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

                                   Form 10-KSB

(Mark One)

      |X|   ANNUAL  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
            EXCHANGE ACT OF 1934

            For the fiscal year ended May 31, 2005

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

            For the transition period from __________ to __________.

                         Commission File Number 0-22735

                       ROBOCOM SYSTEMS INTERNATIONAL INC.
                 (Name of small business issuer in its charter)

                   New York                                       11-2617048
(State or other jurisdiction of incorporation                 (I.R.S. Employer
               or organization)                              Identification No.)

 511 Ocean Avenue, Massapequa, New York                             11758
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number: (516) 795-5100

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

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

                          Common Stock, $.01 par value
                                (Title of Class)

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

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

State issuer's revenues for its most recent fiscal year. $3,568,235.

As of August 26, 2005, the issuer had outstanding 4,540,984 shares of its common
stock.

As of August 25, 2005, the aggregate  market value of the issuer's  common stock
held by  non-affiliates  was  $1,133,137  (based upon the  closing  price of the
issuer's common stock on The Over-the-Counter Bulletin Board on such date).

Transitional Small Business Disclosure Format (check one) Yes |_| No |X|

<PAGE>

                                     Part I

Item 1. Description of Business.

General

      Robocom Systems International Inc. (the "Company"),  incorporated in 1982,
develops,  markets and supports advanced warehouse management software solutions
that enable  companies to realize  significant  cost savings by automating their
warehouse  operations and providing inventory  visibility  throughout the supply
chain.  The  Company's  primary  product,  RIMS(TM),  is  a  client-configurable
software  solution  that enables a company's  warehouse to respond to a customer
order with  greater  accuracy  and in a timelier  manner,  thereby  turning  the
warehouse  into  a  competitive  advantage.  RIMS  operates  in an  open  system
environment and interfaces with an organization's  existing information systems.
In  addition  to  providing  RIMS  software   licenses,   the  Company  provides
installation,  training,  implementation  support and  maintenance  services and
resells related hardware.

Recent Development - Proposed Sale of Business

      On August 17, 2005, the Company  entered into an Asset Purchase  Agreement
dated as of August 17, 2005 (the "Asset Purchase  Agreement")  with Avantce RSI,
LLC, a Delaware limited  liability  company  ("Avantce"),  pursuant to which the
Company agreed to sell to Avantce substantially all of its assets, including its
RIMS software products and all of its intellectual  property rights,  contracts,
accounts  receivable,  tangible  personal  property  and  certain  cash on hand.
Pursuant  to the Asset  Purchase  Agreement,  Avantce  has  agreed to pay to the
Company a purchase price in the amount of $3,170,000, subject to adjustment. If,
on the closing date of the asset sale the Company's working capital (as defined)
exceeds  $1,025,000,  the  Company  will be entitled to retain an amount of cash
equal to the amount of such excess,  and if on such date the  Company's  working
capital (as  defined) is less than  $1,025,000,  the purchase  price  payable by
Avantce  will  be  reduced  by the  amount  of  such  deficiency.  Approximately
$2,970,000 of the purchase price will be paid in cash at the closing, subject to
certain  90-day  deferrals,  and  $200,000  of the  purchase  price will be paid
pursuant to a  promissory  note that will be payable over a period not to exceed
two years.

      Under the Asset Purchase Agreement, the consummation of the transaction is
subject to the  satisfaction of certain closing  conditions,  including  without
limitation,  the  affirmative  vote in favor of the sale by  shareholders of the
Company holding at least two-thirds (2/3) of the Company's outstanding shares at
a special  meeting of  shareholders.  In addition,  the obligation of Avantce to
close is  conditioned  upon it having  secured  financing  sufficient to pay the
purchase price.

      Upon consummation of the sale,  Avantce will pay $76,667,  payable in four
equal quarterly  installments,  to each of Irwin Balaban, the Company's Chairman
of the Board and Chief  Executive  Officer,  and Herbert  Goldman  and  Lawrence
Klein,  members of the Company's Board of Directors,  in  consideration of their
willingness to (i) personally make certain representations and warranties in the
Purchase  Agreement  about the Company and the assets  being sold and (ii) agree
not to compete  with Avantce for a five-year  period.  The three  principals  of
Avantce will guaranty, jointly and severally, the payment such amounts.

      The  Company's  Board of Directors  unanimously  approved the terms of the
sale on August 16,  2005.  Subject to the timely  satisfaction  of the  material
closing  conditions  in the Asset  Purchase  Agreement,  the  Company  currently
anticipates that the sale will be consummated during October 2005.

      The Company has not yet made any determination about future business plans
once  the  asset  sale is  consummated.  The  Company's  Board of  Directors  is
evaluating  several  possible  directions,  including  (i) the  liquidation  and
dissolution of the Company, including the payment of a liquidating cash dividend
to the shareholders or (ii) the payment of a cash dividend equal to a portion of
the proceeds of the asset sale and a transaction in which the Company merges its
"public shell" corporation with a privately-held  operating business whereby the
Company's  shareholders  would retain some  ownership  interest in the surviving
public  corporation.  The Company has not yet  determined  which  option it will
pursue. Furthermore,  the Board of Directors may not choose any of the foregoing
options  and  may,  instead,  pursue  one or more  options  not yet  considered.
Immediately  following the consummation

<PAGE>

of the asset sale,  the  Company  will have no  operating  business or source of
revenues. In the Asset Purchase Agreement, the Company agreed that, for a period
of five (5) years  following  the  consummation  of the asset sale,  it will not
engage in any business that develops or markets computer  software products that
perform functions  substantially similar to the RIMS software product being sold
to Avantce in the asset sale.

      The following  description  of the business of the Company  should be read
with the  understanding  that the  Company  has  agreed  to sell  such  business
pursuant to the terms of the Asset  Purchase  Agreement,  and that the Company's
existing  business  will be  retained  by the  Company  only if the sale of such
assets and the other  transactions  contemplated by the Asset Purchase Agreement
are not consummated.

Industry Background

      In recent years, a number of business  trends have converged to change the
historical  relationships  among  retailers,  manufacturers  and suppliers,  and
distributors.  Increasing  globalization  of the  marketplace  has  resulted  in
greater  geographic  diversity  of  supply  and  production  facilities  and has
increased  competition as more suppliers are offering a greater range of product
offerings  at  multiple  price  levels.  In  addition,  a number  of  trends  in
retailing,  including  the  emergence of virtual  electronic  commerce,  shorter
product life cycles, a significant increase in the number and variety of product
offerings,  and a more informed and price conscious consumer, have put increased
pressure on retailers to reduce  expenses to remain  competitive.  Consequently,
manufacturers,  distributors  and retailers are seeking to reduce  inventory and
inventory   management  costs  by  selecting   suppliers  that  can  respond  to
"just-in-time"  purchasing and "quick response" delivery  techniques that enable
them to better match product inventory to actual customer demand.  Retailers and
other vendors also are  increasingly  demanding that their suppliers comply with
standards for electronic commerce, specific labeling requirements,  Global Trade
Item Number (GTIN) and Radio Frequency Identification (RFID) tags.

      As a result of these trends,  manufacturers and suppliers are experiencing
significant pressures to satisfy customer demands for improved product delivery,
visibility  and  reduced  delivery  times.   Historically,   manufacturers  have
organized their businesses  primarily to increase  manufacturing  efficiency and
output.  However, as major customers shift the burden of inventory management to
the manufacturer or distributor,  manufacturers  and distributors have refocused
their business process  re-engineering efforts to evaluate the service and value
provided to customers from existing operations and supply chains and are seeking
alternatives for streamlining the supply,  warehousing and distribution process.
The need to satisfy  customer  demand for more  effective  and  efficient  order
fulfillment  has  caused   manufacturers   and   distributors  to  seek  greater
communication,  understanding  and control over the entire supply chain. This is
necessary to minimize  materials  inventories,  ensure the timing of  deliveries
from  suppliers,  reduce  manufacturing  cycle times,  minimize  finished  goods
inventories,  improve order accuracy, maximize the efficiency of warehousing and
transportation systems and provide superior response times to customers.

      Retailers,  manufacturers,  and distributors are increasingly  recognizing
that significant cost savings can be achieved through warehouse  computerization
and automation.  An effective warehouse  management system will improve customer
service and reduce costs by achieving the following objectives:

      o     Improve Inventory Accuracy. The self-checking nature of an automated
            warehouse   management   system  ensures   inventory   accuracy  and
            eliminates the costly series of manual checks and backtracking  that
            results when the  inventory on the books and the physical  inventory
            in a  warehouse  do not match.  As a result of the poor  accuracy in
            traditional   printed   paper-based   warehouses,   costly  physical
            inventories  need be taken to reconcile the system  inventory to the
            actual inventory.  The inherent accuracy and cycle counting features
            of a  warehouse  management  system  can  eliminate  the  need for a
            physical inventory.

      o     Reduce Errors. Receiving,  stocking and picking errors are common in
            a manual paper-based  warehouse.  An automated warehouse  management
            system uses barcode technology and other self-checking mechanisms to
            ensure virtually 100% accuracy for every transaction.


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<PAGE>

      o     Improve Space Utilization.  A warehouse management system tracks all
            warehouse  locations  and can direct  each  product  to its  optimal
            storage location to ensure maximum space utilization.

      o     Increase  Productivity.  A warehouse management system maximizes the
            time  operators  spend  adding  value to the  distribution  process,
            filling  orders and  receiving  goods.  System  direction  minimizes
            search  time and  dispatches  operators  to the best task  given the
            equipment and current location.  A warehouse  management system also
            gives the warehouse control of the workload and provides  visibility
            into the entire  range of tasks that need to be  performed  within a
            given time period.

      o     Improve Labor Management and Reporting. Paperwork in a warehouse for
            picking and stocking  drastically  hampers  productivity.  Paperless
            warehouse   management   system   applications   provide   real-time
            information,  reduce  the  possibility  for data  entry  errors  and
            information  delays  and  improve   productivity.   In  addition,  a
            warehouse management system has vast reporting  capabilities because
            every  transaction  is recorded in an audit  trail.  In  paper-based
            warehouses,  the only method available for tracking productivity and
            performance  is a  manual  log  that  is  time  consuming  to  keep,
            susceptible  to  error  and  only as good  as the  information  each
            operator provides.

      o     Support  Internet  Transaction  and  Electronic  Commerce.   Trading
            partners  are  increasingly  expecting  that systems with which they
            interface  will be able to support  electronic  commerce  as well as
            specific labeling, tagging, and packaging requirements.  A warehouse
            management system can provide compliant labeling,  tagging,  and the
            data required to support electronic commerce.

      o     Integration.   Manufacturers   and   suppliers   require   warehouse
            activities to be integrated with their manufacturing, transportation
            and accounting systems and those of their customers.  Such levels of
            data  processing and system  integration  require a capable,  highly
            integrated warehouse management system solution.

      The Company believes the increasing need of manufacturers and distributors
to satisfy  customer demand for more effective and efficient  order  fulfillment
will continue the trend of  manufacturers  and distributors to seek the benefits
of a  state-of-the-art  warehouse  management system.  Additionally,  electronic
commerce provides the means for customers,  vendors and suppliers to collaborate
and share data to make the supply chain more efficient.

      RIMS, which is a full featured automated  warehouse  management system, is
designed to assist  manufactures  and  distributors  in achieving these goals by
improving  inventory  accuracy,  reducing errors,  optimizing space utilization,
providing  workload planning tools, and improving labor management  productivity
and reporting.

Products

      The   Company's    principal   product,    RIMS,   is   a   full-featured,
state-of-the-art  warehouse  management  solution.  RIMS is a highly  scaleable,
highly  configurable  and  flexible  product  with  baseline  functionality  and
features  sufficient for most warehouse  installations.  The strength of RIMS is
its adaptability to varied  environments with little or no modification.  In the
United  States,  RIMS is  generally  sold as an  entire  turnkey  solution  that
provides  the  Company's  clients  with  the  software,  services  and  hardware
necessary   for  a   comprehensive   warehouse   management   system   solution.
Internationally,  RIMS is generally sold to clients via local  distributors  and
implemented by the distributors and/or local implementers.

      The  Company  also  markets  pre-configured  versions  of  RIMS  that  are
specifically  targeted to various  vertical  markets,  such as food and beverage
distribution,  medical and  automotive.  These  pre-configured  versions use the
basic RIMS system as the core with  additional  industry-specific  features  and
functions.

      As a standard,  "off-the-shelf," highly configurable software system, RIMS
is designed to be deployed in  approximately  four months or less and to achieve
measurable  cost  savings  for  clients.  The  efficiency  of  implementing  the
Company's software solutions results from the open systems architecture of RIMS,
which  runs on  various  operating  platforms  (most  notably  Unix,  Linux  and
Windows), has a Field and Screen Configuration Toolkit and uses Oracle, Progress
or SQL Server as its  database  management  system.  The  Company  believes  its
clients  recognize cost savings  throughout  the  warehousing  and  distribution
processes as a result of increases in worker


                                       3
<PAGE>

productivity, efficiencies in space utilization, increases in inventory accuracy
due to lot control,  shelf life control and product serialization  tracking, and
the  elimination of lost product and costly  shipping  errors through the use of
bar code technology.

