<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]   Quarterly report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934

      FOR THE QUARTER ENDED SEPTEMBER 30, 2002

[ ]   Transition report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934

COMMISSION FILE NUMBER 333-89561

                            E-XACT TRANSACTIONS, LTD
             (Exact name of registrant as specified in its charter)

               DELAWARE                                    98-0212722
       (State of Incorporation)                (IRS Employer Identification No.)

      134 ABBOTT STREET SUITE 304                   VANCOUVER, B.C., V6B 2K4
(Address of principal executive offices)            (City, state, zip code)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (604) 691-1670
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes  [X]    No  [ ]

Transitional Small Business Disclosure format (check one):

                             Yes  [ ]    No  [X]

The number of shares outstanding of the Registrant's $0.001 par value common
stock on November 07, 2002 was 10,502,000.
<PAGE>
                            E-XACT TRANSACTIONS, LTD
                                   FORM 10-QSB
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I.     FINANCIAL INFORMATION                                               PAGE
                                                                                ----
<S>         <C>                                                               <C>
  Item 1.   Consolidated balance sheets -
            September 30, 2002 and December 31, 2001                             2

            Consolidated statements of operations and deficit -
            three months ended September 30, 2002 and 2001, and
            nine months ended September 30, 2002 and 2001                       3

            Consolidated statements of cash flows -
            three months ended September 30, 2002 and 2001, and
            nine months ended September 30, 2002 and 2001                        4

            Notes to consolidated financial statements                         5 - 14

  Item 2.   Management's discussion and analysis of financial condition
            and results of operations                                         15 - 20

  Item 3.   Controls and procedures                                              21


PART II.     OTHER INFORMATION

  Item 1.   Legal Proceedings                                                    22

  Item 2.   Changes in Securities                                                22

  Item 3.   Defaults Upon Senior Securities                                      22

  Item 4.   Submission of Matters to a Vote of Security Holders                  22

  Item 5.   Other Information                                                    22

  Item 6.   Exhibits and Reports on Form 8-K                                     22

            Signature                                                            23
</TABLE>


                                     - 1 -
<PAGE>
EXACT TRANSACTIONS LTD.
CONSOLIDATED BALANCE SHEET
Expressed in Canadian Dollars

<TABLE>
<CAPTION>
============================================================================================
                                                                 SEPTEMBER      DECEMBER 31
                                                                   2002             2001
--------------------------------------------------------------------------------------------
                                                                (unaudited)
<S>                                                            <C>              <C>
 ASSETS

CURRENT

  Cash                                                         $    60,626      $    33,402
  Accounts receivable (Note 3)                                     131,273          104,329
  Prepaid expenses and deposits                                     21,133           12,520
--------------------------------------------------------------------------------------------
                                                                   213,032          150,251
  Capital assets (Note 4)                                           73,896           94,296

--------------------------------------------------------------------------------------------
TOTAL ASSETS                                                   $   286,928      $   244,547
============================================================================================

 LIABILITIES AND CAPITAL DEFICIENCY

CURRENT

  Accounts payable and accrued liabilities (Note 5)            $   869,526      $   893,355
  Advance payable (Note 6)                                         209,892          188,335
--------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                        1,079,418        1,081,690
--------------------------------------------------------------------------------------------
 CONTINUING OPERATIONS (Note 1)
 COMMITMENTS (Note 10)
 CONTINGENCIES (Note 12)

 CAPITAL DEFICIENCY

Common stock, common shares issued and outstanding (Note 7)
  10,502,000 at December 31, 2001 and June 30, 2002                 11,715           11,715
  Share purchase warrants                                          281,465          281,465
  Additional Paid In Capital                                     4,833,343        4,833,343
  Accumulated deficit                                           (5,919,013)      (5,963,666)
--------------------------------------------------------------------------------------------
Capital Deficiency                                                (792,490)        (837,143)
--------------------------------------------------------------------------------------------
TOTAL CAPITAL DEFICIENCY AND LIABILITIES                           286,928          244,547
============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements


                                     - 2 -
<PAGE>
EXACT TRANSACT IONS LTD.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT AND RETAINED EARNINGS
Expressed in Canadian Dollars

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                      3 months ended September 30       9 months ended September 30
                                                                         2002            2001              2002             2001
------------------------------------------------------------------------------------------------------------------------------------
                                                                      (Unaudited)     (Unaudited)       (Unaudited)      (Unaudited)
<S>                                                                  <C>              <C>              <C>               <C>
REVENUE                                                              $    240,561         157,639      $    709,219         437,879


Cost of sales                                                              27,272          39,420            80,245          92,772

------------------------------------------------------------------------------------------------------------------------------------
GROSS MARGIN                                                         $    213,289         118,219      $    628,974         345,106
------------------------------------------------------------------------------------------------------------------------------------

EXPENSES:
 General and administrative expenses                                       99,319         162,761           338,457         490,976
 Sales and marketing                                                       26,479          36,684            83,392          82,455
 Research and development                                                  56,653          47,339           171,952         210,196
------------------------------------------------------------------------------------------------------------------------------------
                                                                          182,450         246,783           593,801         783,626

------------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS)                                              $     30,838        (128,565)     $     35,173        (438,520)
------------------------------------------------------------------------------------------------------------------------------------

OTHER (EXPENSES) INCOME
 Other Income                                                             (47,642)        (27,390)            9,480         (16,152)
------------------------------------------------------------------------------------------------------------------------------------

