**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-Q**

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(Mark One)

**[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934**

**For the Quarterly Period Ended September 30, 2002**

**OR**

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

**For the transition period from ________to _________**

**Commission file number 0-19872**

**ELEVON, INC.**
(Exact name of Registrant as specified in its Charter)



|**Delaware**                                                   | **95-2862954**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**303 Second StreetSan Francisco, California     94107**(Address of Principal Executive Offices including Zip Code)

**(415) 495-8811**(Registrant's Telephone Number, Including Area Code)







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

There were 15,482,180 Shares of $.001 Par Value Common Stock outstanding as of
                               November 8, 2002.







**ELEVON, INC.
      QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2002
                                TABLE OF CONTENTS**



|**PART I.   FINANCIAL INFORMATION**                                                                                               | **Page No.**
|--------------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                                  |             
|Item 1.   Interim Consolidated Financial Statements
                  (unaudited):                                                |             
|                                                                                                                                  |             
|Consolidated Balance Sheets as of September 30, 2002
          
     and December 31, 2001                                        | 3           
|                                                                                                                                  |             
|Consolidated Statements of Operations for the three
          
    month and nine month periods ended September 30, 2002 and 2001 | 4           
|                                                                                                                                  |             
|Consolidated Statements of Cash Flows for the
          
    nine month periods ended September 30, 2002 and 2001                 | 5           
|                                                                                                                                  |             
|Notes to Consolidated Financial Statements                                                                                        | 6           
|                                                                                                                                  |             
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations             | 11          
|                                                                                                                                  |             
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                              | 27          
|                                                                                                                                  |             
|Item 4.   Controls and Procedures                                                                                                 | 27          
|                                                                                                                                  |             
|**PART II.  OTHER INFORMATION**                                                                                                   |             
|                                                                                                                                  |             
|Item 6.   Exhibits and Reports on Form 8-K                                                                                        | 28          
|                                                                                                                                  |             
|**Signatures**                                                                                                                    | 29          

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**PART I -- FINANCIAL INFORMATION**

Item 1. Financial Statements
See notes to consolidated financial statements

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**ELEVON, INC.

                          CONSOLIDATED BALANCE SHEETS**
(in thousands, except share amounts)

`September 30   December 31,
                                                             2002          2001
                                                        ------------  ------------
                                                                (unaudited)
ASSETS                                                                            
Current assets:
   Cash and cash equivalents...........................     $19,615        $4,583
   Short-term investments..............................           0           458
   Accounts receivable, net of allowance for doubtful
     accounts of $234 - September 30, 2002 and $476 -
     December 31, 2001.................................       6,628        11,431
   Prepaid expenses....................................         484           904
   Other receivables...................................         913            50
                                                        ------------  ------------
       Total current assets............................      27,640        17,426
Property and equipment, net                                   1,003         1,740
Capitalized software, net of accumulated amortization
  of $52,935 - September 30, 2002 and $52,865 -
  December 31, 2001....................................       1,913         4,853
Long-term accounts receivable..........................         624           562
Other assets...........................................         368           431
                                                        ------------  ------------
Total assets...........................................     $31,548       $25,012
                                                        ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                    
Current liabilities:
   Accounts payable....................................      $1,047        $2,411
   Accrued liabilities.................................       3,977         8,660
   Deferred revenue....................................       6,732        11,809
                                                        ------------  ------------
       Total current liabilities.......................      11,756        22,880
Deferred revenue.......................................       1,809         2,901
Other long-term obligations............................       1,343         2,818
                                                        ------------  ------------
       Total liabilities...............................      14,908        28,599
                                                        ------------  ------------

Commitments and contingencies

Stockholders' equity (deficit):
   Common stock, $.001 par value: 50,000 shares
    authorized; issued 15,481 shares - September 30,
    2002; 14,987 shares - December 31, 2001............          15            15
   Additional paid-in capital..........................      76,950        76,751
   Accumulated other comprehensive income..............         141           358
   Accumulated deficit.................................     (60,466)      (80,711)
                                                        ------------  ------------
       Total stockholders' equity (deficit)............      16,640        (3,587)
                                                        ------------  ------------
Total liabilities and stockholders' equity (deficit)...     $31,548       $25,012
                                                        ============  ============`

See notes to consolidated financial statements

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**ELEVON, INC.

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**
(in thousands, except per share amounts)

`Three Months Ended   Nine Months Ended
                                                     September 30,         September 30,
                                                --------------------- ---------------------
                                                   2002       2001       2002       2001
                                                ---------- ---------- ---------- ----------
REVENUES:                                                                                 
  License and royalty..........................    $1,032       $822     $3,059     $6,502
  Maintenance..................................     5,130      5,565     16,383     16,971
  Consulting...................................     4,389      4,304     16,327     12,349
                                                ---------- ---------- ---------- ----------
     Total revenues............................    10,551     10,691     35,769     35,822

OPERATING EXPENSES:                                                                       
  Costs of revenues:
     Cost of licenses,
      maintenance and consulting...............     3,838      4,262     14,330     12,914
     Amortization of
      capitalized software.....................       539        763      2,473      2,288
  Sales and marketing..........................     1,916      2,838      7,971      8,962
  Product development..........................     1,531      1,868      4,672      7,068
  General and administrative...................     1,524        988      5,123      4,346
  Restructuring charge.........................        --         --        892         --
  Impairment of capitalized
    software...................................        --         --        365         --
  Special credit (Note 5)......................        --         --     (1,732)        --
                                                ---------- ---------- ---------- ----------
     Total operating expenses..................     9,348     10,719     34,094     35,578
                                                ---------- ---------- ---------- ----------
Operating income (loss)........................     1,203        (28)     1,675        244
     Interest income, net......................        44         72         88        300
     Gain on sale of United Kingdom operations
     and e5 intellectual property..............    18,756         --     18,756         --
                                                ---------- ---------- ---------- ----------
Income before income taxes.....................    20,003         44     20,519        544
     Provision for income taxes................       225         25        275         75
                                                ---------- ---------- ---------- ----------

NET INCOME.....................................   $19,778        $19    $20,244       $469          
                                                ========== ========== ========== ==========

BASIC NET INCOME PER SHARE.....................     $1.28      $0.00      $1.33      $0.03          
                                                ========== ========== ========== ==========
Shares used to compute basic
     net income per share......................    15,462     14,987     15,278     14,893
                                                ========== ========== ========== ==========

DILUTED NET INCOME PER SHARE...................     $1.27      $0.00      $1.30      $0.03          
                                                ========== ========== ========== ==========
Shares used to compute diluted
     net income per share......................    15,611     14,988     15,626     14,954
                                                ========== ========== ========== ==========`

See notes to consolidated financial statements

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**ELEVON, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**
(in thousands)