      RIMS.  RIMS is a  responsive  software  application  designed to manage an
entire warehouse operation.  As a user configurable solution,  RIMS incorporates
numerous warehousing practices and strategies as standard capability. RIMS is an
open systems  solution  that is not  restricted to any  particular  equipment or
computer  system.  As such,  the  application  software  has been  installed  on
numerous hardware platforms and database management systems.  RIMS can interface
with  an  organization's  current  material  handling  equipment  and is  easily
integrated with customer or third party purchasing,  electronic data interchange
(EDI),  bar  coding,  accounting,  manufacturing  resource  planning  (MRP)  and
enterprise  resource  planning  (ERP)  applications.  RIMS also  utilizes  radio
frequency (RF)  communications  and bar coding to provide real-time  management,
validation and tracking of all warehouse activities.  RIMS directs personnel and
equipment and manages the inventory, space, labor and equipment in the warehouse
in an efficient and cost effective manner.

      RIMS is a comprehensive  application that manages the receiving, put away,
outbound order processes, and general warehouse operations.  With each warehouse
process, RIMS provides a variety of tactical choices that can be user defined to
a client's  specific  requirements  and needs and that are  designed to maximize
efficiency. Major system features and functions include:

      o     Internet and Intranet Ready.  The product has been engineered  using
            Internet  and  intranet   compatible   technologies  and  standards.
            Warehouse users and authorized trading partners can access warehouse
            data either in real-time local access, via the World Wide Web or via
            telnet remote  access.  This ability  enables the RIMS  warehouse to
            support  Vendor  Managed  Inventory  (VMI) by  allowing  vendors  to
            monitor  the  products  they  supply  to  the  RIMS   warehouse  and
            automatically  replenish  stock as needed.  Multiple  sites can also
            easily access a centrally located RIMS database.

      o     Receiving.  The receiving  process provides control over the receipt
            of inventory  through  scanning the bar codes of incoming product to
            ensure  accuracy  of  inventory  in  the  warehouse.   This  process
            facilitates  the  matching  of  purchase  orders,  transfer  orders,
            advanced shipping notices (ASN) and customer returns.  The receiving
            process  supports  pre-storage  activities  such as  returned  goods
            processing and quality assurance inspection.

      o     Putaway  Process.  The putaway process ensures that all inventory is
            stored  in  the  most   efficient   location   available   based  on
            pre-configured management strategies. The Company or the client will
            configure  the system to  implement  the  client's  unique  business
            demands  assigning  locations based on the client's  parameters with
            consideration given to product characteristics,  ownership,  product
            velocity, demand codes, delivery and shipping requirements,  storage
            devices and cross-docking strategies.

      o     Picking and Shipping.  The RIMS outbound order process analyzes each
            order to determine the most efficient packing,  loading and shipping
            procedures.  The order  processing  function is  configured to match
            each  client's  management  strategies.  The outbound  order process
            includes,  among  other  features,   order  selection,   allocation,
            picking, loading and shipping. Wave planning,  automatic carton size
            selection,  batch picking,  narrow aisle support,  and pick and pass
            processing are just a few of the supported options.

      o     Management.  The general  warehouse  operations  process manages the
            availability  of space  and the  movement  of  warehouse  personnel,
            inventory and material handling equipment through information shared
            by management and warehouse employees. The real-time information and
            product  flexibility allows a client to test or implement  different
            strategies  to  maximize  productivity  and  efficiency.  The system
            allows  clients  to  combine   multiple  tasks  into  a  single  job
            assignment,  such as grouping a put-away and picking assignment into
            one trip. RIMS facilitates cycle counting,  automatic replenishment,
            product moves, inventory control and consolidation,  labor tracking,
            truck appointment  scheduling,  system security,  space utilization,
            vehicle management and rewarehousing.


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<PAGE>

      o     Activity-based  costing and Third-party Logistics (3PL) support. The
            product  provides  the basis for  support of  third-party  logistics
            facilities where multiple product owners share warehouse  facilities
            and are billed for the space and services they use.

      o     Standard  Interfaces.  The Company has developed standard interfaces
            to several ERP solutions  enabling  customers to seamlessly  benefit
            from  RIMS  warehouse  management.   In  addition,   RIMS  offers  a
            user-configurable  Extensible  Markup  Language (XML) interface that
            enables users to quickly and easily map data between RIMS and ERP or
            other external systems.

Service and Maintenance

      In addition to licensing of RIMS, the Company  provides its clients with a
wide range of services that include:

      o     Computer software and hardware configuration services

      o     Operational process review and consultation

      o     Project management of the implementation

      o     Implementation support

      o     Configuration and user training

      o     Customization

      o     Material handling and facility layout consulting

      o     Software and hardware maintenance services

      With a goal of total client satisfaction,  the Company offers a structured
program that  typically  lasts four to six months,  but has been completed in as
little as ten weeks, and begins with the development of joint business scenarios
between the Company and its client.  This program includes  configuration of the
software and hardware,  configuration  training,  a prototype  "pilot  training"
program,  project management and implementation support services. These programs
facilitate  and integrate  the skill of the Company into the client's  processes
and  operations  resulting  in a modeling of the client's  warehouse  management
operations.  The outcome of this program is the early  identification  of client
operating issues prior to client implementation.  In addition, this program aids
in the development of standard  warehouse  operating  procedures for the client.
The Configuration course explains basic RIMS terminology and methodology related
to  system   configuration  and  setup.  The  Company  provides  management  and
installation of operating systems, hardware,  networks,  communication links and
relational database management tools. Standard user training for RIMS includes a
Supervisors' course that provides supervisory warehouse management training that
is necessary to  effectively  control and monitor the warehouse  facility and an
Operators'  course  that is a hands-on  training  course for  warehouse  workers
concentrating  on the execution of RIMS related  tasks.  In addition,  curricula
include  a  post-implementation   class  and  an  audit  of  client  operational
procedures after  implementation.  Customized courses are also made available on
request.  A  Train-the-Trainer  course  provides  information  and  materials to
third-party trainers who will perform the future RIMS training.

      The Company  offers  turnkey  maintenance  services for the RIMS software,
third party  software  and certain  hardware  components  of the system  under a
separate maintenance  agreement.  Maintenance agreements are typically initiated
at the time of implementation, are renewable annually, and entitle the client to
telephone,   email,  and  internet  support,  software  upgrades,   installation
assistance  and  priority   problem   resolution,   including   software  fixes.
Maintenance  fees are  typically a  percentage  of the license  fees  (excluding
hardware),  with  additional  fees for extended hours. If elected by the client,
maintenance  support is offered  24-hours per day,  seven days per week.  In the
event a client does not enter into a maintenance  agreement with the Company, it
would still be entitled to software fixes for reported problems during the first
year of its system's installation, pursuant to the one-year warranty provided to
the  Company's  clients in the end user  contract;  however,  to date,  all RIMS
clients have entered into a maintenance  agreement with the Company after system
implementation.

      In those cases in which the standard RIMS product cannot meet the client's
needs, the Company can enter into contracts to perform certain  modifications to
the baseline product.  Whenever possible, custom modifications are built in such
a way to allow the client to maintain a standard upgrade path, thus enabling the
client to take  advantage  of future  releases  of the  software  as they become
available.


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<PAGE>

Third Party Hardware Products

      The Company's RIMS products use an open  architecture that enables clients
to use various operating  systems,  operate on multiple  hardware  platforms and
inter-operate  with many third party software  applications  and legacy systems.
This open system  capability  enables  clients to continue  using their existing
computer  resources  and to choose among a wide variety of existing and emerging
computer hardware and peripheral technologies.

      In conjunction  with domestic sales of RIMS, the Company offers for resale
a variety of hardware products  developed by third parties,  including  computer
hardware, radio frequency terminal networks, bar code printers and scanners, and
other  peripherals.  The Company  resells all third-party  products  pursuant to
agreements with the products'  manufacturers or through  distributor  authorized
reseller  agreements  pursuant  to which the  Company is  entitled  to  purchase
products at discount prices and to receive  technical support in connection with
product   installations   and   subsequent   product   malfunctions.   The  RIMS
hardware-related   agreements   generally  permit  the  Company  to  resell  the
third-parties'  products  to any RIMS user in the  United  States.  The  Company
anticipates that its foreign distributors or other third party vendors will sell
any hardware or peripherals required in connection with the sale of RIMS outside
of the United States.

Clients

      The Company  targets its  marketing  efforts  primarily on  manufacturers,
distributors,  retailers and  wholesalers in the consumer  products,  industrial
supplies,  petrochemical products, government, food processing, public utilities
and medical/pharmaceutical sectors, as well as other high-volume wholesalers and
distributors.

      Client orders for the  Company's  RIMS products over the last three fiscal
years have ranged from approximately $50,000 to over $1 million. Due to the size
of most  orders  and the need for  differing  levels  of  modification  for each
installation,  the Company  historically  has obtained  orders from a relatively
small number of new clients each fiscal quarter. As a result, individual clients
have often accounted for more than 10% of total revenues in a particular  fiscal
period.  For fiscal year ended May 31, 2003,  the Company had three clients that
accounted for approximately 24%, 13% and 12% of total revenues.  For fiscal year
ended May 31, 2004, the Company had two clients that accounted for approximately
22% and 21% of total  revenues.  For the  fiscal  year ended May 31,  2005,  the
Company had two clients that  accounted for  approximately  33% and 12% of total
revenues.

Sales and Marketing

      The Company currently markets its products and services  primarily through
a direct sales force in North America and directly and indirectly in other parts
of the world.  The Company  conducts  marketing and sales  programs that include
strategic partner development, public relations, direct mail, Internet listings,
advertising,  seminars,  trade shows and ongoing client communications programs.
The   Company  is  also  listed  with  the  United   States   General   Services
Administration  (GSA),  thus allowing federal agencies to purchase products from
the  Company,  without  the  usual  open-bid  process  required  for  government
purchases from non-GSA suppliers.  Sales and marketing  personnel are located at
the  Company's  headquarters  in  Massapequa,  New  York.  The  Company  has  an
international sales and support office in Raamdonksveer,  The Netherlands,  that
seeks customers and viable  distributors in its region of operation and provides
technical support for RIMS products.

      The  Company   obtains  sales  leads  through   partners,   the  Internet,
advertising,  seminars,  trade shows and relationships with industry consultants
and other key players.  A typical  sales cycle begins with the  generation  of a
sales lead or the receipt of a Request for Proposal  ("RFP") from a  prospective
client or his representative. After qualification of the sales lead and analysis
of the prospective client's  requirements,  a formal proposal in response to the
RFP is prepared.  The proposal generally  describes how RIMS is expected to meet
the RFP  requirements and associated  costs.  Product  demonstrations  are often
conducted  at the  prospective  client's  facilities  using  realistic  data and
scenarios.  Reference  calls to  existing  clients and site visits to other RIMS
installations are also encouraged by the Company's sales staff.  While the sales
cycle varies substantially from opportunity to opportunity,  it typically ranges
from six  months  for a  standard  system and from six to 12 months for a system
requiring substantial modification.


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<PAGE>

      The  Company has  developed a  standardized,  comprehensive  and  detailed
implementation  plan to guide new  clients  smoothly  from  contract  signing to
system  startup.  The Company's  project  managers  utilize this  methodology to
ensure that projects are completed  effectively and within budget.  Depending on
the  experience  level of the client and the ease of host  integration,  a first
time  client  will  usually be placed on a plan that ranges from ten to 24 weeks
after the contract  signing.  Subsequent sites can typically be implemented four
to eight weeks apart.

      The Company has supplemented its marketing efforts by aligning itself with
complimentary  solutions providers and technology partners.  Strategic alliances
also assist the Company in keeping pace with  technological  developments of the
major  software and  hardware  vendors  and, in certain  instances,  provide the
Company with product development services.  The Company is a Solution Partner in
the Symbol Technologies Partner Select Program, as a result of which the Company
is an authorized  reseller of certain of Symbol's products and licensed software
and the Company and Symbol have agreed to certain joint marketing strategies for
products of both companies.

      The Company also markets RIMS through  resellers  located in Argentina and
Indonesia.  The Company's  resellers are established  systems  integrators  with
large client bases in their respective  regions.  The Company's  agreements with
such resellers are not exclusive.