NET (LOSS) INCOME BEFORE INCOME TAXES                                     (16,804)       (155,955)           44,653        (454,672)
 Income taxes                                                                  --              --                --              --
------------------------------------------------------------------------------------------------------------------------------------

NET (LOSS) INCOME                                                    $    (16,804)       (155,955)     $     44,653        (454,672)
Deficit, beginning of period                                           (5,902,209)     (5,797,376)       (5,963,666)     (5,498,658)

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

Deficit, end of period                                               $ (5,919,013)     (5,953,330)     $ (5,919,013)     (5,953,330)
====================================================================================================================================

Basic earnings (loss) per share                                      $         --      $    (0.02)     $       0.01      $    (0.05)
------------------------------------------------------------------------------------------------------------------------------------
Diluted earning (loss) per share                                     $         --      $    (0.02)     $       0.01      $    (0.05)


WEIGHTED AVERAGE NUMBER OF SHARES USED TO CALCULATE LOSS PER SHARE
                                 BASIC                                 10,502,000       8,502,000        10,502,000       8,502,000
                                 DILUTED                               10,502,000       8,502,000        10,502,000       8,502,000
</TABLE>

See accompanying notes to consolidated financial statements


                                     - 3 -
<PAGE>
EXACT TRANSACTIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Expressed in Canadian Dollars

<TABLE>
<CAPTION>
=================================================================================================================
                                                        3 months ended September 30   9 months ended September 30
                                                            2002          2001            2002          2001
-----------------------------------------------------------------------------------------------------------------
                                                         (Unaudited)   (Unaudited)     (Unaudited)   (Unaudited)
<S>                                                     <C>            <C>             <C>           <C>
OPERATING ACTIVITIES

Net (Loss) Income                                         $(16,804)     (155,955)      $  44,653      (454,672)
Item not affecting cash:
  Amortization of capital assets                             9,496        15,589          24,153        47,109
  Loss on disposal of capital asset                             --            --             426            --
  Foreign exchange loss and interest on advances            10,524            --           7,274            --
Net change in operating assets and liabilities
  (Increase) Decrease in accounts receivable                 8,129         1,923         (26,944)      (60,009)
  (Increase) Decrease in prepaid expenses and deposits       1,159        12,349          (8,613)         (517)
  Increase (Decrease) in accounts payable and accrued
    liabilities                                             49,069        65,221         (23,830)       57,122
-----------------------------------------------------------------------------------------------------------------
                                                            61,573       (60,872)         17,118      (410,969)
-----------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES

  Proceeds from special warrants                                --            --              --       605,600
  Advances from shareholders                                    --        22,118          14,285      (209,191)
-----------------------------------------------------------------------------------------------------------------
                                                                --        22,118          14,285       396,409
-----------------------------------------------------------------------------------------------------------------
  INVESTING ACTIVITIES

  Purchases of capital assets                               (4,090)         (627)         (4,179)       (1,894)
-----------------------------------------------------------------------------------------------------------------
                                                            (4,090)         (627)         (4,179)       (1,894)
-----------------------------------------------------------------------------------------------------------------

INCREASE (DECREASE) IN CASH                               $ 57,483       (39,381)      $  27,224       (16,455)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD               3,143        38,635          33,402        15,709
-----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (BANK INDEBTEDNESS),
  END OF PERIOD                                           $ 60,626          (746)      $  60,626          (746)
=================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements


                                     - 4 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


1.    CONTINUING OPERATIONS

      The Company specializes in online financial transaction processing
      supporting customers' e-commerce activities. The Company was initially
      incorporated on August 13, 1998 under the laws of British Columbia,
      Canada. On July 28, 1999 the Company was continued into the State of
      Delaware.

      The accompanying financial statements have been prepared on a going
      concern basis, which contemplates the realization of assets and
      satisfaction of liabilities in the normal course of business.

      The Company incurred a net loss of $16,804 for the quarter ended September
      30, 2002, and at September 30, 2002 had a working capital deficiency of
      $866,386 and capital deficiency of $792,490. These factors among others
      indicate that the Company may be unable to continue as a going concern for
      a reasonable period of time. The financial statements do not include any
      adjustments that might result from the outcome of this uncertainty. The
      Company's continuation as a going concern is dependent upon achieving
      operating levels adequate to support the Company's cost structure and
      obtaining adequate financial resources through a contemplated financing or
      otherwise. However, there can be no assurance that such financings will be
      successful.

      In the event that cash flow from operations, if any, together with the
      proceeds of any future financings, are insufficient to meet the Company's
      current operating expenses, the Company will be required to reevaluate its
      planned expenditures and allocate its total resources in such manner as
      the Board of Directors and management deems to be in the Company's best
      interest. This may result in the substantial reduction of the scope of
      existing and planned operations.

      The success of the Company's future operations is dependent upon
      maintaining its profitability, and upon its ability to raise additional
      financing. Management's plans include obtaining the continued support of
      creditors, expanding product offerings within its own sales channel and
      with channel partners, raising additional financing and, ultimately,
      positioning the Company for profitable operations.

2.    SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

      The accompanying financial statements have been prepared pursuant to the
      rules and regulations of the Securities and Exchange Commission. Certain
      information and footnote disclosures normally included in the annual
      financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted pursuant to those
      rules or regulations. The interim financial statements are unaudited, but
      reflect all adjustments which are, in the opinion of management, necessary
      to provide a fair statement of results for the interim periods presented.
      These financial statements should be read in conjunction with the
      consolidated financial statements and related notes thereto in the
      Company's Annual Report on Form 10KSB for the year ended December 31,
      2001. The results of operations for the interim periods are not
      necessarily indicative of the results to be expected in the future
      periods.