`Nine Months Ended
                                                                       September 30,
                                                               ------------------------
                                                                   2002         2001
                                                               -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:                                            
     Net income...............................................    $20,244         $469
     Adjustments to reconcile net income to
       net cash provided (used) by operating activities:
       Depreciation and amortization..........................      3,237        3,249
       Provision for doubtful accounts........................        174         (167)
       Loss on property retirements...........................         20           52
       Impairment of capitalized software.....................        365           --
       Special credit (Note 5)................................     (1,732)          --
       Gain on sale of United Kingdom operations
       and e5 intellectual property...........................    (18,756)          --
     Changes in operating assets and liabilities:
       Accounts receivable....................................        255        1,057
       Prepaids and other assets..............................       (536)        (308)
       Accounts payable and  accrued liabilities..............     (1,921)      (3,815)
       Deferred revenue.......................................        (27)      (1,083)
       Other..................................................       (280)         (92)
                                                               -----------  -----------
           Net cash provided (used) by operating activities         1,043         (638)
                                                               -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:                                            
     Proceeds from employee stock purchase plan
       issuances and stock options exercised..................        304          294
     Capital lease payments...................................       (107)         (98)
                                                               -----------  -----------
           Net cash provided by financing activities..........        197          196
                                                               -----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES:                                            
     Purchases of short- and long-term investments............         --       (4,490)
     Maturities of short-term investments.....................        458        6,149
     Proceeds from gain on sale of United Kingdom operations
     and e5 intellectual property, net of expenses of $835....     14,865           --
     Purchases of property and equipment......................       (521)        (670)
     Additions to capitalized software........................     (1,013)      (1,144)
     Other....................................................          3           29
                                                               -----------  -----------
           Net cash provided (used) by investing activities...     13,792         (126)
                                                               -----------  -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..........     15,032         (568)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD...............      4,583        4,219
                                                               -----------  -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD.....................    $19,615       $3,651 
                                                               ===========  ===========
Supplemental disclosure:
    Cash paid for income taxes................................        $71          $78`

See notes to consolidated financial statements

---

**ELEVON, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

1. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and include all adjustments (consisting only of normal
recurring adjustments) which the Company considers necessary for a fair
presentation of the financial position, operating results and cash flows for
those periods.  Results for the interim periods are not necessarily indicative
of the results for the entire year.  These consolidated financial statements and
any notes thereto should be read in conjunction with the audited consolidated
financial statements included in the Walker Interactive Systems, Inc. Annual
Report on Form 10-K for the year ended December 31, 2001.  Certain
reclassifications have been made to prior years' amounts in order to conform to
the 2002 consolidated financial statement presentation.

1. EARNINGS PER SHARE

The Company calculates basic earnings per share ("EPS") and diluted
EPS in accordance with Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share." Basic EPS is
computed by dividing net income (loss) by the weighted average number of common
shares outstanding for that period. Diluted EPS takes into account the effect of
dilutive instruments, such as stock options, and uses the average share price
for the period in determining the number of common stock equivalents that are to
be added to the weighted average number of shares outstanding.  Common stock
equivalents are excluded from the diluted loss per share calculation if the
effect would be antidilutive.

1. COMPREHENSIVE INCOME/(LOSS)

SFAS No. 130 requires disclosure of total non-stockholder changes in equity,
which include unrealized gains and losses on securities classified as available-
for-sale under SFAS No. 115, foreign currency translation adjustments accounted
for under SFAS No. 52, and minimum pension liability adjustments made pursuant
to SFAS No. 87.

The reconciliation of net income to comprehensive income for the three-month
and nine-month periods ended September 30, 2002 and 2001 is as follows (in
thousands):

`Three Months Ended Nine Months Ended
                                           September 30,       September 30,
                                      ------------------- -------------------
                                         2002      2001      2002      2001
                                      --------- --------- --------- ---------
Net income...........................  $19,778       $19   $20,244      $469
Other comprehensive loss.............     (230)     (247)     (217)      (91)
                                      --------- --------- --------- ---------
Total comprehensive income / (loss)..  $19,548     ($228)  $20,027      $378
                                      ========= ========= ========= =========`

1. IMPAIRMENT AND RESTRUCTURING CHARGES

During the quarter ended June 30, 2002, the Board of Directors approved a
strategic restructuring plan designed to reduce costs and strengthen the
Company's position to successfully execute its strategy.  The Company recorded a
pre-tax restructuring charge totaling $892,000 for severance costs related to
the involuntary termination of employees in the Company's United States and
United Kingdom operations.

The cash outlay from the restructuring charge is estimated to be
approximately $890,000, of which approximately $35,000 was paid in the quarter
ended June 30, 2002, $650,000 was paid in the quarter ended September 30, 2002,
and $130,000 will be paid in the fourth quarter of 2002 and $30,000
in the first quarter of 2003.  The remaining balance of approximately
$45,000 was transferred to Novele, as an acquired liability (see Note 5, "Acquisition
and Divestitures").  In addition the cash paid for accrued vacation related to
the restructuring activities was approximately $175,000, which had been accrued as it
was earned prior to the restructuring.

In accordance with SFAS No. 86, "Accounting for the Costs of Computer
Software to Be Sold, Leased or Otherwise Marketed", the Company
periodically evaluates capitalized software carrying amounts against the related
estimated net realizable values of the assets.  During the second quarter of
2002, this evaluation indicated that the estimated net realizable values of
certain assets were not sufficient to recover the associated carrying values and
resulted in an impairment charge of $365,000.

1. ACQUISITION AND DIVESTITURES



Fiscal 2001 and 2002 Acquisition and Divestiture

On November 1, 2001, the Company acquired from the administrative
receiver of QSP Group PLC ("QSP"), QSP's intellectual property and a
consulting contract.  QSP, headquartered in Newcastle, United Kingdom, was a
global provider of financial systems on mainframe and UNIX platforms to Global
2000 companies and was placed in administrative receivership on October 17,
2001.  The acquisition cost of $2.0 million was allocated to the intellectual
property and was being amortized on a straight line-basis over a two-year period
from the date of acquisition.  Subsequent to November 1, 2001, the Company hired
certain former QSP employees, provided consulting services under the acquired
contract, and engaged with the former QSP customer base to establish new
relationships.  Revenues and costs related to these activities have been
included in the Company's consolidated financial statements from November 1,
2001 through September 6, 2002.

On September 6, 2002, the Company sold its United Kingdom operations and
its Elevon 5 intellectual property to Novele Limited ("Novele"),
located in London, United Kingdom.  Under the terms of a Sale Purchase Agreement
("Agreement") dated September 6, 2002, Elevon sold the stock of its
wholly owned subsidiary, Elevon International Limited, to Novele for
consideration of $16.5 million.  Approximately $15.7 million cash was received
at closing. The remaining balance of $800,000 is due on or before December 31,
2002 subject to certain conditions under the terms of the Agreement.  In
addition to acquiring the Elevon operations headquartered in the United Kingdom,
Novele acquired the Elevon 5 intellectual property, which Elevon had acquired
from the administrative receiver for the QSP Group PLC in November 2001. We have
deferred $200,000 of the gain as recovery is dependent upon our completion of
certain customer requirements during the fourth quarter of fiscal 2002.  Novele
will also become an exclusive distributor of Elevon software, including Elevon 2
and Active Financial Planning, in the United Kingdom and certain other
territories, as defined in a Software Distribution Agreement.  Under the terms
of the Distribution Agreement, for the specified territories the Company will
receive a royalty based on a percentage applied to actual maintenance revenues
and new license sales of the Elevon 2 and Active Financial Planning products.

The Company recognized an after-tax gain in respect of the above transaction
of $18.6 million (net of $200,000 of taxes), or $1.19 per diluted share, in the
consolidated statement of operations for the three months ended September 30,
2002. The gain before taxes was calculated as follows (amounts in
thousands):

`Proceeds received                                                    $15,700
Proceeds receivable                                                     $800
Deferred gain                                                          ($200)
Transaction costs                                                      ($835)
Net book value of Elevon 5 intellectual property                     ($1,167)
Elimination of deficit                                                $4,458
                                                                    ---------
                                                                     $18,756
                                                                    =========`

The operations and related intellectual property sold had revenues, operating expenses
(including amortization) and net income as follows (in thousands, except per share amounts):

`Three Months Ended     Nine Month
                                          September 30,          September
                                   2002      2001         2002      2001

Total revenue                      $3,011    $2,057      $12,916    $7,456

Total operating expenses           $2,668    $2,052      $11,206    $6,467

Net income                           $343        $5       $1,710      $989

Diluted net income per share        $0.02     $0.00        $0.11     $0.07`



Fiscal 2000 Divestitures

In October 2000, the Company sold the net assets of its Aptos product
line to B-Plan Information Systems Limited ("B-Plan").  The Aptos
product line was an integrated suite of client/server financial applications for
medium-sized companies and was marketed primarily in the United Kingdom.  The
divesture agreement provided for total consideration of approximately $2.3
million.  The Company received an initial payment of approximately $425,000 in
December 2000, and, in October 2001, the Company and B-Plan executed a mutual
release from any and all claims associated with the divesture agreement.  Under
the terms of the mutual release agreement, B-Plan paid the Company approximately
$442,000, including interest, in November 2001 and is obligated to pay the
Company an aggregate of approximately $575,000 in quarterly installments from
April 2002 through January 2006.  The first quarterly payment from B-Plan was
received in April 2002 and subsequent payments have been recognized in the
financial statements as received.