      For the fiscal year ended May 31, 2003,  approximately 6% of the Company's
revenues were generated  outside the United  States.  For the fiscal years ended
May 31, 2004 and 2005, approximately 9% of the Company's revenues were generated
outside the United States. There are a number of risks inherent in the Company's
current  and  proposed  international  business  activities.  There  can  be  no
assurance  that such factors  will not have an adverse  effect on the ability of
the  Company  to  increase  revenues  from  future   international   sales  and,
consequently, on the Company's results of operations.

Product Development

      The Company, through its development and support personnel,  works closely
with its clients and prospective  clients and closely follows industry  research
to determine their  requirements and to design  enhancements and new products to
meet client needs.  Using input from the user and the technical  community,  the
Company's steering committee selects suitable  enhancements for inclusion in new
releases of RIMS.  Product  improvements  are often  initiated by  client-funded
modifications  that can be  incorporated  into  the  standard  package.  Clients
benefit by funding  enhancements that improve the baseline product through lower
maintenance costs and future ability to upgrade. All Company product development
is performed by its employees.  The Company's  capitalized  software development
costs were  $648,612,  $821,041  and  $805,602  in fiscal  2003,  2004 and 2005,
respectively.

      The  Company's  software  development  efforts have included the design of
enhancements to RIMS using Internet technologies compliant with current industry
standards.  By incorporating these technologies into RIMS,  authorized users and
their  supply  chain  applications  on the World Wide Web are able to access and
manage a RIMS controlled warehouse from anywhere on the Internet. For example, a
RIMS  client  is able to permit  its  authorized  users to access  its RIMS data
repository  via the  Internet,  which will reduce the burden on its own customer
service  department  because the status of orders and the  location of inventory
for an order may be monitored  directly by the  authorized  user (i.e., a retail
client or plant manager). Vendor Managed Inventory (VMI) is also supported using
the Internet  accessibility.  Protection of the client's data and restriction of
unauthorized  access are provided  within the RIMS system using  standards-based
authorization and encryption. Scalability and ease of maintenance are additional
benefits of this  architecture.  The Company has released several version of its
Internet and intranet  enabled RIMS  product.  Theses  versions of RIMS featured
multiwarehouse functionality,  a yard management system for inbound trucks and a
link  to a  transportation  management  system  (TMS).  The  RIMS  product  also
highlighted  tasks  interleaving  and new system  directed RF task for increased
operator  productivity,  and  included  batch  picking,  cycle  counting by item
velocity,  and an interface to external systems structured around the technology
of  Extensible   Markup  Language  (XML).  A  standard  report  writer  is  also
incorporated  into the RIMS product  offering.  RIMS Alert, an event-driven tool
that employs XML technology to trigger  electronic mail messages to subscribers,
can  be  integrated   with  a  customer's   RIMS   application   or  implemented
independently.  The Company's  latest version,  RIMS Version 5.0 was released in
the first quarter of fiscal 2006. Its primary focus is a modernized browser user
interface  and enhanced  features such as Third Party  Billing  (Activity  Based
Costing),  kitting  and kit


                                       7
<PAGE>

assembly, automatic carton size assignments to pickers, support for Global Trade
Item Number (GTIN), Radio Frequency  Identification  (RFID) tag generation,  and
improved  real-time  screen  configuration  utilities.  Additionally,   improved
security   features  are  incorporated   into  RIMS  5.0,  as  demanded  by  the
marketplace.

      The  introduction of each new release of RIMS has resulted in enhancements
of  earlier   releases  as  the  new  releases  offer   improved   features  and
functionality  over prior versions.  The Company  continues to offer maintenance
services for earlier  releases of RIMS and the  obsolescence of earlier releases
has not had,  and is not expected to have,  a material  impact on the  Company's
results of operations or financial condition.  Delays or difficulties associated
with  introductions  of new features,  modules or products could have a material
adverse  effect on the  Company's  business,  results of operations or financial
condition.

Competition

      The market for warehouse management and distribution  software and related
services is very competitive and is characterized by rapid changes in technology
and user  needs  and the  frequent  introduction  of new  products  and  product
enhancements. The Company's competitors and potential market entrants range from
small,  privately held firms to large national and  international  organizations
with  more  extensive  technical  staffs  and  technological  resources,  larger
marketing and sales  organizations,  and greater  financial  resources  than the
Company. The Company also competes with software  applications  developed by the
internal management  information system departments of its potential clients, as
well as  warehousing  options  embedded in certain ERP  solutions.  The Company,
however,  believes that potential  clients  increasingly  will purchase software
applications from outside vendors specializing in warehouse management software,
including the Company,  due to high development costs, poor support, the lack of
comparable functionality, inconsistent or delayed development schedules and lack
of programming talent within organizations not specifically focused on warehouse
management solutions.

      The Company believes that historically the market for warehouse management
and  distribution  software could be  characterized by the size of the client or
the complexity of the client's  warehouse handling  environment.  Competitors in
the high end of the market offered turnkey systems that typically integrated all
aspects of software,  hardware and services related to the warehouse  management
system, including electronic commerce functionality,  real-time labor management
functionality, labor planning, tracking and management functionality, integrated
host system  communications,  modular software  development,  material  handling
device control,  automated storage equipment control,  inbound/outbound  traffic
management,  and full receiving,  putaway/storage,  order  processing,  picking,
packing,  shipping,  inventory control and management  reporting  functionality.
Middle market competitors differ from high-end competitors primarily by offering
systems with limited hardware  flexibility,  little or no management,  labor and
storage  reporting,  little  or no radio  frequency  functionality  and  reduced
hardware and software costs.  Middle market systems  generally provide excellent
tracking  and  control,  but  do not  actively  help  to  manage  the  warehouse
operation.  At the lower end of the market,  competitors tend to specialize in a
specific aspect of warehouse functionality, such as receipts tracking, warehouse
data  collection  tasks or carousel  control,  and have  smaller  technical  and
development staffs.

      The Company believes that, unlike most of its competitors,  it can compete
effectively  in both the high end and middle  segments  of the market due to the
scalability,  flexibility, hardware and platform independence,  configurability,
functionality  and price of RIMS.  The Company has a large number of competitors
in these markets and believes that its primary  competitors in these markets are
Red Prairie  Corporation,  Manhattan  Associates,  Inc., HighJump Software,  and
Provia  Software,  each of which  provides  complete  warehouse  management  and
distribution software. In addition, certain well-known software developers, such
as SAP AG and J.D.  Edwards & Co. offer  integrated  manufacturing or accounting
software  packages that include a warehouse  management  component.  Many of the
Company's competitors have greater name recognition, more extensive engineering,
management  and marketing  capabilities  and  significantly  greater  financial,
technological and personnel resources than the Company.

      Over the last few years, as software  developers began to develop software
for more  than one  client  in the  same  industry,  the  market  for  warehouse
management  systems has increasingly been characterized by the industry in which
the client competes.  By easily tailoring RIMS to support the unique features of
certain  targeted  markets,  the  Company  believes  it will have a  competitive
advantage in selling  prospective  clients in the same industry in which similar
functionality and implementation issues arise.


                                       8
<PAGE>

      The Company  believes that the competitive  factors  affecting its markets
include  features such as  compatibility  with  electronic  commerce,  openness,
scalability,  ability to  integrate  with third party  products,  functionality,
adaptability,  ease of use, product  reputation,  quality,  performance,  price,
client  service and support,  effectiveness  of sales and marketing  efforts and
company  reputation.  Although the Company  believes that it currently  competes
favorably  on most  factors,  there can be no  assurance  that the  Company  can
maintain its competitive  position  against  current and potential  competitors,
especially those with greater financial,  market presence, product functionality
and/or other resources than the Company.

Proprietary Rights, Licenses and Pricing

      The Company relies on a combination of contract, copyright,  trademark and
trade secret laws,  and other measures to protect its  proprietary  information.
The Company does not have any  software  patents or patent  applications.  Trade
secret and copyright laws afford only limited  protection.  The Company believes
that, because of the rapid pace of technological change in the computer software
industry,  trade  secret  and  copyright  protection  are  less  significant  in
affecting the Company's  business,  results of operations or financial condition
than factors such as the  knowledge,  ability and  experience  of the  Company's
employees,  frequent product  enhancements and timeliness and quality of support
services.

      The Company  sells its  products to its clients  under a  non-transferable
perpetual  license.  The Company generally  licenses its products solely for the
client's  internal  operations  and only at designated  sites.  The Company also
makes available multi-site licenses. Multi-site licenses are discounted from the
first license fee for the second site and beyond.  Licensing of RIMS is based on
the  number  of   concurrent   users.   The  Company   also  offers   discounted
enterprise-wide licenses for clients with numerous sites.

      The Company does not generally provide source code to the client under its
licenses.  The  Company  believes  that  providing  source  code  increases  the
likelihood of  misappropriation  or other misuse of the  Company's  intellectual
property.  The Company has, however,  entered into source code escrow agreements
with certain clients whereby, under certain  circumstances,  source code is made
available to a client. This is a common practice in the software industry. Under
the terms of the Company's  license  agreements,  the Company generally owns all
modifications to its software that are implemented for a client.

      The Company is not aware of any case in which its products,  trademarks or
other proprietary rights infringe the property rights of third parties,  but has
not  performed  any  independent   investigations   to  determine  whether  such
infringement exists.  Accordingly,  there can be no assurance that third parties
will not assert  infringement  claims  against  the  Company in the future  with
respect to current or future products or that any such assertion may not require
the Company to enter into royalty  arrangements or result in litigation.  As the
number of software  products in the industry  increases and the functionality of
these products  further overlap,  the Company believes that software  developers
may become increasingly subject to infringement claims. Any such claims, with or
without merit, can be time consuming and expensive to defend.

Employees

      As of August 26, 2005,  the Company had 27 employees,  of which seven were
employees   primarily  in  management  and   administration,   nine  in  product
development,  nine in  client  support,  and two in  sales  and  marketing.  The
Company's   employees  are  not   represented  by  any   collective   bargaining
organization and the Company has never experienced a work stoppage.  The Company
considers its relations with its employees to be satisfactory.


                                       9
<PAGE>

Item 2. Description of Property.

      The  Company's  headquarters  are  located  in  Massapequa,  New  York  in
approximately  10,000  square feet of office  space that is leased from  Robocom
Properties,  Inc.,  a  corporation  of  which  the  principal  shareholders  are
currently  officers  or  directors  of  the  Company.   See  "Item  12.  Certain
Relationships  and Related  Transactions."  The annual  rental on the  corporate
headquarters is $168,000  (excluding  operating  expenses,  insurance,  property
taxes and  assessments),  subject to increases  based upon  fluctuations  in the
prime rate,  as  published  in the Wall  Street  Journal.  The lease  expires on
December 31, 2010.

      The Company also leases approximately 280 square feet in Raamsdonksveer in
the  Netherlands.  The lease  expires on April 13,  2006,  and is  automatically
extended for a period of one year.  Six months notice is needed to terminate the
lease by the  Company.  The  lease has an annual  rental  rate of  approximately
$5,500 (excluding operating expenses and insurance).

      The Company  believes that its existing  facilities are sufficient for its
current operations.

Item 3. Legal Proceedings.

      In June 2005,  the Company  was named as a  Respondent  in an  arbitration
commenced  in London by Robocom UK Ltd.  under the UNCITRAL  arbitration  rules.
Robocom UK Ltd.  ("UK")  alleges  that it was  terminated  without  cause by the
Company as a non-exclusive distributor in the United Kingdom and Ireland, and it
is purportedly seeking damages of (pound)200,000. The Company believes the claim
of  UK is  without  merit  and  intends  to  defend  the  claim  vigorously.  In
particular,  the  Company has denied all claims and has  asserted  counterclaims
alleging that UK was properly terminated and that the Company suffered more than
$US 30,000 in actual damages and in excess of $US 100,000 in lost opportunities.
The Company is now in the process of selecting arbitrators.

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

      No matters were submitted to a vote of security  holders during the fourth
quarter of fiscal 2005.


                                       10
<PAGE>

                                     Part II

Item 5. Market for Common Equity and Related Shareholder Matters.

      The Company's Common Stock trades on The  Over-the-Counter  Bulletin Board
under the symbol RIMS.  The following  table  represents  the high and low price
information for the Company's  Common Stock for each quarterly  period in fiscal
2004 and 2005.

                                                    Fiscal 2004     Fiscal 2005
                                                    High    Low     High    Low
                                                   -----   -----   -----   -----
            Quarter ended August 31                $1.02   $0.09   $0.82   $0.50
            Quarter ended November 30               1.17    0.60    0.92    0.57
            Quarter ended February 28               0.93    0.50    0.99    0.65
            Quarter ended May 31                    0.85    0.40    0.93    0.63

      Quotations  listed  above  reflect  inter-dealer  prices,  without  retail
mark-up, mark-down or commission and may not represent actual transactions.

      On August 25, 2005,  the closing  price of the  Company's  Common Stock as
reported on the Over-the-Counter Bulletin Board was $0.58.