                                     - 5 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


2.    SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (CONTINUED)

      These financial statements have been prepared in accordance with the
      following significant accounting polices.

      (a)   Basis of consolidation

            These consolidated financial statements include the assets,
            liabilities and operating results of the Company and its
            wholly-owned subsidiary. All significant intercompany balances and
            transactions have been eliminated.

      (b)   Use of Estimates

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions that affect the reported amounts of assets,
            liabilities, revenues and expenses and disclosure of contingent
            assets and liabilities at the date of the financial statements and
            for the periods presented. Estimates are used for, but not limited
            to, accounting for doubtful accounts, amortization, recoverability
            of long-lived assets, income taxes, and contingencies. Actual
            results may differ from those estimates.

      (c)   Foreign Currency Translation

            On January 1, 2002 the Company changed its functional currency from
            the United States dollar to the Canadian dollar. The majority of the
            Company's operating transactions are denominated in Canadian
            dollars. Monetary assets and liabilities denominated in other than
            the Canadian dollars are translated using the exchange rates
            prevailing at the balance sheet date. Revenues and expenses are
            translated using average exchange rates prevailing during the
            period. Gains and losses on foreign currency transactions are
            recorded in the consolidated statement of operations. The Company
            has re-measured its assets, liabilities, revenues and expenses for
            prior periods using the historical exchange rates in existence at
            the date of the transactions.

      (d)   Research and Development Costs

            All research and development costs are expensed when incurred unless
            they meet generally accepted accounting criteria for deferral and
            amortization. The Company reassesses whether it has met the relevant
            criteria for deferral and amortization at each reporting date. To
            date, no development costs have been deferred.


                                     - 6 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      (e)   Capital Assets and Amortization

            Capital assets are recorded at cost and amortized over the estimated
            useful lives of the assets on the following basis:

              Leasehold improvements     useful life of asset on a straight-line
                                         basis
              Computer software          100% declining balance
              Computer equipment         30% declining balance

            In the year of acquisitions, half the above-mentioned rates are
            used.

            The Company periodically evaluates the recoverability of its capital
            assets whenever events or changes in circumstances indicate that the
            carrying amount of an asset may not be recoverable. An impairment
            loss would be recognized when estimates of future cash flows
            expected to result from the use of an asset and its eventual
            disposition are less than its carrying amount. One adjustment in
            assets had been identified by the Company in the period ended
            September 30, 2002 and no impairment in assets was identified in
            2001. The adjustment identified for the nine months ended September
            30, 2002 resulted from the Company's decision to end its office
            lease at October 31, 2002 and relocate to a new office space.
            Leasehold improvement was adjusted to reflect the one month
            remaining on the office lease.

      (f)   Revenue Recognition

            The Company's revenue is derived from the following sources:

            (i)   Online Transactions

                  Revenue from the setup, maintenance, customization and
                  processing of online transactions is recognized when the
                  services are performed, the amount of revenue is fixed or
                  determinable and collectibility is reasonably assured.


                                     - 7 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      (f)   Revenue Recognition

            (ii)  Web Development

                  Revenue from services related to web development are
                  recognized when the services are performed, the amount of
                  revenue is fixed or determinable and collectibility is
                  reasonably assured. Provision for estimated losses on
                  contracts is recorded when identified.

      (g)   Income Taxes

            The Company accounts for income taxes under the provisions of
            Statement of Financial Accounting Standards ("SFAS") No. 109,
            Accounting for Income Taxes. This statement provides for a liability
            approach under which deferred income taxes are provided based upon
            enacted tax laws and rates applicable to the periods in which the
            temporary differences between the accounting values of the Company's
            assets and liabilities and their corresponding tax values will
            reverse.

            Deferred tax assets, if any, are recognized only to the extent that,
            in the opinion of management, it is more likely than not that the
            income tax assets will be realized.

      (h)   Basic and Diluted Loss Per Share

            Basic loss per share is computed by dividing net loss available to
            common stockholders by the weighted-average number of common shares
            outstanding for the period along with the contingently issuable
            common shares on exercise of special warrants which have been
            treated as outstanding as all necessary conditions for their
            exercise have been satisfied.

      (i)   Comprehensive Income

            SFAS No. 130, Reporting Comprehensive Income, establishes standards
            for the reporting and display of comprehensive income and its
            components (revenue, expenses, gains and losses) in a full set of
            general-purpose financial statements. The Company has no
            comprehensive income items, other than the net loss, in any of the
            periods presented.


                                     - 8 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      (j)   Recent Accounting Pronouncements

            In July 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 addresses the
            initial recognition and measurement of intangible assets acquired in
            a business combination and SFAS No. 142 addresses the subsequent
            recognition and measurement of intangible assets acquired outside of
            a business combination whether acquired individually or with a group
            of other assets. These standards require all business combinations
            to be accounted for using the purchase method of accounting.

            Goodwill is no longer amortized but instead is subject to impairment
            tests at least annually.

            The Company was required to adopt SFAS No. 141 and No. 142 on a
            prospective basis as of January 1, 2002; however, certain provisions
            of these new standards may also apply to any acquisitions concluded
            subsequent to June 30, 2001. The adoption of SFAS No. 141 and No.
            142 did not to have a material effect on the Company's financial
            position or results of operations.