In April 2000, the Company sold its stock ownership in Revere Inc.
("Revere") to Gores Technology Group ("GTG").  Revere's main
product comprised the IMMPOWER asset management application.  The divestiture
agreement provided that GTG pay the Company $500,000 at closing, and, dependent
upon the parties reaching mutual agreement on a final determination of Revere's
net assets as defined in the divestiture agreement, an additional amount may be
due to or from GTG.  Management believes no additional amounts are due to or
from GTG.

During the period that the Company owned and operated the divested product
lines, reserves were established in the normal course of business to provide for
contractual and other obligations.  The Company retained certain of those
reserves when the product lines were divested to cover certain existing
obligations and those that were expected to arise from the change in ownership.
During the approximately two-year period since the divestitures, the Company
believes that it has discharged substantially all obligations associated with
the divestitures through cash payments and negotiation. The residual amount of
$1.7 million has been included as a special credit in the consolidated statement
of operations during the nine months ended September 30, 2002.

1. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 141, "Business Combinations" and SFAS No.142,
"Goodwill and Other Intangible Assets." SFAS No. 141 requires that all
business combinations initiated after June 30, 2001 be accounted for under the
purchase method and addresses the initial recognition and measurement of
goodwill and other intangible assets acquired in a business combination. SFAS
No. 142 addresses the initial recognition and measurement of intangible assets
acquired outside of a business combination and the accounting for goodwill and
other intangible assets subsequent to their acquisition. SFAS No. 142 provides
that intangible assets with finite useful lives be amortized and that goodwill
and intangible assets with indefinite lives will not be amortized, but will
rather be tested at least annually for impairment. The Company has adopted SFAS
No. 142 for its fiscal year beginning January 1, 2002. As the Company does not
have any goodwill recorded in its consolidated financial statements as of
January 1, 2002 the adoption SFAS No. 142 did not have an impact on the
financial position, results of operations or cash flows of the Company.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Long-Lived Assets", which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets.  SFAS No. 144
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of", but retains the
fundamental provisions for recognizing and measuring impairment of long-lived
assets to be held and used or disposed of by sale.  The Statement also
supercedes the accounting and reporting provisions for the disposal of a segment
of a business, and eliminates the exception to consolidation for a subsidiary
for which control is likely to be temporary.  SFAS No. 144 eliminates the
conflict between accounting models for treating the dispositions of long-lived
assets that existed between SFAS No.121 and the guidance for a segment of a
business accounted for as a discontinued operation by adopting the methodology
established in SFAS No. 121, and also resolves implementation issues to SFAS No.
121.  This Statement is effective for fiscal years beginning after December 15,
2001.  The Company has adopted SFAS No. 144 for its fiscal year beginning
January 1, 2002.  The adoption of SFAS No. 144 did not have an impact on the
financial position, results of operations or cash flows of the Company.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities", which addresses accounting
for restructuring and similar costs.  SFAS No. 146 supersedes previous
accounting guidance, principally Emerging Issues Task Force Issue No. 94-3.  The
Company will adopt the provisions of SFAS No. 146 for restructuring activities
initiated after December 31, 2002.   SFAS No. 146 requires that the liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred.  Under Issue 94-3, a liability for an exit cost was
recognized at the date of the Company's commitment to an exit plan.   SFAS No.
146 also establishes that the liability should initially be measured and
recorded at fair value.  Accordingly, SFAS No. 146 may affect the timing of
recognizing future restructuring costs as well as the amounts recognized.

ELEVON, INC.





Item 2.   	MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion of results of operations and financial
condition of the Company should be read in conjunction with the Company's
unaudited financial statements and notes thereto included elsewhere in this Form
10-Q.  The report on this Form 10-Q contains forward-looking statements,
including statements related to industry trends and demand for mainframe and
other software products, cash commitments and working capital requirements.
Discussions containing such forward-looking statements may be found in the
material set forth under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," generally and specifically therein
under the captions "Recent Developments," "Liquidity and Capital
Resources," and "Additional Risk Factors." You can identify
forward-looking statements by the use of forward-looking terminology such as
"believes," "expects," "may," "will,"
"should," "seeks," "approximately,"
"intends," "plans," "pro forma,"
"estimates," or "anticipates," or the negative of these
words and phrases or similar words or phrases.  You can also identify forward-
looking statements by discussions of strategy, plans or intentions.  Forward-
looking statements involve numerous risks and uncertainties and you should not
rely upon them as predictions of future events.  There is no assurance that the
events or circumstances reflected in forward-looking statements will occur or be
achieved.  Forward-looking statements are necessarily dependent on assumptions,
data, or methods that may be imprecise and we may not be able to realize them.
The risk factors on pages 20 through 27, among others, should be considered in
evaluating the Company's prospects and future financial performance.

The Company designs its software products specifically for the Internet
architecture and business to business ("B2B") e-business models.  The
Company believes that its architecture is among the most scalable and adaptable
for the enterprise-level business software.  The Company's strategy is to offer
enterprise financial, operational and analytical e-business solutions to a
variety of industries.  The Company's e-business solutions support and enhance
enterprise-wide financial, operational and analytic processes, including
procurement, revenue management, financial management and insight, business
planning, budgeting, forecasting and financial consolidation.  The Company's
software products utilize the Microsoft Windows operating systems on the
desktop, NT, UNIX and S/390 operating systems on the server and industry-leading
On Line Analytical Processing ("OLAP"), Relational Database Management
Systems ("RDBMS") including IBM's DB2 and DB2 OLAP server, Hyperion
Solutions' Essbase and Microsoft  SQL/Server.  The Company's e-business
solutions utilize the latest-generation IBM eServer zSeries Web Application
Server.  In addition, the Company utilizes iSeries, pSeries and xSeries servers
as an integral part of its e-business strategy for analytic solutions.

RECENT DEVELOPMENTS

On September 6, 2002, we sold our United Kingdom operations and our
Elevon 5 intellectual property to Novele Limited ("Novele"), located
in London, United Kingdom.  Under the terms of a Sale Purchase Agreement
("Agreement") dated September 6, 2002, we sold the stock of our wholly
owned subsidiary, Elevon International Limited, to Novele for consideration of
$16.5 million.  Approximately $15.7 million cash was received at closing. The
remaining balance of $800,000 is due on or before December 31, 2002 subject to
certain conditions under the terms of the Agreement.  We have deferred $200,000
of the gain as recovery is dependent upon our completion of certain customer
requirements during the fourth quarter of fiscal 2002.  In addition to acquiring
the Elevon operations headquartered in the United Kingdom, Novele acquired the
QSP ("Elevon 5") intellectual property, which we had previously
acquired from the administrative receiver for the QSP Group PLC in November 2001
for $2.0 million in cash.  Novele will also become an exclusive distributor of
of Elevon software, including Elevon 2 and Active Financial Planning, in the
United Kingdom and certain other territories, as defined in a Software
Distribution Agreement.