      As of August 26, 2005, there were 4,540,984 shares of the Company's Common
Stock  outstanding  held by  approximately  34  shareholders  of record.  Of the
4,540,984 shares, 1,953,684 shares of Common Stock were held in street name.

      The Company does not currently  pay dividends on its Common Stock.  It has
been is  management's  practice  not to declare or pay  dividends  on the Common
Stock,  but to retain  earnings,  if any, for the operation and expansion of the
Company's  business.  If the proposed asset sale is consummated  pursuant to the
terms of the Asset Purchase Agreement, the Board of Directors of the Company may
distribute  all or a  portion  of the  proceeds  of such  sale to the  Company's
shareholders  in connection  with the liquidation and dissolution of the Company
or the  payment of a cash  dividend  equal to a portion of the  proceeds  of the
asset sale and a  transaction  in which the Company  merges its  "public  shell"
corporation  with a  privately-held  operating  business  whereby the  Company's
shareholders  would  retain  some  ownership  interest in the  surviving  public
corporation.


                                       11
<PAGE>

Item 6. Management's Discussion and Analysis or Plan of Operation.

      On August 17, 2005, the Company  entered into an Asset Purchase  Agreement
pursuant to which the Company agreed to sell  substantially all of its assets to
Avantce.  See Item 1. Business - Recent Development - Proposed Sale of Business.
Immediately  following the  consummation of the asset sale pursuant to the Asset
Purchase  Agreement,  the Company will have no  operating  business or source of
revenue.  The Company's  Board of Directors  has not yet made any  determination
about  the  future  business  plans  once the  asset  sale is  consummated.  The
Company's  Board  of  Directors  is  evaluating  two  possible  directions:  (i)
liquidation  and  dissolution,  or (ii) a  partial  distribution  of cash  and a
possible  transaction  in which the Company  sells or merges its "public  shell"
corporation  to or with a  private  operating  business  whereby  the  Company's
shareholders  would  retain  some  ownership  interest in the  surviving  public
corporation. However, the Board of Directors may not choose any of the foregoing
options and may, instead, pursue one or more options not yet considered.

      If the transactions  contemplated by the Asset Purchase  Agreement are not
consummated  for any reason,  the Company will review all options for continuing
operations,  and will  potentially  seek to sell its  business to another  third
party. All  forward-looking  statements in the following  discussion relating to
the business of the Company assume the  continuation  of the Company's  existing
business in the ordinary  course which,  given the  agreements of the parties to
the Asset Purchase Agreement, the Company believes is not likely to occur.

      Certain  statements  in  this  Report  also  constitute   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  forward-looking  statements  involve  known and  unknown  risks,
uncertainties and other factors which may cause the actual results,  performance
or  achievements  of the  Company  to be  materially  different  from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.  Factors that might cause such a difference include,
among  others,   uncertainties   relating  to  general   economic  and  business
conditions;  industry  trends;  changes  in demand  for the  Company's  product;
uncertainties  relating to client plans and commitments and the timing of orders
received  from  clients;  announcements  or changes in pricing  policies  by the
Company or its  competitors;  unanticipated  delays in the  development,  market
acceptance or installation of the Company's products; availability of management
and  other  key  personnel;  availability,  terms  and  deployment  of  capital;
relationships  with third-party  equipment  suppliers;  governmental  export and
import policies;  global trade policies;  and worldwide  political stability and
economic  growth.  The words  "believe,"  "expect,"  "anticipate,"  "intend" and
"plan" and similar expressions identify forward-looking statements.  Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date the statement was made.

Overview

      The  Company's  principal  activities  include  marketing  and  support of
comprehensive  warehouse  management software systems.  The Company licenses its
standard  RIMS  warehouse  management  systems;  it  provides  related  services
(including  customization and  modification,  project  management,  training and
implementation)  and  maintenance  support;  and it  sells  related  third-party
hardware products.  If the Company fails to consummate the transfer contemplated
by the Asset  Purchase  Agreement  (the "Asset  Sales"),  the  Company's  future
operating  results  will  be  significantly   dependent  upon  continued  market
acceptance of RIMS and enhancements  thereto.  In addition,  since a substantial
portion  of the  Company's  revenues  in any  fiscal  period  are  derived  from
relatively  few  sales of RIMS,  both the  number  of new  sales of RIMS and the
timing of orders for, and  installations  of, new systems in any fiscal  period,
has caused and, if the Company fails to  consummate  the Asset Sale, is expected
to continue to cause, significant fluctuations in revenue from period to period.

      The Company's  revenues are derived from software  license fees,  fees for
services,  sales of hardware and maintenance fees. Software license fees include
revenue from the licensing of the Company's  proprietary RIMS software and, to a
limited extent,  revenue from the sublicensing of certain third-party  software.
Software  license fee revenue is recorded when the software has been  delivered,
the license  agreement  with the client has been executed and  collection of the
resulting  receivable  is deemed  probable.  Service  revenues  are derived from
project  management,   customization  and  modification  of  licensed  software,
training,  on-site support and  implementation  services.  Service  revenues are
recorded when the service is performed.  Hardware  revenues are derived from the


                                       12
<PAGE>

Company's  resale of a variety of  third-party  hardware  products  on behalf of
other manufacturers, including computer hardware, radio frequency equipment, bar
code scanners, printers and other peripherals. Such revenues are recognized when
the title to such hardware  passes to the client.  Clients  typically enter into
one-year  maintenance  agreements  with the Company upon the  completion  of the
software  utilization and pay  maintenance  fees annually or monthly in advance.
The Company recognizes revenue from each maintenance  agreement ratably over the
period  covered by the  agreement,  but is only required to perform  maintenance
services  as  and  when  the  client  requests  them.  Historically,  all of the
Company's RIMS clients have entered into, and substantially all of the Company's
RIMS clients have renewed, maintenance agreements with the Company.

      The Company's total revenues are dependent upon a relatively  small number
of large sales.  The  Company's  has large  contracts  with two  customers  that
contributed significantly to revenues.  Revenues from the Company's five largest
clients in each of fiscal 2003, 2004 and 2005 accounted for  approximately  65%,
59% and 64% of total revenues, respectively.

      Costs of revenues  represents  the cost of software  modification,  system
implementation and other services,  hardware and maintenance  support.  Costs of
services and costs of  maintenance  consist  primarily of labor costs for client
support, including personnel costs, and costs relating to subcontracted services
and overhead.  Typically,  costs of  maintenance  associated  with the Company's
standard  maintenance  contract  decrease  over  the  life  of  the  maintenance
contract.  The number of programmers and service and support personnel  employed
by the Company was 18 at May 31, 2003, 2004 and 2005.  Programmers also function
as  engineers  in the  development  of software,  as  described  below.  Cost of
hardware  consists  primarily  of the cost of  hardware  sold by the  Company on
behalf of other manufacturers.

      Amortization of software development costs consists of the amortization of
costs of engineering  personnel and related  development  expenses,  such as the
development of software  tools and  documentation,  capitalized  starting at the
point  technological  feasibility is  demonstrated.  The Company believes that a
significant level of investment in software  development is essential to achieve
and maintain a market leadership  position.  The Company  capitalized  $648,612,
$821,041 and $805,602 in fiscal 2003, 2004 and 2005, respectively,  for software
development  costs.  Research and  development  costs for these periods were not
significant.  The Company employed eight software  development  employees at May
31, 2003 and nine software development  employees at May 31, 2004 and 2005, some
of which also functioned as programmers for the  installation or modification of
the Company's software. Amortization of software development costs has decreased
primarily due to the final  amortization  of  capitalized  software  development
costs for early versions of RIMS. RIMS has been  technologically  feasible since
1992 and saleable  since the  beginning of fiscal 1995.  The  Company's  product
development  efforts have been directed at enhancing and improving RIMS. Version
4.0,  based on  Internet  technology,  enables  authorized  users to monitor and
manage their  warehouses  and enables  supply chain partners to access order and
shipment  status in real time, for the cost of an Internet  connection.  Version
4.2 provides additional Internet- and intranet-based  capabilities.  Features in
RIMS Version 4.3 include multiwarehouse functionality,  a yard management system
for inbound and outbound trucks and a link to a transportation management system
(TMS). RIMS Version 5.0 primarily focuses on a modernized browser user interface
and enhanced  features such as Third Party  Billing  (Activity  Based  Costing),
kitting and kit assembly,  automatic carton size assignments to pickers, support
for Global Trade Item Number (GTIN), Radio Frequency  Identification  (RFID) tag
generation, and improved real-time screen configuration utilities. Additionally,
improved  security  features are incorporated  into RIMS 5.0, as demanded by the
marketplace.  Additional  functionality to utilize RFID tags on product is being
investigated and discussed with several existing customers.

      The Company  anticipates  that the dollar amount of the costs  capitalized
will not increase  significantly  during  fiscal 2006.  As a percentage of total
revenue, the Company anticipates that, so long as it retains its current line of
business,  amortization of software  development expenses will remain consistent
with current levels.

      Selling, general and administrative expenses consist primarily of salaries
for  sales,  marketing,  administrative,   executive  and  financial  personnel,
commissions paid to sales personnel,  and travel and promotional  expenses.  The
sales  and  marketing,  general  and  administrative  staff  consisted  of eight
employees  at May 31,  2003 and nine  employees  at May 31,  2004 and 2005.  The
Company  anticipates  that,  so long as it retains its current line of business,
such  expenses  will  decrease  as a  percentage  of total  revenues as revenues
increase.


                                       13
<PAGE>

Results of Operations:

      The  following  table  sets  forth,  for the  periods  indicated,  certain
statement of operations data:

                                 (In thousands)

                                                         Year ended May 31,
                                                    ----------------------------
                                                      2003       2004      2005
                                                    -------    -------    ------
Revenue:
   Software license fees ........................   $   230    $   546    $  322
   Services .....................................     1,299      1,203     1,571
   Hardware .....................................       730         90       130
   Maintenance ..................................     1,470      1,516     1,545
                                                    -------    -------    ------
   Total revenues ...............................     3,729      3,355     3,568
                                                    -------    -------    ------

Cost of revenue:
  Cost of license fees ..........................         1        111        72
  Cost of services ..............................       624        673       647
  Cost of hardware ..............................       503         78       120
  Cost of maintenance ...........................       626        643       679
                                                    -------    -------    ------
  Total cost of revenues ........................     1,754      1,505     1,518
                                                    -------    -------    ------

Amortization of software
  development costs .............................       774        767       758
                                                    -------    -------    ------
Gross margin ....................................     1,201      1,083     1,292
Selling, general and administrative expenses ....       683        644       799
                                                    -------    -------    ------
Income from operations ..........................       518        439       493
Interest income (expense), net ..................       (32)       (17)        6
                                                    -------    -------    ------
Income before income taxes ......................       486        422       499
Income tax benefit ..............................        --         --         4
                                                    -------    -------    ------
Net income ......................................   $   486    $   422    $  503
                                                    =======    =======    ======

Comparison of Fiscal Years Ended May 31, 2004 and May 31, 2005

      Revenue. Total revenue increased from $3,354,619 in the year ended May 31,
2004 to  $3,568,235  for the year  ended May 31,  2005.  Software  license  fees
decreased  by  approximately  41% in fiscal  2005 as  compared  to fiscal  2004,
primarily  because the Company sold one large RIMS  license and several  smaller
third-party  licenses  during the 2004  period,  as compared to the sale of RIMS
licenses  with fewer user counts and several  larger  third-party  licenses sold
during  the 2005  period.  The  Company's  software  license  fee  revenues  are
generally  derived from a relatively small number of license sales. As a result,
software  revenues  fluctuate  based  on the  size  and  timing  of new  license
agreements.  Sales  cycles for the  product are  typically  long,  as  potential
customers are required to make a significant  capital  investment in information
technology. In addition,  customers often delay purchase decisions based on then
current economic uncertainties. Services revenues increased by approximately 31%
in fiscal 2005 as compared to fiscal 2004.  This  increase was  primarily due to
higher revenues related to increased  modification and installation services for
two new customers.  Hardware  revenues  increased by approximately 45% in fiscal
2005 as compared  to fiscal  2004,  primarily  due to an increase in the sale of
hardware  in  connection  with the  implementation  of RIMS at new  sites and an
increase in the sale of replacement hardware to existing customers.  The Company
considers the sale of hardware to be non-strategic. These sales primarily depend
upon  specific  customer  requirements  and may vary from  period to period.  In
addition,  customers  have the  ability to purchase  hardware  from a variety of
vendors at competitive prices.  Maintenance  revenues increased by approximately
2% for the  2005  period  as  compared  to the  2004  period,  primarily  due to
additional  maintenance  revenues  for domestic  and  international  RIMS sites,
offset,  in part,  by the election of certain  older  customers  to  discontinue
maintenance  services.  Increases in  maintenance  revenues are  dependent  upon
overall license revenue growth and maintenance contract renewal rates.