            The FASB issued SFAS No. 144, Accounting for the Impairment or
            Disposal of Long-Lived Assets, in August 2001. SFAS No. 144, which
            addresses financial accounting and reporting for the impairment of
            long-lived assets and for long-lived assets to be disposed of,
            supersedes SFAS No. 121 and is effective for fiscal years beginning
            after December 15, 2001. Therefore, the Company was required to
            adopt SFAS No. 144 as of January 01, 2002. The adoption of SFAS No.
            144 did not have a material impact on the Company's financial
            position or results of operations.

            In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
            Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
            and Technical Corrections. Among other things, SFAS No. 145 rescinds
            both SFAS No. 4, Reporting Gains and Losses from Extinguishment of
            Debt, and the amendment to SFAS No. 4, SFAS No. 64, Extinguishments
            of Debt Made to Satisfy Sinking-Fund Requirements. Through this
            rescission, SFAS No. 145 eliminates the requirement (in both SFAS
            No. 4 and SFAS No. 64) that gains and losses from the extinguishment
            of debt be aggregated and, if material, classified as an
            extraordinary item, net of the related income tax effect. Generally,
            SFAS No. 145 is effective for transactions occurring after May 15,
            2002. The Company does not expect SFAS No. 145 to have a material
            impact on the Company's results of operations or its financial
            position.

            In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
            Associated with Exit or Disposal Activities. SFAS No. 146 requires
            that the liability for a cost associated with an exit or disposal
            activity be recognized at its fair value when the liability is
            incurred. Under previous guidance, a liability for certain exit
            costs was recognized at the date that management committed to an
            exit plan, which was generally before the actual


                                     - 9 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      (j)   Recent Accounting Pronouncements (continued)

            liability has been incurred. As SFAS No. 146 is effective only for
            exit or disposal activities initiated after December 31, 2002, the
            Company does not expect the adoption of this statement to have a
            material impact on the Company's financial statements.

      (k)   Stock options

            Stock options are denominated in United States dollars and are
            therefore subject to variable accounting. For the three and nine
            months ended September 30, 2002 no compensation expense was
            recognized as the exercise price of the options was greater than
            market price.

      (l)   Comparative figures

            Certain comparative figures have been reclassed to conform with the
            current period's presentation

3.    ACCOUNTS RECEIVABLE

      Accounts receivable and other are recorded net of a $12,523 allowance for
      doubtful accounts at September 30, 2002 (December 31, 2001 - $19,999)

4.    CAPITAL ASSETS

<TABLE>
<CAPTION>
                                               September 30          December 31
                           --------------------------------------    -----------
                                                   2002                 2001
                           --------------------------------------    -----------
                                        Accumulated      Net Book     Net Book
                             Cost       Amortization      Value        Value
                           --------     ------------     --------    -----------
<S>                        <C>          <C>              <C>         <C>
Leasehold improvements ..  $  7,333       $  7,211       $   122       $ 5,143
Computer software .......   133,509        131,639         1,870           775
Computer equipment ......   177,298        105,393        71,905        88,378
                           --------       --------       -------       -------
                           $318,140       $244,243       $73,897       $94,296
                           ========       ========       =======       =======
</TABLE>


                                     - 10 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


5.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      The principal components of accounts payable and accrued liabilities were
      as follows:

<TABLE>
<CAPTION>
                                                     September 30    December 31
                                                         2002           2001
                                                     ------------    -----------
<S>                                                  <C>             <C>
Trade payables ....................................   $  819,380     $  855,067
Other accrued liabilities .........................       50,146         38,288
                                                      ----------     ----------
                                                      $  869,526     $  893,355
                                                      ==========     ==========
</TABLE>

6.    ADVANCES PAYABLE

      The advances payable from certain stockholders of the Company bear
      interest at bank prime rate plus one percent and have no fixed terms of
      repayment. The advances are secured by certain assets of the Company.

7.    STOCKHOLDERS' EQUITY

      (a)   Authorized Stock

            The Company was initially incorporated on August 13, 1998 under the
            laws of British Columbia, Canada with 50,000,000 authorized common
            stock with no par value. On July 28, 1999 the Company was continued
            into the State of Delaware.

            The Company has authorized 50,000,000 common stock with a par value
            of $0.001 per share.

      (b)   Stock Options

            The following table summarizes information about stock options
            outstanding at September 30, 2002:

<TABLE>
<CAPTION>
               Date granted   Expiry date   Number of options    Exercise price
                                                                 (US dollars)
<S>                           <C>           <C>                  <C>
                12-Jan-00      11-Jan-05          357,000           $  1.00

                21-Mar-00      20-Mar-05           13,000              1.00

                17-May-00      16-May-05           78,500              3.35

                24-Apr-01      23-Apr-06          625,000              0.25
                                             ------------
                                                1,073,500
                                             ------------
</TABLE>


                                     - 11 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


7.    STOCKHOLDERS' EQUITY (CONTINUED)

      (c)   Warrants

            The following warrants were outstanding as at September 30, 2002

<TABLE>
<CAPTION>
Date granted     Expiry date     Number of shares     Exercise price
                                                      (US dollars)
<S>             <S>             <S>                  <S>
28-Jul-99        28-Jul-04       1,007,136            $1.32
26-Apr-01        26-Apr-03       2,000,000             0.23
                                 ---------
                                 3,556,668
                                 ---------
</TABLE>


8.    FINANCIAL INSTRUMENTS

      (a)   Fair Value

            The carrying values of cash, accounts receivable, and deposits as
            reflected in the balance sheet, approximate their respective fair
            values as at September 30, 2002 and December 31, 2001 because of the
            demand or short-term maturity of these instruments.