We recognized an after-tax gain in respect of the sale of our United Kingdom
operations and e5 intellectual property of $18.6 million, or $1.19 per diluted
share, in the consolidated statement of operations for the three months ended
September 30, 2002.

On June 18, 2002, we announced that we were undertaking a strategic
restructuring designed to reduce operating costs and strengthen our position to
successfully execute our strategy. We recorded pretax restructuring charges
totaling $892,000 for severance costs related to the involuntary termination of
employees in our United States and United Kingdom operations.  During the second
quarter of 2002, our evaluation of capitalized software carrying amounts against
the related estimated net realizable values of the assets indicated that the
estimated net realizable values of certain assets were not sufficient to recover
the associated carrying values and resulted in an impairment charge of $365,000.
In addition, we recorded a benefit of $1.7 million during the quarter ended June
30, 2002 related to a reduction in estimated liabilities associated with
divested product lines. The combined effect of the charges and the special
credit described above was a net reduction in operating expenses of $475,000 in
the consolidated statement of operations for the three months ended June 30,
2002. Had these transactions not occurred, we would have experienced a net loss
of $263,000, or $0.02 per diluted share, for the second quarter.

On February 4, 2002, we announced we would start doing business as Elevon,
Inc. On May 23, 2002, the stockholders approved an amendment to our Restated
Certificate of Incorporation to formally change the Company's name to Elevon,
Inc. The certificate was filed with the Secretary of State of the State of
Delaware on May 31, 2002. On July 15, 2002, our ticker symbol on the Over the
Counter Bulletin Board was changed to "ELVN".

In the second quarter of 2000, we formed a wholly owned subsidiary,
RareVision, Inc., to further the development and market testing of a business-
to-business internet model for a web-based, knowledge management analytical
application for smaller businesses.  During fiscal 2000 and 2001, product
development and marketing expenses totaling $6.6 million were incurred and
charged to operations. During 2001, further development of the RareVision
product line on a standalone basis was suspended and the remaining components of
the development effort were integrated into our analytics product line.

RESULTS OF OPERATIONS

As more fully described in Note 5 to the interim consolidated financial
statements and in "Recent Developments" in Management's Discussion and
Analysis of Financial Condition and Results of Operations, in November 2001 we
acquired the QSP intellectual property and in September 2002 we sold our United
Kingdom operations and the previously acquired QSP intellectual property to
Novele Limited.

To assist in the understanding of the effects of the divestiture of the
United Kingdom operations and the previously acquired QSP intellectual property,
the historical results for the operations remaining after the divestiture
("North America") and the divested operations ("United
Kingdom"), where relevant, have been shown separately.

Variations in the United Kingdom results for the three and nine month periods
ended September 30, 2002 and 2001 relate primarily to the incremental revenues
and costs associated with reestablishment of the former QSP operations. The
incremental QSP revenues and costs were partially offset by the absence of one
month of United Kingdom legacy revenues and costs following the divestiture,
together with a decline in United Kingdom core license and maintenance revenues
for the nine months ended September 30, 2002.

Quarters ended September 30, 2002 and September 30,
2001

REVENUES

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Revenues:
  License and royalty      $850      $182    $1,032         $661      $161      $822
  Maintenance             3,403     1,727     5,130        4,328     1,237     5,565
  Consulting              3,287     1,102     4,389        3,645       659     4,304
                       --------- --------- ---------    --------- --------- ---------
Total revenues           $7,540    $3,011   $10,551       $8,634    $2,057   $10,691
                       ========= ========= =========    ========= ========= =========`

Total North America revenues for the three months ended September 30, 2002
were $7.5 million, a decrease of $1.1 million, or 12.7%, as compared to the
three months ended September 30, 2001.  The decrease in total revenues is
attributable to lower maintenance and consulting revenue, partially offset by
higher license revenue.

Revenue for the three month periods ended September 30, 2002 and 2001 from a
single customer represented 16.1% and 18.8% of total revenue, respectively.

North America license revenues for the three months ended September 30, 2002
were $850,000, an increase of $189,000, or 28.6%, as compared to the three
months ended September 30, 2001. Our license revenues for the three months ended
September 30, 2001 were negatively impacted by the aftermath of the events of
September 11, because license agreements are traditionally executed in the last
several weeks of a quarter.

North America maintenance revenues for the three months ended September 30,
2002 were $3.4 million, a decrease of $925,000, or 21.4%, as compared to the
three months ended September 30, 2001. North America maintenance revenues for
the three months ended September 30, 2001 included revenue from several
maintenance agreements which were not renewed and incremental revenue arising
from the early termination of one customer agreement.

North America consulting revenues for the three months ended September 30,
2002 were $3.3 million, a decrease of $358,000, or 9.8%, as compared to the
three months ended September 30, 2001. The decrease relates primarily to the
decline in consulting revenues from the legacy analytics product line.

COSTS OF LICENSES, MAINTENANCE AND CONSULTING.

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Cost of revenues         $2,494    $1,344    $3,838       $3,208    $1,054    $4,262
                       ========= ========= =========    ========= ========= =========`

North America costs of licenses, maintenance and consulting were $2.5 million
for the three months ended September 30, 2002, representing 33.1% of total North
America revenues, and $3.2 million for the three months ended September 30,
2001, representing 37.2% of total North America revenues.

The cost of North America license revenue, which is mainly related to third
party license costs, was not significant in the three month periods ended
September 30, 2002 and 2001.

The cost of North America maintenance, as a percentage of related revenue,
decreased in the three months ended September 30, 2002 as compared to the three
months ended September 30, 2001. The decrease is primarily due to the savings in
employee compensation costs that we achieved as a result of the restructuring
actions taken in June 2002.

The costs of North America consulting, as a percentage of related revenue,
decreased in the three months ended September 30, 2002 as compared to the three
months ended September 30, 2001. The decrease reflects the effect of the
restructuring actions taken in the second quarter of 2002, together with a
relative reduction in the use of subcontractors in the three months ended
September 30, 2002.

SALES AND MARKETING.

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Sales and marketing      $1,174      $742    $1,916       $2,071      $767    $2,838
                       ========= ========= =========    ========= ========= =========`

North America sales and marketing costs for the three months ended September
30, 2002 were $1.2 million, a decrease of $897,000, or 43.3%, as compared to the
three months ended September 30, 2001. As a percentage of North America
revenues, sales and marketing expenses were 15.6% and 24.0% in the three months
ended September 30, 2002 and 2001, respectively. The decrease is attributable to
reduced discretionary spending and reduced sales and marketing employee related
costs.

PRODUCT DEVELOPMENT.

Product development related expenses, excluding amortization of capitalized
software, were as follows (in thousands):

`Three Months Ended
                                           September 30,
                                      -------------------
                                         2002      2001
                                      --------- ---------
Product development expenditures.....   $1,695    $2,298
Less:
   Additions to capitalized software.     (164)     (430)
                                      --------- ---------
Product development expense..........   $1,531    $1,868
                                      ========= =========`

Net product development expense decreased $337,000, or 18.0%, in the three
months ended September 30, 2002 as compared to the three months ended September
30, 2001 and was 14.5% and 17.5% of total revenues, respectively.  For the three
months ended September 30, 2002, total product development expenditures
decreased $603,000, primarily reflecting the absence of  RareVision costs, which
were approximately $500,000 for the quarter ended September 30, 2001. Product
development expenses for the three months ended September 30, 2002 include
$89,000 relating to the divested Elevon 5 product line. Additions to capitalized
software decreased $266,000, or 61.9%, in the third quarter of fiscal 2002 as
compared to the third quarter of fiscal 2001 and were 9.7% and 18.7% of product
development expenditures, respectively. The decrease in software costs
capitalized in the three months ended September 30, 2002 is primarily
attributable to a larger proportion of our product development resources being
allocated to projects that do not meet our capitalization criteria.

