORK.  This program allows  companies to use
car rental  companies,  airline and baggage  departments

to access the negative file of an individual.

Pre-Paid (Stored Value), Credit, Debit and Similar Card-Based Products and
Services Offered to Consumers and Commercial Markets.

         Leveraging the Company's back office operations, on December 10, 2001
the Company formed Value Stream Systems, Inc. to market, sell and service
pre-paid (stored value), debit, credit and other similar card products to
consumer and commercial markets (the "Card Business"). Revenues are generated
from initial card sales (competitive card sales range from $8 to $40 per card)
and on-going cardholder transaction and load fees.

         To date, the Company's marketing of card programs has been limited to
pre-paid (stored value) cards in test markets. For the year ended July 31, 2002,
only 5% of the Company's revenues were generated from the sale and services of
pre-paid (stored value) card products.


         The Company believes pre-paid (stored value) card products have a broad
appeal to consumers in many demographic groups. The Company plans to market
pre-paid (stored value) card-based products to a wide variety of commercial and
consumer markets, including:


o        Un-banked and credit impaired (consumers with poor credit or with no
         access to a checking account)
o        Company payroll programs
o        College students
o        Consumers with fixed disposable income
o        Person-to-person money transfers
o        Security conscious consumers
o        Internet shoppers
o        Retail gift programs
o        Travel oriented consumers
o        Reward and incentive programs

                                       2
<PAGE>

         The Company is working with a number of marketers and commercial
enterprises to launch several marketing programs primarily in the U.S. Markets
during fiscal 2003.


ACH TRANSACTION CUSTOMERS & MARKETING

         The Company provides ACH services to in excess of 80 entities none of
which accounts for more than 10% of the Company's annual revenues. The Company
believes that many of its customers view the ACH transaction services offered by
UCT as a relatively quick and efficient means of collecting payment for services
or products from geographically remote consumers, especially consumers with
limited access to credit.


         The Company's target audience includes:

o        Businesses that are not large enough to cost efficiently develop ACH
         processing expertise or relationships with Financial Institutions;
o        Businesses that are seeking to collect one or a limited number of ACH
         payments from a large number of clients; and
o        Businesses that are seeking to collect payments from clients with
         limited access to credit.

         The Company believes that substantially all of UCT's customers market
their products or services to consumers through telemarketing, the internet
and/or direct mailings.

         To date, most of UCT's customers have been acquired through referrals.
The Company has a sales manager to sell its products and services to enterprises
and independent third party sales organizations ("ISO's"). The Company intends
to hire additional sales and business development executives with established
relationships to generate ACH sales and market the Company's services and
products.

ACH BUSINESS SUPPLIERS


         With respect to the Company's ACH Business, the Company believes its
principal suppliers are various Financial Institutions that provide access to
the ACH Network (the "Financial Institution Suppliers"). As of October 10, 2002
the Company had established servicing relationships with three Financial
Institutions and was in the process of developing a fourth relationship.


         As required by the ACH Network rules, the Company has entered into
agreements with the Financial Institutions that prescribe, among other things:

         *    How ACH entries may be submitted to an ACH Operator;
         *    For whom ACH entries may be submitted; and
         *    The proper documentation of ACH transactions.

         The Company has developed a number of business practices to assist it
in identifying customers that have business practices that are consistent with
the Company's obligations to its Financial Institution suppliers, government and
NACHA regulations. To date the Company believes is has complied with all the
material terms of its Financial Institution Supply Agreements.

         The Company believes its experience and reputation in the ACH
transaction business has assisted it to develop and retain relationships with
Financial Institutions. The Company does not believe that the loss of any one
supply relationship would materially affect its business.

ACH BUSINESS PROPRIETARY RIGHTS

         The Company believes that UCT developed and has the exclusive
proprietary right to use the software applications it utilizes to prepare ACH
transfer instructions, interface with the ACH Network and otherwise provide ACH
transaction services. The Company has developed proprietary customer lists and
methods of doing business which it attempts to protect through a combination of
confidentiality and non-compete provisions which are contained in the various
employment agreements the Company has entered into. There can be no assurance
that such contractual provisions will prevent third parties or former employees
from obtaining or using information that the Company considers proprietary.

                                       3
<PAGE>

ACH TRANSACTION SERVICING COMPETITION

         The businesses and markets in which the Company operates is a highly
competitive industry.

         In the ACH transaction services business, the Company believes it faces
competition from Financial Institutions and other Servicers, including companies
such as Global E Telecom, ACH Direct and ACH Processing Co. In addition to these
relatively large competitors, the Company believes the ACH transaction services
business is relatively fragmented and, accordingly, the Company faces
competition from many relatively small Servicers. The Company believes certain
of the industry's small Servicers may be its most formidable competition for
target customers since they can more readily modify their marketing efforts and
operations to respond to perceived opportunities.

         The Company attempts to distinguish its services from the ACH transfer
services offered by Financial Institutions and other Servicers by striving to:

         *    Provide Servicing on more flexible financial terms than certain
              competitors; and
         *    Provide Servicing to small, often noninstitutional customers.

         Many of our competitors have substantially greater financial,
technical, personnel and other resources than the Company and have established
reputations as credit worthy institutions. Similarly, many of the Company's
competitors have superior means or rights to access or utilize the ACH Network.

NACHA REGULATION

         The ACH Network is governed by rules promulgated by the National
Automated Clearing House Association ("NACHA"). NACHA regulates, among other
things, who is able to utilize the ACH Network, the rights, privileges, duties
and obligations of an Originator and a Financial Institution participating in
the ACH Network, how ACH entries are submitted to ACH Operators, and the
documentation required from a consumer to initiate a debit from their bank
account. Although the Company and most other Servicers are not directly subject
to NACHA regulation, the Company's suppliers, and the Financial Institutions,
are required by NACHA to impose certain duties and obligations upon any third
party they grant the right to access the ACH Network. As a result, the Company
and other Servicers are indirectly subject to regulation by NACHA.

         The Company has developed practices and procedures to assist it to stay
abreast of NACHA regulations and changes in the ACH industry. In addition to
internal compliance efforts, the Company is an associate member of EastPay, a
not for profit association which provides training, education, and consulting
services with respect to ACH transactions.

         The Company believes NACHA regulations currently limit access to the
ACH Network by some of the Company's potential competitors, such as Servicers
without established relationships with Financial Institutions. However, the
Company also believes that changes in the NACHA regulations could have an
adverse or negative impact upon the Company's business model. For instance, if
NACHA promulgated rules that materially restricted the Company's right or
ability to submit ACH entries directly to ACH Operators, the Company's business
could be adversely affected.

GOVERNMENT REGULATION

         Various aspects of the Company's businesses and the business of the
Company's primary suppliers and customers are subject to federal and state
regulations. The Company's failure or the Company's suppliers' or customers'
failure to comply with any applicable laws and regulations could result in
restrictions on the Company's right or ability to provide products and services,
as well as the imposition of civil fines and/or criminal penalties.

         Many of the Company's customers utilize teleservices to market their
products and/or services. Teleservice sales practices are regulated at both the
federal and state level. The Telephone Consumer Protection Act, which was
enacted in 1991, authorized and directed the Federal Communications Commission
(the "FCC") to enact rules to regulate the telemarketing industry. In December
of 1992, the FCC enacted rules, which place restrictions on the methods and
timing of telemarketing sales calls.

                                       4
<PAGE>

         The Federal Telemarketing Consumer Fraud and Abuse Act of 1994 (the
"TCFAA") authorizes the Federal Trade Commission (the "FTC") to issue
regulations designed to prevent deceptive and abusive telemarketing acts and
practices. The FTC issued its Telemarketing Sales Rule (the "Sales Rule"), which
went into effect in January 1996. This Sales Rule applies to most direct
teleservice telemarketing calls and certain operator teleservices telemarketing
calls and generally prohibits a variety of deceptive, unfair or abusive
practices in telemarketing sales. In addition to federal legislation and
regulation, there are numerous state statutes and regulations governing
telemarketing activities. The Company believes that it could be adversely
impacted if any federal or state regulations were enacted that materially
restricted or impaired the Company's customers' ability to market or accept
orders for products or services telephonically.

         The debt collection services and activities of the Company and the
Company's customers are subject to the Fair Debt Collection Practices Act and
state collections statutes and licensing requirements.

         Although the Company does not believe it is directly subject to the
provisions of Regulation E promulgated by the Federal Reserve board, the Company
believes that the Financial Institutions that provide it access to the ACH
Network are subject to Regulation E. Regulation E governs electronic funds
transfers made by regulated financial institutions and providers of access
devices and electronic fund transfer systems. Regualtion E requires written
receipt for transactions, monthly statements, pre-transaction disclosures and
error resolution procedures. For instance, Regulation E imposes significant
obligations on Financial Institutions to, among other things, reimburse
consumers if their bank accounts have been improperly debited and, in certain
events, pay certain fines and expenses. The Company believes that many of the
provisions of its agreements with Financial Institutions are designed to impose
obligations upon the Company to act in conformity with Regulation E and
indemnify and hold the financial institutions harmless if the Company's
activities cause the Financial Institutions to violate Regulation E.

         As a money transmitter, the Company is subject to the Patriot Act which
requires the Company to, among other things, maintain an anti-money laundering
program which includes:

|X|      The development of internal policies, procedures and controls;
|X|      The designation of a compliance officer;
|X|      An ongoing employee training program; and
|X|      An independent audit function to test programs.

The Patriot Act also requires the Company to implement certain procedures to
verify the identity of its customers, maintain certain records of the person's
identity and determine if any prospective customer is a known terrorist or
terrorist organization. For willful violations, the Patriot Act provides for
civil and criminal penalties of up to $250,000 or more and/or up to five years
imprisonment.

         Financial institutions are now subject to the requirements of the
federal financial modernization law known as the Gramm-Leach-Bliley Act.
Regulations implementing the privacy provisions of this law went into effect in
July 2001. The Act imposes significant requirements on any entity engaged in the
business of providing financial services, including entities that provide
services to financial institutions. The privacy provisions of the Act impose on
each entity subject to the new requirements an affirmative obligation to develop
and implement policies to protect the security and confidentiality of consumers'
nonpublic personal information and to disclose those policies to consumers
before a customer relationship is established and annually thereafter. The
banking regulators and the Federal Trade Commission have issued regulations
which implement the privacy portions of the Act. We believe that these
regulations permit our customers and Financial Institutions to provide debt data
and other nonpublic personal information to us.

                                       5
<PAGE>

CARD BUSINESS

         The Company intends to pursue its plans to market, sell and service
pre-paid (stored value), debit, credit and other similar card products (the
"Card Business").

         Stored Value Cards

         Based upon its test market experience to date, the Company plans to
enter into long term arrangements with one or more suppliers of pre-paid cards
("Stored Value Cards"), such as one of the many banks authorized to supply
Stored Value Cards under the Visa or MasterCard tradename. The Company intends
to market and service the Stored Value Cards through marketing and servicing
arrangements it has secured with a number of third parties. The Company intends
to individually provide customer service with respect to the Stored Value Cards.
The Company intends to utilize its ACH transaction processing expertise and
proprietary software to collect the proceeds of card sales and to track and
regulate card usage.

         Based upon its experiences to date, the Company believes it can enter
into Stored Value Card issuing, servicing and marketing arrangements which
provide for the provision of certain services and the incurrence of expenses
primarily on the basis of the number of cards being serviced. The Company is
currently in the process of negotiating with third parties a long term issuing
arrangement and a number of additional servicing and marketing arrangements.

         The Company believes its existing software systems are capable of
coordinating the services of Stored Value Card suppliers, marketers and
servicers on a test market basis and anticipates further developing its software
systems as the business expands.

         The Company believes its existing employees and its contracts for
marketing organizations and service providers are capable of handling the
administration, marketing and customer service of Stored Value Cards for the
foreseeable future. In addition, the Company's existing employees are capable of
processing the ACH transactions associated with the sale and loading of Stored
Value Cards. The Company anticipates that it will need to hire additional
managers and customer service representatives if the Company's Stored Value Card
business is expanded as planned. Similarly, the Company anticipates hiring
additional marketing and sales personnel to assist it in securing additional
Stored Value Card marketing organizations.

         Although the Company hopes to structure its Stored Value Card as
described above, as perceived opportunities arise and/or disappear, the
Company's plans may change and it may seek alternate means of developing its
Stored Value Card business.

         Debit Cards

         Of the various services of the Card Business, the Company anticipates
that debit cards ("Debit Cards") will be the next service the Company will test
market. Debit Cards are, from the perspective of a user, in many ways the
functional equivalent of Stored Value Card. A user's ability to utilize a Debit
Card is conditioned upon the user's maintenance of a positive account balance at
the issuing bank.

         The Company intends to structure its Debit Card business in a manner
comparable to its Stored Value Card Business. The Company plans to enter into
long term arrangements with one or more issuers of Debit Cards, such as one of
the many federally or state chartered banks authorized to open accounts and
issue branded or un-branded debit cards. Simultaneously, the Company plans to
enter into marketing and servicing arrangements with a number of third parties
to market and service the Debit Cards.

         The Company intends to individually provide customer service with
respect to Debit Cards. The Company believes it is capable of providing all of
the back office services for the creation of a cardholder master file,
cardholder customer service, statementing, due diligence, risk management, fraud
minimization, card design, production and encoding, card issuance and
activation, and card and PIN mailings

         The Company intends to utilize its ACH transaction processing expertise
and proprietary software to collect the proceeds of Debit Card sales and to
track and regulate card usage.

         The Company is currently in the process of negotiating supply,
servicing and marketing arrangements with a number of service providers.

                                       6
<PAGE>

         Credit Cards & Other Similar Products

         The Company is actively exploring the credit card business and other
card based products. The Company anticipates that it will expend additional
personnel and cash resources determining which, if any, other card based
business it should enter into. If perceived opportunities arise, the Company may
devote substantial resources pursuing the opportunity.

CARD BUSINESS PROPRIETARY RIGHTS

         The Company has developed and believes it has the exclusive right to
use the proprietary software system used in its Card Business. The Company
considers its software and applications as proprietary and currently relies on a
combination of copyright, trade secret and trademark laws and license agreements
to protect its intellectual property rights. The Company also has entered and
will enter into license agreements with end-users of the products and
applications, and has required all employees to enter into confidentiality and
non-disclosure agreements. Despite these precautions, it may be possible for
unauthorized third parties to copy aspects of the Company's products or to
obtain and use information that the Company regards as proprietary.

COMPETITION IN THE CARD BUSINESS

         The competition in the Card Business includes Stored Value Systems, a
wholly owned subsidiary of Comdata, iCard Systems, and Super Cash Card. Many of
these companies have substantially greater financial, technical, personnel and
other resources than the Company, have established supply, servicing and
marketing arrangements or expertise, and have established reputations for
success in the development, licensing and sale of their products, especially the
larger organizations. Several of these competitors have the financial resources
necessary to enable them to withstand substantial price competition or downturns
in their markets.

GOVERNMENTAL REGULATION

          The Company believes it has maintained full compliance with all
necessary regulations regarding all phases of transaction processing and card
sales including but not limited to: The Federal Trade Commission Regulations,
The Fair Credit Reporting Act, The Patriot Act, Regulation E, the Uniform
Commercial Code, Telemarketing Regulations, and various Privacy Laws.

EMPLOYEES

         As of July 31, 2002, the Company and its subsidiaries have 15 full-time
employees, 2 part-time employees and 2 consultants. Of such full-time employees,
5 persons are in management, 8 persons are in operations, 1 person is in sales
and marketing and 1 person is in administration. No employee of the Company or
its subsidiaries is covered by a collective bargaining agreement or is
represented by a labor union. The Company considers its employee relations to be
good.

DISCONTINUED OPERATIONS

         In November 2000, the Company announced the execution of a Merger
Agreement between a wholly owned subsidiary of the Company and Bristol Retail
Solutions, a distributor of point of sale equipment. The merger was effectuated
as of June 29, 2001.

         In connection with the merger, the Company changed its name from
Registry Magic to Voice Flash Networks, Incorporated. Pursuant to the terms of
the merger, Bristol Retail Solutions, Inc. was merged into a wholly owned
subsidiary of the Company and the Company: (i) issued 5,493,736 shares of common
stock to the holders of the Bristol common stock (.65 shares of Common Stock for
each share of Bristol Common Stock); (ii) issued 500,000 shares of the Company's
Series A Convertible Preferred Stock at $2.00 per share to the holders of the
Bristol Convertible Series C Preferred Stock; and (iii) the Company assumed
Bristol's obligation to issue 3,434,896 shares of common stock upon the exercise
of options and warrants (the right to purchase .65 shares of Company common
stock for each right to purchase a share of Bristol common stock). In connection
with, and in anticipation of the merger, the Company advanced Bristol
approximately $1,918,655.

                                       7
<PAGE>

         On July 7, 2001, the Company's subsidiary, Bristol Retail Solutions,
and its four operating subsidiaries filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code and have since filed
voluntary petitions for liquidation under Chapter 7 of the United States
Bankruptcy Code. See "Item 3. Legal Proceedings" for more information regarding
the bankruptcy proceedings of Bristol Retail Solutions and its subsidiaries.

ITEM 2.  DESCRIPTION OF PROPERTIES

         The Company conducts its operations out of two offices located in South
Florida.

         The Company leases 3,882 square feet of office space in Boca Raton,
Florida. Under this lease, the Company pays a monthly base rental of $5,742,
plus a proportionate share of taxes and operating expenses. This lease expires
in October 2002. In anticipation of the expiration of this lease, on September
25, 2002 the Company has entered into a new lease for 3,345 square feet of
office space located in Deerfield Beach, Florida for thirty-seven months
(commencing in November 2002) with a monthly base rental of $4,460, plus a
proportionate share of taxes, operating expenses and annual base rent
escalations.