            Due to the substantial doubt with regard to the going concern
            assumption (Note 1), creditors may not be able to obtain full
            settlement of amounts due. As such, the fair value of accounts
            payable and accrued liabilities and advances payable are
            indeterminable.

      (b)   Credit Risk and Economic Dependence

            Financial instruments which potentially subject the Company to
            credit risk consist of bank deposits and accounts receivable. Cash
            is deposited with high credit quality financial institutions.
            Accounts receivable consist of amounts receivable from trade and
            other receivables. The Company does not require collateral or other
            security to support accounts receivable. The Company estimates its
            allowance for doubtful accounts based on analysis of specific
            accounts and its operating history.

            The Company is subject to credit risk as it earns revenue from a
            limited number of customers. During the nine months ended September
            30, 2002 - $178,126 (2001 - $82,987) and the quarter ended September
            30, 2002 - $43,241 (2001 - $37,731) of revenue was derived from two
            customers. As at September 30, 2002 accounts receivable included
            $20,531 (December 31, 2001 - $6,235) due from these two customers.


                                     - 12 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


9.    RELATED PARTY TRANSACTIONS

      Related party transactions not otherwise disclosed in these financial
      statements include:

      (a)   As at September 30, 2002 accounts payable and accrued liabilities
            included $115,005 (December 31, 2001 - $83,028) due to two corporate
            stockholders for operating costs paid on its behalf;

      (b)   During the quarter ended September 30, 2002 and nine months ended
            September 30, 2002, the Company incurred interest of $5,206 (2001 -
            $1376) and $7,762 (2001 - $21,967), respectively, on advances from
            certain stockholders of the Company; and,

      (c)   As at September 30, 2002, $209,893 (December 31, 2001 - $188,335)
            was due to certain stockholders and directors of the Company;

10.   COMMITMENTS

      Future minimum operating lease payment for premises and equipment leases
      for the periods ended September 30, are due as follows:

<TABLE>
<S>                                                                <C>
       2003 .....................................................  $   41,897
       2004 .....................................................      38,089
       2005 .....................................................      35,079
       2006 .....................................................      35,079
       2007 .....................................................      26,309
                                                                   ----------
                                                                   $  176,453
                                                                   ==========
</TABLE>

11.   SEGMENTED INFORMATION

      The Company operates in one segment - electronic commerce services.

      The Company attributes revenue among geographical areas based on the
      location of the customers. During the quarter ended September 30, 2002,
      90% of revenues were derived in Canada (quarter ended September 30, 2001 -
      95%). During the nine months ended September 30, 2002, 90% of revenues
      were derived in Canada (nine months ended September 30, 2002 - 95%).
      Long-lived assets include capital assets and are located in Canada.

      The Company's customer sales concentration is discussed in Note 8 (b).


                                     - 13 -
<PAGE>
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)


12.   CONTINGENCIES

      The Company received a statement of assessment from Canada Customs and
      Revenue Agency on April 18, 2002 denying the Company's filing position
      with regards to its continuation in the U.S. CCRA has assessed a liability
      of $324,484. On July 10, 2002 the company filed its Notice of Objection
      strongly defending its position. No provision for this amount has been
      recorded, as the outcome of this assessment is uncertain.

      On October 2, 2001, a former employee (the "Plaintiff") filed a complaint
      in the Supreme Court of British Columbia, Vancouver County, against the
      Company in connection with an employment contract dated November 26, 1999.
      The Plaintiff alleges that he was terminated without cause on September
      11, 2001 and seeks severance pay of $45,000 plus two weeks vacation and
      out of pocket expenses of $2,431.

      On October 23, 2001 the Company filed a Statement of Defense denying the
      allegation that any moneys are due to the Plaintiff.

      The Company believes that the Plaintiff's complaint is without merit and
      intends to vigorously defend these proceedings. The Company believes that
      the Plaintiff was terminated with reasonable cause and has sufficient
      evidence to support its case.


                                     - 14 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002

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

      Forward-looking Statements

      The following Management Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the accompanying
consolidated financial interm statements and notes included in this report.
Statements made in this Form 10-QSB that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements often can be identified by the use of
terms such as "may," "will," "expect," "believes," "anticipate," "estimate," or
"continue," or the negative thereof. The Company intends that such
forward-looking statements be subject to the safe harbors for such statements.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to risks,
uncertainties and important factors beyond the control of the Company that could
cause actual results and events to differ materially from historical results of
operations and events from those presently anticipated or projected. These
factors include adverse economic conditions, entry of new and stronger
competitors, inadequate capital, unexpected costs, failure to gain product
approval in the North American or foreign countries and failure to capitalize
upon access to new markets. Additional risks and uncertainties that may affect
forward-looking statements about the Company's business and prospects include
the possibility that a competitor will develop a more comprehensive solution,
delays in market awareness of its products, possible delays in execution of
sales and marketing strategy, which could have an immediate and material adverse
effect. The Company disclaims any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

     Overview

     The Company was incorporated under the laws of the Province of British
Columbia on August 13, 1998. On July 29, 1999 the Company filed a certificate of
domestication and certificate of incorporation with the Secretary of State of
the State of Delaware, thereby "domesticating" or transitioning from a Canadian
company to one organized under the laws of the State of Delaware.

     The consolidated financial statements of the Company are prepared in
accordance with accounting principles generally accepted in the United States of
America which for this Company complies in all material respects with Canadian
generally accepted accounting principles.

      The Company provides real-time financial transaction processing services
using Internet technology. Its electronic commerce (e-commerce) software
services allow PC based point-of-sale terminals, PCs, computer systems and
proprietary product platforms to accept credit card payments and submit those
payments to various payment processing networks for pre-authorization,
authorization and settlement/deposit. The Company is approved to act as a third
party payment processor to conduct transaction processing with major financial
networks in North America.