AMORTIZATION OF CAPITALIZED SOFTWARE.

Capitalized software amortization in the three months ended September 30,
2002 was $539,000, a decrease of $224,000, or 29.4%, as compared to the three
months ended September 30, 2001. The decrease is mainly due to several projects
becoming fully amortized during the quarter, partially offset by incremental
amortization of the Elevon 5 intellectual property during the three months ended
September 30, 2002 of $173,000.

GENERAL AND ADMINISTRATIVE.

`North    United     2002         North    United     2001
                           America   Kingdom    Total       America   Kingdom    Total
                            -----     -----     -----        -----     -----     -----
General and administrative  $1,230      $294    $1,524         $775      $213      $988
                          ========= ========= =========    ========= ========= =========`

North America general and administrative expenses in the three months ended
September 30, 2002 were $1.2 million, an increase of $455,000, or 58.7%, as
compared to the three months ended September 30, 2001. As a percentage of total
revenues, general and administrative expenses were 16.3% and 9.0% in the three
months ended September 30, 2002 and 2001, respectively.  The increase in the
three months ended September 30, 2002 is primarily due to the effect of a
$300,000 benefit resulting from a favorable sales tax determination during the
third quarter of 2001, combined with a provision of $100,000 to increase the
allowance for doubtful accounts in the three months ended September 30, 2002.

GAIN ON SALE OF UNITED KINGDOM OPERATIONS AND e5 INTELLECTUAL PROPERTY.

The Company recognized an after-tax gain in respect of the sale of its United
Kingdom operations and e5 intellectual property of $18.6 million, or $1.19 per
diluted share, in the consolidated statement of operations for the three months
ended September 30, 2002 (see Note 5, "Acquisition and Divestitures").

PROVISION FOR INCOME TAXES.

In the three months ended September 30, 2002, the Company provided $225,000
for state, federal and foreign income taxes that could not be offset against net
operating loss carryforwards, including $200,000 for the alternative minimum tax
liability in relation to the disposal of the Elevon 5 intellectual property (see
Note 5, "Acquisition and Divestitures"). In the three months ended
September 30, 2001, the Company recorded an income tax expense of $25,000
associated with state and foreign taxes.

Nine months ended September 30, 2002 and September 30,
2001

REVENUES

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Revenues:
  License and royalty     1,367     1,692     3,059        5,089     1,413     6,502
  Maintenance            10,516     5,867    16,383       13,043     3,928    16,971
  Consulting             10,970     5,357    16,327       10,234     2,115    12,349
                       --------- --------- ---------    --------- --------- ---------
Total revenues          $22,853   $12,916   $35,769      $28,366    $7,456   $35,822
                       ========= ========= =========    ========= ========= =========`

Total North America revenues for the nine months ended September 30, 2002
were $22.9 million, a decrease of $5.5 million, or 19.4%, as compared to the
nine months ended September 30, 2001.  The decrease in total revenues is
attributable to lower license and maintenance revenue, partially offset by
higher consulting revenue.

Revenue for the nine month periods ended September 30, 2002 and 2001 from a
single customer represented 18.1% and 17.5% of total revenue, respectively.

North America license revenues for the nine months ended September 30, 2002
were $1.4 million, a decrease of $3.7 million, or 73.0%, as compared to the nine
months ended September 30, 2001. Our license revenues for the nine months ended
September 30, 2002, in common with many other software companies, were
negatively impacted by the general economic slowdown and reduction in corporate
spending for technology.  We also signed several individually larger license
agreements during the first nine months of 2001, which contributed to the
decrease in license revenues in the first nine months of 2002 when compared to
the first nine months of 2001.

North America maintenance revenues for the nine months ended September 30,
2002 were $10.5 million, a decrease of $2.5 million, or 19.4%, as compared to
the nine months ended September 30, 2001.  North America maintenance revenues
for the nine months ended September 30, 2001 included revenue from several
maintenance agreements which were not renewed, due to customer acquisitions or
the completion of migrations to alternative platforms. In 2001 we also provided
short-term extended support to several customers who were migrating to current
releases, and derived incremental revenue from the early termination of one
customer agreement.

North America consulting revenues for the nine months ended September 30,
2002 were $11.0 million, an increase of $736,000, or 7.2%, as compared to the
nine months ended September 30, 2001. The increase is primarily due to
continuing strong revenues in our North American Elevon 2 consulting business,
partially offset by a decline in legacy analytics consulting revenue.

COSTS OF LICENSES, MAINTENANCE AND CONSULTING.

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Cost of revenues         $8,694    $5,636   $14,330       $9,731    $3,183   $12,914
                       ========= ========= =========    ========= ========= =========`

North America costs of licenses, maintenance and consulting were $8.7 million
for the nine months ended September 30, 2002, representing 38.0% of total North
America revenues, and $9.7 million for the nine months ended September 30, 2001,
representing 34.3% of total North America revenues. The total North America cost
of revenues is lower for the nine months ended September 30, 2001 because
proportionately more license revenue was recognized in this period than in the
nine months ended September 30, 2002, and the cost of license revenue, which is
mainly related to third-party license costs, was insignificant for both these
periods.

The cost of North America maintenance, as a percentage of related revenue,
decreased in the nine months ended September 30, 2002 as compared to the nine
months ended September 30, 2000. The decrease was mainly the result of lower
employee compensation costs.

The costs of North America consulting, as a percentage of related revenue,
were substantially the same in the nine months ended September 30, 2002 as in
the nine months ended September 30, 2001. Lower employee-related costs were
offset by an increase in subcontractor costs.

SALES AND MARKETING.

`North    United     2002         North    United     2001
                        America   Kingdom    Total       America   Kingdom    Total
                         -----     -----     -----        -----     -----     -----
Sales and marketing      $5,035    $2,936    $7,971       $6,481    $2,481    $8,962
                       ========= ========= =========    ========= ========= =========`

North America sales and marketing costs for the nine months ended September
30, 2002 were $5.0 million, a decrease of $1.4 million, or 22.3%, as compared to
the nine months ended September 30, 2001. As a percentage of North America
revenues, sales and marketing expenses were 22.0% and 22.9% in the nine months
ended September 30, 2002 and 2001, respectively. The decrease is attributable to
reduced discretionary spending and reduced sales and marketing employee related
costs.

PRODUCT DEVELOPMENT.

Product development related expenses, excluding amortization of capitalized
software, were as follows (in thousands):

`Nine Months Ended
                                           September 30,
                                      -------------------
                                         2002      2001
                                      --------- ---------
Product development expenditures.....   $5,685    $8,208
Less:
   Additions to capitalized software.   (1,013)   (1,140)
                                      --------- ---------
Product development expense..........   $4,672    $7,068
                                      ========= =========`

Net product development expense decreased $2.4 million, or 33.9%, in the nine
months ended September 30, 2002 as compared to the nine months ended September
30, 2001 and was 13.1% and 19.7% of total revenues, respectively.  For the nine
months ended September 30, 2002, total product development expenditures
decreased $2.5 million, mainly reflecting the effect of RareVision costs of
$2.9 million for the nine months ended September 30, 2001, partially offset by
increased spending on the "Active Financial Planning" product. Product
development expenses for the nine months ended September 30, 2002 include
$339,000 relating to the divested Elevon 5 product line. Additions to
capitalized software decreased $127,000, or 11.1%, in the nine months ended
September 30, 2002 as compared to the nine months ended September 30, 2001 and
were 17.8% and 13.9% of product development expenditures, respectively. The
decrease in software costs capitalized in the nine months ended September 30,
2002 is primarily attributable to a larger portion of product development
resources being allocated to projects that do not meet the Company's
capitalization criteria.