         The Company also leases 2,150 square feet of office space in Ft.
Lauderdale, Florida for its operations/transaction processing center. The lease
term is 36 months and commenced on March 1, 2001. The monthly base rental of
this facility is $2,831, plus the proportionate share of taxes and operating
expenses.

ITEM 3.  LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

         The Company is a party to the following legal proceeding:

         On July 7, 2001, the Company's subsidiary, Bristol Retail Solutions,
and its four operating subsidiaries filed voluntary petitions for reorganization
under chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Central District of California (Los Angeles), Case Nos.
LA01-30857-VZ, LA01-30872-VZ, LA01-30885-VZ, LA01-30893-VZ and LA01-30895-VZ. On
August 27, 2001, Bristol's representative appeared before the U.S. Bankruptcy
Court and advised the court that Bristol was unable to obtain debtor in
possession of financing. Accordingly, Coast Business Credit, a division of
Southern Pacific Bank began a Chapter 11 liquidation of the assets of Bristol.
Coast Business Credit has completed the disposal of its collateral. Since there
were no remaining assets, in April 2002 the Chapter 11 case had been dismissed.
In September, 2002, the Company initiated a voluntarily Chapter 7 Bankruptcy for
Bristol and its subsidiaries (Case Nos. LA02-35875-VZ, LA02-35885-VZ,
LA02-35865-VZ, LA02-35873-VZ, LA02-35914-VZ).

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

         The Company did not submit any matters to its shareholders during the
fourth quarter of the fiscal year ended July 31, 2002.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         From inception through May 2002 the Company's Common Stock was traded
on the NASDAQ SmallCap Market under the symbol "VFNX." From May 2002 to date,
the Company's Common Stock was traded on the OTC Bulletin Board Market. The
following sets forth the range of high and low closing bid prices for the Common
Stock as reported on NASDAQ and OTCBB during each of the periods presented
during the respective fiscal years ended July 31. The quotations set forth below
are inter-dealer quotations, without retail mark-ups, markdowns or commissions,
and may not necessarily represent actual transactions.

                                       8
<PAGE>

        PERIOD                    HIGH                      LOW
        ------                    ----                      ---

             2001
        -------------
        First Quarter             $1.90                    $0.56
        Second Quarter            $2.47                    $0.62
        Third Quarter             $3.56                    $1.37
        Fourth Quarter            $2.28                    $0.71

             2002
        -------------
        First Quarter             $0.90                    $0.20
        Second Quarter            $0.53                    $0.29
        Third Quarter             $0.66                    $0.25
        Fourth Quarter            $0.51                    $0.24

         As of July 31, 2002 there were 256 record holders of the Company's
Common Stock. The Company believes that there are substantially in excess of 300
beneficial and round lot holders of the Company's Common Stock.

         The Company also has outstanding 718,750 Redeemable Class A warrants,
which were issued by the Company in connection with its acquisition of Bristol
Retail Solutions. There is presently no trading market for these warrants.


         The Company has not paid any cash dividends on its Common Stock and
currently does not expect to declare or pay cash dividends in the foreseeable
future. The Company presently intends to retain any earnings that may be
generated to provide funds for the operation of business.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

                              Number of
                            securities to     Weighted-     Number of securities
                            be issued upon     average     remaining available
                             exercise of    exercise price   for issuance under
                             outstanding    of outstanding   equity compensation
                              options          options           plans

Equity compensation plans
approved by security
holders...............     3,610,663(1)                           1,183,333
                         -----------------  ----------------  ------------------

Equity compensation plans
not approved by security
holders...............         0                                       0
                         -----------------  ----------------  ------------------

(1)      All of the options included in such figure were issued pursuant to the
         Company's 1999 Stock Option Plan.

Related Stockholder Matters

         As of January 1, 2002 and March 7, 2002, the Company agreed to issue
options to purchase common stock to the Company's two outside directors. Each
director received warrants to purchase 100,000 shares of common stock at an
exercise price of $.26 a share, which options vest over one year and are
exercisable for up to three years.

         In February 2002, the Company issued certain note holders warrants (the
"Warrants") to purchase 90,000 shares of common stock and, in June 2002, the
Company issued the note holders some additional warrants (the "Additional
Warrants") to purchase 175,000 shares of common stock. The Additional Warrants
were issued in consideration of a six month maturity date extension on a
$175,000 promissory note. The Warrants have an exercise price of $.45 per share
and are exercisable until February 2005. The Additional Warrants have an
exercise price of $.35 per share and are exercisable until July 2004.

         In May 2002, the Company entered into a public relations contract
pursuant to which the Company received certain services and, in exchange, the
Company issued the service provider 40,000 shares of common stock and warrants
to purchase 20,000 shares of common stock at an exercise price of $.25 per
share. The warrants are exercisable from June 2002 to June 2004.

                                       9
<PAGE>

         In July 2002, the Company entered into an investor relations and
financial services consulting contract with a former director of the Company. In
consideration of the services to be provided to the Company, and the service
provider's agreement to surrender options to purchase 125,000 shares of common
stock at prices ranging from $1.375 to $3.75, the Company issued the service
provider options to purchase 100,000 shares of common stock at an exercise price
of $.35 per share. The options are exercisable from July 2002 to July 2004.

         The Company believes that all securities issued in the transactions
described above were issued under an exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

          The following discussion and analysis should be read in conjunction
with the financial statements of the Company and the notes thereto appearing
elsewhere herein. Comparisons of the Company's results of operations for the
year ended July 2002 with the results of operations for the year ended July 31,
2001 below may not be meaningful and may be misleading due to the Company's
change in business during fiscal 2002 and the October 2001 acquisition of United
Capturdyne Technologies, Inc. ("UCT").

RESULTS OF OPERATIONS

         In October 2001, the Company shifted its business from a technology
development company to a financial service-fee based company. In October 2001,
the Company acquired all of the issued and outstanding shares of United
Capturdyne Technologies, Inc. ("UCT"). UCT is a 12 year old financial service
provider engaged in supplying advanced transaction processing and account
management software for enterprise retail and service oriented commercial
clients.

         From inception (October 1995) to October 2001, the Company was unable
to build a substantial market for its speech recognition and wireless
technologies products and services. Prior to October, 2001, the Company
generated minimal revenue and incurred significant losses.

         For the year ended July 31, 2002, revenues were $4,227,923 as compared
to $178,572 for the year ended July 31, 2001, an increase of $4,049,351. The
increase in revenues was a result of the change in business, the acquisition of
UCT in October 2001 and the growth of UCT's business. UCT generated $4,023,061
of revenues in the ten month period ended July 31, 2002 compared to $1,010,255
of revenues for the ten month period ended July 31, 2001.

         For the quarter ended July 31, 2002, revenues were $1,625,044, 26%
higher than revenues for the quarter ended April 30, 2002. Based upon the
Company's experience to date, the Company anticipates that the revenues in the
first fiscal quarter of 2003 will exceed the revenues generated in the fourth
fiscal quarter of 2002.

         All of the Company's revenues during fiscal 2002 were generated from
financial services and were generated in the last ten months of the year.
Specifically, during fiscal 2002, 93% of the Company's revenues were generated
from automatic clearing house ("ACH") transactions, 5% were generated from the
sale of card based products and 2% were generated from software services. In
comparison, the Company's revenues for fiscal 2001 were solely generated from
the sale of speech recognition and wireless technologies products and services.

         For the year ended July 31, 2002, operating costs were $1,229,780 or
29% of revenues as compared to $611,759 or 343% of revenues for the year ended
July 31, 2001. The change in operating costs is due to the Company's change in
business combined with a cost reduction program which included significant staff
and administrative expense reductions at the beginning of the 2002 fiscal year.
The Company believes that the operating costs as a percentage of revenues as it
relates to the transaction processing business will remain approximately the
same for the foreseeable future.

         For the year ended July 31, 2002, general and administrative expenses
were $1,881,217 compared to $3,078,345 for the year ended July 31, 2001, a
decrease of $1,197,128 or (39%). The decrease in general and administrative
expense was a result of a cost reduction program which included significant
staff and administrative expense reductions at the beginning of the 2002 fiscal
year. The Company believes that the level of general and administrative expenses
relative to revenue should remain approximately the same for the foreseeable
future.

                                       10
<PAGE>

         For the years ended July 31, 2002 and July 31, 2001, sales and
marketing expenses were $361,266 and $128,198, respectively. The increase of
$233,068 relates to the increase in the marketing efforts associated with the
ACH business and Card Business. The Company believes that the absolute and
relative level of sales and marketing expenses will increase significantly if,
as planned, the Company builds its staff, hires experienced business development
executives, develops independent sales organizations, forms strategic marketing
partnerships to sell and distribute card based products, and develop customized
software and financial services.

         For the year ended July 31, 2002, depreciation expense was $92,106
compared to $128,418 for the year ended July 31, 2001, a decrease of $36,312.
The decrease is primarily attributable to the full depreciation of equipment
during the year. In fiscal 2002, the Company also recognized an $18,721 loss on
the disposal of equipment.

         For the year ended July 31, 2002, interest expense, net was $91,589
compared to $28,373 for the year ended July 31, 2002, an increase of $63,216. In
fiscal 2002, the Company also recognized a $75,000 loss on the repurchase of
Convertible Notes.

         For the year ended July 31, 2002, income tax benefit was $156,000
compared to 0 for the year ended July 31, 2001. The income tax benefit
recognized in fiscal 2002 primarily relates to the partial recognition of the
Company's Net Operating Loss carryforward. At July 31, 2002, the Company had a
deferred tax asset of $5,038,054 which may not be fully realized and accordingly
a $4,870,054 valuation allowance has been provided.

         In fiscal 2001 the Company's wholly-owned subsidiary, Bristol Retail
Solutions, Inc. and its subsidiaries filed for bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code. As of July 31, 2001, the
Company was unable to adopt a plan of reorganization and has since adopted a
plan to discontinue the operations of Bristol. As a result, the Company
recognized a $13,950,120 loss from discontinued operations. This loss was
comprised of a $11,958,167 write off of Goodwill, a $1,918,655 write-off of
advances to Bristol by the Company, and a $73,298 operating losses by Bristol
since the acquisition. There where no losses incurred from Bristol during fiscal
2002.

         For the year ended July 31, 2002, the Company generated $.03 of net
income per share and, for the year ended July 31, 2001, the Company generated a
loss of $2.63 per share. For the quarter ended July 31, 2002, the Company
reported net income of $380,253 or $.02 per share.

         The Company's weighted average number of shares outstanding increased
by approximately 10,000,000 share primarily as a result of shares issued in
connection with the major business acquisitions, the satisfaction of debt and
the compensation of employees and consultants.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's liquidity and capital resources have improved
significantly in fiscal 2002. As of July 31, 2002, the Company had $2,277,697 in
cash and cash equivalents as compared to $12,171 as of July 31, 2001.
Shareholder's equity improved from a deficit of $1,115,041 as of July 31, 2001
to a positive balance of $775,162 as of July 31, 2002. The positive increase in
Shareholder's equity is primarily the result of positive net income, the sale of
common stock and the conversion of debt to equity. Working Capital (current
assets less current liabilities) also improved from ($321,640) to ($36,531).

         For the year ended July 31, 2002, net cash used in operating activities
was $524,402 compared to net cash used in operating activities of $3,836,065 for
the year ended July 31, 2001, a decrease of $3,311,663. The decrease in net cash
used by operating activities was attributable to a $1,238,612 decrease in net
cash used in continuing operations combined with a $2,073,051 decrease in cash
used in discontinued operations.

          The decrease in net cash used in operating activities was primarily
related to the $4,430,765 improvement in net income from continuing operations
(the difference between $634,244 of income from continuing operations for the
year ended July 31, 2002 and a $3,796,521 loss from continuing operations for
the year ended July 31, 2001).

                                       11
<PAGE>

         For the year ended July 31, 2002, net cash provided by investing
activities was $1,802,045 compared to net cash used in investing activities of
$63,174 for the year ended July 31, 2001, an increase of $1,865,219. The
increase was due to the cash acquired in connection with the United Capturdyne
Technologies, Inc. acquisition. However, a substantial portion of this cash was
held as client reserve funds payable, which serve as security for balances owed
or incurred. The Company holds such cash in local bank accounts until utilized
or released from reserve. As of July 31, 2002, the Company held $1,369,460 in
cash as client reserve funds payable.

          For the year ended July 31, 2002, net cash provided by financing
activities was $987,883 compared to net cash provided by financing activities of
$2,034,743 for the year ended July 31, 2001, a decrease of $1,046,860. The
decrease is in net cash provided by financing activities was primarily due to a
$1,430,382 decrease in the sale of stock which was partially offset by net
proceeds of $117,500, $220,000 and $132,000 from convertible notes, a bank line
of credit and promissory notes, respectively. The Company has explored and
anticipates continuing to explore credit facilities and debt instruments that
will provide the Company with longer term or more cost efficient capital.

         Although for the year ended July 31, 2002, the Company used $524,402 in
operating activities, for the three months ended July 31, 2002 the Company
generated $774,334 of cash in operations.

         The Company believes that if the Company continues to generate cash
from operations as it did in the three months ended July 31, 2002, the cash
generated from operations will provide sufficient working capital for the
foreseeable future to retire its debts on their scheduled maturity dates, to
fund the operation and modest expansion of the Company's ACH transaction
business and fund the operation of the Company's other businesses at prevailing
levels.

         However, if the Company materially expands its electronic payments
software service business or Card Business, the Company will have significant
capital requirements due to the substantial costs associated with product
development and refinement, marketing, sales personnel, management, recruitment
of skilled personnel, the negotiation and preparation of supply, servicing and
marketing arrangements, the acquisition of additional computer hardware and the
development of software.

         Aside from the Company's $300,000 revolving line of credit which had
limited availability as of the date of this report, the Company has no current
arrangements with respect to, or potential sources of, additional financing and
does not anticipate that existing shareholders will satisfy any portion of the
Company's future financing requirements. If the Company is unable to obtain
additional financing when needed, this would have a material adverse effect on
the Company's business, including the curtailment of product and service
development, marketing and expansion activities.

CRITICAL ACCOUNTING POLICIES

         We have identified the policies outlined below as critical to our
business operations and an understanding of our results of operations. The
listing is not intended to be a comprehensive list of all of our accounting
policies. In many cases, the accounting treatment of a particular transaction is
specifically dictated by accounting principles generally accepted in the United
States, with no need for management's judgment in their application. The impact
and any associated risks related to these policies on our business operations is
discussed throughout Management's Discussion and Analysis of Financial Condition
and Results of Operations where such policies affect our reported and expected
financial results. For a detailed discussion on the application of these and
other accounting policies, see the Notes to the Consolidated Financial
Statements. Note that our preparation of the financial statements requires us to
make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of our
financial statements, and the reported amounts of revenue and expenses during
the reporting period. There can be no assurance that actual results will not
differ from those estimates.

                                       12
<PAGE>

         Revenue Recognition

         Revenues from ACH transactions, stored value and debit card products
and other transaction processing fees are recognized when provided. In fiscal
2001, revenues from the sale of software products were recognized at the time of
sale and shipment of the product and revenues from product development was
recognized when the development was complete.

         Capitalized Software

         The Company capitalizes the qualifying costs of developing its software
products. Capitalization of costs requires that technological feasibility have
been established. Development costs incurred prior to the establishment of
technological feasibility are expensed as incurred. When the software is fully
documented and available for unrestricted sale or license, capitalization of
development costs ceases, and amortization commences and is computed on a
product-by-product basis, based on either a straight-line basis over the
economic life of the product or the ratio of current gross revenues to the total
current and anticipated future gross revenues, whichever is greater. The
establishment of technological feasibility and the ongoing assessment of
recoverability of capitalized software development costs require considerable
judgment by management with respect to certain external factors, including, but
not limited to, technological feasibility, anticipated future gross revenues,
estimated economic life and changes in software and hardware technologies.

         Realization of capitalized software development costs is subject to the
Company's ability to market its software product in the future and generate cash
flows sufficient to support future operations. Capitalized software development
costs totaled $ 421,696 during the years ended July 31, 2002. Amortization of
capitalized software development costs totaled $ 14,964 during the years ended
July 31, 2002, and is included in operating expenses in the accompanying
consolidated income statements.

         Accounts Receivable and Reserve Funds Payable

         Accounts Receivable consist of funds advanced to clients. The Company
has the right to establish reserve holdback to secure against the high risk and
fraud involved in accepting telephone order and mail order one time processing
items. The Company's contracts with commercial customers delineate the reserve
percentages and period of time over which these holdbacks are to be made.

         The Company reviews each client's activity, including charge backs on
an ongoing basis and determines if the customer reserves are adequate. In the
event that the specific client reserves are not deemed adequate, the Company
establishes additional reserves. The Company's contract provides that a certain
percentage of each customers reserve is retained by the Company and may be used
in a general reserve.

         Any adjustments to the general reserve are recorded as an adjustment to
or from income in the period it is determined. Any allowances for doubtful
accounts is included in the general reserve. The Company has established that it
will retain any unpaid amounts into income when an account is deemed to be
abandoned.

         Goodwill

         Goodwill represents the aggregate excess of the cost of companies
acquired over the fair value of their net assets at dates of acquisition. In
accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," the
Company recognizes goodwill as an asset. In October 2001, the Company recognized
$1,020,025 in goodwill for the acquisition of United Capturdyne Technologies,
Inc. In accordance with the new standard, the Company is not permitted to
amortize the goodwill. In lieu of amortization, goodwill must be tested for
impairment using a fair-value-based approach. This impairment test requires the
determination of the fair value of the intangible asset. If the fair value of
the intangible asset is less than its carrying value, an impairment loss should
be recognized in an amount equal to the difference.