                                       14
<PAGE>

      Cost of Revenues.  Total cost of revenues  increased  from  $1,505,509  in
fiscal 2004 to $1,518,559 in fiscal 2005. As a percentage of revenue, total cost
of  revenues  decreased  from  approximately  45% in fiscal  2004 as compared to
approximately  43% in fiscal 2005. The cost of licensing  consists  primarily of
license  fees for  third-party  software  sold in  connection  with  RIMS.  As a
percentage  of  license  fee  revenues,   cost  of  license  fees  increased  to
approximately  22% in fiscal 2005,  as compared to  approximately  20% in fiscal
2004.  This increase was  primarily  due to the sale of  additional  third-party
licenses  during the 2005  period.  The cost of service  consists  primarily  of
salaries of employees who perform modification and implementation services. As a
percentage of service revenues,  the cost of services decreased to approximately
41% in fiscal 2005, as compared to  approximately  56% in the 2004 period.  This
decrease  was  due  to  higher  average  billing  rates  for   modification  and
installation  services  performed during the 2005 period for new RIMS sites. The
cost of hardware  consists  primarily  of costs of  computers,  scanners,  radio
frequency  equipment and printers that are purchased for resale to our customers
and used in connection with RIMS. As a percentage of hardware revenues, the cost
of  hardware  increased  to  approximately  92% in fiscal  2005,  as compared to
approximately  87% in the 2004 period.  This  increase was  primarily due to the
type of hardware sold. The Company does not carry an inventory of hardware items
sold,  only offers  hardware as an option to its  customers who desire a turnkey
solution.  The cost of maintenance  consists  primarily of salaries of employees
who perform  customer  support and  third-party  maintenance  for the support of
licenses and hardware.  As a percentage  of  maintenance  revenues,  the cost of
maintenance  was higher in the 2005  period due to the  increased  number of new
users of RIMS. As new users gain experience using the RIMS product,  the cost of
maintenance typically decreases.

      Amortization  of  Software  Development  Costs.  Amortization  of software
development  costs  decreased from $766,733 in fiscal 2004 to $758,159 in fiscal
2005. This decrease was due to the final  amortization  of capitalized  software
development costs for an older version of RIMS. As a percentage of revenue,  the
amortization of software  development costs was approximately 23% in fiscal 2004
and approximately 21% in fiscal 2005.

      Selling,  General  and  Administrative  Expenses.   Selling,  general  and
administrative expenses consist of salaries for sales, administrative, executive
and  financial  personnel,   commissions,   travel  and  promotional   expenses,
professional  fees  and  insurance,  as well as other  administrative  expenses.
Selling,  general and  administrative  expenses  increased by approximately 24%,
from  $643,787 in fiscal 2004 to $798,907 in fiscal  2005.  As a  percentage  of
revenue,   selling,   general  and   administrative   expenses   increased  from
approximately 19% in fiscal 2004 to approximately 22% for the 2005 period.  This
increase was  primarily  due to  increased  costs  related to salaries  expense,
accounting  and legal fees,  and  expenses  associated  with the  Company's  our
international  sales  office.  In  addition,  during the 2004 period the Company
realized a  non-recurring  vendor  credit of $25,000  and a reversal  of accrued
labor expenses in the amount of $32,500.

      Interest Income  (Expense),  Net.  Interest income increased to $7,206, as
compared to $1,137 for the period ended fiscal 2004. This increase was primarily
due to an increase in cash on hand,  in addition to an increase in the  interest
rate applicable to cash  investments  during the 2005 period.  Interest  expense
decreased  to $1,084,  as compared to $17,913 for the period  ended fiscal 2004.
This  decrease  was  primarily  due to the  reduction  in the  loan  payable  to
Baseboard Investments, LLC.

      Income  Taxes.  No provision for income taxes was reflected in the 2003 or
2004  periods,  as the Company had  sufficient  net  operating  losses to offset
current earnings. During the 2005 period, a benefit for taxes was recorded based
on a reduction in the valuation allowance. This valuation allowance was provided
because of  uncertainty,  based on the Company's our  historical  results,  with
respect to realization of the Company's deferred tax assets.

Comparison of Fiscal Years Ended May 31, 2003 and May 31, 2004

      Revenue. Total revenue decreased from $3,728,794 in the year ended May 31,
2003 to  $3,354,619  for the year  ended May 31,  2004.  Software  license  fees
increased  by  approximately  137% in fiscal 2004 as  compared  to fiscal  2003,
primarily  because the Company sold one large  domestic RIMS license and several
international  RIMS  licenses,  in addition to  third-party  license  sales made
during the 2004 period. The Company's revenues rely on a relatively small number
of license sales each period. As a result,  software revenues fluctuate based on
the size of new  license  agreements  and the  number of sales of  upgrades  and
add-ons to existing  licenses.  Although software


                                       15
<PAGE>

revenues  increased  during the 2004  period as  discussed  above,  the  Company
continues to  experience  the effects of economic  uncertainties  and  depressed
spending for  information  technology in the United States and Europe.  Services
revenues  decreased  by  approximately  7% in fiscal  2004 as compared to fiscal
2003,  primarily due to lower  revenues  from  services  related to upgrades and
modifications  to  existing  RIMS sites,  offset,  in part,  by higher  revenues
related  to the  installation  of new RIMS  sites  during  the 2004  period.  In
addition,  during  fiscal  2003,  the Company  realized  non-recurring  deferred
service  revenue  in the  amount of  $88,537.  Hardware  revenues  decreased  by
approximately  88% in fiscal 2004 as compared to fiscal 2003,  primarily because
the Company sold a significant  amount of RIMS-related  hardware to one existing
customer and sold hardware  associated with the  implementation of a RIMS system
to a new customer  during the 2003  period.  The Company  considers  the sale of
RIMS-related  hardware to be  non-strategic.  These sales primarily  depend upon
specific  customer  requirements.  In  addition,  customers  have the ability to
purchase  hardware  from a large  variety  of  vendors  at  competitive  prices.
Maintenance  revenues  increased by approximately 3% in fiscal 2004, as compared
to fiscal  2003.  This  increase was  primarily  due to  additional  maintenance
revenues  for new RIMS sites,  offset,  in part,  by a reduction  in pricing for
maintenance  of  third-party   licenses  and  hardware  to  existing  customers.
Increases in  maintenance  revenue are dependant  upon overall  license  revenue
growth and maintenance contract renewal rates.

      Cost of Revenues.  Total cost of revenues  decreased by approximately  14%
from  $1,754,612 in fiscal 2003 to $1,505,509 in fiscal 2004. As a percentage of
revenue,  total cost of revenues decreased from approximately 47% in fiscal 2003
as compared to approximately  45% in fiscal 2004. As a percentage of license fee
revenues,  cost of license fees increased to approximately 20% in fiscal 2004 as
compared to approximately .5% in fiscal 2003. This increase is primarily due the
sale of licenses with  associated  third-party  fees during the 2004 period.  In
addition,  during the 2003 period, the Company applied a credit related to prior
periods to third party license fees.  As a percentage of service  revenues,  the
cost of services  increased to  approximately  56% in fiscal 2004 as compared to
approximately  48% in the 2003 period.  This increase is primarily due to higher
variable costs  associated  with the  installation of RIMS at customer sites. In
addition, the Company realized non-recurring service revenues with no associated
costs during the 2003 period. As a percentage of hardware revenues,  the cost of
hardware was higher in fiscal 2004 due to higher  hardware costs from suppliers.
The Company does not carry an  inventory of hardware  items sold and only offers
hardware  as an  option  to  customers  who  desire  a  turnkey  solution.  As a
percentage of maintenance  revenues,  the cost of maintenance was slightly lower
in the 2004 period as compared to the 2003 period.  As new users gain experience
using the RIMS product, the cost of maintenance typically decreases.

      Amortization  of  Software  Development  Costs.  Amortization  of software
development costs decreased by approximately 1%, from $774,006 in fiscal 2003 to
$766,733 in fiscal  2004.  This  decrease was due to the final  amortization  of
capitalized  software  development costs for early versions of RIMS,  offset, in
part,  by  increased  amortization  expense  for  newer  versions  of  RIMS  and
additional RIMS related products.  As a percentage of revenue,  the amortization
of  software  development  costs  was  approximately  21%  in  fiscal  2003  and
approximately 23% in fiscal 2004.

      Selling,  General  and  Administrative  Expenses.   Selling,  general  and
administrative  expenses  decreased by approximately 6%, from $682,905 in fiscal
2003 to $643,787 in fiscal 2004.  As a percentage of revenue,  selling,  general
and  administrative  expenses increased from approximately 18% in fiscal 2003 to
approximately  19% for the 2004  period.  The  decrease in selling,  general and
administrative  expenses  was  primarily  due to  decreased  salaries  and other
related expenses,  offset, in part, by an increase in costs related to marketing
expenses, accrued professional fees and shareholder relations.

      Interest Income  (Expense),  Net.  Interest income  decreased by $2,282 to
$1,137 as compared to $3,419 in fiscal 2003.  The  decrease is primarily  due to
the decline in interest rates during the 2004 period. Interest expense decreased
by $17,187 to $17,913 as compared to $35,100 in fiscal 2003.  This  decrease was
primarily  due to the  reduction in the loan  payable to Baseboard  Investments,
LLC.

      Income  Taxes.  No provision for income taxes was reflected in the 2004 or
2003  periods,  as the Company has  sufficient  net  operating  losses to offset
current  earnings.  No deferred tax expense has been recorded in the 2004 period
or the 2003 period as the Company  continues to record a valuation  allowance to
reserve for its net deferred tax assets.  The  valuation  allowance was provided
for because of  uncertainty,  based on the Company's  historical  results,  with
respect to realization of deferred tax assets.


                                       16
<PAGE>

Fluctuations in Operating Results

      The  Company's  quarterly  revenues  and  operating  results  have  varied
significantly  in the past and,  if the  Company  retains  its  current  line of
business,  are  likely to vary  substantially  from  quarter  to  quarter in the
future,  depending upon a number of factors, such as the length of the Company's
sales cycle,  the  unanticipated  cancellation  of significant  agreements,  the
timing of new version  releases by the  Company and its  competitors,  budgeting
cycles of the Company's  clients,  demand for the Company's  software,  software
life  cycles,  acceptance  of new  software  introduced  by the  Company and its
competitors,  the size and timing of client orders, changes in the proportion of
revenues  attributable to software license fees versus services,  changes in the
level of operating  expenses and general  economic  conditions.  In addition,  a
significant  portion of the Company's  revenues has been derived from relatively
few sales of licenses for RIMS, and, consequently,  the timing of such sales has
caused material  fluctuations in the Company's  operating results.  Accordingly,
the  Company  believes  that  period-to-period  comparisons  of its  results  of
operations  are not  necessarily  meaningful and should not be relied upon as an
indication of future performance.

      Because the Company recognizes a significant  portion of revenues over the
installation  period of the system (which,  although designed to be completed in
approximately  four  months,  generally  ranges  from  four to eight  months  in
duration  as a result  of the  client's  scheduling  requirements)  and  because
installation   commences   promptly  after  execution  of  the  related  license
agreement, the Company does not maintain a significant backlog. Software license
fees for each  quarter  depend in part on orders  for which  implementation  has
begun during that quarter and on license  agreements under  implementation  that
were executed in prior quarters.  The sales cycle for RIMS typically ranges from
six to twelve  months,  and  contract  signing  may be  delayed  for a number of
reasons,  including  client  budgetary  constraints  and internal  authorization
reviews.  In addition,  delays in the  completion of a contract may require that
the revenues  associated  with such contract be recognized over a longer period.
Consequently,  the  Company's  business,  results  of  operations  or  financial
condition for a quarter could be materially adversely affected by implementation
delays.

Liquidity and Capital Resources

      During fiscal 2005, the Company  funded its operations  through cash flows
from operations. The Company did not require any draw down of its existing lines
of credit during fiscal 2005.

      Net cash provided by operating  activities was $1,203,781,  $1,212,187 and
$996,091 in fiscal 2003, 2004 and 2005, respectively.  Cash flow from operations
decreased  during  the 2005  period  primarily  due to a  decrease  in  accounts
receivable,  accrued expenses and deferred revenues,  in addition to an increase
in unbilled receivables.

      Net accounts receivable were $505,804 as of May 31, 2005. This compares to
$511,989 at May 31, 2004. The decrease in accounts receivable  primarily relates
to services for implementations  and several large annual maintenance  contracts
that were  billed in the latter  part of fiscal  2004 and paid  during the first
half of fiscal 2005. The Company  believes  there are no substantial  risks with
respect to receivables known or anticipated at this time.

      The  Company  expended  $19,996,  $11,731  and $8,333 for the  purchase of
equipment in fiscal 2003, 2004 and 2005,  respectively.  The Company capitalized
$648,612, $821,041 and $805,602 in fiscal 2003, 2004 and 2005, respectively, for
software development costs. If the Company retains its current line of business,
any costs associated with the development of new products or enhancements to the
existing RIMS product will be financed through working capital.