AMORTIZATION OF CAPITALIZED SOFTWARE.

Capitalized software amortization in the nine months ended September 30, 2002
was $2.5 million, an increase of $185,000, or 8.1%, as compared to the nine
months ended September 30, 2001. The increase is due to incremental amortization
of the Elevon 5 intellectual property during the nine months ended September 30,
2002 of $672,000, partially offset by a decrease of fully amortized legacy
analytics products.

GENERAL AND ADMINISTRATIVE.

`North    United     2002         North    United     2001
                           America   Kingdom    Total       America   Kingdom    Total
                            -----     -----     -----        -----     -----     -----
General and administrative  $3,782    $1,341    $5,123       $3,601      $745    $4,346
                          ========= ========= =========    ========= ========= =========`

North America general and administrative expenses in the nine months ended
September 30, 2002 were $3.8 million, an increase of $181,000, or 5.0%, as
compared to the nine months ended September 30, 2001. As a percentage of North
America revenues, general and administrative expenses were 16.5% and 12.7% in
the nine months ended September 30, 2002 and 2001, respectively.  The increase
in general and administrative expenses in the nine months ended September 30,
2002 as compared to the nine months ended September 30, 2001 relates to the
inclusion of a $450,000 benefit from the termination of a lease and a $300,000
reversal of an accrual resulting from a favorable sales tax determination in the
nine months ended September 30, 2001, whereas no such benefits were recorded in
the nine months ended September 30, 2002. This was offset by savings in
employee-related costs in the nine months ended September 30, 2002.

RESTRUCTURING CHARGE, IMPAIRMENT OF CAPITALIZED SOFTWARE AND SPECIAL
CREDIT

During the quarter ended June 30, 2002, we recorded pretax restructuring
charges totaling $892,000 comprised of severance costs related to the
involuntary termination of employees in our United States and United Kingdom
operations, an impairment charge of $365,000 for capitalized software, and a
benefit of $1.7 million related to a reduction in estimated liabilities
associated with divested product lines.

GAIN ON SALE OF UNITED KINGDOM OPERATIONS AND e5 INTELLECTUAL PROPERTY.

The Company recognized an after-tax gain in respect of the sale of its United
Kingdom operations and e5 intellectual property of $18.6 million, or $1.19 per
diluted share, in the consolidated statement of operations for the three months
ended September 30, 2002 (see Note 5, "Acquisition and Divestitures").

PROVISION FOR INCOME TAXES.

In the nine months ended September 30, 2002, the Company provided $275,000
for state, federal and foreign income taxes that could not be offset against net
operating loss carryforwards, including $200,000 for the alternative minimum tax
liability in relation to the disposal of the Elevon 5 intellectual property (see
Note 5, "Acquisition and Divestitures"). In the nine months ended
September 30, 2001, the Company recorded an income tax expense of $75,000
associated with state and foreign taxes.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2002, the Company's principal sources of liquidity
included cash and cash equivalents aggregating $19.6 million. In addition, we
have a line of credit, secured by accounts receivable, whereby we may borrow up
to $4.0 million, dependent upon the amount of eligible accounts receivable as
defined in the agreement. The agreement is renewable annually in the first
quarter. We have never borrowed under this line of credit. As of September 30,
2002, we have future operating lease obligations of approximately $9.6 million
through 2007, of which approximately $2.0 million is payable during the twelve
month period from September 30, 2002.

The Company's operating activities, which included the Company's United
Kingdom operations through September 6, 2002, provided cash of $1.0 million and
used cash of $638,000 in the nine months ended September 30, 2002 and September
30, 2001, respectively. This increase was primarily driven by an improvement in
operating income, partially offset by spending on restructuring activities in
the nine months ending September 30, 2002.

Financing activities provided $197,000 and $196,000 in cash during the nine
months ended September 30, 2002 and September 30, 2001, respectively, consisting
of proceeds from the issuance of stock under the Company's employee stock
purchase plan and proceeds from stock options exercised, less payments made on
capital leases.

Investing activities provided cash of $13.8 million in the nine months ended
September 30, 2002 and used $126,000 in cash during the nine months ended
September 30, 2001. In the nine months ended September 30, 2002, we received net
proceeds from the divesture of our United Kingdom operations of $14.9 million,
and short-term investments totaling $458,000 matured.  These inflows were offset
by additions to capitalized software of $1.0 million and fixed asset purchases
of $521,000. The major cash flows in the nine months ended September 30, 2001
comprised net investment activity totaling $1.7 million, offset by additions to
capitalized software of $1.1 million and fixed asset purchases of $670,000.

We believe that our principal sources of liquidity, which include cash and
cash equivalents of $19.6 million as of September 30, 2002 and funds expected
from operations will satisfy our currently anticipated working capital and
capital expenditure requirements for at least the next twelve months. While
there can be no assurance, we believe the non-cash charges in our statement of
operations for depreciation and amortization of capitalized software will
continue to exceed our cash requirements for capital expenditures and our
additions to capitalized software, thereby providing cash flow to fund our
working capital requirements. In addition, we expect that the restructuring
actions taken in the three months ended June 30, 2002 will continue to have a
positive effect on future cash flow, primarily as a result of reductions in
employee compensation and related costs. Variations in our working capital
requirements are dependent primarily on the rate of growth in our revenues, the
timing and mix of our revenues, and the timing of collections of accounts
receivable associated with our revenues. In addition, we have a credit facility
that provides for up to $4.0 million of borrowings, dependent upon the amount of
eligible accounts receivable, as defined in the agreement.  However, the
following factors, among others, could affect our liquidity and capital
resources:

- Our ability to successfully transition our
product offerings to collaborative commerce solutions and to gain market
acceptance for our new products, including the Active Financial Planning product
released during the second quarter of 2002.

- Our performance is sensitive to general
economic conditions.  A sustained recession, in which customers delay or cancel
discretionary software purchases, would be damaging to our operational results
and cashflows.

- Our ability to successfully win new
consulting business to replace existing projects as they are completed.

- Our ability to renew customer maintenance agreements.

We cannot assure you that we will not need to raise additional capital to
fund operations within the next twelve months. We cannot assure you that
additional financing can be obtained on acceptable terms, or at all. If
additional funds are raised by issuing equity securities, dilution to
stockholders may result. If adequate funds are not available, our financial
condition, our results from operations and the market price of our stock could
be adversely affected.



ADDITIONAL RISK FACTORS

We operate in a rapidly changing environment that involves numerous risks and
uncertainties that could have a material adverse effect on us. The following
discussion details some, but not all, of these risks and uncertainties.

Our operating results may fluctuate, which may adversely affect the
trading price of our stock.

Our operating results fluctuate as a result of a variety of factors
including:

- the execution of new license agreements;

- the shipment of software products;

- customer acceptance criteria for services
performed;

- completion of milestone or other significant
development requirements pursuant to our license agreements;

- the financial terms of consulting agreements
and the inclusion of fixed as opposed to variable pricing;

- third-party royalty payments for licensed
software;

- the demand for our products and services;

- changes in our product and services mix;

- the development and launch of new products
and services, and the life cycles of our existing products and services;

- product development expenditures required to
update and expand our product portfolio and related third-party consulting
costs;

- sales and marketing expenses generally
related to the entry into new markets with new or existing products and
maintenance of market share in existing markets;

- acquisitions and the integration and
development of acquired entities or products;

- competitive conditions in the industry; and

- general economic conditions.

As a result, we believe that period-to-period comparisons of our operating
results are not necessarily meaningful and should not be relied upon as
indications of our future performance.