                                       13
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

         In March 2000, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 44 ("Interpretation 44"), "Accounting For Certain
Transactions Involving Stock Compensation". Interpretation 44 provides criteria
for the recognition of compensation expense in certain stock-based compensation
arrangements that are accounted for under Accounting Principles Board Opinion
No. 25, "Accounting For Stock Issued To Employees". Interpretation 44 is
effective July 1, 2000, with certain provisions effective retroactively to
December 15, 1998 and January 12, 2000. There was no effect of the retroactive
provisions of Interpretation 44 on the Company's financial statements.
Interpretation 44 is not expected to have a material effect on the Company's
financial statements.

         In July 2001, the FASB issued FASB No. 143, "Accounting for the Asset
Retirement Obligations." This statement addresses financial accounting and
reporting obligation associated with the retirement of tangible long-lived
assets and associated retirement costs. This statement applies to all entities.
It applies to legal obligations associated with the retirement of long-lived
assets that result from the acquisition, construction, development and (or) the
normal operation of a long-lived asset, except for certain obligations of
leases. This statement is effective for financial statements issued for fiscal
years beginning after June 15, 2002. The Company does not believe the adoption
of this standard will have a material impact on the Company's financial
statements.

         In July 2002, the FASB issued FASB No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Standard supercedes the
accounting guidance provided by Emerging Issues Task Force No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity" (including "Certain Costs Incurred in a Restructuring"). FASB No. 146
requires companies to recognize costs associated with exit activities when they
are incurred rather than at the date of a commitment to an exit or disposal
plan. FASB No. 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The Company is currently evaluating this
Standard.

RISK FACTORS

         This Annual Report Form 10-KSB contains "forward-looking statements"
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. All statements,
other than statements of historical facts, included in or incorporated by
reference into this Form 10-KSB, are forward-looking statements. In addition,
when used in this document, the words "anticipate," "estimate," "intends,"
"project" and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Although the Company believes that the expectations we include in
such forward-looking statements are reasonable, we cannot assure you that these
expectations will prove to be correct.

         Among the key risks that could cause actual results to differ
materially from expectations, estimates of costs, projected results or
anticipated results are as follows:

The Company has significant future capital requirements and needs additional
financing to pursue its business plans.

         The Company believes that if the Company continues to perform as it has
in the last three months, the cash generated from operations will provide
sufficient working capital for the foreseeable future to retire its debts on
their scheduled maturity dates, to fund the operation and modest expansion of
the Company's ACH transaction business and fund the operation of the Company's
other businesses at prevailing levels.

         However, if the Company materially expands its electronic payments
software service business or Stored Value business, the Company will have
significant capital requirements due to the substantial costs associated with
product development and refinement, marketing, recruitment of skilled personnel,
the negotiation and preparation of supply, servicing and marketing arrangements,
the acquisition of additional computer hardware and the development of software.

         The Company has no current arrangements with respect to, or potential
sources of, additional financing and does not anticipate that existing
shareholders will satisfy any portion of the Company's future financing
requirements. If the Company is unable to obtain additional financing when
needed, this would have a material adverse effect on the Company's business,
including the curtailment of product and service development, marketing and
expansion activities.

                                       14
<PAGE>

If the Company is unable to raise additional capital as needed, the future
growth of the Company's business and operations could be severely limited.

         The planned growth of the Company's business is dependent upon the
Company's ability to raise additional capital, possibly through the issuance of
long-term or short-term indebtedness or the issuance of equity securities in
private or public transactions.

         If the Company raises additional capital through the issuance of debt,
this will result in increased interest expense. If the Company raises additional
funds through the issuance of equity or convertible debt securities, the
percentage ownership of the Company held by existing shareholders will be
reduced and those shareholders may experience significant dilution. In addition,
new securities may contain certain rights, preferences or privileges that are
senior to those of the Company's common stock. There can be no assurance that
acceptable financing for future acquisitions or for the integration and
expansion of existing operations can be obtained on suitable terms, if at all.

The Company's financial flexibility may be restricted by the Company's Series A
Preferred Stock.

         Until all of the Company's Series A Preferred Stock is retired or
converted into common stock, the Company is restricted from certain financing
activities. More specifically, the Company is generally required to obtain the
consent of at least 50% of the holders of the Series A before: (i)issuing any
capital stock having priority over or ranking on parity with the Series A with
respect to the payment of dividends or as to the distribution of assets;
(ii)declaring or paying any dividend to or making a distribution on any capital
stock subordinate to the Series A; (iii) issue any common stock or common stock
purchase rights at prices below the then prevailing market price; or (iv)
dispose of substantially all of the assets of the Company or engage in a merger.
The Company faces the risk that if and when it seeks to raise additional
capital, it may be difficult, expensive time consuming and/or impossible to
secure the requisite consent of the holders of the Series A Preferred Stock.

The Company's revenue has historically been dependent on demand for ACH
transaction services.

         The Company has historically generated a substantial portion of its
revenue from a few products. For the year ended July 31, 2002, approximately 93%
of Company's revenues were generated from ACH transaction processing.

The Company has historically been relatively dependent on customers from a
limited number of industries

         The Company believes that substantially all of UCT's customers market
their products or services to consumers through telemarketing, the internet
and/or direct mailings. Accordingly, the Company believes that if any federal
regulations, state regulations, NACHA regulations, business practices,
technological changes or other factors negatively impacted the Company's
customers, the Company could also be adversely affected.

The Company's ACH Transaction business could be negatively impacted by
regulatory changes

         The Company's ACH transaction services business is highly dependent
upon continued, uninterrupted access to the ACH Network. The Company believes
that if any NACHA regulation, government regulation, or any other statute, rule
or judicial decision directly or indirectly restricted or impaired the Company's
ability to submit ACH entries to ACH Operators in the manner it currently
conducts business, the Company could be materially adversely affected. For
instance, the Company believes that the following types of potential regulatory
changes could have an adverse impact on the Company:

o        a NACHA regulation requiring Servicers to submit to NACHA regulation in
         order to access the ACH Network;
o        a NACHA regulation that required Financial Institutions to impose more
         stringent controls over the manner in which the Company submits ACH
         entries to ACH Operators;
o        a NACHA regulation prohibiting or restricting ACH transfers from
         depository accounts with poor credit histories;
o        a government or NACHA regulation that materially restricted or impaired
         the Company's customers' ability to market or accept orders for
         products or services telephonically; or
o        a government or NACHA regulation that imposed more stringent record
         keeping obligations upon the Company or its suppliers.

                                       15
<PAGE>

The Company's ACH Transaction business could be negatively impacted by a change
in the business practices of the Company's Financial Institution Suppliers

         As mentioned above, the Company's ACH transaction services business is
highly dependent upon continued, uninterrupted access to the ACH Network. Three
Financial Institutions currently provide the Company access to the ACH Network
and the Company is actively seeking and negotiating additional contracts. If the
three Financial Institutions that currently provide the Company access to the
ACH Network were to terminate their relationships with the Company and if the
Company were unable to secure the services of an additional Financial
Institutions on favorable terms, the Company could be adversely impacted. The
Company has developed a number of business practices to assist it identify
customers that have business practices that are consistent with the Company's
obligations to its Financial Institution Suppliers and government and NACHA
regulations. To date the Company believes is has complied with all the material
terms of its Financial Institution Supply Agreements; however, there can be no
assurance the Company will be able to continue to do so in the future.

         Even if the Company individually continues to maintain good relations
with its Financial Institution Suppliers, the Company could be negatively
impacted if the business practices of its customers, or even other Servicers,
are determined to be un-acceptable to the Company's Financial Institution
Suppliers or the Financial Institution industry. Alternatively, the Company's
Financial Institution Suppliers could cease to work with any Servicers that are
initiating ACH debits from bank accounts with exceptionally high insufficient
fund histories.

The Company's ACH transaction servicing business could be negatively impacted by
certain actions of its customers.

         The Company recognizes that its customers could violate various
statutes, laws, NACHA rules and/or contractual provisions that could materially,
adversely impact the Company. For instance, the Company believes its right to
initiate ACH entries on behalf of a customer is premised on, among other things,
the Company's customer lawfully securing the agreement of one of its clients to
purchase a product or service from the customer and maintaining certain records
of such agreement. The failure of a customer to establish a right to initiate an
ACH debit of a client account could potentially subject the Company to
investigations, lawsuits, the loss of its supplier relationships, the loss of
its associate status in NACHA, the loss of reserve funds, and/or criminal or
civil penalties. The Company has developed business practices to assist it
identify problematic prospective customers and systematically problematic ACH
transaction requests. Nonetheless, there can be no assurance that the Company
will be successful in avoiding problems created by its customers.

The Company faces a variety of risks associated with the Card Business

         The Company has a limited operating history in the Card Business.
Although the Company has hired and intends to continue to hire personnel with
experience in the Card Business, the Company is still building its Card Business
team. Similarly, although the Company has previously entered into short term
Stored Value Card Supply arrangements, the Company has not yet entered into any
definitive long term supply arrangements with respect to Stored Value Cards or
any other Card Business products. Even if the Company successfully negotiates
and enters into the contracts projected to be necessary to operate its Stored
Value Card business, there can be no assurance that the Company will be
successful and generate a profit or recoup its investment in the business. The
Company may become dependent upon one or more of its service providers and be
unable to locate alternate service providers. Although the Company does not
anticipate entering into a direct contractual relationship with Visa or
Mastercard, the Company believes that many of the policies and procedures of the
merchant banks that issue Stored Value Cards will be heavily influenced, if not
dictated, by Visa and Mastercard. Accordingly, if Visa or Mastercard established
policies or procedures that conflicted with the Company's then prevailing method
of conducting business, the Company could be adversely impacted. Similarly, if
the Company's employees, the Company's marketing contractors and/or servicing
contractors fail to perform in accordance with the policies and procedures of
the Company's Stored Value Card supplier(s), the Company's relationship with the
supplier(s)could be terminated.

                                       16
<PAGE>

The Company's Card Business is subject to a variety of regulatory risks

         The Card Business is heavily regulated in a variety of different ways.
The Company could be materially adversely impacted if new federal or state
statutes, regulations or policies were adopted that:

o        Made it more difficult or expensive to market Card Business products
         through telemarketing services;
o        Imposed more stringent restrictions on the fees or expenses the
         Company, its suppliers, servicers or marketers could directly or
         indirectly charge users for their services; or
o        Made it more difficult or expensive to issue Card Business products.

The Company may have difficulties in obtaining and maintaining proprietary
rights.

         The Company's success depends in part upon proprietary software which
it has developed which may be difficult to protect. The Company currently relies
on a combination of contractual rights, trade secrets, know-how, trademarks,
non-disclosure agreements and technical knowledge to establish and protect
proprietary rights. The measures taken to protect proprietary rights may not be
adequate to prevent misappropriation of the technology or independent
development by others of products with features based upon, or otherwise similar
to, the Company's products. The Company may not have the resources to defend or
prosecute a patent infringement or other proprietary rights infringement action.

There is Only a Limited Trading Market for the Company's Common Stock, and Penny
Stock Regulations May Discourage the Development of an Active Secondary Market
for the Company's Common Stock.

         Our shares are traded on the OTC Bulletin Board. Securities traded on
the OTC Bulletin Board are, for the most part, thinly traded. The Securities and
Exchange Commission (SEC or Commission) has adopted regulations, which generally
define penny stocks to be an equity security that has a market price less than
$5.00 per share, subject to certain exemptions. As of the date of the report,
the closing price of the Company's common stock was less than $5.00 per share
and therefore is a "penny stock" pursuant to the rules under the Securities
Exchange Act of 1934, as amended. Such designation requires any broker or dealer
selling such securities to disclose certain information concerning the
transactions, obtain a written agreement from the purchaser, and determine that
the purchaser is reasonably suitable to purchase such securities. These rules
may restrict the ability of brokers and dealers to sell the Company's common
stock and may adversely affect the ability of investors to sell their shares.

The Trading Price of the Company's Common Stock May Fluctuate Dramatically.

         The price of the Company's common stock has fluctuated substantially
sine it began trading on the Over-the-Counter Bulletin Board (OTCBB) on May
2002. The market price of the Company's common stock is likely to continue to be
highly volatile. Factors such as a substantial number of our issued and
outstanding shares becoming subject to resale pursuant to Rule 144 in October
2002, the substantial numbers of shares issuable upon the exercise of options or
warrants or upon the conversion of convertible debentures, terms of any equity
and/or debt financing, fluctuations in our operating results and market
conditions could have a significant impact on the future price of our common
stock and could have a depressive effect on the then market price of the common
stock.

The Company's Success is Dependent on the Efforts of Four Key Executive
Officers.

         The success of the Company is dependent on the performance of four key
executive officers: the Chief Executive Officer of the Company, the Chief
Financial Officer of the Company, the Chief Executive Officer of UCT, and Chief
Operating Officer of UCT. Given the concentration in responsibility and the
importance of each of the four key executives, the Company is dependent on its
ability to retain and motivate its current executives. The Company does not have
a "key executive" life insurance policy on any of its executives. The loss of
the services of any of the Company's four key executive officers could have a
material adverse effect on the business, operating results, or financial
condition of the Company.

                                       17
<PAGE>

Provisions of the Company's articles of incorporation and bylaws may delay or
prevent a take-over which may not be in the best interests of the Company's
shareholders.

         Provisions of the Company's articles of incorporation and bylaws may be
deemed to have anti-takeover effects, which include when and by whom special
meetings of the Company's shareholders may be called, and may delay, defer or
prevent a takeover attempt. In addition, certain provisions of the Florida
Business Corporation Act also may be deemed to have certain anti-takeover
effects which include that control of shares acquired in excess of certain
specified thresholds will not possess any voting rights unless these voting
rights are approved by a majority of a corporation's disinterested shareholders.

         In addition, the Company's articles of incorporation authorize the
issuance of up to 5,000,000 shares of preferred stock with such rights and
preferences as may be determined from time to time by the Company's board of
directors, of which 500,000 shares are currently issued and outstanding. The
Company's board of directors may, without shareholder approval, issue preferred
stock with dividends, liquidation, conversion, voting or other rights which
could adversely affect the voting power or other rights of the holders of the
Company's common stock.

ITEM 7.  FINANCIAL STATEMENTS

         See "Index to Financial Statements" for the financial statements
included in this Form 10-KSB.


                            VOICEFLASH NETWORKS, INC.
                      (D/B/A "THE DATAFLASH CORPORATION")
                                AND SUBSIDARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED JULY 31, 2002 AND 2001

                                      INDEX




                                                                      PAGE


Report of Independent Certified Public Accountants                     F-2

Consolidated Balance Sheet                                             F-3

Consolidated Income Statements                                         F-4

Consolidated Statements of Shareholders' Equity                        F-5

Consolidated Statements of Cash Flows                                  F-6 - 7

Notes to Consolidated Financial Statements                             F-8 - 27





                                       F-1



<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of
VoiceFlash Networks, Inc.

We have audited the accompanying consolidated balance sheet of VoiceFlash
Networks, Inc. ("D/B/A "The DataFlash Corporation"), as of July 31, 2002 and the
related consolidated statements of income, shareholders' equity and cash flows
for the years ended July 31, 2002 and 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of VoiceFlash Networks,
Inc. ("D/B/A "The DataFlash Corporation"), as of July 31, 2002 and the results
of its operations and its cash flows for the years ended July 31, 2002 and 2001,
in conformity with accounting principles generally accepted in the United
States.




                                                   Sherb & Co., LLP
                                                   Certified Public Accountants

New York, New York
October 9, 2002



                                       F-2


<PAGE>

                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries
                           Consolidated Balance Sheet
                                  July 31, 2002

                                     ASSETS

Current assets:
 Cash and cash equivalents                          $         2,277,697
 Accounts receivable                                            249,399
 Note receivable, current                                        53,000
 Prepaid and other current assets                                56,525
 Deferred tax assets                                            168,000
                                                      -----------------
        Total current assets                                  2,804,621

Property and equipment, net                                      82,305
Other assets                                                    685,107
Note receivable, long-term                                       24,256
Goodwill                                                      1,020,025
                                                      -----------------
                                                    $         4,616,314
                                                      =================

                   LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses              $           830,001
 Dividends payable                                              130,000
 Reserve funds payable                                        1,369,460
 Bank line of credit                                            220,000
 Notes payables, net of discount                                291,691
                                                      -----------------
        Total current liabilities                             2,841,152

Series A Redeemable Preferred Sock, $.001 par
 value - 5,000,000 shares authorized; 500,000
 shares issued and outstanding                                1,000,000

Shareholders' equity:
 Common stock, par value $.001 - 50,000,000
 shares authorized, 18,874,178
 issued and outstanding                                          18,874
 Additional paid-in capital                                  29,924,721
 Deferred compensation                                          (23,688)
 Subscription receivable                                       (281,500)
 Accumulated deficit                                        (28,863,245)
                                                      -----------------
        Total shareholders' equity                              775,162
                                                      -----------------
                                                    $         4,616,314
                                                      =================

          See notes to accompanying consolidated financial statements.