The Company has certifications with financial networks in North America and
there have been and will likely continue to be, from time to time, ongoing
changes to these certification requirements. The Company has met any regulatory
and technical changes and will endeavor to meet any future regulatory and
technical changes as required by the networks for which the Company maintains
certification with. A


                                     - 15 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


recent regulatory program sponsored by Visa International was successfully
completed by the Company requiring it to comply with a comprehensive set of
security, audit and control procedures related to the handling of sensitive Visa
account information. The program was conducted by independent third party
auditors who presented a compliance report back to Visa International.

The Company's success will depend largely upon its ability to compete
successfully, comply with evolving regulatory and technical standards, develop
new products, and services and market them successfully in a market that is
becoming increasingly competitive.

The Company determined that as of January 1, 2002 its functional currency was
the Canadian dollar. Previously the functional currency of the Company was the
United States dollar. The change in the Company's functional currency was made
as the majority of the Company's operating transactions are now denominated in
the Canadian dollar. Monetary assets and liabilities denominated in other than
Canadian dollars were translated using the exchange rates prevailing at the
balance sheet date. Revenues and expenses were translated using average exchange
rates prevailing during the period. Gains and losses on foreign currency
transactions were recorded in the consolidated statement of operations and
deficit. The Company re-measured its assets, liabilities, revenues and expenses
for prior periods using historical exchange rates in existence at the date of
the transactions. As at September 30, 2002 a significant component of the
existing accounts payable and accrued liabilities and advances payable were
denominated in United States dollars ($425,575). The impact of a 1% increase in
the relative value of the Canadian dollar to the United States dollar would
reduce accounts payable and accrued liabilities and advances payable and
increase net income from operations by $4,256 United States dollars -
approximately $6,300 Canadian dollars.

Results of Operations
Interim Financial Results
(All amounts are expressed in Canadian dollars)

 The Company earns its revenues by charging its customers setup fees, monthly
account maintenance fees and transaction fees for usage of its services.
Transaction fees are based on the number of transactions processed in a month.
Additional revenue is also derived through consulting services charged to
customers who require a customized solution.

Revenues

The revenues are derived primarily from transaction processing fees and monthly
service fees. During the three month period ended September 30, 2002, revenues
increased by 152.60% over the comparable period in 2001. The increase was due
primarily to an increase in the number of customers, an increase in the number
of transactions processed per customer, and custom solutions for certain
customers. As at September 30, 2002 the Company had 338 customers compared to
270 customers as at September 30, 2001. The total value of transactions
processed by the Company for the quarter ended September 30, 2002 amounted to
approximately $240 million compared to $356 million in the comparable quarter in
2001. For the nine month period ended September 30, 2002, revenue increased by
161.97% over the comparable period in 2001 for the above mentioned reasons.

Gross profit percentage for the three months ended September 30, 2002 increased
from 74.99% in 2001 to 88.66% in 2002. For the nine months then ended, gross
profit percentages were 88.69% in 2002 and 78.81% in 2001. The Company was able
to contain its cost of sales despite an increase in revenue. In the three and
nine months ended September 30, 2002, cost of sales in the comparative periods
were lower due


                                     - 16 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


the fact that the company had ceased relations with a large financial processing
network in the United States in the fourth quarter of 2001. Most of the setup
and monthly costs of this relationship were recorded in three months ended
September 30, 2001.

Expenses

Total expenses during the three months ended September 30, 2002 amounted to
$182,450 compared to $246,783 for the three months ended September 30, 2001. The
decrease of 26.07% in operating expenses was due to continued cost cutting and
process automation efforts that the Company has focused on since closing its
office in the United States.

The decrease in operating expenses from $783,626 for the nine months ended
September 30, 2001 to $593,801 in 2002 is largely attributable to continued cost
cutting and process automation efforts that the Company has focused on since
closing its office in the United States.

General and Administrative (G&A): During the three months ended September 30,
2002, G&A expenses amounted to $99,319 compared to $162,761 in the comparable
period in 2001. The decrease of approximately 39% in G&A expenses over the
comparable period was due to the fact the Company has continued to focus on cost
cutting and reductions in non-essential activities requiring G & A resources.
For the ended September 30, 2002, accounting expenses decreased from $ 66,823 in
2001 to $39,133 in 2002, rent decreased from $34,427 in 2001 to $32,192 in 2002.
Amortization of equipment decreased from $46,873 in 2001 to $36,428 in 2002.
Wages and salaries decreased from $146,331 in 2001 to $141,930 in 2002. For the
nine months ended September 30, 2002, G&A expenses decreased from $490,976 in
2001 to $338,457. The decrease in G&A expenses is largely attributable to
continued cost cutting and process automation efforts that the Company has
focused on since closing its office in the United States.

Sales and Marketing: Sales and Marketing expenses for the nine months ended
September 30, 2002 were $83,392 compared to $82,455 for the same period ended
2001 and quarter ended September 30, 2002 amounted to $26,479 compared to
$36,684 incurred in the three months ended September 30, 2001. The majority of
the sales and marketing expense consisted of the payroll of employees involved
in marketing.