      As of May 31, 2005, the Company had $662,735 in cash and cash  equivalents
and working capital of $708,814.

      On September  27, 2004,  the Company  received a line of credit from North
Fork Bank that  provided for  borrowings of up to $500,000 and expired on August
1, 2005. The line was secured by a lien on all of the assets of the Company, and
the three  principal  shareholders  and directors of the Company  guaranteed the
obligation under this line of credit, jointly and severally.


                                       17
<PAGE>

      On September  24, 2004,  the Company  amended its existing  line of credit
with Baseboard Investments, LLC ("Baseboard"),  a limited liability company, the
members of which consist of three of the Company's  directors.  As amended,  the
line  provides for  borrowings  of up to $500,000  and expires on September  19,
2005.  Borrowings  bear interest at the prime rate, as published by the New York
office of  Citibank,  N.A,  plus two percent  (8.50% at August 26,  2005.  As of
August 26, 2005, no borrowings were outstanding under this line of credit.

      The Company's capital  requirements depend on many factors,  including the
level and timing of revenues and new product  development.  The Company  expects
that,  if it retains its current line of  business,  capital  expenditures  will
remain at current levels in the next 12 months.

      The Company believes that, if it retains its current line of business, its
existing  cash  and  cash  equivalents,   anticipated   revenues  from  existing
maintenance  contracts,  and  anticipated  revenues from existing  contracts for
implementation  of RIMS at new  sites,  including  license  fees,  hardware  and
services,  will be sufficient to fund its  operations at the current levels over
the next twelve months.

Inflation and Seasonality

      The Company does not believe its operations have been materially  affected
by inflation or seasonality.


                                       18
<PAGE>

Item 7. Financial Statements

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                            Form 10-KSB
                                                                                           Page Numbers
<S>                                                                                             <C>
Reports of Independent Registered Public Accounting Firm .............................          20

Balance Sheets as of May 31, 2004 and 2005 ...........................................          21

Statements of Operations for the years ended May 31, 2003, 2004 and 2005 .............          22

Statements of Shareholders' Equity for the years ended May 31, 2003, 2004 and 2005 ...          23

Statements of Cash Flows for the years ended May 31, 2003, 2004 and 2005 .............          24

Notes to Financial Statements ........................................................          25
</TABLE>


                                       19
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
  Robocom Systems International Inc.

We have audited the accompanying balance sheets of Robocom Systems International
Inc. as at May 31, 2005,  and 2004,  and the related  statements of  operations,
shareholders'  equity and cash  flows for each of the three  years in the period
ended May 31, 2005.  These financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Robocom Systems  International
Inc. as of May 31, 2005 and 2004,  and the  results of its  operations,  and its
cash  flows  for each of the three  years in the  period  ended May 31,  2005 in
conformity with accounting principles generally accepted in the United States.


                                        /s/ Eisner & Lubin LLP
                                        ----------------------

New York, New York
  July 19, 2005, except as to Notes 5 and 8,
  which are as of August 16, 2005.


                                       20
<PAGE>

                       ROBOCOM SYSTEMS INTERNATIONAL INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              2004             2005
                                                                          ------------     ------------
<S>                                                                       <C>              <C>
Assets
Current assets:
     Cash and cash equivalents .......................................    $    533,172     $    662,735
     Accounts receivable, less allowance for doubtful accounts of
        $6,536 in 2004 and $5,800 in 2005 ............................         511,989          505,804
     Unbilled revenue ................................................          51,754          155,624
     Deferred taxes ..................................................          40,076           39,800
     Other current assets ............................................         149,455          119,910
                                                                          ------------     ------------
Total current assets .................................................       1,286,446        1,483,873

Property and equipment, less depreciation of $17,169 in 2004 and
     $30,832 in 2005 .................................................          24,582           19,253
Capitalized software, net ............................................       1,576,233        1,623,675
                                                                          ------------     ------------
Total assets .........................................................    $  2,887,261     $  3,126,801
                                                                          ============     ============

Liabilities and Shareholders' Equity
Current liabilities:
     Accounts payable ................................................    $     70,807     $    111,032
     Accrued expenses ................................................         236,772          162,917
     Deferred revenue ................................................         673,802          501,110
                                                                          ------------     ------------
Total current liabilities ............................................         981,381          775,059
                                                                          ------------     ------------

Loans payable to shareholders ........................................          56,644               --
Deferred tax liabilities .............................................          40,076           35,670
                                                                          ------------     ------------
Total liabilities ....................................................       1,078,101          810,729
                                                                          ------------     ------------

Shareholders' equity:
     Preferred stock, $.01 par value; 1,000,000 shares authorized;
        None issued ..................................................              --               --
     Common stock, $.01 par value; 10,000,000 shares authorized;
       4,495,984 and 4,540,984 issued and outstanding at May 31,
       2004 and 2005, respectively ...................................          44,960           45,410
     Warrants: 100,000 outstanding at May 31, 2004 and 2005 ..........         166,728          166,728
     Additional paid-in capital ......................................      11,832,246       11,835,846
     Accumulated deficit .............................................     (10,234,774)      (9,731,912)
                                                                          ------------     ------------
Total shareholders' equity ...........................................       1,809,160        2,316,072
                                                                          ------------     ------------
Total liabilities and shareholders' equity ...........................    $  2,887,261     $  3,126,801
                                                                          ============     ============
</TABLE>

See accompanying notes.


                                       21
<PAGE>

                       ROBOCOM SYSTEMS INTERNATIONAL INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 Year ended May 31,
                                                    ------------------------------------------
                                                        2003            2004           2005
                                                    -----------     -----------     ----------
<S>                                                 <C>             <C>             <C>
Revenues:
   Software license fees .......................    $   230,127     $   546,141     $  322,498
   Services ....................................      1,299,036       1,203,316      1,570,788
   Hardware ....................................        730,297          89,524        129,985
   Maintenance .................................      1,469,334       1,515,638      1,544,964
                                                    -----------     -----------     ----------
   Total revenues ..............................      3,728,794       3,354,619      3,568,235
                                                    -----------     -----------     ----------

Cost of revenues:
   Cost of license fees ........................          1,071         111,414         72,470
   Cost of services ............................        623,948         672,976        647,396
   Cost of hardware ............................        503,141          77,973        119,946
   Cost of maintenance .........................        626,452         643,146        678,747
                                                    -----------     -----------     ----------
   Total cost of revenues ......................      1,754,612       1,505,509      1,518,559
Amortization of software development costs .....        774,006         766,733        758,159
                                                    -----------     -----------     ----------
                                                      2,528,618       2,272,242      2,276,718
                                                    -----------     -----------     ----------
Gross margin ...................................      1,200,176       1,082,377      1,291,517

Selling, general and administrative expenses ...        682,905         643,787        798,907
                                                    -----------     -----------     ----------
Income from operations .........................        517,271         438,590        492,610
Interest income (expense), net .................        (31,681)        (16,776)         6,122
                                                    -----------     -----------     ----------
Income before income taxes .....................        485,590         421,814        498,732
Income tax benefit .............................             --              --          4,130
                                                    -----------     -----------     ----------
Net income .....................................    $   485,590     $   421,814     $  502,862
                                                    ===========     ===========     ==========
Net income per basic share .....................    $       .11     $       .09     $      .11
                                                    ===========     ===========     ==========
Net income per diluted share ...................    $       .11     $       .09     $      .11
                                                    ===========     ===========     ==========

Weighted average shares outstanding:
   Basic .......................................      4,495,984       4,495,984      4,525,080
                                                    ===========     ===========     ==========
   Diluted .....................................      4,495,984       4,577,011      4,673,412
                                                    ===========     ===========     ==========
</TABLE>

See accompanying notes.


                                       22
<PAGE>

                       ROBOCOM SYSTEMS INTERNATIONAL INC.

                       STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                       Common Stock
                                --------------------------

                                                                                 Additional                            Total
                                                Par Value                          Paid-In        Accumulated      Shareholders'
                                  Shares          $.01           Warrants          Capital          Deficit           Equity
                                ------------------------------------------------------------------------------------------------
<S>                             <C>           <C>              <C>              <C>              <C>               <C>
Balance, May 31, 2002 ..        4,495,984     $     44,960               --     $ 11,832,246     $(11,142,178)     $    735,028

Net income .............               --               --               --               --          485,590           485,590

Common stock warrants ..               --               --     $    166,728               --               --           166,728
                                ------------------------------------------------------------------------------------------------

Balance, May 31, 2003 ..        4,495,984           44,960          166,728       11,832,246      (10,656,588)        1,387,346

Net income .............               --               --               --               --          421,814           421,814
                                ------------------------------------------------------------------------------------------------

Balance, May 31, 2004 ..        4,495,984           44,960     $    166,728       11,832,246      (10,234,774)        1,809,160

Net income .............               --               --               --               --          502,862           502,862

Common stock ...........           45,000              450               --            3,600               --             4,050
                                ------------------------------------------------------------------------------------------------

Balance, May 31, 2005 ..        4,540,984     $     45,410     $    166,728     $ 11,835,846     $ (9,731,912)     $  2,316,072
                                ================================================================================================
</TABLE>

See accompanying notes.


                                       23
<PAGE>

                       ROBOCOM SYSTEMS INTERNATIONAL INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          Year ended May 31,
                                                            ---------------------------------------------
                                                                2003             2004             2005
                                                            -----------      -----------      -----------
<S>                                                         <C>              <C>              <C>
Operating activities
Net income ............................................     $   485,590      $   421,814      $   502,862
Adjustments to reconcile net income to net
   cash provided by operating activities:
       Depreciation of property and equipment .........          44,202           27,631           13,662
       Amortization of software development costs .....         774,006          766,733          758,160
       Provision for bad debts ........................          11,021            6,536            5,800
       Deferred income taxes ..........................              --               --           (4,130)
       Changes in operating assets and liabilities:
         Accounts receivable ..........................          (8,847)         (72,643)             385
         Unbilled revenue .............................          46,196           65,458         (103,870)
         Other current assets .........................         (14,005)         (10,352)          29,545
         Accounts payable .............................         (25,610)         (22,876)          40,225
         Accrued expenses .............................          (7,569)          (3,257)         (73,855)
         Deferred revenue .............................        (101,203)          33,143         (172,692)
                                                            -----------      -----------      -----------
Net cash provided by operating activities .............       1,203,781        1,212,187          996,092
                                                            -----------      -----------      -----------

Investing activities
Software development costs ............................        (648,612)        (821,041)        (805,602)
Capital expenditures ..................................         (19,996)         (11,731)          (8,333)
                                                            -----------      -----------      -----------
Net cash used in investing activities .................        (668,608)        (832,772)        (813,935)
                                                            -----------      -----------      -----------

Financing activities
Loan payable to shareholders ..........................         (19,058)         (15,186)         (56,644)
Loan payable to Baseboard Investments LLC .............        (300,000)        (266,542)              --
Proceeds from stock option exercise ...................              --               --            4,050
                                                            -----------      -----------      -----------
Net cash used in financing activities .................        (319,058)        (281,728)         (52,594)
                                                            -----------      -----------      -----------

Increase in cash and cash equivalents .................         216,115           97,687          129,563
Cash and cash equivalents at beginning of year ........         219,370          435,485          533,172
                                                            -----------      -----------      ------------
Cash and cash equivalents at end of year ..............     $   435,485      $   533,172      $   662,735
                                                            ===========      ===========      ============
Supplemental disclosures of cash flow information:
  Cash paid for interest ..............................     $     1,396      $     1,666      $    41,315
                                                            ===========      ===========      ============
</TABLE>

Non-cash financing activity:

      On May 27, 2003, the Company issued warrants to purchase 100,000 shares of
      Common Stock in return for the release of long-term  debt in the amount of
      $161,872 and the related interest of $4,856.

See accompanying notes.


                                       24
<PAGE>

                       Robocom Systems International Inc.
                        Notes to the Financial Statements

1. Organization and Significant Accounting Policies

Organization

      Robocom Systems  International  Inc. (the  "Company") was  incorporated in
June 1982 in the State of New York.  The  Company is engaged in the  development
and marketing of automated  warehouse  management  systems and related software,
which is used by various commercial enterprises located in the United States and
abroad.  Since June 1994,  the Company  licenses and  installs  its  proprietary
software product RIMS, which is an "off-the-shelf"  inventory management system.
The Company also provides  related  services,  including  modification,  project
management,  training,  implementation  support,  maintenance  and  the  sale of
hardware and third party software.