                                       F-3



<PAGE>

                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries
                         Consolidated Income Statements


                                                  Years Ended July 31,
                                            --------------------------------
                                                 2002               2001
                                            -------------    ---------------

Revenues                                    $  4,227,923     $      178,572
                                            -------------    ---------------
Costs and expenses:
 Operations                                    1,229,780            611,759
 General and administrative                    1,881,217          3,078,345
 Sales and marketing                             361,266            128,198
 Depreciation                                     92,106            128,418
 Loss on disposal of equipment                    18,721               -
 Interest expense, net                            91,589             28,373
 Loss on repurchase of convertible notes          75,000               -
                                            -------------    ---------------
                                               3,749,679          3,975,093
                                            -------------    ---------------
Income (loss) from continuing operations
 before income tax benefit                       478,244         (3,796,521)
Income tax benefit, net                          156,000               -
                                            -------------    ---------------
Income (loss) from continuing operations         634,244         (3,796,521)
                                            -------------    ---------------
Loss from discontinued operations, net of
 taxes                                              -           (13,950,120)
                                            -------------    ---------------
Net income (loss)                                634,244        (17,746,641)

Preferred stock dividend                        (120,000)           (10,000)
                                            -------------    ---------------
Net income (loss) applicable to common
 shareholders                               $    514,244     $  (17,756,641)
                                            =============    ===============
Basic net income (loss) to common
shareholders per share
  Continuing operations                     $       0.03     $        (0.56)
  Discontinued operations                            -                (2.07)
                                            -------------    ---------------
Net income (loss) to common
 shareholders                               $       0.03     $        (2.63)
                                            =============    ===============
Diluted net income (loss) to common
 shareholders per share
  Continuing operations                     $       0.03     $         (0.56)
  Discontinued operations                            -                 (2.07)
                                            -------------    ----------------
Net income (loss) to common
 shareholders                               $       0.03     $         (2.63)
                                            =============    ================
Weighted average number of common shares
 outstanding-basic                            16,399,042           6,750,991
Potientially dilutive common shares            1,224,883                -
                                            -------------    ----------------
Weighted average number of common and
 common equivalent shares outanding
 assuming dilution                            17,623,925           6,750,991
                                            =============    ================


          See notes to accompanying consolidated financial statements.

                                       F-4



<PAGE>
<TABLE>
<CAPTION>
                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries
                 Consolidated Statement of Shareholders' Equity

                                                                       Additional
                                                   Common Stock         Paid-in     Deferred  Subscription  Accumulated
                                                Shares       Amount     Capital   Compensation  Receivable   Deficit        Total
                                                ---------    -------  ----------- ------------  ----------  ------------- ----------
<S>             <C> <C>                         <C>       <C>         <C>          <C>          <C>        <C>          <C>
Balance at July 31, 2000                        5,380,068 $    5,380  $14,016,102  $    -       $    -     $(11,620,848) $2,400,634

 Sale of common stock, net                      1,964,800      1,965    1,728,417       -            -             -      1,730,382
 Warrants issued for consulting services             -          -       1,458,515       -            -             -      1,458,515
 Common stock issued in connection with
  the acquisition of discontinued
  subsidiary                                    5,493,736      5,493    6,861,678       -            -             -      6,867,171
 Valuation of options and warrants in
  connection with the acquisition of
  discontinued subsidiary                            -          -       4,009,898       -            -             -      4,009,898
 Beneficial conversion feature in
  connection with convertible notes                  -          -          80,000       -            -             -         80,000
 Issuance of warrants in connection with
  convertible notes                                  -          -          95,000       -            -             -         95,000
 Dividends-preferred stock                           -          -            -          -            -          (10,000)    (10,000)
 Net loss                                            -          -            -          -            -      (17,746,641)(17,746,641)
                                                ---------    -------  ----------- ------------ ---------- -------------- -----------
Balance at July 31,2001                        12,838,604     12,838   28,249,610       -            -      (29,377,489) (1,115,041)

 Sale of common stock                           1,200,000      1,200      298,800       -            -             -        300,000
 Common stock issued in connection with
  the acquisition of United Capturdyne
  Technologie                                   1,200,000      1,200      573,800       -            -             -        575,000
 Common stock sold to executives                1,525,000      1,525      279,975       -        (281,500)         -           -
 Common stock issued in connection to the
  repurchase of convertible notes                 800,000        800      159,200       -            -             -        160,000
 Common stock issued in connection with the
  conversion of convertible notes               1,140,574      1,141      206,359       -            -             -        207,500
 Common stock issued for consulting services      170,000        170       86,482    (70,652)        -             -         16,000
 Issuance of warrants for consulting services        -          -          39,658    (35,069)        -             -          4,589
 Issuance of warrants to note holders for
  the maturity extensions of the notes
  payable                                            -          -          30,837       -            -             -         30,837
 Amortization                                        -          -            -        82,033         -             -         82,033
 Dividends-preferred stock                           -          -            -          -            -         (120,000)   (120,000)
 Net income                                          -          -            -          -            -          634,244     634,244
                                              ----------  ----------  -----------  ----------   ---------- -------------- ----------
Balance at July 31,2002                        18,874,178 $   18,874  $29,924,721  $ (23,688)   $(281,500) $(28,863,245) $  775,162
                                              ==========  ==========  ===========  ==========   ========== ============== ==========
</TABLE>
        See notes to accompanying consolidated financial statements.

                                       F-5


<PAGE>

                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries
                          Consolidated Statements of Cash Flows

                                                        Years Ended July 31,
                                                   ----------------------------
                                                       2002           2001
                                                   ------------  --------------
OPERATING ACTIVITIES:
 Net income (loss)                                 $   634,244   $ (17,746,641)
 Adjustments to  reconcile net income (loss) to
  net cash used in operating activities:
  Depreciation                                          92,106         128,418
  Loss on dispopsal of equipment                        18,721            -
  Common stock and option conversion expense for
   consulting services                                 102,622       1,458,515
  Option conversion expense for maturity of notes
   payable                                              15,528            -
  Loss on repurchase of convertible notes               75,000            -
  Loss from discontinued operations                       -         13,950,120
  Amortization of debt discount and beneficial
   conversion feature                                   83,000          92,000
 Changes in operating assets, net of effects
 of acquisition
  Accounts receivable                                 (236,459)        193,626
  Inventories                                             -            107,950
  Other current assets                                (231,266)          6,660
  Deferred tax asset                                  (168,000)           -
  Other assets                                        (384,333)         (6,434)
  Accounts payable and accrued expenses               (819,546)         52,772
  Reserve funds payable                                293,981            -
                                                   ------------  --------------
  Net cash used in continuing operations              (524,402)     (1,763,014)
  Net cash used in discontinued operations                -         (2,073,051)
                                                   ------------  --------------
NET CASH USED IN OPERATING ACTIVITIES:                (524,402)     (3,836,065)
                                                   ------------  --------------
INVESTING ACTIVITIES:
 Purchase of equipment, net                            (20,754)        (63,174)
 Cash acquired in acquisition of United Capturdyne
 Technologies, Inc.                                  1,822,799            -
                                                   ------------  --------------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES                                           1,802,045         (63,174)
                                                   ------------  --------------
FINANCING ACTIVITIES:
 Sale of common stock                                  300,000       1,730,382
 Proceeds from convertible notes                       750,000         175,000
 Repayment of convertible notes                       (457,500)           -
 Proceeds from notes payable                           176,000            -
 Repayment of notes payable                            (44,000)           -
 Proceeds from bank line of credit                     270,000            -
 Repayment of bank line of credit                      (50,000)           -
 Advances from related party                              -            100,000
 Payments of notes receivable                           43,383          29,361
                                                   ------------  --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES              987,883       2,034,743
                                                   ------------  --------------
Net increase (decrease) in cash                      2,265,526      (1,864,496)

Cash at beginning of year                               12,171       1,876,667
                                                   ------------  --------------
Cash at end of year                                $ 2,277,697      $   12,171
                                                   ============  ==============


          See notes to accompanying consolidated financial statements.

                                       F-6


                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries
                          Consolidated Statements of Cash Flows




Supplemental disclosures of cash flow information:

 Cash paid for interest                             $    39,600   $        -
                                                   =============  =============
 Cash paid for taxes                                $      -      $        -
                                                   =============  =============


Non-cash disclosure:

 Common stock issued pursuant to purchase
 agreements                                         $  575,000    $        -
                                                   ============   =============
 Conversion of notes to common stock                $  207,500    $        -
                                                   ============   =============
 Dividends on preferred stock                       $  120,000    $      10,000
                                                   ============   =============
 Discount on convertible notes                      $     -       $      95,000
                                                   ============   =============
 Issuance of preferred stock in connection
 with the acquisition of discontinued subsidiary    $     -       $   1,000,000
                                                   ============   =============
 Issuance of common stock in connection with
 the acquisition of discontinued subsidiar          $     -       $   6,867,171
                                                   ============   =============
 Options and warrants issued in connection with
 the acquisition of discontinued subsidiary         $     -       $   4,009,898
                                                   ============   =============



              See notes to accompanying consolidated financial statements.

                                       F-7

<PAGE>



                            VoiceFlash Networks, Inc.
                      ("D/B/A "The DataFlash Corporation")
                                and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         VoiceFlash Networks, Incorporated (D/B/A "The DataFlash Corporation" or
         the "Company") was incorporated on October 11, 1995. The Company was
         originally organized to design, develop, commercialize and market
         proprietary products and services in speech recognition technologies.
         Subsequently, the Company began to develop proprietary products and
         services in wireless area networks technologies. The Company's products
         and services generated limited sales in both speech recognition and
         wireless technologies and the Company was unable to successfully create
         a substantial market. The Company incurred significant losses from
         inception through September 2001.

         In October 2001, the Company shifted its business model from a
         technology development company to a financial services company. On
         October 19, 2001, the Company acquired United Capturdyne Technologies,
         Inc. ("UCT"), a supplier of advance transaction processing and account
         management software for enterprise retail and service oriented
         commercial clients. Since October 2001, the Company, through its
         subsidiaries, develops and markets proprietary transaction processing
         products and services to traditional retail and e-commerce merchants in
         North America. The Company offers a variety of e-commerce technologies
         to its merchant clients, such as Automated Clearing House (ACH) check
         processing and customized electronic payment software. The Company also
         plans to market pre-paid (stored value), credit, debit and similar
         card-based products to a variety of commercial and consumer markets,
         including company payroll programs, college students, and credit
         impaired and un-banked markets, people with poor credit or with no
         access to a checking account. Finally, the Company plans to be at the
         forefront of developing value-added technological enhancements to
         better service its merchant clients and stored value card members.


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.       Principles of Consolidation-The  accompanying  consolidated
                  financial statements include the accounts of the Company
                  and all of its wholly owned  subsidiaries  (United  Capturdyne
                  Technologies,  Inc.,  Value Stream Systems,  Inc. and
                  Shared On-Line Rental Network,  Inc.).  All significant
                  intercompany  transactions and balances have been eliminated
                  in consolidation.

         b.       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.

                                      F-8
<PAGE>

         c.       Cash Equivalents - The Company considers all highly liquid
                  debt instruments with original maturities of three months or
                  less to be cash equivalents. Cash equivalents include
                  investments in money market accounts. The Company invests cash
                  through high-credit-quality financial institutions. The
                  Company may, from time to time, maintain cash balances in
                  excess of the federally insured limit of $100,000. At July 31,
                  2002 the Company's cash balances exceeded the federally
                  insured limit by approximately $1,600,000.

         d..      Fair Value of Financial Instruments - The Company's financial
                  instruments consists principally of cash and cash equivalents,
                  accounts and notes receivable, accounts and notes payable,
                  reserve funds payable and accrued liabilities. The carrying
                  amounts of such financial instruments as reflected in the
                  balance sheet approximate their estimated fair value as of
                  July 31, 2002. The estimated fair value is not necessarily
                  indicative of the amounts the Company could realize in a
                  current market exchange or of future earnings or cash flows.

         e.       Concentration of Credit Risk - Credit losses, if any, have
                  been provided for in the financial statements based on
                  management's expectations. The Company's accounts receivable
                  are subject to potential concentrations of credit risk. The
                  Company does not believe that it is subject to any unusual or
                  significant risks, in the normal course of business.

         f.       Capitalized  Software  Development  Costs-The  Company
                  capitalizes  the qualifying  costs of developing its software
                  products. Capitalization of costs requires that technological
                  feasibility have been established. Development costs incurred
                  prior to the establishment of technological feasibility are
                  expensed as incurred. When the software is fully documented
                  and available for unrestricted sale or license, capitalization
                  of development costs ceases, and amortization commences and is
                  computed on a product-by-product basis, based on either a
                  straight-line basis over the economic life of the product or
                  the ratio of current gross revenues to the total current and
                  anticipated future gross revenues, whichever is greater. The
                  establishment of technological feasibility and the ongoing
                  assessment of recoverability of capitalized software
                  development costs require considerable judgment by management
                  with respect to certain external factors, including, but not
                  limited to, technological feasibility, anticipated future
                  gross revenues, estimated economic life and changes in
                  software and hardware technologies.

                  Realization of capitalized software development costs is
                  subject to the Company's ability to market its software
                  product in the future and generate cash flows sufficient to
                  support future operations. Capitalized software development
                  costs totaled $ 421,696 during the years ended July 31, 2002.
                  Capitalized software development costs are being amortized
                  over a 2 year period. Amortization of capitalized software
                  development costs totaled $ 14,964 during the year ended July
                  31, 2002, and is included in operating expenses in the
                  accompanying consolidated income statements.

          g.      Property and Equipment - Property and equipment is recorded at
                  cost. Depreciation is calculated on a straight-line basis over
                  the estimated useful lives of the assets, which range from
                  three to five years.

                                      F-9
<PAGE>

         h.       Long-Lived Assets - In accordance with SFAS No. 144
                  "Accounting for Impairment or Disposal of Long-Lived Assets,"
                  the Company includes as a component of income from continuing
                  operations before taxes on income, the impairment loss on
                  assets to be held and losses on assets expected to be disposed
                  of.

         i.       Goodwill-Goodwill  represents the aggregate excess of the cost
                  of companies acquired over the fair value of their net
                  assets at dates of acquisition. In accordance with SFAS No.
                  142, "Goodwill and Other Intangible Assets," the Company
                  recognizes goodwill as an asset. In October 2001, the Company
                  recognized $1,020,025 in goodwill for the acquisition of
                  United Capturdyne Technologies, Inc. In accordance with the
                  new standard, the Company is not permitted to amortize the
                  goodwill. In lieu of amortization, goodwill must be tested for
                  impairment using a fair-value-based approach. This impairment
                  test requires the determination of the fair value of the
                  intangible asset. If the fair value of the intangible asset is
                  less than its carrying value, an impairment loss should be
                  recognized in an amount equal to the difference. There was no
                  impairment loss recognized in fiscal 2002.

         j.       Accounts Receivable and Reserve Funds Payable-Accounts
                  receivable consists of funds advanced to clients.

                  The Company has the right to establish reserve holdback to
                  secure against the high risk and fraud involved in accepting
                  telephone order and mail order one time processing items. The
                  Company's contracts with commercial customers delineate the
                  reserve percentages and period of time over which these
                  holdbacks are to be made.

                  The Company reviews each client's activity, including charge
                  backs on an ongoing basis and determines if the customer
                  reserves are adequate. In the event that the specific client
                  reserves are not deemed adequate, the Company establishes
                  additional reserves. The Company's contract provides that a
                  certain percentage of each customers reserve is retained by
                  the Company and may be used in a general reserve. Any
                  adjustments to the general reserve are recorded as an
                  adjustment to or from income in the period it is determined.
                  The Company has established that it will retain any unpaid
                  amounts into income when an account is deemed to be abandoned.

         k.       Revenue Recognition - Revenues from ACH transactions, stored
                  value and debit card products and other transaction processing
                  fees are recognized when provided. In fiscal 2001, revenues
                  from the sale of software products were recognized at the time
                  of sale and shipment of the product and revenues from product
                  development were recognized when the development was complete.

                                      F-10
<PAGE>

         l.       Income Taxes - The Company accounts for income taxes pursuant
                  to the provisions of Statement of Financial Accounting
                  Standards (SFAS) No.109, "Accounting for Income Taxes," which
                  requires, among other things, a liability approach to
                  calculating deferred income taxes. The asset and liability
                  approach requires the recognition of deferred tax liabilities
                  and assets for the expected future tax consequences of
                  temporary differences between the carrying amounts and the tax
                  bases of assets and liabilities. Realization of the benefits
                  related to the net operating loss carry forwards may be
                  limited in any one year due to IRS Code Section 382, change of
                  ownership rules.

         m.       Net Income (Loss) Per Common Share-The Company has adopted the
                  provisions Statement of Financial Accounting Standard No. 128,
                  "Earnings per share", which became effective for financial
                  statements for fiscal years ending after December 15, 1997.
                  This statement requires that the Company report basic and
                  diluted earnings (loss) per share for all periods reported.
                  Basic net income (loss) per share is computed by dividing net
                  income (loss) by the weighted average number of common shares
                  outstanding for the period. Diluted net income (loss) per
                  share is computed by dividing net income (loss) by the
                  weighted average number of common shares outstanding for the
                  period, adjusted for the dilutive effect of common stock
                  equivalents, consisting of the stock options and warrants
                  using the treasury stock method.

                  For fiscal 2001, the Company reported a net loss of
                  $17,746,641. For this period, diluted net loss per share was
                  the same as basic net loss per share since the inclusion of
                  the stock options and warrants would have been anti-dilutive.

         n.       Stock Based Compensation - SFAS No. 123, "Accounting for Stock
                  Based Compensation," establishes a fair value method for
                  accounting for stock-based compensation plans either through
                  recognition or disclosure. The Company did not adopt, for
                  employee options the fair value based method but instead
                  discloses the pro forma effects of the calculation required by
                  the statement.

         o.       Preferred Stock - The Board of Directors is authorized to
                  issue shares of preferred stock and to determine the dividend,
                  liquidation, conversion, redemption, and other rights,
                  preferences and limitations of such shares without any further
                  vote or action of the shareholders. Accordingly, the Board of
                  Directors has the power, without shareholder approval, to
                  issue preferred stock with dividend, liquidation, conversion,
                  voting, or other rights which could negatively affect the
                  voting power or other rights of the holders of the Common
                  Stock.

         p.       Reclassifications-Certain  reclassifications have been made to
                  the 2001 consolidated financial statements to conform to the
                  2002 presentation.