Research and Development (R&D): Research and development expenses consist
primarily of compensation expenses and consulting fees to support the
development of the Company's software, services and technologies. Research and
development expenditures were $56,653 for the three months ended September 30,
2002 compared to $47,339 in the comparable period in 2001. For the nine months
ended September 30, 2002, research and development expenditures were $171,952
compared to $210,196 in the comparable period in 2001. The decrease in R&D
expenses was due to a reduction of US staff that were required for transition in
2001. The Company has adequate resources to maintain its operating systems and
continue with modest software development goals. The Company feels it can hire
contract developers to enhance existing development resources to meet essential
development goals. The Company matches new development initiatives with the
resources it has available and therefore limits new development initiatives
appropriately.

Other Income: The Company is subject to foreign exchange gains and losses as a
large portion of its liabilities and advances are denominated in United States
Dollars. For the quarter ended September 30, 2002, the Company experienced
foreign exchange losses of $47,642 (27,390 for the quarter ended September 30,
2001). For the nine months then ended, foreign exchange gains and other income
resulted


                                     - 17 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


in a contribution of $9,480 to the Company's net income. For the same period
2001, foreign exchange losses and other expenses were $16,152. As the Company
continues to incur liabilities and earn a portion of its revenue in the United
States, the Company will continue to be subject to foreign exchange gains and
losses.

Net (Loss) Income:

The Company incurred a net loss of $12,936 for the three months ended September
30, 2002 and a net profit of $44,653 for the nine months then ended compared to
a loss of $155,955 for the three months ended September 30, 2001 and $454,672
for the nine months then ended. As the Company has a significant amount of its
trade payables denominated in United States dollars and because the Canadian
dollar had weakened against the United States dollar during the quarter ended
September 30, 2002, it recognized approximately $54,000 of unrealized foreign
exchange losses included in other income in this quarter. Management believes
that it has a good mix of customers to maintain its profitability in the future
and recognizes consolidation trends with its competitors and a general slowdown
in new customer acquisition.

Recent Accounting Pronouncements

In July 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 addresses the initial recognition and measurement of
intangible assets acquired in a business combination and SFAS No. 142 addresses
the subsequent recognition and measurement of intangible assets acquired outside
of a business combination whether acquired individually or with a group of other
assets. These standards require all business combinations to be accounted for
using the purchase method of accounting. Goodwill is no longer amortized but
instead is subject to impairment tests at least annually.

The Company is required to adopt SFAS No. 141 and No. 142 on a prospective basis
as of January 1, 2002; however, certain provisions of these new standards may
also apply to any acquisitions concluded subsequent to September 30, 2001. The
adoption of SFAS No. 141 and No. 142 did not to have a material effect on the
Company's financial position or results of operations.

The FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, in August 2001. SFAS No. 144, which addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, supersedes SFAS No. 121 and is effective
for fiscal years beginning after December 15, 2001. Therefore, the Company was
required to adopt SFAS No. 144 as of January 1, 2002. The adoption of SFAS No.
144 has not had a material impact on the Company's financial position or results
of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
Among other things, SFAS No. 145 rescinds both SFAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and the amendment to SFAS No. 4, SFAS No.
64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. Through
this rescission, SFAS No. 145 eliminates the requirement (in both SFAS No. 4 and
SFAS No. 64) that gains and losses from the extinguishment of debt be aggregated
and, if material, classified as an extraordinary item, net of the related income
tax effect. Generally, SFAS No. 145 is effective for transactions occurring
after May 15, 2002. The Company does not expect SFAS No. 145 to have a material
impact on the Company's results of operations or its financial position.


                                     - 18 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. SFAS No. 146 requires that the liability for a cost
associated with an exit or disposal activity be recognized at its fair value
when the liability is incurred. Under previous guidance, a liability for certain
exit costs was recognized at the date that management committed to an exit plan,
which was generally before the actual liability has been incurred. As SFAS No.
146 is effective only for exit or disposal activities initiated after December
31, 2002, the Company does not expect the adoption of this statement to have a
material impact on the Company's financial statements.

Critical Accounting Policies and Estimates

The significant accounting policies are outlined within note 2 to the
consolidated interim financial statements. Some of those accounting policies
require the Company to make estimates and assumptions that affect the amounts
reported by the Company. The following items require the most significant
judgment or estimation:

      Revenue Recognition:

      New customers are required to complete a Merchant Registration Form and a
      Transactions Processing Agreement. The term of the Agreement is normally
      for a year with an automatic renewal at the anniversary date. The Company
      receives it revenue from four sources: new account activations, monthly
      service/membership fees, online transactions fees and customized
      development. These revenues are recognized when the services are
      performed, the amount of revenue is fixed or determinable and
      collectibility is reasonably assured.

      Accounts Receivable:

      The Company performs monthly reviews of its accounts receivable. Customers
      who are in arrears are normally given the opportunity to pay off arrear
      balances prior to suspension of processing services. Provision for
      doubtful accounts are normally based on customers who are 120 days in
      arrears. However, the review is also based on a case by case basis
      depending on the customer's circumstances. A significant change in the
      financial position of the Company's customers could have a material
      adverse impact on the collectability of the accounts receivable.

      Use of estimates:

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities at
      the date of the financial statements and the reported amounts of revenues
      and expenses during the reporting period. Examples include provisions for
      bad debts, and the contingencies described in Legal Proceedings in item 1
      following. Actual results could differ from those estimates.

      Liquidity & Capital Resources

      Cash flow:

      The Company's net cash inflow during the three months ended September 30,
      2002 was $57,483 compared to a net cash outflow of $ 39,381 for the three
      months ended September 30, 2001 and for the nine months ended September
      30, 2002 was net cash inflow was $27,224 compared to a net outflow of
      $16,455 for the nine months ended September 30, 2001. The increase in cash
      inflow for


                                     - 19 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


      this quarter ended September 30, 2002 is mainly due to receipt of payment
      for customization revenue incurred this quarter and for payment of
      accounts for customization revenue recorded in past quarters. The
      Company's cash position is expected to improve as it expects to activate
      new accounts as a result of its continued sales efforts with its own sales
      resources as well as expanding its product availability within its Partner
      channels.