Significant Accounting Policies

      Use of Estimates

      The  preparation  of financial  statements in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

      Revenue Recognition

      The Company's  revenues are derived from software  license fees,  fees for
services,  sales of hardware and maintenance  contracts.  Software  license fees
include  revenue from the licensing of the Company's  proprietary  RIMS software
and revenue from the  sublicensing  of certain  third-party  software.  Software
license  fee revenue is  recorded  when the  software  has been  delivered,  the
license  agreement  with the client has been  executed,  and  collection  of the
resulting  receivable  is deemed  probable.  Service  revenues  are derived from
project management,  training, on-site support and implementation services, and,
to a lesser extent,  from  customization and modification of licensed  software.
The majority of service  revenues are  recorded  when the service is  performed.
Service revenues for project management and modifications are recorded using the
percentage of completion method.  Hardware revenues are derived from the sale of
products of other  manufacturers,  including computer hardware,  radio frequency
equipment, bar code printers and other peripherals. Such revenues are recognized
when title to such hardware passes to the client.  Clients  typically enter into
one-year  maintenance  agreements with the Company upon  utilization of RIMS and
pay  maintenance  fees  annually or monthly in advance.  The Company  recognizes
revenue from each maintenance  agreement  ratably over the period covered by the
agreement,  but is only required to perform maintenance services as and when the
client requests them. The Company recognized revenues, in all periods presented,
in  accordance  with the  American  Institute of  Certified  Public  Accountants
Statement of Position  ("SOP") 97-2,  "Software  Revenue  Recognition,"  and SOP
98-9,  "Modification of SOP 97-2,  Software Revenue  Recognition with Respect to
Certain Transactions," which amends paragraphs 11 and 12 of SOP 97-2, to require
recognition of revenue using the residual method under certain circumstances.

      Unbilled revenues represent aggregate revenues earned in excess of related
billings and are shown as a current asset.  Deferred revenues relate to billings
in advance of the services and are shown as a current liability.


                                       25
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

      Software Development Costs

      Software  development  costs  have been  capitalized  in  accordance  with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the
Costs of Computer  Software to be Sold,  Leased,  or  Otherwise  Marketed."  The
capitalization of these costs begins when a product's technological  feasibility
has been established, and ends when the product is available for general release
to clients.  The  establishment  of  technological  feasibility  and the ongoing
assessment of recoverability of capitalized  software  development costs require
considerable  judgment by management with respect to certain  external  factors,
including,  but not limited to,  technological  feasibility,  anticipated future
gross  revenues,  estimated  economic life, and changes in software and hardware
technologies. The Company capitalizes software development costs associated with
each subsequent enhancement of its product upon the achievement of technological
feasibility.  Software development costs, including enhancements,  are amortized
to cost of  revenue,  using the  straight-line  method  over three  years or the
expected life of the product,  whichever is less. Research and development costs
incurred prior to the establishment of technological feasibility are expensed as
incurred. Such amounts for the periods presented are not significant.

      Cash and Cash Equivalents

      The Company  considers all highly liquid  investments,  with a maturity of
three months or less at the time of purchase, to be cash equivalents.

      Accounts Receivable

      Trade accounts  receivable are stated at the amounts management expects to
collect   from   outstanding   balances.   Management   provides   for  probable
uncollectible  amounts  through a charge to earnings and a credit to a valuation
allowance based on its assessment of the current status of individual  accounts.
Balances  that are  still  outstanding  after  management  has  used  reasonable
collection  efforts are written off through a charge to the valuation  allowance
and a credit to trade accounts  receivable.  Changes in the valuation  allowance
have not been material to the financial statements.

      Property and Equipment

      Property and equipment  consists of computers and other office  equipment.
The Company  depreciates the cost of computers and other office  equipment using
the straight-line method over the estimated useful lives (three years).

      Basic and Diluted Net Income Per Share

      Basic and diluted net income per share is computed by dividing  net income
by the weighted  average  number of shares of common stock  outstanding  for the
periods presented.

      Stock Options

      SFAS No. 123,  "Accounting for Stock-Based  Compensation,"  defines a fair
value method of  accounting  for the issuance of stock  options and other equity
instruments.  Under the fair value method,  compensation cost is measured at the
grant  date  based on the fair  value of the  award and is  recognized  over the
service period,  which is usually the vesting period.  Pursuant to SFAS No. 123,
companies are encouraged,  but are not required,  to adopt the fair value method
of  accounting  for  employee  stock-based  transactions.   Companies  are  also
permitted  to  continue  to  account  for  such  transactions  under  Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," but
are required to disclose in the  financial  statement  footnotes,  pro forma net
income and per share  amounts as if the  Company  had  applied the new method of
accounting for all grants made since 1997. SFAS No. 123 also requires  increased
disclosures for stock-based compensation  arrangements.  The Company adopted the
disclosure requirements of SFAS No. 123.


                                       26
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

      Income Taxes

      The Company provides for income taxes under SFAS No. 109,  "Accounting for
Income  Taxes," which employs an asset and liability  approach in accounting for
income taxes payable or refundable at the date of the financial  statements as a
result of all events that have been  recognized in the financial  statements and
as measured by the provisions of enacted laws.

      Advertising Costs

      Advertising  costs are expensed as  incurred.  For the years ended May 31,
2003, 2004 and 2005, these costs amounted to approximately $25,000,  $43,000 and
$34,000, respectively.

      Segment Information

      The Company operates in one business segment,  as defined by SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information."

      The Company's revenues by geographic markets are summarized below:

                                    2003          2004          2005
                                 ----------    ----------    ----------

         Domestic ...........    $3,496,349    $3,060,086    $3,235,163
         Europe .............       162,595       174,137       192,682
         Pacific ............        60,102       103,938        61,300
         Other ..............         9,748        16,458        79,090
                                 ----------    ----------    ----------
                                 $3,728,794    $3,354,619    $3,568,235
                                 ==========    ==========    ==========

      Concentration of Credit Risk

      The  Company's  client base is comprised of large  clients in  diversified
industries.  Ongoing credit evaluations of its clients' financial  condition are
made and generally no collateral is required.  For the fiscal year ended May 31,
2003,  the Company had three clients that accounted for  approximately  24%, 13%
and 12% of total  revenues.  For the fiscal year ended May 31, 2004, the Company
had two clients that accounted for  approximately 22% and 21% of total revenues.
For the  fiscal  year ended May 31,  2005,  the  Company  had two  clients  that
accounted for  approximately  33% and 12% of total  revenues.  Revenues from the
Company's five largest  clients in each of fiscal 2003,  2004 and 2005 accounted
for approximately 65%, 59% and 64% of total revenues,  respectively.  Management
does not believe significant credit risk existed at May 31, 2005.


                                       27
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

2. Shareholders' Equity

      Warrants

      On May 27, 2003, the Company issued warrants to purchase 100,000 shares of
Common Stock at an exercise price of $0.50 per share to Robocom Properties, Inc.
("Properties"),  in return for the  release of  long-term  debt in the amount of
$161,872 and the related interest of $4,856 owed to Properties under a long-term
debt  agreement  dated  May 30,  2002.  These  stock  purchase  warrants  can be
exercised  at any time and will  expire on May 31,  2008.  The  shareholders  of
Properties are also shareholders of the Company.

      Stock Option Plan

      The Company has a Stock Option and Long-term  Incentive  Compensation Plan
(the "Plan"),  which,  as amended,  provides for the issuance of up to 1,150,000
shares of the  Company's  Common Stock.  Outstanding  options were granted at an
exercise price equal to or in excess of the prevailing market price on the grant
date. These options contain a vesting schedule  determined at the date of grant.
Incentive  stock  options are granted to employees.  All other options  granted,
including those granted to directors and consultants, are nonqualified options.

      The following  summarizes  stock option  activity during fiscal 2003, 2004
and 2005:

                                                                Weighted-
                                                     Shares       Average
                                                      under      Exercise
                                                     Option       Price
                                                    --------    ---------
         Balance, May 31, 2002                       283,700      $4.29
         Granted                                      45,000      $0.09
         Cancelled                                  (154,700)     $6.91
                                                    --------
         Balance, May 31, 2003                       174,000      $0.87
         Granted                                     350,000      $0.65
         Cancelled                                    (5,000)     $2.00
                                                    --------
         Balance, May 31, 2004                       519,000      $0.71
         Granted                                     230,000      $0.58
         Cancelled                                   (34,000)     $2.63
         Exercised                                   (45,000)     $0.09
                                                    --------
         Balance, May 31, 2005                       670,000      $0.61
                                                    ========

      The  options  exercisable  at May 31,  2003,  2004 and 2005 were  174,000,
399,000 and  590,000,  respectively.  The  weighted  average  exercise  price of
options  exercisable at May 31, 2003, 2004 and 2005 was $0.87,  $0.73 and $0.61,
respectively.

      The weighted-average  fair value of options granted during the years ended
May 31, 2003, 2004 and 2005 was $0.09, $0.65 and $0.58 per share, respectively.


                                       28
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

      The  following  table  summarizes  information  about this plan at May 31,
2005:

                      Options                                Options
                    Outstanding           Weighted          Exercisable
                    -----------           Average           -----------
     Exercise                            Remaining
      Prices           Shares         Contractual Life        Shares
      ------           ------         ----------------        ------
      $0.500           75,000             0.6 years            75,000
      $0.570          200,000             4.4 years           200,000
      $0.650          380,000             3.6 years           300,000
      $0.750           15,000             0.5 years            15,000
                      -------                                 -------
                      670,000                                 590,000
                      =======                                 =======

      Pro forma  information  regarding  net  income and net income per share is
required by SFAS No. 123, which also requires that the information be determined
as if the Company had accounted  for its employee  stock option grants under the
fair value method  required by SFAS No. 123. The fair value of each option grant
has been  estimated  as of the  date of grant  using  the  Black-Scholes  option
pricing model with the following assumptions:

                                          For the year ended May 31,
                                         2003        2004        2005
                                       -------     -------     -------
         Expected life ............    5 years     5 years     5 years
         Interest rate ............       1.18%       0.94%       1.63%
         Volatility ...............       1.80        1.80        1.80
         Dividend yield ...........          0%          0%          0%

      If the Company had recognized  compensation cost for stock-based  employee
compensation  in accordance  with SFAS No. 123, the Company's net income for the
years ended May 31, 2003, 2004 and 2005 would have decreased as follows:

<TABLE>
<CAPTION>
                                                                     For the year ended May 31,
                                                                    2003        2004        2005
                                                                  --------    --------    --------
<S>                                                               <C>         <C>         <C>
         Pro forma net income:
             As reported .....................................    $485,590    $421,814    $502,862
             Pro forma in accordance with SFAS No. 123 .......    $433,348    $260,978    $344,657
         Pro forma basic and diluted net income per share:
             As reported .....................................    $    .11    $    .09    $    .11
             Pro forma in accordance with SFAS No. 123 .......    $    .10    $    .06    $    .08
</TABLE>

      The compensation expense and pro forma net income may not be indicative of
amounts to be included in future periods.

      The  remaining  number of shares  reserved for options at May 31, 2005 was
435,000.


                                       29
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

3. Detail of Certain Balance Sheet Accounts

      Software Development Costs, net

      Software development costs, net, consisted of the following:

                                                  For the year ended May 31,
                                                     2004            2005
                                                 -----------     -----------

            Software development costs ......    $ 3,013,172     $ 3,818,773
            Less accumulated amortization ...     (1,436,939)     (2,195,098)
                                                 -----------     -----------
                                                 $ 1,576,233     $ 1,623,675
                                                 ===========     ===========

      Accrued Expenses

      Accrued expenses consisted of the following:

                                                  For the year ended May 31,
                                                     2004            2005
                                                 -----------     -----------

            Payroll and related taxes .......    $    93,656     $    93,701
            Accrued hardware costs ..........          3,196          32,019
            Accrued interest ................         45,197              --
            Professional fees and other .....         94,723          37,197
                                                 -----------     -----------
                                                 $   236,772     $   162,917
                                                 ===========     ===========

4. Employee Benefit Plan

      The Company has a 401(k) defined  contribution  plan. This plan covers all
employees subject to certain service requirements. Under the terms of the 401(k)
plan, the Company will match 50% of an employee's  contribution  up to 6% of the
participating employee's compensation. Plan expenses for each of the years ended
May  31,  2003,  2004  and  2005  amounted  to  $32,000,  $43,000  and  $46,000,
respectively.