                                      F-11
<PAGE>

         q.       Recent and Future Accounting Pronouncements -

                  a. In March 2000, the Financial Accounting Standards Board
                     (FASB) issued FASB Interpretation No. 44 ("Interpretation
                     44"), "Accounting For Certain Transactions Involving Stock
                     Compensation".  Interpretation 44 provides criteria for the
                     recognition of compensation expense in certain stock-based
                     compensation arrangements that are accounted for under
                     Accounting Principles Board Opinion No. 25, "Accounting For
                     Stock Issued To Employees". Interpretation 44 is effective
                     July 1, 2000, with certain provisions effective
                     retroactively to December 15, 1998 and January 12,2000.
                     There was no effect of the retroactive provisions of
                     Interpretation  44 on the Company's financial statements.
                     Interpretation 44 is not expected to have a material effect
                     on the Company's financial statements.

                  b. In July 2001, the FASB issued FASB No. 143, "Accounting for
                     the Asset Retirement Obligations." This statement addresses
                     financial accounting and reporting obligations associated
                     with the retirement of tangible long-lived assets and
                     associated retirement costs. This statement applies to all
                     entities. It applies to legal obligations associated with
                     the retirement of long-lived assets that result from the
                     acquisition, construction, development and (or) the normal
                     operation of a long-lived asset, except for certain
                     obligations of leases. This statement is effective for
                     financial statements issued for fiscal years beginning
                     after June 15, 2002.  The Company does not believe the
                     adoption of this standard will have a material impact on
                     the Company's financial statements.

                  c. In July 2002, the FASB issued FASB No. 146, "Accounting for
                     Costs Associated with Exit or Disposal Activities." This
                     Standard supercedes the accounting guidance provided by
                     Emerging Issues Task Force No.94-3,"Liability  Recognition
                     for Certain Employee Termination Benefits and Other Costs
                     to Exit an Activity"(including "Certain Costs Incurred in a
                     Restructuring"). FASB No. 146 requires companies to
                     recognize costs associated with exit activities when they
                     are incurred rather than at the date of a commitment to an
                     exit or disposal plan. FASB No. 146 is to be applied
                     prospectively to exit or disposal activities initiated
                     after December 31, 2002.  The Company is currently
                     evaluating this Standard.


2.       ACQUISITION

         The Company completed the acquisition of United Capturdyne
         Technologies, Inc. ("UCT") in October 2001. The acquisition was
         accounted for using the purchase method of accounting. The results of
         operations are included in the financial statements from the date of
         acquisition. UCT's product line is designed to accommodate a broad
         spectrum of needs encountered both at the point-of-sale and on the
         Internet. Pursuant to the purchase agreement VoiceFlash issued
         1,200,000 shares (the "acquisition shares") of restricted common stock
         valued at $540,000 (market value of $0.50 per share at date of
         agreement, less a 10% discount due to restrictive nature of stock) to
         UCT. The Company has agreed to assist in the registration of the resale
         of the acquisition shares with the Securities and Exchange Commission.

                                      F-12
<PAGE>

         The following table gives a summary of the acquisitions in financial
         terms:

         Purchase Price                                     $     540,000
         Acquisition Costs                                         35,000
         Fair Value of Assets Acquired                         (1,976,733)
         Fair Value of Liabilities Assumed                      2,421,758
                                                              ------------
         Goodwill                                           $   1,020,025
                                                              ============
         The detailed components consist of the following:

         Fair Value of assets acquired:

         Cash                                               $   1,822,799
         Officers loan receivable                                  96,798
         Property, plant and equipment                             55,530
         Other                                                      1,606
                                                              ------------
                                                            $   1,976,733
                                                              ============
         Fair Value of liabilities assumed:

         Accounts payable                                   $   1,857,177
         Accrued expenses and deposits                            446,533
         Deferred tax payable                                       7,010
         Corporate and payroll tax payable                        111,038
                                                              ------------
                                                            $   2,421,758
                                                              ============

         The following schedule combines the unaudited pro-forma results of
         operations of the Company and United Capturdyne Technologies Inc., as
         if the acquisition occurred on August 1, 2000 and includes such
         adjustments which are directly attributable to the acquisition. It
         should not be considered indicative of the results that would have been
         achieved had the acquisition not occurred or the results that would
         have been obtained had the acquisition actually occurred on August 1,
         2000.

                                                     Years Ended July 31,
                                              ----------------------------------
                                                     2002               2001
                                                --------------      ------------
Revenues                                        $  4,666,957       $  1,322,287
                                                --------------      ------------
Costs and expenses:
 Operations                                        1,522,864            567,183
 General and administrative                        2,437,820          4,042,015
 Sales and marketing                                 376,523            273,194
 Depreciation                                         96,092            146,047
 Loss on disposal of equipment                        18,721               -
 Interest expense, net                                89,562              8,004
 Loss on repurchase of convertible notes              75,000               -
 Loss on sale of marketable securities               123,974             31,154
                                                  ------------       -----------
                                                   4,740,556          5,067,597
                                                  ------------       -----------
Income (loss) from continuing operations
 before income taxes                                 (73,599)        (3,745,310)

Income tax benefit                                   156,000               -
                                                  ------------       -----------
Income (loss) from continuing operations              82,401         (3,745,310)
                                                  ------------      ------------
Loss from discontinued operations, net of taxes         -           (13,950,120)
                                                  ------------      ------------
Net income (loss)                                     82,401        (17,695,430)

Preferred stock dividend                            (120,000)           (10,000)
                                                  ------------      ------------
Net income (loss) applicable to common
 shareholders                                   $    (37,599)      $(17,705,430)
                                                  ============      ============

                                      F-13

<PAGE>

Basic and diluted net loss to common
 shareholders per share

    Continuing operations                       $        0.00      $      (0.47)
    Discontinued operations                              0.00             (1.75)
                                                  ------------      ------------
      Net income (loss) to common shareholders  $        0.00      $      (2.23)
                                                  ============      ============

Weighted average number of common shares
       outstanding-basic                           16,616,029         7,950,991
Potentially dilutive common shares                  1,491,542              -
                                                  ------------      ------------
Weighted average number of common and common
equivalent shares outstanding assuming dilution    18,107,571         7,950,991
                                                 =============      ============

3.       SEGMENT INFORMATION

         The Company has three reportable segments, transaction based
         services-commercial (including ACH processing transactions and software
         services), card based products and services, and voice recognition
         products and services (only in fiscal 2001). The following table sets
         forth operating segment information:


                                                  Years Ended July 31,
                                              ----------------------------------
                                                     2002               2001
                                                --------------      ------------
Revenues
 Transaction based services-commercial         $   4,023,061      $       -
 Card based products and services                    204,862              -
 Voice recognition products and services                -              178,572
                                                --------------      ------------
Total revenues                                      4,227,923           178,572
                                                --------------      ------------
Operations
 Transaction based processing                       1,083,401               -
 Card based products and services                     146,379               -
 Voice recognition products and services                 -              611,759
                                                --------------      ------------
Total operations                                    1,229,780           611,759
                                                --------------      ------------
Segment profit (loss)
 Transaction based processing                       2,939,660               -
 Card based products and services                      58,483               -
 Voice recognition products and services                 -             (433,187)
                                                --------------      ------------
Total segment profit (loss)                         2,998,143          (433,187)
                                                --------------      ------------
Other costs and expenses:
 General and administrative                         1,881,217         3,078,345
 Sales and marketing                                  361,266           128,198
 Depreciation                                          92,106           128,418
 Loss on disposal of equipment                         18,721              -
 Interest expense, net                                 91,589            28,373
 Loss on repurchase of convertible notes               75,000              -
                                                --------------      ------------
                                                    2,519,899         3,363,334
                                                --------------      ------------
Income (loss) before income taxes                     478,244        (3,796,521)

Income tax benefit                                    156,000              -
                                                --------------      ------------
Net income (loss)                                     634,244        (3,796,521)

Preferred stock dividend                             (120,000)          (10,000)
                                                --------------      ------------
Net income (loss) applicable to common
 shareholders                                   $     514,244       $(3,806,521)
                                                ==============      ============

                                      F-14
<PAGE>

4.       PROPERTY AND EQUIPMENT

         At July 31, 2002, the Company's property and equipment is summarized as
follows:

            Office equipment                                        $   101,259
            Computers                                                    57,246
                                                                    ------------
                                                                        158,505
            Accumulated depreciation                                    (76,200)
                                                                    ------------
                                                                    $    82,305
                                                                    ============

5.        INCOME TAXES

         The non-deductibility of certain expenses for tax purposes resulted in
         an increase in the effective tax rate. For the years ended July 31,
         2002 and 2001, income tax expense (benefit) consisted of the following:

                                                    2002                2001
                                              --------------     --------------
        Current                                $    12,000       $      -

        Deferred                                  (168,000)             -
                                              --------------     --------------
        Income tax benefit, net                $  (156,000)      $      -
                                              ==============     ==============

         At July 31, 2002, the Company had a net operating loss carryforward
         (NOL) of approximately $13,500,000.

         The net deferred tax asset is comprised of the following at July 31,
         2002:

            Deferred tax assets:
             Net operating loss carryforward                   $      5,038,054
                                                               -----------------
             Net deferred tax asset                                   5,038,054
             Deferred tax asset valuation allowance                  (4,870,054)
                                                               -----------------
                                                               $        168,000
                                                               =================

         Realization of all of the Company's deferred tax asset at July 31, 2002
         is not considered to be more likely than not and accordingly a
         $4,870,054 valuation allowance has been provided. The Company may have
         available additional net operating loss carryovers associated with the
         acquisition of Bristol. Such amounts would be subject to the
         limitations under Section 382 of the Internal Revenue Code relating to
         changes in ownership.

         The net operating loss carryforward is summarized below:

              Year Loss Originated             Year Expiring           Amount
              --------------------             -------------       -------------
                 July 31, 1996                      2011          $      40,000
                 July 31, 1997                      2012                240,000
                 July 31, 1998                      2013              1,550,000
                 July 31, 1999                      2014              4,630,000
                 July 31, 2000                      2015              3,370,000
                 July 31, 2001                      2016              4,460,000
                 July 31, 2002                                         (790,000)
                                                                    ------------
                                                                   $ 13,500,000
                                                                    ============
6.       BANK LINE OF CREDIT

         On February 5, 2002, the Company secured a revolving bank line of
         credit (the "credit facility"). Under the terms of the credit facility,
         the Company may from time to time borrow up to $ 300,000, which is
         payable upon demand. The Company has pledged certain assets of the
         Company as collateral for the credit facility and corresponding
         promissory note. Interest is payable monthly and the interest rate is
         the bank's floating prime rate, 4.75% at July 31, 2002. As of July 31,
         2002 the Company had borrowed $ 220,000 under the credit facility.

                                      F-15

<PAGE>

7.       CONVERTIBLE PREFERRED STOCK

         The Company is currently in the process of reviewing the terms of the
         Series A Preferred Stock to determine if the Company's Amended and
         Restated Articles accurately reflect the scope of the Company's
         obligations to the holders of the Series A Preferred Stock. The Company
         does not anticipate that its obligations to the Series A Preferred
         Stock holders will be increased as a result of such review.

         On June 26, 2001, the Company issued to Berthel SBIC, LLC. (Berthel),
         as part of its acquisition of Bristol, 500,000 shares of its Series A
         Convertible Preferred Stock (the Series A) and a warrant to purchase
         276,250 shares of its common stock for $1,000,000. The warrant has an
         exercise price of $.01 per share and is exercisable until January 12,
         2005. The warrants were valued at $376,414 by the Company using a
         Black-Scholes option-pricing model.

         The holders of the Series A are entitled to receive cumulative cash
         dividends at a rate of $0.24 per year per share. The Company recorded
         cumulative dividends of $130,000 and $10,000 as of July 31, 2002 and
         2001.

         The holders of the Series A are entitled to a liquidation preference
         equal to $2.00 per share. Also, after the holders of Common Stock
         receive an amount equal to the aggregate paid-in capital, the Series A
         holder is entitled to share ratably in all remaining assets of the
         Company. The holders of the Series A have the right to convert each
         preferred share into a number of shares equal to $2.00 divided by the
         then prevailing conversion price. The conversion price is subject to
         adjustment in the event of stock splits or combinations and in the
         event of the Company sells any Common Stock or securities convertible
         into or exercisable for Common Stock at prices below the then
         prevailing Trigger Price (a "Trigger Event"). The Conversion Price is
         not subject to adjustment in the event of certain stock option grants
         to employees or directors and the issuances of Common Stock in
         connection with the acquisition of a business. For each Trigger Event,
         the then prevailing conversion price is subject to downward, weighted
         average adjustment. The Company believes the conversion price was
         approximately $.94 as of July 31, 2002. Upon the occurrence of an Event
         of Default which is not cured within 60 days of notice, the conversion
         price shall be reduced by 50%.

         If the Company fails to redeem 250,000 shares of the Series A by
         January 15, 2005, the Series A holders are entitled to receive warrants
         to purchase a number of shares of the Company's Common Stock equal to
         85% of the difference between 250,000 and the amount actually redeemed.
         If the Company fails to redeem the remainder of the Preferred Stock by
         January 15, 2006, the Series A holder is entitled to receive a warrant
         to purchase a number of shares of the Company's Common Stock equal to
         85% of any Series A shares outstanding. The warrants will have an
         exercise price of $.01 per share and be exercisable from the date of
         issuance until the fifth anniversary of the date of issuance.

                                      F-16

<PAGE>

8.       SHAREHOLDERS' EQUITY

         On November 22, 2000, the Company issued 500,000 shares of common stock
         for $500,000 to an accredited investor.

         In March 2001, the Company issued 1,302,000 of common stock pursuant to
         Regulation S. The Company sold 1,302,000 shares of stock at $1.00 per
         share to accredited investors for net proceeds of $1,131,000. The
         Company paid a 10% placement fee, closing fees and issued 130,200
         three-year warrants exercisable at $1.00 per share.

         In April 2001, the Company issued warrants to purchase an aggregate of
         725,000 shares of its common stock exercisable at prices ranging from
         $1.00 to $1.50 per share to several consultants for services provided.
         Accordingly, the Company has valued the warrants at their fair value
         and has recorded a charge to operations in the amount of approximately
         $1,459,000. This expense was reflected in general and administrative
         expenses for fiscal 2001 in the accompanying consolidated income
         statement.

         In June 2001, the Company issued 148,000 of common stock pursuant to
         Regulation S. The Company sold 148,000 shares of stock at $0.75 per
         share to accredited investors for net proceeds of $99,720. The Company
         paid a 10% placement fee, closing fees and issued 14,800 shares of
         common stock in connection with the sale of the stock.

         In June 2001, the Company issued 5,493,736 of common stock pursuant to
         the acquisition of Bristol Retail Solutions. These shares were valued
         at $6,867,171, which was the price at the date of the acquisition. The
         company issued 1,029,464 warrants at prices ranging from $.01 to $6.00
         and 2,488,037 options at prices ranging from $.19 to $3.13 to the
         existing Bristol holders at the date of acquisition. Accordingly, the
         Company has valued the warrants and options at their fair value and has
         recorded a charge in the amount of approximately $4,001,000. This
         expense is reflected in loss from discontinued operations in the
         accompanying condensed statement of operations.

         On September 24, 2001, the Company sold 1,150,000 shares of common
         stock to an officer of the Company for a $ 184,000 promissory note,
         which approximated fair value at the date of issuance, pursuant to an
         employment agreement. The promissory note is classified as a
         subscription receivable in the shareolders' equity section of the
         balance sheet.

         On October 8, 2001, the Company issued an aggregate of 1,200,000 shares
         of restricted common stock valued at $.45 per share, which approximated
         fair value at the date of issuance, to the shareholders of United
         Capturdyne Technologies, Inc. in connection with the merger of the
         Company's wholly owned subsidiary with and into United Capturdyne
         Technologies, Inc.

         On October 31, 2001, the Company issued an aggregate of 230,000 shares
         of its common stock to an individual pursuant to a consulting agreement
         dated October 31, 2001. Under the agreement, the individual is to
         provide the Company with consulting services. The Company subsequently
         cancelled 100,000 shares that were previously issued in terms of this
         consulting agreement. In connection with this issuance, the value of
         such shares, $0.54 per share, the fair market value at the date of
         issuance, or $70,052 is being deferred over the term of the agreement.

                                      F-17

<PAGE>

         In November 2001, the Company satisfied a conversion request by issuing
         516,826 shares of common stock to a holder of $ 80,000 in principal
         amount of convertible notes. In January 2002, the Company satisfied a
         conversion request by issuing 276,453 shares of common stock to a
         holder of $ 62,500 in principal amount of convertible notes. In
         February 2002, the Company satisfied a conversion request by issuing
         347,295 shares of common stock to a holder of $ 65,000 in principal
         amount of convertible notes.

         In February 2002, the Company issued the holders of the notes warrants
         (the "Warrants") to purchase 90,000 shares of common stock and, in June
         2002, the Company issued the note holders some additional warrants (the
         "Additional Warrants") to purchase 175,000 shares of common stock. The
         Additional Warrants were issued in consideration of a six month
         maturity extension on a $175,000 promissory note. The Warrants have an
         exercise price of $.45 per share and are exercisable until February 22,
         2005. The Additional Warrants are exercisable at $ .35 per share and
         expire on July 12, 2004. The Company has valued the warrants at their
         fair value and has recorded a charge of $30,837 to expense.

         On March 7, 2002 the Company sold 375,000 common shares to an officer
         of the Company for a $ 97,500 promissory note, pursuant to an
         employment agreement. The shares were valued at $0.26 per share, which
         approximated fair value at the date of issuance. The promissory note is
         classified as a subscription receivable in the shareolders' equity
         section of the balance sheet.