      The Company acquired a new laser printer for its general office use and
      upgraded it's core development tools to the current version. Additional
      investment was made in the form of computer memory required to process
      increased volume of transactions. Management will continue to review its
      operations and adjust its operations based on market conditions.

      Capital resources: The Company had a capital deficiency of $792,490 as at
      September 30, 2002 compared to a deficiency of $866,386 as at December 31,
      2001. In the event that cash flow from operations, together with the
      proceeds of any future financings, are insufficient to meet the Company's
      expenses, the Company will be required to re-evaluate its planned
      expenditures and allocate its total resources in such manner as the board
      of directors and management deems to be in the best interest of the
      Company and its stockholders.

      The success of the Company is dependant upon the continuing support of its
      creditors, its ability to continue to raise financing to fund operations
      and ultimately upon its ability to achieve profitable operations.

      The Company incurred a net loss of $16,804 for the quarter ended September
      30, 2002 and a net profit of $44,653 for the nine months then ended, and
      at September 30, 2002 had a working capital deficiency of $866,386 and
      capital deficiency of $792,490. These factors among others indicate that
      the Company may be unable to continue as a going concern for a reasonable
      period of time. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty. The Company's
      continuation as a going concern is dependent upon achieving operating
      levels adequate to support the Company's cost structure and obtaining
      adequate financial resources through a contemplated financing or
      otherwise. However, there can be no assurance that such financings will be
      successful.

      In the event that cash flow from operations, if any, together with the
      proceeds of any future financings, are insufficient to meet the Company's
      current operating expenses, the Company will be required to reevaluate its
      planned expenditures and allocate its total resources in such manner as
      the Board of Directors and management deems to be in the Company's best
      interest. This may result in the substantial reduction of the scope of
      existing and planned operations.

      The success of the Company's future operations is dependent upon
      maintaining its profitability, and upon its ability to raise additional
      financing. Management's plans include obtaining the continued support of
      creditors, raising additional financing and, ultimately, positioning the
      Company for profitable operations.

      Subsequent events

      The Company entered into a new five year lease for operating premises to
      begin on November 1, 2002 at new facilities in Vancouver, B.C. The new
      lease will save the Company approximately $850 per month in rent expense
      compared to rent expense on its previous premises. As a result of the
      lease, the company is committed to an estimated annual cost of $35,079.


                                     - 20 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


      ITEM 3. CONTROLS AND PROCEDURES

            Based on their evaluation (the "Evaluation"), the Company's Chief
            Executive Officer, Peter Fahlman, and Chief Financial Officer,
            Edmund Shung, have concluded that the Company's disclosure controls
            and procedures are generally effective, but also concluded that due
            to the company's small staff, weakness exists due to it being
            impractical for full segregation of duties. The Company's Chief
            Executive Officer, Peter Fahlman, and Chief Financial Officer,
            Edmund Shung, have concluded that these weaknesses did not have a
            material impact on the accuracy of the Company's financial
            statements.

            As of the date of this report, there have not been any significant
            changes in the Company's internal controls or in other factors that
            could significantly affect these controls subsequent to the date of
            the Evaluation.


                                     - 21 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


      Part II. Other Information

Item 1. Legal Proceedings

      1. On October 2, 2001 Robert Roker, a former employee (the "Plaintiff")
filed a complaint in the Supreme Court of British Columbia, Vancouver County,
against the Company in connection with an employment contract dated November 26,
1999. The Plaintiff alleges that he was terminated without cause on September
11, 2001 and seeks severance pay of $45,000 plus two weeks vacation and out of
pocket expenses of $2,431.

      On October 23, 2001 the Company filed a Statement of Defense denying the
allegation that any moneys are due to the Plaintiff.

      The Company believes that the Plaintiff's complaint is without merit and
intends to vigorously defend these proceedings. The Company believes that the
Plaintiff was terminated with reasonable cause and has sufficient evidence to
support its case.

Item 2. Changes in Securities

      No changes in securities.

Item 3. Defaults Upon Senior Securities

      Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

      Not applicable

Item 5. Other Information

      Not applicable

Item 6.  Exhibits and Reports on Form 8-K

            (a)   Exhibits

                  None

            (b)   Reports on Form 8-K.

                  No form 8-K reports were file in the quarter ended September
                  30, 2002


                                     - 22 -
<PAGE>
E-XACT TRANSACTIONS LTD.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2002


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1933 the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


E-XACT TRANSACTIONS LTD
(Registrant)

Dated:   November 14, 2002                           By:   /s/ Peter Fahlman
                                                           Peter Fahlman
                                                           President and CEO


                                     - 23 -
<PAGE>
I, Peter Fahlman, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of E-xact Transactions
Ltd.

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
registrant's board of directors (or persons performing the equivalent function):

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.

Date: November 18, 2002

                                /s/ Peter Fahlman
                                -----------------
                                  Peter Fahlman
                                    President
<PAGE>
I, Edmund Shung, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of E-xact Transactions
Ltd.

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
registrant's board of directors (or persons performing the equivalent function):

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.

Date: November 18, 2002

                                /s/ Edmund Shung
                                ----------------
                                  Edmund Shung
                             Chief Financial Officer