Our quarterly operating results are particularly dependent on the number of
license agreement bookings we execute in each quarter. The amount of quarterly
bookings has varied substantially from quarter to quarter due to a variety of
reasons including:

- a high proportion of license agreements are
negotiated during the latter part of each quarter and these negotiations may not
be completed before the quarter end;

- the sales cycles for some of our products are
relatively long due to our focus on "enterprise solutions" as opposed to
individual products, which adds complexity to the customer's selection,
negotiation and approval process;

- our longer sales cycle resulting from our
transition to e-business, as the transition to collaborative commerce involves
coordination with multiple vendors that can delay the sales process;

- the amount related to each booking may vary
significantly due to the need for different solutions for different customers;

- procurement procedures may vary from customer
to customer, which may affect the timing of the bookings;

- the period for a customer to complete product
evaluations and to complete any subsequent purchase approval may be delayed due
to resource limitations; and

- economic, political and industrial conditions
can adversely affect business opportunities without notice.

In addition, bookings that we execute during a particular quarter may not be
recognized as revenue during such quarter because such bookings may not have met
our revenue recognition criteria. We cannot assure you that we will be able to
effect new bookings in accordance with historical results or management's
expectations, and our inability to do so could have a material adverse effect on
our operating results, financial condition and the market price of our stock.

While we typically sell our software under a standard license agreement,
license agreements associated with large enterprise solutions often require the
negotiation of terms and conditions that differ substantially from our standard
license agreement terms. The negotiation of these agreements may extend the
sales cycle. We may not always obtain terms and conditions that permit the
recognition of revenue upon shipment of the licensed product or under the
percentage of completion method of contract accounting rules. Accordingly,
revenue may not be recognized after shipment of a product because specified
milestones have not been met or because applicable services have not been
completed.

We have and expect to enter into fixed-price consulting agreements,
particularly in response to increased competition in the industry. We have
recognized lower profit margins on certain fixed-price service agreements when
compared to variable agreements. No assurance can be given that we will be able
to conclude fixed-price agreements on terms that will allow us to achieve
acceptable operating margins, and the failure to do so could have a material
adverse effect on our operating results, financial condition and the market
price of our stock.

We historically have generated a majority of our consulting revenue from pre-
and post-implementation services. We have provided services that include, but
are not limited to, Year 2000 readiness engagements, best practice solution
engagements and other hardware and software solutions. We intend to continue to
pursue consulting engagements for which we believe we are qualified. We cannot
assure you that these engagements will result in profit margins equal to or
greater than those engagements that are specific to a customer's product
implementation. Further, we cannot assure you that consulting revenue generated
from non-implementation related projects will continue in the future. Our
inability to obtain consulting engagements and derive adequate profit margins
from such engagements could have a material adverse effect on our operating
results, financial condition and the market price of our stock.

Many customers who have bought our mainframe financial applications have the source
code. Accordingly, customers may choose to maintain their own systems or outsource the
maintenance to a provider of their choosing. We cannot assure you that
we will be successful in all cases in persuading customers to sign
maintenance contracts with us. The failure to do so would have an adverse effect on our
maintenance revenue stream.

Employee and facility related expenditures comprise a significant portion of
our operating costs and expenses, and are therefore relatively fixed over the
short term. In addition, our expense levels are based, in significant part, on
our forecasted revenue. If revenue levels fall below our expectations, operating
results are likely to be adversely affected. There can be no assurance that we
will be able to achieve profitability on a quarterly or annual basis in the
future. Any of the foregoing factors could cause our future operating results to
fall below the expectations of public securities market analysts, which could
have an adverse effect on the trading price of our common stock.

We were delisted from the Nasdaq National Market, which may adversely affect
the trading price of our stock.

Since March 6, 2001 our stock has traded on the Over the Counter Bulletin
Board. This is generally considered a less efficient market, and our stock
price, as well as the liquidity of our common stock, may be adversely affected
as a result.  Further, we cannot assure you that our stock will be relisted on
the Nasdaq National Market, or any other exchange, in the future.

The market price of our stock may experience volatility, which may cause the
value of your investment in our common stock to decline.

Technology companies, including ourselves, frequently experience
volatility in their common stock prices. Factors such as quarterly fluctuations
in results of operations, announcements of technological innovations by us or
our competitors, the introduction of new products by us or our competitors, and
macroeconomic conditions in the computer hardware and software industries
generally may have a material adverse impact on the market price of our stock.
If revenues or earnings in any quarter fail to meet the expectations of the
investment community, our stock price could be impacted immediately. In
addition, we have issued shares and stock options, which, if sold directly or
exercised and sold on the open market in large concentrations, could cause our
stock price to decline in the short term. Furthermore, the stock market has from
time to time experienced extreme price and volume fluctuations that have
particularly affected the market price for many technology companies, in some
cases unrelated to the operating performance of those companies. These broad
market fluctuations may materially adversely affect the market price of our
stock.

If we are unable to renew our existing third party license agreements or
obtain new agreements, we may not be able to successfully develop our technology
and our business, operating results and financial condition may be adversely
affected.

We generate revenue from internally developed software products, some of
which utilize technology licensed from third parties. We expect to continue
utilizing third party technology and may enter into agreements with additional
business partners. If sales of software utilizing third party technology
increase disproportionately, gross margins may be below historical levels due to
third party royalty obligations. We cannot assure you that the third parties
will renew existing agreements with us or will not require financial conditions
that are unfavorable to us. In addition, we cannot assure you that existing
third party agreements will not be terminated. If we are unable to continue
utilizing third party technology, we may not be able to successfully develop
certain of our current and new products and our business, operating results and
financial condition could be adversely affected.

If there is a further downturn in the technology industry or in general
economic conditions, our business, operating results and financial condition may
be adversely affected.

Certain software companies, including ourselves, have experienced
significant economic downturns as a result of technological shifts and
competitive pressures. These downturns are characterized by decreased product
demand, price erosion, work slowdowns and layoffs. Our operations may, in the
future, experience substantial fluctuations from period to period because of
such industry patterns and general economic and political conditions which could
affect the timing of orders from customers. We cannot assure you that such
factors will not have a materially adverse effect on our business, operating
results, financial condition, or market price of our stock.

Our royalty revenue stream is dependent on the success of Novele in selling
the Elevon 2 and Active Financial Planning products.

Following the disposal of our United Kingdom operations, Novele Limited
has become the exclusive distributor for the Elevon 2 and Active Financial
Planning products in the United Kingdom and certain other territories. Our
revenues, operating results and financial condition are likely to be adversely
affected if Novele is unsuccessful in marketing and selling these products.

If we are unable to compete successfully in our market it will harm our
business.

The business and financial applications software market for large,
complex organizations is intensely competitive. Our principal competitors with
e-business solutions are SAP AG, Oracle Corporation and PeopleSoft, Inc. With
our analytical applications, we principally compete with Hyperion Solutions
Corporation, Adaytum Software Inc. and Comshare, Inc.

We also compete to a lesser extent with other independent software
application vendors. Some of our current and potential competitors have
substantially greater financial, technical, marketing and sales resources than
us. Some of these competitors also offer business application products not
offered by us, primarily in the areas of human resources and manufacturing.
However, we remain one of the few companies committed to providing and enhancing
applications for the mainframe environment. Most of the competitors listed above
compete with us by offering UNIX-based applications.

We encounter competition from a broad range of firms in the professional
services market, including the current and former consulting divisions of the
major accounting firms, which possess greater resources than we do, and small
independent firms that compete primarily on the basis of price.

The principal competitive factors in the market for business and financial
applications software and services include product functionality, flexibility,
portability, integration, reliability, performance, product availability, speed
of implementation, quality of customer support and user documentation, vendor
reputation, experience, financial stability, cost effectiveness and price. We
believe that we compete favorably with respect to these factors. There can be no
assurance, however, that we will be able to compete successfully in the future,
and the failure to do so could have a material adverse effect on our operating
results, financial condition and the market price of our stock.