         On January 1, 2002 and March 7, 2002 the Company agreed to issue
         warrants to purchase common stock to the Company's two outside
         directors. In the aggregate, each director received three year warrants
         to purchase 100,000 shares of common stock at an exercise price of $
         0.26 a share, vesting over one year.

         On March 7, 2002, the Company sold 1,200,000 shares of common stock and
         1,000,000 warrants (exercisable at $ 0.30 per share commencing 150 days
         after March 15, 2002 and expiring on March 15, 2007) for $300,000.

         In accordance with an Agreement of Redemption dated as of March 18,
         2002, the Company repurchased $ 538,100 of Convertible Notes plus $
         22,000 of unpaid interest for $ 300,000 cash, 800,000 common shares,
         222,534 warrants (exercisable at $ 0.30 per share commencing 150 days
         after March 15, 2002 and expiring on March 15, 2007) and $176,000 note.
         The Company recognized a $ 75,000 loss and $160,000 increase in equity
         resulting from the repurchase of these Convertible Notes.

         In May 2002, the Company entered into a public relations contract
         pursuant to which the Company received certain services and, in
         exchange, the Company issued the service provider 40,000 shares of
         common stock, valued at $16,000, and warrants to purchase 20,000 shares
         of common stock at an exercise price of $.40 per share. The warrants
         are exercisable from June 15, 2002 to June 15, 2003. The Company has
         valued the warrants at their fair value and has recorded a charge of
         $4,589 to expense.

                                      F-18

<PAGE>

         In July 25, 2002, the Company entered into an investor relations and
         financial services consulting contract with a former director of the
         Company. In consideration of the services to be provided to the
         Company, and the service provider's agreement to surrender options to
         purchase 125,000 shares of common stock at prices ranging from $1.375
         to $3.75, the Company issued the service provider options to purchase
         100,000 shares of common stock at an exercise price of $.35 per share.
         The options are exercisable from July 25, 2002 to July 28, 2004. The
         Company has valued the warrants at their fair value $35,069 and has
         deferred the amount of the term of the agreement.

         The Company believes that all securities issued in the transactions
         described above were issued under an exemption from registration
         provided by Section 4(2) of the Securities Act of 1933, as amended.

9.       NOTES PAYABLE AND RELATED TRANSACTIONS

         Notes Payable consisted of the following at July 31, 2002:

                      (a)  June 12, 2001-Note 1         $     100,000
                           June 12, 2001-Note 2                50,000
                           June 12, 2001-Note 3                25,000
                                                       ----------------
                                                              175,000
                           Less: Deferred interest            (15,309)
                                                       ----------------
                                                              159,691
                                                       ----------------

                       (b) March 18, 2002-Note 1               92,756
                           March 18, 2002-Note 2               39,244
                                                       ----------------
                                                              132,000
                                                       ----------------

                           Balance, July 31, 2002       $     291,691
                                                       ================

            a.    On June 12,  2001,  the  Company  entered  into  three
                  convertible  promissory  notes  totaling  $175,000.  These
                  notes  are convertible,  at the option of the holder at any
                  time,  at $1.00 per share.  These note bears  interest at
                  10.00% per annum,  payable in quarterly  installments.  The
                  principal  amount and all unpaid  interest was  originally
                  due and payable  on June 12,  2002.  Such  notes are
                  convertible  into  common  stock at $1.00 per  share.  Along
                  with these convertible  promissory  notes,  the Company issued
                  150,000 warrants to acquire shares of the Company's common
                  stock.The  warrants  are  exercisable  at $1.00 per share.
                  The  Company  recorded  these  warrants  as a  discount  to
                  the convertible  promissory  notes for $95,000.  The discount
                  was derived  from the  Black-Scholes  option-pricing  model
                  based on the following  assumptions:  expected stock price
                  volatility of 129%;  risk-free interest rate of 5.25%; and
                  an expected  5-year life. The discount has been fully
                  amortized as interest  expense over fiscal 2002.  With respect
                  to such discount,  the Company recorded interest expense of
                  $83,000 and $12,000 for the years ended July 31, 2002 and
                  2001, respectfully.

                                      F-19

<PAGE>

                  If the Company defaults with respect to the repayment of the
                  notes, it is required to issue the holders of the notes
                  300,000 warrants to purchase common stock at an exercise price
                  of $1.00 per share. The Company's Chairman of the Board
                  pledged 315,000 shares of common stock as collateral for the
                  notes.

         In February 2002, the Company issued the holders of the notes warrants
         (the "Warrants") to purchase 90,000 shares of common stock and, in June
         2002, the Company issued the note holders some additional warrants (the
         "Additional Warrants") to purchase 175,000 shares of common stock. The
         Additional Warrants were issued in consideration of a six month
         maturity extension on a $175,000 promissory note. The Warrants have an
         exercise price of $.45 per share and are exercisable until February 22,
         2005. The Additional Warrants are exercisable at $ .35 per share and
         expire on July 12, 2004. All other terms of the original notes,
         including interest remain unchanged.

            b.    Pursuant to subscription agreements executed August 6, 2001
                  (the "closing date") the Company sold two 7% convertible notes
                  due August 6, 2004 and two five year warrants to purchase an
                  aggregate of 150,000 shares of our common stock for an
                  aggregate purchase price of $750,000. The two warrants are
                  exercisable at $1.50 per share.

                  In addition, on October 18, 2001 the Company issued an
                  additional three warrants to purchase an aggregate of 150,000
                  shares of our common stock exercisable at $.20 per share.
                  These warrants were issued principally in consideration for an
                  extension of time to register shares underlying the notes.

                  The holders have the right to convert any outstanding and
                  unpaid principal portion of the note into fully paid and
                  non-assessable shares of our common stock. The conversion
                  price per share shall be the lowest of:

                 (1)      $1.50;

                 (2)      80% of the average of the three lowest closing bid
                          prices for our common stock for 30 trading days prior
                          to, but not including, the conversion date on the
                          Nasdaq SmallCap Market, Nasdaq National Market,
                          American Stock Exchange or New York Stock Exchange
                          (the principal trading exchange or market for our
                           common stock); or

                 (3)      if not trading on a principal trading exchange or
                          market, 75% of the average of the three lowest closing
                          bid prices for our common stock for 30 trading days
                          prior to, but not including, the conversion date, on
                          such other principal market or exchange where our
                          common stock is listed or traded.

                  The two initial common stock purchase warrants may be
                  exercised for a period of five years any time 150 days after
                  the closing date at an exercise price of $1.50 per share. The
                  three additional common stock purchase warrants may be
                  exercised for a period of five years any time after October
                  18, 2001 at an exercise price of $.20.

                                      F-20

<PAGE>

                  In November 2001, the Company satisfied a conversion request
                  by issuing 516,826 shares of common stock to a holder of
                  $ 80,000 in principal amount of convertible notes. In January
                  2002, the Company satisfied a conversion request by issuing
                  276,453 shares of common stock to a holder of $ 62,500 in
                  principal amount of convertible notes. In February 2002, the
                  Company satisfied a conversion request by issuing 347,295
                  shares of common stock to a holder of $ 65,000 in principal
                  amount of convertible notes.

                  On March 18, 2002, the Company repurchased $ 538,100 of
                  Convertible Notes plus $ 22,000 of unpaid interest for
                  $ 300,000 cash, 800,000 common shares, 222,534 warrants
                  (exercisable at $ 0.30 per share commencing 150 days after
                  March 15, 2002 and expiring on March 15, 2007) and $176,000
                  note. The Company recognized a $ 75,000 loss and $160,000
                  increase in equity resulting from the repurchase of these
                  Convertible Notes.

                  The $176,000 in principal amount of Notes have a maturity date
                  of May 15, 2002 and require the payment of interest at a rate
                  of 2% per month if the notes are not repaid in full. The
                  Company has an oral understanding with the holders of the
                  notes extending the maturity date and the repayment of
                  principal in four installments of $44,000 through October 15,
                  2002 and accrued interest with the last installment. As of
                  July 31, 2002 the Company paid the first $44,000 installment
                  payment leaving an unpaid principal balance of $132,000 plus
                  accrued interest.

10.      COMMITMENTS AND CONTINGENCIES

                  a.      Employment Agreements

                  Effective December 21, 1997, the Company entered into a
                  three-year employment agreement with Lawrence Cohen providing
                  for base annual salary of $115,500. During the year ended July
                  31, 2001, the Board of Directors extended the employment
                  agreement through December 19, 2003. The employee may receive
                  annual bonuses at the discretion of the Company, with bonuses
                  to be determined by the Compensation and Audit Committee.

                  Effective September 24, 2001, the Company entered into a
                  three-year employment agreement with Robert Kaufman, providing
                  for an annual base salary of $125,000, $150,000 and $175,000.
                  The agreement will automatically renew for an additional
                  two-year period unless the Company has provided 180 days prior
                  notice. The employee and the Company simultaneously entered
                  into a Stock Purchase Agreement pursuant to which the Company
                  sold to the employee 1,000,000 shares of its Common Stock in
                  exchange for $10,000 in cash and a $150,000 promissory note
                  bearing interest at the rate of six percent per annum with a
                  maturity date of September 24, 2004. The employee and the
                  Company also simultaneously entered into a Restricted Stock
                  Purchase Agreement pursuant to which the Company sold to the
                  employee 450,000 shares of its Common Stock in exchange for
                  $4,500 in cash and a $67,500 promissory note bearing interest

                                      F-21

<PAGE>

                  at the rate of six percent per annum with a maturity date of
                  September 24, 2004. Of the 450,000 shares, 150,000 shares have
                  vested and the balance will vest on September 24, 2003. In
                  consideration of employee's provision of services to the
                  Company, the Company will forgive one third of the total sum
                  due under the promissory notes, plus interest accrued, on each
                  anniversary of the promissory note signing, provided the
                  employee is then employed by the Company.

                  The employee will receive an annual guaranteed bonus to cover
                  all of the employee's tax obligations arising from the
                  forgiveness of indebtedness and any compensating bonuses.

                  Effective March 7, 2002, the Company entered into a three-year
                  employment agreement with Thomas C. Teper, providing for an
                  annual base salary of $110,000, $125,000 and $150,000. The
                  employee and the Company simultaneously entered into a Stock
                  Purchase Agreement pursuant to which the Company sold to the
                  employee 375,000 shares of its Common Stock in exchange a
                  $97,500 promissory note bearing interest at the rate of six
                  percent per annum with a maturity date of March 7, 2005. In
                  consideration of employee's provision of services to the
                  Company, the Company will forgive one third of the total sum
                  due, plus interest accrued, on each anniversary of the
                  promissory note signing, provided the employee is then
                  employed by the Company. The employee will receive an annual
                  guaranteed bonus to cover all of the employee's tax
                  obligations arising from the forgiveness of indebtedness and
                  any compensating bonuses.

                  Effective October 18, 2001, UCT entered into a three-year
                  employment agreement with Max Jeffery Korbin, II, providing
                  for an initial base annual salary of $125,000. The employee
                  also received a one time $500,000 bonus as consideration for
                  entering into the agreement and for entering into a
                  non-competition agreement. Included in other assets at July
                  31, 2002 is $327,500 less $49,125 of accumulated amortization
                  as a capitalized non-compete agreement. This capitalized
                  non-compete agreement is being amortized over 5 years.

                  Effective October 3, 2001, UCT entered into a three-year
                  employment agreement with Jack Stone, providing for an annual
                  base salary of $100,000, $110,000 and $120,000. The employee
                  was also granted options to purchase 40,000 shares of UCT's
                  Common Stock at the price of $.265 per share. In addition, UCT
                  will grant the employee options to purchase 40,000 shares at a
                  purchase price of $.265 on each subsequent anniversary
                  following the signing of the agreement. The employment
                  agreement can only be terminated as a result of employee's
                  death or disability or for cause. In addition, the agreements
                  contain confidentiality provisions and a six-month post
                  termination non-competition restriction.

                  Under Florida law, a court of competent jurisdiction may
                  determine not to enforce such non-competition restrictions or
                  partially enforce or modify such provisions.

                                      F-22

<PAGE>

                  b.       Leases

                  The Company conducts its operations out of two offices located
                  in South Florida. Both offices premises are leased under
                  operating leases.

                  The Company leases 3,882 square feet of office space in Boca
                  Raton, Florida. Under this lease, the Company pays a monthly
                  base rental of $5,742, plus a proportionate share of taxes and
                  operating expenses. This lease expires in October 2002. In
                  anticipation of the expiration of this lease, on September 25,
                  2002 the Company has entered into a new lease for 3,345 square
                  feet of office space located in Deerfield Beach, Florida for
                  thirty-seven months (commencing in November 2002) with a
                  monthly base rental of $4,460, plus a proportionate share of
                  taxes, operating expenses and annual base rent escalations.

                  The Company also leases 2,150 square feet of office space in
                  Ft. Lauderdale, Florida for its operations/transaction
                  processing center. The lease term is 36 months and commenced
                  on March 1, 2001. The monthly base rental of this facility is
                  $2,831, plus the proportionate share of taxes and operating
                  expenses.

                  The future minimum payments of the Deerfield Beach office and
                  Ft. Lauderdale office, excluding escalation charges, are as
                  follows:


                  Year Ending
                  July 31,
                  2003                             $         74,112
                  2004                                       73,337
                  2005                                       53,520
                  2006                                       13,380
                                                       ----------------
                                                       $    214,349
                                                       ================

                  Total rent expense charged to operations for the years ended
                  July 31, 2002 and 2001 was approximately $124,000 and $42,000.



                                      F-23
<PAGE>

11.      STOCK OPTIONS AND WARRANTS
         --------------------------

         In March 1999, the Company adopted a Stock Option Plan (the 1999
         "Plan") under which 500,000 shares of common stock are reserved for
         issuance upon exercise of stock based awards including, non-qualified
         stock options. In May 2001 the Company increased the number of shares
         of common stock in the 1999 Plan to 5,000,000. The 1999 Plan is also
         authorized to issue short-term cash incentive awards. The 1999 Plan is
         administered by either the Board or such committees; officers and/or
         employees of the Company as the Board may so designate. The purchase
         price of each share of common stock purchased upon exercise of any
         option granted is as follows: (i) incentive stock options shall be
         equal to or greater than the fair market value of the common stock on
         the date of grant as required under Section 422 of the Internal Revenue
         Code, (ii) options granted to 10% holders and designated by the plan
         administrator as incentive stock options shall be at least 110% of the
         fair market value of the common stock on the date of grant as required
         under Section 422 of the Internal Revenue Code, (iii) non-employee
         director options shall be equal to or greater than the fair market
         value of the common stock on the date of the grant.

         Subsequent to July 31, 2002, the Company issued five-year non-plan
         options to purchase 350,000 shares of common stock exercisable at $.72
         was granted to two directors and one employee. These options have
         available a cashless exercise provision whereby the holder can exercise
         the options based on a formula pursuant to the stock option agreement.

         SFAS No. 123, Accounting for Stock-Based Compensation, requires the
         Company to provide pro forma information regarding net loss and net
         loss per share as if compensation cost for the Company's stock option
         plan had been determined in accordance with the fair value based method
         prescribed in SFAS No. 123. The Company estimates the fair value of
         each stock option at the grant date by using the Black-Scholes
         option-pricing model with the following weighted-average assumptions
         used for grants in 2002: no dividend yield percent; expected volatility
         between 110% and 172%, risk-free interest rate of 5.0% and expected
         lives ranging between 2 and 10 years for the 1997 Plan, 1999 Plan and
         non-plan options.


         The following table illustrates the Company's stock option and warrants
         issuances and balances outstanding during the years ended July 31, 2002
         and 2001. The Company generally issues warrants to purchase shares of
         common stock in connection with debt and equity financing and to
         non-employee consultants.

                                      F-24
<PAGE>

                                          OPTIONS                WARRANTS
                                  ---------------------- -----------------------
                                               Weighted                 Weighted
                                     Shares    Average      Shares      Average
                                   Underlying  Exercise   Underlying    Exercise
                                      Options   Price      Warrants      Price
                                    ----------  --------  -----------  ---------
Outstanding at July 31, 2000         444,500  $    3.87         -     $    -
     Granted                       3,610,663       2.95    1,884,464      1.57
     Canceled                       (238,500)      5.22         -          -
     Exercised                          -           -           -          -
                                   ----------  --------  -----------  ----------
Outstanding at July 31, 2001       3,816,663  $     .91    1,884,464  $   1.57
     Granted                       1,311,000        .29    1,657,534  $    .38
     Canceled                     (2,112,163)      1.41         -          -
     Exercised                           -          -           -          -
                                   ----------  --------- ------------ ----------
Outstanding at July 31, 2002       3,015,500  $     .28    3,541,998  $   1.33
                                   ==========  ========= ============ ==========

The following is additional information with respect to the Company's options
and warrants as of July 31, 2002

                                                             OPTIONS
               OPTIONS OUSTANDING                          EXERCISABLE
------------------------------------------------   -----------------------------
                               Weighted
     Range                      Average    Weighted
      of           Number      Remaining   Average      Number       Weighted
    Exercise         Out      Contractual  Exercise    Exerci-        Average
     Price         standing      Life       Price       sable     Exercise Price
   ------------    ---------- ------------ ---------  ----------- --------------
   $.01-$.25        1,514,500  7.25 years    $ .19     1,514,500    $       .19
   $.26 - $.50      1,343,500  5.76 years    $ .28       472,500    $       .44
   $.51 - $1.87       157,500  3.55 years    $1.92       157,500    $      1.92
                   ----------                         -----------
                    3,015,500                          2,144,500
                   ==========                         ===========

                                      F-25

<PAGE>

                                                             WARRANTS
              WARRANTS OUSTANDING                          EXERCISABLE
   ------------------------------------------   -----------------------------
                                  Weighted
    Range                       Average        Weighted
     of            Number      Remaining       Average    Number     Weighted
   Exercise         Out       Contractual      Exercise   Exerci-     Average
    Price          standing       Life          Price      sable  Exercise Price
   -------------   ---------- --------------- --------- --------- --------------
   $.01-$.25          302,236  1.42 years      $ .01      302,256     $   .01
   $.26 - $.50      1,507,534  4.03 years      $ .32    1,507,534     $   .32
   $.51 - $2.00     1,232,500  2.54 years      $1.05    1,232,500     $  1.05
   $2.00 - $3.90      499,728   .42 years      $5.85      499,728     $  5.85
                   ==========                           =========
                    3,541,998                           3,541,998
                   ==========                           =========

Had compensation cost for the Company's two option plans been determined in
accordance with SFAS 123, the Company's net income (loss) and income (loss) per
share would have been increased to the pro forma amounts indicated below:

                                                        Year Ended July 31,
                                                  ------------------------------
                                                        2002           2001
                                                  -------------  ---------------
    Net income(loss):               As reported     $  514,244    $ (17,666,641)
                                    Pro forma       $  433,216    $ (20,602,104)
    Net loss per share:
               Basic                As reported     $      .03    $       (2.63)
               Basic                Pro forma       $      .03    $       (3.06)
               Diluted              As reported     $      .03    $       (2.63)
               Diluted              Pro forma       $      .02    $       (3.06)

                                      F-26

<PAGE>

12.      DISCOUNTINUED OPERATIONS

         The Company completed the acquisition of Bristol Retail Solutions, Inc.
         ("Bristol") in June 2001. Bristol was a dealer of retail point-of-sale
         systems in the United States, with sales, service and support offices
         in 10 cities located in six states. The purchase price for Bristol was
         (i) the issuance of .65 of a share of the Company's common stock for
         every 1 share of Bristol's common stock, based on 8,451,902 shares of
         Bristol common stock which converted to 5,493,736 shares of the
         Company's stock at a price of $1.25 per share (ii) the issuance of
         500,000 shares of the Company's Series A Convertible Preferred Stock at
         $2.00 per share amounting to $1,000,000 for the Bristol' Convertible
         Series C Preferred Stock and (iii) the Company assuming all outstanding
         warrants and options of Bristol at a rate of .65 of the Company's
         shares for every 1 share of Bristol's warrants and / or options
         outstanding at the date of acquisition. The Company valued the warrants
         and options issued for the Bristol acquisition based on the
         Black-Scholes option-pricing model and used the following assumptions:
         expected stock price; volatility of 172%; risk-free interest rate of
         6.02%; and an expected lives ranging from one to five years.

         The following table gives a summary of the acquisitions in financial
         terms:

         Purchase Price                                      $       11,871,624
         Acquisition Costs                                               86,543
         Fair Value of Assets Acquired                               (8,200,000)
         Fair Value of Liabilities Assumed                            8,200,000
                                                                  --------------
         Goodwill                                         $          11,958,167
                                                                  ==============
         The components of the purchase price are as follows:

            Common Stock (5,493,736 shares)                         $  6,861,726
            Series A Convertible Preferred Stock                       1,000,000
            Value of the Company's Warrants and Options issued         4,009,898
                                                                    ------------
                                                                    $ 11,871,624
                                                                    ============
         Fair Value of assets acquired:

            Cash                                                    $    200,000
            Accounts receivable                                        2,300,000
            Inventory                                                  3,300,000
            Property, plant and equipment                                200,000
            Intangible assets                                          2,000,000
            Other                                                        200,000
                                                                     -----------
                                                                    $  8,200,000
                                                                     ===========
         Fair Value of liabilities assumed:

            Accounts payable                                        $  3,500,000
            Accrued expenses and customer deposits                     2,000,000
            Notes payable                                              2,700,000
                                                                      ----------
                                                                    $  8,200,000
                                                                      ==========

         In July 2001, Bristol entered into bankruptcy under Chapter 11 of the
         United States bankruptcy code. As of July 31, 2001, the Company's
         wholly owned subsidiaries were unable to adopt a plan of reorganization
         and have since adopted a plan to discontinue the operations of Bristol.
         In fiscal 2001, this resulted in a charge to operations of $13,950,120
         comprised of the write off of Goodwill of $11,958,167, the write-off of
         advances to Bristol by the Company totaling $1,918,655, and operating
         losses by Bristol since the acquisition of $73,298.

         Since there were no remaining assets, in April 2002 the Chapter 11 case
         had been dismissed. The Company is now in the process of filing a
         voluntarily Chapter 7 Bankruptcy for Bristol and its subsidiaries.



                                      F-27
<PAGE>

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

         Feldman Sherb & Co.,  P.C., a  professional  corporation  of certified
public  accountants  ("Feldman")  was the  independent accounting  firm for The
Company for the fiscal  years  ended July 31,  2001 and 2000 and the nine month
ten day period  ended May 10, 2002.

         Feldman was merged into Grassi & Co., CPA's, P.C., ("Grassi") and the
principal accountants who had been responsible for the Company's audit during
the years ended July 31, 2001 and 2000 left and started their own firm called
Sherb & Co., LLP ("Sherb"). As a result, on May 11, 2002, the Company dismissed
Grassi and selected Sherb to serve as independent public accountants for the
fiscal year 2002.


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
         COMPLIANCE WITH SECTION 16(a)

DIRECTORS AND EXECUTIVE OFFICERS

         The following table sets forth the names and ages of our current
directors and executive officers, the principal officers and positions held by
each person. The executive officers are elected annually by the board of
directors. The executive officers serve terms of one year or until their death,
resignation or removal by the board of directors. There are no family
relationships between any of the directors and executive officers. In addition,
there was no arrangement or understanding between any executive officer and any
other person pursuant to which any person was selected as an executive officer.

                                       18
<PAGE>

         The directors and executive officers of the Company are as follows:

NOW                                 AGE              POSITIONS
---                                 ---              ---------

Lawrence Cohen                      59               Chairman of the Board

Robert J. Kaufman(1)                49               Chief Executive Officer,
                                                     President, Director
                                                     and Vice Chairman of the
                                                     Board

Thomas C. Teper                     41               Chief Financial Officer,
                                                     Executive Vice President,
                                                     Director and Corporate
                                                     Secretary

Max Jeffrey Korbin II               45               Chief Executive Officer-
                                                     United Capturdyne
                                                     Technologies, Inc.,
                                                     President-Value Stream
                                                     Systems, Inc. and Director

Jack Stone                          47               Chief Operating Officer-
                                                     United Capturdyne
                                                     Technologies, Inc., Vice
                                                     President-Value Stream
                                                     Systems, Inc. and Director

Steven Serle(2)                     53               Independent Director

Dr. Mark Brody                      47               Independent Director

(1)      Chairman of the Compensation Committee
(2)      Chairman of the Audit Committee

         LAWRENCE  COHEN has served as  Chairman  of the Board since he founded
The  Company in October  1995.  From  February  2000 to September  2001,  Mr.
Cohen served as acting Chief  Executive  Officer of The Company.  Mr. Cohen was
Chairman of the Board of McLaren Automotive  Group, Inc. from May, 1999 until
December,  2001.  McLaren  Automotive  Group, Inc. (NASDAQ:  MCLN) is an
automotive design and motorsports  group. He served as Chairman of the Board and
Chief Executive Officer of Bristol Retail  Solutions,  Inc. (OTC: BRTL), a
point-of-sale  equipment  distributor,  from April  1996,  when he  co-founded
Bristol  Retail  Solutions,  until it was merged and reorganized in July 2001.
In 1993, Mr. Cohen co-founded  Apollo  BioPharmaceuticals,  Inc., a
privately-held  company in Massachusetts engaged in the development of
neuroprotective  pharmaceuticals.  Apollo was merged with Mitokor  Corporation
in January,  2002. Between
November 1990 and September 1996, Mr. Cohen served as Chairman of the Board of
BioTime,  Inc.  (Nasdaq:BTIM),  a biotechnology  firm he founded to develop an
artificial blood plasma substitute.  He was co-founder of Cryomedical Sciences
(Nasdaq:CMSI),  a low temperature surgery  company,  and served as its President
from November 1990 to November  1991. Mr. Cohen has been engaged in providing
financial consulting and merchant banking services to early-stage companies for
the past 25 years.

         ROBERT J. KAUFMAN has served as Chief Executive Officer and President
of The Company since September 2001. On December 5, 2001, Mr. Kaufman was
appointed to the Board of Directors and on July 29, 2002, Mr. Kaufman was
appointed as Vice Chairman. From 1996 to 2001, Mr. Kaufman was the principal
shareholder and managing director of several closely held companies the
developed commercial real estate projects in South Florida. From 1989 to 1995,
Mr. Kaufman was Chief Executive Officer and President of Parlux (Nasdaq: PARL).
During his tenure at PARL, revenues doubled (from $17 to $35 million) while
returning to profitability. Prior to joining Parlux, Mr. Kaufman held the
position of President and Chief Executive Officer for The Fragrance Group Ltd, a
New York based company which he founded and which generated revenues of up to
$20 million. From 1981 until 1989 Mr. Kaufman also held executive positions with
Warner/Lauren, a division of Warner Communications, and Aromax Corporation, a
division of Elf Aquitaine Petroleum, a French conglomerate.

                                       19
<PAGE>

         THOMAS C. TEPER has served as Chief Financial  Officer and Executive
Vice  President,  of The Company since March 2002. On May 1, 2002,  Mr. Teper
was  appointed to the Board of Directors  and on July 29,  2002,  Mr. Teper was
appointed as Corporate  Secretary. From March 2001 to March 2002,  Mr. Teper
served as an advisor to emerging  businesses,  particularly  in electronic
commerce,  media, communications,  customer  relationship  management and
marketing.  From August 1999 to March 2000, Mr. Teper served as Chief Financial
Officer and Vice President of  Localbusiness.com,  Inc., an business news and
resource  internet site.  Mr. Teper was  instrumental  in the sale of the
Company to  institutional  investors.  From  May 1990  to August  1999,  Mr.
Teper  served in a variety of  executivepositions,  including Chief Financial
Officer and Senior Vice President-Facilities  Acquisition and Development,  at
Precision Response Corporation  (Nasdaq:  PRRC), a $350 million in revenue
provider of business  services,  including  customer  relationship  management,
electronic  commerce and call center  management to Fortune 500 companies.
During Mr. Teper's tenure at PRRC, the company grew from $8 to $250 million in
revenue and became a public  company.  Mr. Teper  facilitated  the successful
$245 million public offering of PRRC's common shares,  secured $100 million in
financing and oversaw the rapid  expansion of operations.  Prior to PRRC, Mr.
Teper served as a Manager at Ernst & Young LLP and was  responsible for the
planning and  supervision of multiple audit  engagements  and personnel.  Mr.
Teper is a Certified Public Accountant.

         M. JEFFERY KORBIN II has served as Chief Executive  Officer of United
Capturdyne  Technologies  since March 1990. On December 5, 2001,  Mr.  Korbin
was  appointed to the Board of Directors of The Company.  On December  2001 Mr.
Korbin was appointed as President of Value Stream  Systems,  Inc.  Mr.  Korbin
is the founder of United  Capturdyne.  Mr.  Korbin is the pioneer of the first
Electronic Draft  Capture (EDC)  programs in 1983.  Mr. Korbin has over 20 years
experience in the  point-of-sale  industry and has served a wide array of
clients by bringing  cost  effective  point-of-sale  solutions to merchants
who do not have the capital to compete with major chains and mass merchandisers.

         JACK STONE has served as Chief  Operating  Officer of United
Capturdyne  Technologies  since June 2001. In January 2002,  Mr. Stone was
appointed  as Vice  President  of Value  Stream  Systems,  Inc.  On May 1, 2002,
Mr.  Stone was  appointed  to the Board of Directors.  From November 2000 to May
2001, Mr. Stone served as a consultant in the electronic  transaction
processing industry.  From 1978 to October,  1999 Mr. Stone served in a variety
of executive  positions,  including  Executive Vice President and Chief
Operating Officer at Worldcheck, Inc. a national check guarantee company.

         STEVEN SERLE was  appointed to the Board of Director on January 1,
2002, as an  independent  director.  On July 29, 2002,  Mr. Serle was  appointed
as chair of the audit  committee.  From  September  1999 to present,  Mr. Serle
has served as President  and Chief Executive  Officer  for  Creative  Ventures
of Boca.  Creative  Ventures  owns and  operates  3 Remax  franchises  in Boca
Raton with approximately  100 real estate  sale  agents who broker or consult
with  respect to more than $250  million in real  estate  sales per year. Mr.
Serle currently  serves as Chairman of the Commercial Real Estate  Investment
Corp., a commercial real estate investing firm and Chairman of First  Lending
Corporation,  a residential  mortgage  lending  company.  Mr. Serle has also
served as the President of Corporate  Title from  October 1997 to the present.
From 1995 to the present Mr.  Serle  served as managing  partner of Steven
Serle, P.A.,  a law firm  specializing  in  corporate  and real estate law.  Mr.
Serle is an attorney and was admitted to Florida Bar in April 1995.

         DR. MARK BRODY was appointed to the Board of Directors on January 1,
2002, as an independent director. Dr. Brody is a well recognized neurologist. He
has served as the President of Innovative Research Solutions and a Director of
Brain Attack and Comprehensive Stroke Center, Bethesda Memorial Hospital from
December 1997 until the present. He was issued the award for Government of
Alberta Heritage Fund Bursary for Academic Excellence 1979. He is a member of
the Public Health Partnership Council on Stroke for the State of Florida. He has
given several presentations and has authored a number of articles and
publications on neurology.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors and executive officers, and persons who own more than ten
percent of our outstanding common stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of our equity securities. Such persons are required by SEC
regulation to furnish us with copies of all such reports they file.

                                       20
<PAGE>

         To our knowledge, based solely on a review of the copies of such
reports furnished to us and written or oral representations that no other
reports were required for such persons, all Section 16(a) filing requirements
applicable to our officers, directors and greater than ten percent (10%)
beneficial owners have been complied with, except for three Forms 4, Statement
of Changes in Beneficial Ownership ("Form 4"), which should have been filed by
Lawrence Cohen], the Form 3, Initial Statement of Ownership of Securities ("Form
3"), and the Form 4 which were filed late by Robert J. Kaufman, the Form 3 which
was filed late by Thomas C. Teper, the Form 3 and the Form 4 which were filed
late by Max Jeffrey Korbin, the Form 3 and three Forms 4 which were filed late
by Mark Brody, the Form 3 and two Form 4s which were filed late by Jack Stone
and the Form 3 and the Form 4 which were filed late by Steven Serle.

ITEM 10.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table sets forth the aggregate compensation paid to the
"Named Executive Officers" of the Company. No other executive officer of the
Company was paid a total annual salary and bonus for the fiscal year ended July
31, 2002 which was $100,000 or more.

                                                        Securities    Other
Name and Principal     Fiscal                           Underlying    Annual
     Position           Year     Salary     Bonus         Options   Compensation
------------------     ------    ------     -----       ----------- ------------

Lawrence Cohen,         2002    $115,500                     0          0
Chairman                2001    $115,500                  775,000       0
                        2000    $115,500                  897,000       0

Robert J. Kaufman,      2002    $119,270  $117,813 (1)    250,000       0
President & CEO

Thomas C. Teper,        2002    $38,958   $26,406 (2)     375,000       0
CFO & EVP

Max Jeffrey Korbin II,  2002    $81,715   $500,000 (3)    150,000      9,000
CEO-UCT &
President-VSS

Jack Stone,             2002    $84,526       0           270,000       0
COO-UCT &
Vice President-VSS

(1)      Such figure includes cash bonuses and debt forgiven in consideration of
         services.
(2)      Such figure includes one time bonus payments in consideration of the
         employee's execution of an employment and non-competition agreement and
         the sale of UCT common stock to the Company.
(3)      Such figure includes the expenses incurred by the Company to provide
         the employee the use of a car.

OPTION GRANTS IN LAST FISCAL YEAR

         The table below sets forth the following information with respect to
options granted to the Named Executive Officers during the year ended July 31,
2002:

o        The number of shares of common stock underlying options granted during
         the  year;
o        The percentage that such options represent of all options granted to
         employees during the year;
o        The exercise price of each option; and
o        The expiration date of each option.

                                       21
<PAGE>

                         Number of   Percent of
                        Securities   Total Options
                        Underlying    Granted to      Exercise       Expiration
                         Options      Employees       Price           Date
                        ---------    -----------      -------         ------

Lawrence Cohen              0            0               0              N/A

Robert J. Kaufman        250,000(1)     23.9%         $0.26          3/7/2012(2)

Thomas C. Teper          375,000(3)     35.9%         $0.26          3/7/2012(4)

Max Jeffrey Korbin II    150,000(5)     14.4%         $0.26          3/7/2012(6)

Jack Stone               120,000(7)     11.5%         $0.265        10/3/2011(8)

Jack Stone               150,000(9)     14.4%         $0.26         3/7/2012(10)

(1)      The options vest and are exercisable (i) 50% as of September 7, 2002;
         and (ii) 50% as of September 7, 2003.
(2)      The  options  expire  upon the  sooner of March  7,2012 or one year
         after the named  employee's  employment  with the  Company terminates.
(3)      The options  vest and are  exercisable  (i)  one-third  as of March 7,
         2002;  (ii)  one-third  as of March 7, 2003;  and (iii) one-third as of
         March 7, 2004.
(4)      The  options  expire  upon the  sooner of March  7,2012 or one year
         after the named  employee's  employment  with the  Company terminates.
(5)      The options vest and are exercisable (i) 50% as of September 7, 2002;
         and (ii) 50% as of September 7, 2003.
(6)      The  options  expire  upon the  sooner of March  7,2012 or one year
         after the named  employee's  employment  with the  Company terminates.
(7)      The options vest and are  exercisable  (i) one-third as of October 3,
         2001;  (ii)  one-third as of October 3, 2002;  and (iii) one-third as
         of October 3, 2003.
(8)      The  options  expire  upon the sooner of October  3,2012 or one year
         after the named  employee's  employment  with the Company terminates.
(9)      The options vest and are exercisable (i) 50% as of September 7, 2002;
         and (ii) 50% as of September 7, 2003.
(10)     The  options  expire  upon the  sooner of March  7,2012 or one year
         after the named  employee's  employment  with the  Company terminates.