If we are unable to stay current with the rapid technological change that
characterizes the software industry, our products may not gain marketplace
acceptance and our business, operating results and financial condition could
suffer.

The software industry is characterized by rapid technological change. The
pace of change has accelerated due to advances in mainframe and client/server
technology and the growth in Internet, intranet and extranet utilization. We
expect to evaluate potential opportunities and may invest in those that are
compatible with our strategic direction. However, there can be no assurance that
any such investments will be profitable. Our legacy products are also designed
primarily for use with certain mainframe and client/server systems.  The
introduction of products embodying new technologies and the emergence of new
industry standards can render existing products obsolete. Accordingly, our
future success depends in part upon our ability to continue to enhance our
current products and to develop and introduce new products that respond to
evolving customer requirements and keep pace with technological development and
emerging industry standards, such as new operating systems, hardware platforms,
interfaces and third party applications software.

We cannot assure you that:

- we will be successful in developing and marketing product enhancements or
new        products that respond to technological change, changes in customer
requirements or emerging industry standards;
- we will not experience difficulties that could delay or prevent the
successful development, introduction and marketing of such products and
enhancements; or
- any new products or enhancements that we may introduce will achieve market
acceptance.

The failure to do any of the above could have a material adverse effect on
our operating results, financial condition and the market price of our
stock.

If we are unable to introduce, develop and market new and enhanced
versions of our software products, we may be put at a competitive
disadvantage.

Our success depends on our continued ability to introduce, develop and
market new and enhanced versions of our software products. However, we cannot
assure you that this process can be maintained. We plan to continue our
investment in product development in future periods. However, we cannot assure
you that revenues will be sufficient to support the future product development
that is required for us to be competitive. Although we may be able to release
new products in addition to enhancements to existing products, we cannot assure
you that our new or upgraded products will be accepted by the market, will not
be delayed or canceled, or will not contain errors or "bugs" that could affect
the performance of the product or cause damage to users' data.

If we are unable to effectively protect our intellectual property, we may be
put at a competitive disadvantage; and if we are involved in an intellectual
property rights dispute, we may not prevail and may be subject to significant
liabilities or required to license rights from a third party.

We regard our products as proprietary. Through our license agreements
with customers and our internal security systems, confidentiality procedures and
employee agreements, we have taken steps to maintain the trade secrecy of our
products. However, we cannot assure you that misappropriation will not occur. In
addition, the laws of some countries do not protect our proprietary rights to
the same extent as do the laws of the United States. We cannot assure you that
the confidentiality of any proprietary information will provide any meaningful
competitive advantage. We have no patents relating to our products. We believe
that, because of the rapid pace of technological change in the computer software
industry, that patents and copyrights are less significant than factors such as
the knowledge, ability and experience of our employees, frequent product
enhancements and the timeliness and quality of support services. We cannot
assure you that our current efforts to retain our products as proprietary will
be adequate. The failure to do so could have a material adverse effect on our
operating results, financial condition and the market price of our stock.

Although we believe that our products do not infringe upon the proprietary
rights of third parties, we cannot assure you that third parties will not assert
infringement claims against us in the future with respect to current or future
products, or that any such assertions will not require us to enter into royalty
arrangements or result in costly litigation, or result in us being unable to use
the intellectual property.

We may be subject to product liability claims if our software fails in
mission critical applications, and limitation of liability provided in our
license agreements may not protect us.

The license and support of our software for use in mission critical
applications creates the risk of product liability claims against us. Our
license agreements with our customers contain provisions designed to limit our
exposure to potential product liability claims. It is possible, however, that
the limitation of liability provisions contained in such license agreements may
not be enforced as a result of international, federal, state and local laws or
ordinances or unfavorable judicial decisions. Damage liability or injunctive
relief resulting from such claims could have a materially adverse impact on our
business, operating results and financial condition.

Our business depends on certain key executives, the loss of whom could weaken
our management team, and on attracting and retaining qualified personnel.

We believe that our continued success depends in large part upon our
ability to attract, train and retain highly skilled technical, sales, marketing
and managerial personnel. Because of the high level of demand, competition for
such personnel is intense and we sometimes experience difficulty in locating
candidates with appropriate qualifications or within desired geographic
locations. The success of our business is dependent on our ability to attract,
train, retain and productively manage such personnel.

We have excess capacity in our San Francisco headquarters.

Our headquarters are located in San Francisco under a lease that expires
in 2007. Although historical commercial building vacancy rates have been low in
San Francisco, recent changes in the economy have resulted in a significant
increase in available office space. Our San Francisco headquarters office space
exceeds our current needs, and while we are seeking to reduce this excess office
space we cannot assure you that this can be achieved at economic terms
acceptable to us.

The difficulties inherent in integrating acquired businesses, products or
technology could have an adverse effect on our results of operations, business
and financial condition.

We have acquired and may continue to acquire complimentary businesses,
products or technology. The process of integrating an acquired company's
business into our operations may result in unforeseen operating difficulties and
expenditures and may require significant management attention that would
otherwise be available for the ongoing development of our business. Acquisitions
involve numerous risks, including difficulties in the assimilation of
operations, technologies and products of the acquired company, risks associated
with entering markets in which we have no or limited direct prior experience and
the potential loss of key employees of the acquired company. We cannot assure
you that we will successfully integrate any new acquisition or realize any
anticipated benefits of an acquisition. Further, future acquisitions by us could
result in potentially dilutive issuances of equity securities, the incurrence of
debt and contingent liabilities and amortization related to goodwill and other
intangible assets, which could materially affect our operating results and
financial condition.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Following the disposal of our United Kingdom operations on September 6,
2002 (see Note 5, "Acquisition and Divestures"), our market risk with
regard to exchange rate exposure has been reduced to a negligible amount.  No
adverse changes with regard to interest rate risk have been experienced.

Item 4.  CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the Company's
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.  In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

Within 90 days prior to the date of this report, the
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and the Company's Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures.  Based on the foregoing, the Company's Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective.

There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect the
internal controls subsequent to the date the Company completed its
evaluation.

PART II.  OTHER INFORMATION



Item 6.	EXHIBITS AND REPORTS ON FORM 8-K



1. Exhibits



None





1. Reports on Form 8-K

Elevon, Inc. filed a Current Report on Form 8-K on September 20, 2002 in
connection with its divestiture of the United Kingdom operations and the sale of
the Elevon 5 intellectual property.





ELEVON, INC.

FORM 10-Q

SIGNATURES

ELEVON SYSTEMS, INC.

FORM 10Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |             
| | ------------
| | ELEVON, INC.

| |             
| | ------------
| | (Registrant)



| |     |                      
| | --- | ---------------------
| | By: | /s/ Stanley V. Vogler

| |                                             
| | --------------------------------------------
| |                                             
| | Stanley V. Vogler                           
| | Chief Financial Officer                     
| | (Principal Financial and Accounting Officer)

---

Certification of the Chief Executive Officer

I, Frank M. Richardson, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Elevon, Inc.;

2.  Based on my knowledge, this quarterly 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 quarterly
report;

3.  Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 we 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 quarterly 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
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly 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 the registrant's board of directors:

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
quarterly report whether or not 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.



/s/ Frank M. Richardson

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

Frank M. Richardson

November 12, 2002



Certification of the Chief Financial Officer

I, Stanley V. Vogler, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Elevon, Inc.;

2.  Based on my knowledge, this quarterly 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 quarterly
report;

3.  Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 we 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 quarterly 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
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly 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 the registrant's board of directors:

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
quarterly report whether or not 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.

/s/ Stanley V. Vogler

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

Stanley V. Vogler

November 12, 2002