EMPLOYMENT AGREEMENTS

         Effective December 21, 1997, the Company entered into a three-year
employment agreement with Lawrence Cohen providing for base annual salary of
$115,500. During the year ended July 31, 2001, the Board of Directors extended
the employment agreement through December 19, 2003. The employee may receive
annual bonuses at the discretion of the Company, with bonuses to be determined
by the Compensation and Audit Committee. No formula or criteria have been
specifically determined. The agreements provide for severance equal to one
year's salary in the event of (i) non-renewal of the agreement upon expiration
other than for cause or (ii) a change of control of the Company as a result of
which the employee is not retained by new management on a comparable basis. In
addition, the agreements contain confidentiality provisions and 12-month post
termination non-competition restriction which may be imposed by the Company
provided the employee receives a lump sum payment equal to one year's salary
within 30 days of termination of employment.

         Effective September 24, 2001, the Company entered into a three-year
employment agreement with Robert Kaufman, providing for an annual base salary of
$125,000, $150,000 and $175,000. The agreement will automatically renew for an
additional two-year period unless the Company has provided 180 days prior
notice. The employee can terminate the agreement at any time and for any reason
after giving the Company thirty days notice. The employee and the Company
simultaneously entered into a Stock Purchase Agreement pursuant to which the
Company sold to the employee 1,000,000 shares of its Common Stock in exchange
for $10,000 in cash and a $150,000 promissory note bearing interest at the rate
of six percent per annum with a maturity date of September 24, 2004. The
employee and the Company also simultaneously entered into a Restricted Stock
Purchase Agreement pursuant to which the Company sold to the employee 450,000
shares of its Common Stock in exchange for $4,500 in cash and a $67,500
promissory note bearing interest at the rate of six percent per annum with a
maturity date of September 24, 2004. Of the 450,000 shares, 300,000 shares have

                                       22
<PAGE>

vested and the balance will vest on September 24, 2003. In consideration of
employee's provision of services to the Company, the Company will forgive one
third of the total sum due under the promissory notes, plus interest accrued, on
each anniversary of the promissory note signing, provided the employee is then
employed by the Company. The employee will receive an annual guaranteed bonus to
cover all of the employee's tax obligations arising from the forgiveness of
indebtedness and any compensating bonuses. The agreement provides for lump sum
severance pay equal to two times the sum of the employee's highest annual base
salary plus highest bonus in respect of any year within the three year period
preceding the end of employment in the event of (i) the Company's termination of
the agreement prior to expiration of the term (ii) the death or disability of
the employee (iii) a change of control of the Company as a result of which the
employee voluntarily resigns or is not retained or (iv) the employee's voluntary
resignation for good reason. If any of these events occur, the employee's stock
option will immediately and fully vest. Moreover, provided that the employee was
employed by the company until March 7, 2003, all indebtedness due under the
promissory note will be automatically forgiven and all guaranteed and
supplemental bonuses that would have become due within the year will become
immediately due. In addition, the agreements contain confidentiality provisions
and a 12-month post termination non-competition restriction. In the event of (i)
the Company's termination of the agreement prior to expiration of the term (ii)
the death of the employee or (iii) a change of control of the Company as a
result of which the employee voluntarily resigns or is not retained, the
non-competition period will be reduced to three months. The Company and the
employee also entered into an indemnification agreement.

         Effective March 7, 2002, the Company entered into a three-year
employment agreement with Thomas Teper, providing for an annual base salary of
$110,000, $125,000 and $150,000. The employee can terminate the agreement at any
time and for any reason after giving the Company thirty days notice. The
employee and the Company simultaneously entered into a Stock Purchase Agreement
pursuant to which the Company sold to the employee 375,000 shares of its Common
Stock in exchange a $97,500 promissory note bearing interest at the rate of six
percent per annum with a maturity date of March 7, 2005. In consideration of
employee's provision of services to the Company, the Company will forgive one
third of the total sum due, plus interest accrued, on each anniversary of the
promissory note signing, provided the employee is then employed by the Company.
The employee will receive an annual guaranteed bonus to cover all of the
employee's tax obligations arising from the forgiveness of indebtedness and any
compensating bonuses. The agreement provides for lump sum severance pay equal to
the higher of (a) two times the sum of the employee's highest annual base salary
plus highest bonus in respect of any year within the three year period preceding
the end of employment or (b) the annualized sum of the employee's base salary
plus the maximum amount of bonuses which the employee could have been entitled
to in the current year in the event of (i) the Company's termination of the
agreement prior to expiration of the term (ii) the death or disability of the
employee or (iii) a change of control of the Company as a result of which the
employee voluntarily resigns or is not retained. If any of these events occur,
the employee's stock options will immediately and fully vest. Moreover, provided
that the employee was employed by the company until March 7, 2003, all
indebtedness due under the promissory note will be automatically forgiven and
all guaranteed and supplemental bonuses that would have become due within the
year will become immediately due. In addition, the agreements contain
confidentiality provisions and a 12-month post termination non-competition
restriction. In the event of (i) the Company's termination of the agreement
prior to expiration of the term (ii) the death of the employee or (iii) a change
of control of the Company as a result of which the employee voluntarily resigns
or is not retained, the non-competition period will be reduced to three months.
The Company and the employee also entered into an indemnification agreement.

         Effective October 18, 2001, UCT entered into a three-year employment
agreement with Max Jeffrey Korbin, II, providing for an initial base annual
salary of $125,000. The employee also received a one time $500,000 bonus as
consideration for entering into the agreement and for entering into a
non-competition agreement. UCT can terminate the agreement at any time for any
reason; provided that, unless the termination is based on cause, the employee
will be entitled to receive the base salary that the employee would have
received through the completion of the three year term. In addition, the
agreements contain confidentiality provisions and a two-year post termination
non-competition restriction.

                                       23
<PAGE>

         Effective October 3, 2001, UCT entered into a three-year employment
agreement with Jack Stone, providing for an annual base salary of $100,000,
$110,000 and $120,000. The employee was also granted options to purchase 40,000
shares of UCT's Common Stock at the price of $.265 per share. In addition, UCT
will grant the employee options to purchase 40,000 shares at a purchase price of
$.265 on each subsequent anniversary following the signing of the agreement. The
employment agreement can only be terminated as a result of employee's death or
disability or for cause. In addition, the agreements contain confidentiality
provisions and a six-month post termination non-competition restriction.

         Under Florida law, a court of competent jurisdiction may determine not
to enforce such non-competition restrictions or partially enforce or modify such
provisions.

AGGREGATED FISCAL YEAR END OPTION VALUE TABLE

         The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of July 31,
2002. No stock options were exercised by the Named Executive Officers during the
period ended July 31, 2002. No stock appreciation rights were granted or are
outstanding.

                Number of Unexercised Options  Value of Unexercised In The Money
                   Held at July 31, 2002          Options at July 31, 2002(1)
                   ---------------------          ---------------------------

Name              Exercisable   Unexercisable      Exercisable   Unexercisable
--------------    -----------   -------------      -----------   -------------
Lawrence Cohen     1,672,000         0              $109,801              0

Robert J. Kaufman       0         250,000               0                 0

Thomas C. Teper      125,000      250,000               0                 0

Max Jeffrey Korbin      0         150,000               0                 0

Jack Stone            40,000      230,000               0                 0


(1)      Dollar values are calculated  based on the difference  between the
         option  exercise price and $0.26,  the closing bid price of the
         Company's Common Stock on July 31, 2002, as reported by OTCBB.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of October 10, 2002, information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person who is known by the Company to own beneficially more than 5% of its
Common Stock, (ii) each director , (iii) each Named Executive Officer (as
defined herein), and (iv) all directors and executive officers as a group.
Unless otherwise indicated below, the persons in the table above have sole
voting and investment power with respect to all shares shown as beneficially
owned by them, subject to community property laws where applicable. A person is
deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from the date of this report upon the exercise of options.
Each person's percentage of ownership is determined by assuming that any options
held by such person have been exercised. As of July 31, 2002 there were
18,874,178 shares of Common Stock outstanding. Unless otherwise indicated below,
the address of each person is c/o the Company at 6401 Congress Avenue, Suite
250, Boca Raton, Florida 33487.

                                       24
<PAGE>
                                                         PERCENTAGE OF
NAME AND ADDRESS OF       SHARES OF COMMON STOCK        OUTSTANDING SHARES
 BENEFICIAL OWNERS          BENEFICIALLY OWNED          BENEFICIALLY OWNED(1)
-------------------       ----------------------        ---------------------


Lawrence Cohen                4,060,514(1)                   21.5%

Robert J. Kaufman             1,425,000(2)                    7.5%

Thomas C. Teper                 500,000(3)                    2.6%

Max Jeffrey Korbin              535,000(4)                    2.8%

Mark Brody                      187,094(5)                    1.0%

Jack Stone                      205,000(6)                    1.1%

Steven Serle                     81,250(7)                    0.4%

All officers and directors
as a group (7 persons)        6,723,858                      35.6%


(1)      Such figure includes (i) 1,672,000 shares of Common Stock underlying
         immediately exercisable options and (ii) 2,388,514 shares owned by
         Alliant. Alliant is a Delaware Limited Partnership, as to which Mr.
         Cohen is the general partner and members of Mr. Cohen's family are
         limited partners. Mr. Cohen disclaims beneficial ownership with respect
         to the limited partnership interests owned by members of his family and
         (iii) 315,000 shares pledged as collateral for convertible promissory
         notes.

(2)      Such figure includes 125,000 shares of Common Stock underlying
         presently exercisable options at an exercise price of $0.26. Such
         figure also includes 1,150,000 shares of Common Stock held by the
         "Robert J. Kaufman GRAT of 2002" for which Mr. Kaufman serves as
         trustee.

(3)      Such figure includes 125,000 shares of Common Stock underlying
         presently exercisable   options at an exercise price of $0.27.

(4)      Such figure includes 75,000 shares of Common Stock underlying presently
         exercisable options at an exercise price of $0.26.

(5)      Such figure includes 81,250 shares of Common Stock underlying options
         either presently exercisable or exercisable within the next sixty (60)
         days at an exercise price ranging from $0.26 to $0.40.

(6)      Such figure includes  155,000 shares of Common Stock  underlying
         presently  exercisable  options at an exercise price ranging from $0.26
         to $0.265.

(7)      Such figure includes 81,250 shares of Common Stock underlying options
         either presently exercisable or exercisable within the next sixty (60)
         days at an exercise price ranging from $0.26 to $0.40.

         If the Company fails to pay any dividend with respect to its Series A
Preferred Stock (the "Series A")and such failure remains uncured for 60 days
after notice thereof, then the holders of the Series A (the "A Holders") may be
entitled to designate and elect three members of the Company's board of
Directors. A fourth director may be designated and approved by the holders of
the Series A and the holders of the Common Stock (the "Common Holders"), each
voting separately as a class. If the A Holders and the Common Holders fail to
nominate a fourth director, such director seat shall be filled by the vote of A
Holders and the Common Holders, voting together, with the A Holders having the
right to cast votes equal to the number of shares into which the Series A is
then convertible.


                                       25
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company completed a merger with Bristol Retail Solutions in May
2001. Both companies had certain common shareholders and members of management.
Larry Cohen, Chairman of the Board and former Chief Executive Officer of the
Company used to serve as the Chairman of the Board and Chief Executive Officer
of Bristol Retail Solutions. As of the date of the merger, Larry Cohen
beneficially owned 24.9% of the Company's common stock and 27.3% of Bristol
Retail Solutions. David Kaye, a director of The Company from August 2000 until
April 2001, also served as the President and CEO of Bristol Retail Solutions
from January 2000 to April 2001.

         For more information regarding the merger of the Company and Bristol
Retail Solutions, see the section entitled "Discontinued Operations" above.

         See also the section above entitled "Employment Agreements" for a
description of the Company's sale of common stock to its President and Chief
Financial Officer.

         The Company acquired all of the issued and outstanding shares of UCT in
exchange for 1.2 million restricted shares of the Company's common stock (the
"Exchange Shares")in October 2001. Max Jeffrey Korbin, II, Chief Executive
Officer of UCT, individually received 460,000 of the Exchange Shares and an
Employment Agreement (see section above entitled "Employment Agreements" for a
description of the terms of the agreement) in connection with the acquisition.

         To assist the Company raise $175,000 through the issuance of
convertible notes, in June, 2001, the Chairman pledged 315,000 shares of his
common stock as collateral.

                                       26

<PAGE>

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

         A.       EXHIBITS:

                  Exhibit
                  Number            Description

                  3.1               Articles of Incorporation, as amended*
                  3.2               By-Laws(1)
                  4.1               Form of Common Stock Certificate(1)
                  4.4               Form of Representative's Warrants(1)
                  10.1              1999 Stock Option Plan(1)
                  10.2              Employment Agreement effective as of
                                    December 21, 1997, between the Company and
                                    Larry Cohen(1)
                  10.3              Amendment to Employment Agreement, dated as
                                    of July, 2002, between the Company and Larry
                                    Cohen.*
                  10.4              Employment Agreement, dated as of September
                                    24, 2001, between the Company and Robert
                                    Kaufman*
                  10.5              Employment Agreement, dated as of March 7,
                                    2002, between the Company and Thomas Teper*
                  10.6              Employment Agreement, dated as of October
                                    18, 2001, between UCT and Max Jeffrey
                                    Korbin, II*
                  10.7              Employment Agreement, dated as of October 3,
                                    2001, between UCT and Jack Stone*
                  22.1              List of Subsidiaries*

-----------------------
 *       Filed herewith.
(1)      Filed as an exhibit to the  Company's  Registration  Statement  on Form
         SB-2 (File No.  333-47715)  as filed with and declared effective by the
         Commission on May 28, 1998.
(2)      Filed as an exhibit to the  Company's  Registration  Statement  on Form
         S-4 (File No.  333-55638)  as filed with and  declared effective by the
         SEC on May 9, 2001.


B.       REPORTS ON FORM 8-K


         On September 20, 2002 the Company filed a report on Form 8-K indicating
a change in its auditors.

ITEM 14. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. We believe our disclosure
controls and procedures (as defined in Sections 13a-14(c) and 15d-14(c) of the
Securities Exchange Act of 1934, as amended) are adequate, based on our
evaluation of such disclosure controls and procedures on October 10, 2002.

(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.

                                       27
<PAGE>




SIGNATURES

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

                                          VOICEFLASH NETWORKS INCORPORATED

DATE: October   23  , 2002                 /s/ ROBERT J. KAUFMAN
              ------                     --------------------------------------
                                            Robert J. Kaufman,
                                          Chief Executive Officer and President

         The undersigned directors and officers of the Company hereby constitute
and appoint Robert J. Kaufman and Thomas C. Teper and each of them with full
power to act without the other and with full power and substitution and
resubstitution, our true and lawful attorneys-in-fact with full power to execute
in our name and behalf in the capacities indicated below this Annual Report on
Form 10-KSB and any and all amendments thereto and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and hereby ratify and confirm all that such
attorneys-in-fact, or any of them, or their substitutes shall lawfully do or
cause to be done by virtue hereof.

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

DATE: October   23  , 2002                               /s/ LAWRENCE COHEN
              ------                                 --------------------------
                                                      Lawrence Cohen, Director
                                                      and Chairman of the Board

DATE: October   23  , 2002                               /s/ ROBERT J. KAUFMAN
              ------                                 --------------------------
                                                       Robert J. Kaufman,
                                                       Director, Vice Chairman
                                                       of the Board, Chief
                                                       Executive Officer and
                                                       President

DATE: October   23  , 2002                               /s/ THOMAS C. TEPER
              ------                                 --------------------------
                                                       Thomas C.Teper, Director,
                                                       Secretary,  Executive
                                                       Vice President,  Chief
                                                       Financial Officer, and
                                                       Principal Accounting
                                                       Officer

DATE: October   23  , 2002                               /s/ MAX JEFFREY KORBIN
              ------                                 --------------------------
                                                       Max Jeffrey Korbin,
                                                       Director, Chief Executive
                                                       Officer-UCT and
                                                       President-VSS

DATE: October   23  , 2002                               /s/ JACK STONE
              ------                                 --------------------------
                                                       Jack Stone, Director and
                                                       Chief Operating
                                                       Officer-UCT and Vice
                                                       President-VSS

DATE: October   23  , 2002                               /s/ STEVEN SERLE
              ------                                 --------------------------
                                                        Steven Serle, Director

DATE: October   23  , 2002                               /s/ MARK BRODY
              ------                                 --------------------------
                                                         Mark Brody, Director

                                       27
<PAGE>

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Kaufman, certify that:

1. I have reviewed this annual report on Form 10-KSB of VoiceFlash Networks
Incorporated;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

DATE: October   23  , 2002
              ------



                                                       /s/ ROBERT J. KAUFMAN
                                                       ----------------------
                                                         Robert J. Kaufman
                                                      Chief Executive Officer

                                       28
<PAGE>




I, Thomas C. Teper, certify that:

1. I have reviewed this annual report on Form 10-KSB of VoiceFlash Networks
Incorporated;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

DATE: October   23  , 2002
              ------




                                                        /s/ THOMAS C. TEPER
                                                        --------------------
                                                            Thomas C. Teper
                                                       Chief Financial Officer
                                                    Principal Accounting Officer

                                       29