                                       30
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

5. Income Taxes

      Deferred tax assets and liabilities are determined based on the difference
between the financial  accounting  and the tax bases of assets and  liabilities.
Significant  components of the Company's  deferred tax assets and liabilities as
of May 31, 2004 and 2005 were as follows:

                                                      For the year ended May 31,
                                                          2004          2005
                                                       ----------    ----------
            Deferred tax assets:
               Accrued expenses ...................    $   37,462    $   37,480
               Allowance for doubtful accounts ....         2,614         2,320
               Net operating loss carryforwards ...     3,030,026     2,854,148
                                                       ----------    ----------
            Total deferred tax assets .............     3,070,102     2,893,948
            Valuation allowance ...................     2,439,609     2,240,348
                                                       ----------    ----------
            Net deferred tax assets ...............       630,493       653,600
            Deferred tax liabilities:
                Software development costs ........       630,493       649,470
                                                       ----------    ----------
            Net deferred tax assets ...............    $       --    $    4,130
                                                       ==========    ==========

      The  valuation  allowance  at May 31,  2003,  2004 and  2005 was  provided
because of uncertainty,  based on the Company's historical results, with respect
to realization of deferred tax assets. The valuation  allowance decreased during
the years ended May 31, 2003, 2004 and 2005 by $251,082,  $169,996 and $199,261,
respectively. At May 31, 2005, the valuation allowance has been calculated under
the assumption that the potential asset sale referred to in Note 8 will occur.

      The  components of the tax benefit for the three years ended May 31, 2003,
2004 and 2005 are as follows:

<TABLE>
<CAPTION>
                                                                   For the year ended May 31,
                                                                 2003          2004          2005
                                                              ---------     ---------     ---------
<S>                                                           <C>           <C>           <C>
            Currently Payable:
                Before benefit of operating loss
                   carryforward ..........................    $ 254,106     $ 152,584     $ 182,051
                Benefit of operating loss carryforward ...     (254,106)     (152,584)     (182,051)
            Deferred:
                Federal ..................................           --            --        (3,510)
                State ....................................           --            --          (620)
                                                              ---------     ---------     ---------
            Total ........................................    $      --     $      --     $  (4,130)
                                                              =========     =========     =========
</TABLE>


                                       31
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

      Income  taxes  for the  fiscal  years  ended May 31,  2003,  2004 and 2005
differs from the statutory U.S. federal income tax rate due to the following:

<TABLE>
<CAPTION>
                                                                For the year ended May 31,
                                                               2003        2004        2005
                                                              ------      ------      ------
<S>                                                            <C>         <C>         <C>
            Federal statutory tax rate ...................      34.0%       34.0%       34.0%
            State income taxes, net of Federal benefit ...       5.9         5.9         5.9
            Utilization of operating loss
            carryforwards ................................     (40.0)      (40.0)      (40.0)
            Other ........................................       0.1         0.1        (0.7)
                                                              ------------------------------
                                                                 0.0%        0.0%       (0.8)%
                                                              ==============================
</TABLE>

      At May 31,  2005,  the Company had net  operating  loss  carryforwards  of
approximately $7.1 million for income tax purposes,  which may be able to reduce
taxable income in future years. The utilization of these losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior to
the  expiration  of the net operating  loss  carryforwards.  Net operating  loss
carryforwards will expire through May 31, 2022.

6. Related Party Transactions

      The Company leases its principal facilities from Robocom Properties,  Inc.
("Properties").  The  shareholders  of Properties are also  shareholders  of the
Company. In connection  therewith,  the Company incurred expenses of $168,000 in
fiscal years ending 2003, 2004 and 2005. During fiscal 2002,  $161,872 of unpaid
rental  expense was  converted  to long-term  debt as of May 30,  2002,  bearing
interest at 3% per annum and  maturing on May 30, 2004.  On May 27,  2003,  this
amount,  plus the related accrued interest of $4,856, was exchanged for warrants
to purchase  100,000  shares of Common  Stock at an  exercise  price of $.50 per
share.  These stock  purchase  warrants  can be  exercised  at any time and will
expire on May 31, 2008.

      As of May 30, 2002,  the Company  converted  debt  incurred  under a prior
consulting agreement with the chairman of the board and principal shareholder of
the Company to a promissory note,  bearing interest at 3% per annum and maturing
on May 30, 2004. As of May 30, 2003, this note was extended until June 30, 2005,
under the existing terms. As of May 31, 2005, $10,567 remained unpaid under this
note and has been included in accounts payable.

      As of May 30, 2002,  the Company  converted  debt  incurred  under a prior
consulting agreement with a director and principal shareholder of the Company to
a  promissory  note,  bearing  interest at 3% per annum and  maturing on May 30,
2004. As of May 30, 2003, this note was extended until June 30, 2005,  under the
existing terms.  As of May 31, 2005,  $2,861 remained unpaid under this note and
has been included in accounts payable.

      The Company has a line of credit from Baseboard Investments LLC, a limited
liability  company,  the  members of which  consist of the same three  principal
shareholders  and  directors  of the Company.  This line of credit  provided for
borrowings of up to $1,250,000.  As of September 24, 2004,  the Company  amended
this line of credit.  As amended,  the line  provides  for  borrowings  of up to
$500,000 and is set to expire on  September  19,  2005.  As of May 31, 2005,  no
borrowings were outstanding under the line of credit.


                                       32
<PAGE>

                       Robocom Systems International Inc.
                  Notes to the Financial Statements (continued)

7. Lease Commitments

      The Company is obligated,  under noncancellable  operating leases covering
its facilities (Note 6), to pay minimum annual rentals of approximately:

               Fiscal year ending:

                  2006 ...........................    $177,000
                  2007 ...........................     171,000
                  2008 ...........................     169,000
                  2009 ...........................     168,000
                  2010 ...........................     168,000
                                                      --------
                                                      $853,000
                                                      ========

      Total rental expense for each of the years ended May 31, 2003 and 2004 was
$184,000.  Total  rental  expense  for the year ended May 31,  2005  amounted to
approximately $177,000.

8. Subsequent Event

      On August 16, 2005, the Company's Board of Directors  unanimously approved
an agreement  to sell  substantially  all the assets of the Company,  subject to
certain adjustments, to an unrelated third party for approximately $3,170,000 in
cash. The sale is expected to result in a pre-tax gain of $300,000.

      Under the Purchase  Agreement,  the  consummation  of the  transaction  is
subject to the  satisfaction of certain closing  conditions,  including  without
limitation, the affirmative vote in favor of the sale by shareholders holding at
least  two-thirds  (2/3) of the  outstanding  shares  at a  special  meeting  of
shareholders.  In addition,  the obligation of the buyer to close is conditioned
upon it having secured financing  sufficient to pay the purchase price.  Subject
to the timely  satisfaction of the material  closing  conditions in the Purchase
Agreement,  the Company currently  anticipates that the sale will be consummated
during October 2005.

      The Company has not yet made any determination about future business plans
once the asset sale is consummated. However, immediately following the potential
sale,  the  Company  will have no  operating  business  or  source of  revenues.
Furthermore,  the  Company  has  agreed  that,  for a period  of five (5)  years
following  the sale, it will not engage in any business that develops or markets
computer software products that perform functions  substantially  similar to the
RIMS software product being sold.


                                       33
<PAGE>

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

      None.

Item 8A. Controls and Procedures

      (a)   As of the end of the period  covered  by this  report,  the  Company
            carried  out an  evaluation,  under  the  supervision  and  with the
            participation  of the  management,  including  the  Chief  Executive
            Officer and principal  accounting  officer,  of the effectiveness of
            the design and operation of the  disclosure  controls and procedures
            pursuant to Rule 13a-15 under the  Securities  Exchange Act of 1934,
            as amended (the  "Exchange  Act").  Based upon the  evaluation,  the
            Chief Executive Officer and principal  accounting  officer concluded
            that,  as of the end of the  period,  the  disclosure  controls  and
            procedures  were  effective  in  timely  alerting  him  to  material
            information  relating to the Company  required to be included in the
            reports that are filed and submitted pursuant to the Exchange Act.

      (b)   During the period  covered by this report,  there were no changes in
            our internal controls over financial  reporting that have materially
            affected,  or  are  reasonably  likely  to  materially  affect,  the
            internal controls over financial reporting.


                                       34
<PAGE>

                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act

Directors and Executive Officers

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

       Name          Age                         Position
       ----          ---                         --------

Irwin Balaban        73     Chairman of the Board, President and Chief Executive
                            Officer

Judy Frenkel         53     Senior Vice President and Chief Operating Officer

Robert B. Friedman   66     Director

Herbert Goldman      74     Director

Lawrence B. Klein    71     Director

      Irwin Balaban, a co-founder of the Company, has been Chairman of the Board
since 1983.  From 1983 until his  retirement in March 1999, he was President and
Chief Executive Officer of the Company.  Since March 1999, he had been providing
consulting  services to the  Company.  In his  capacity as a  consultant  to the
Company,  in July 2001, Mr.  Balaban  assumed the offices of President and Chief
Executive Officer.

      Judy Frenkel has been Chief  Operating  Officer of the Company  since July
2001.  Prior  thereto,  Ms.  Frenkel  had been Senior  Vice-President  - Systems
Development since September 2000. From September 1999 to September 2000, she had
been Vice President - Systems Development of the Company. From September 1992 to
September  1999, she was the Manager of Systems  Analysis for the Company.  From
April 1986 to September 1992, she was a Systems Analyst for the Company.

      Robert B.  Friedman  has been a director of the Company  since March 2003.
Mr.  Friedman is currently the principal  owner and managing  partner of several
business ventures,  including the Norwich (CT) Comfort Suites Hotel, the Norwich
(CT)  Navigators - Class AA affiliate of the San  Francisco  Giants,  the Nathan
Hale Inn & Conference Center at the University of Connecticut and the Middletown
Inn & Conference  Center.  From 1969 to 1989,  Mr.  Friedman,  a graduate of The
Wharton  School of the  University  of PA, was  President  and a Director of the
Middex  Development  Corporation,  a national real estate  development  company,
involved  in the  development,  ownership  and  management  of hotels and office
buildings.

      Herbert  Goldman,  a co-founder of the Company,  has been a director since
1983. He provided consulting services to the Company from his retirement in 1996
until May 2000. From 1991 until his  retirement,  Mr. Goldman had been Executive
Vice President - Operations of the Company.

      Lawrence B. Klein, a co-founder of the Company,  has been a director since
1991.  He was  Executive  Vice  President  -  Worldwide  from May 1999 until his
retirement  in May  2000,  and from May 2000 to May  2001,  provided  consulting
services to the Company. From 1991 to May 1999, Mr. Klein was the Executive Vice
President, Marketing and Sales of the Company.


                                       35
<PAGE>

      All directors  hold office until the next annual  meeting of  shareholders
and until  their  successors  have been duly  elected and  qualified.  Executive
officers are elected by, and serve at the discretion of, the Board of Directors.

Compliance with Section 16(a) of the Exchange Act

      Based  solely upon a review of Forms 3, 4 and 5  furnished  to the Company
pursuant to Section  16(a)-3e of the  Securities Act of 1934, the Company is not
aware of any  delinquencies  for the period ended May 31, 2005.  None of Messrs.
Balaban,  Friedman,  Goldman and Klein or Ms. Frenkel has filed Forms 3 or 5, if
required.  The Company is not aware of the  requirement  or  exemption of any of
such  individuals  to  file a Form 5,  but  notes  the  absence  of any  written
representation identified in paragraph (b)(2)(i) of Item 405 of Regulation S-B.

Code of Ethics

      On  September  13, 2004,  the Board of Directors of the Company  adopted a
Code of Ethics and Business  Conduct  applicable  to all members of the Board of
Directors,  the  executive  officers and  employees of the Company and a Code of
Ethics that applies to all  financial  executives  and employees of the Company.
The Company has posted these  policies on its web site at  www.robocom.com.  The
Code of  Ethics  and  Business  Conduct  and the Code of  Ethics  for  Financial
Executives and Employees were filed as Exhibits 14.1 and 14.2, respectively,  to
the  Company's  Current  Report  on Form 8-K as filed  with the  Securities  and
Exchange  Commission  on  September  29,  2004 and are  incorporated  herein  by
reference.

Committees of the Board of Directors

      The  Board  of  Directors  has   established  an  Audit  Committee  and  a
Compensation  Committee.  The Audit  Committee is responsible  for  recommending
independent auditors for selection by the Board of Directors, reviewing with the
independent  auditors the scope and results of the audit engagement,  monitoring
the Company's financial policies and internal control procedures,  and reviewing
and monitoring the provisions of non-audit  services  performed by the Company's
independent  auditors.  The Compensation  Committee is responsible for reviewing
and  recommending  salaries,  bonuses and other  compensation  for the Company's
officers.  The Compensation  Committee is also responsible for the administering
the Company's stock option plan and for establishing terms and conditions of all
stock options granted under this plan. All of the members of the Audit Committee
and the Compensation Committee are non-employee directors. Mr. Friedman has been
appointed  to sit  on the  audit  committee  to  serve  as the  audit  committee
financial expert.  Mr. Friedman is considered  independent within the meaning of
Rule  4200(a)(15)  of the National  Association  of Securities  Dealers  listing
standards, as amended.


                                       36
<PAGE>

Item 10. Executive Compensation.

      The following table sets forth all  compensation  awarded to, earned by or
paid to the chief  executive  officer  ("CEO") of the Company and the  Company's
four most highly compensated executive officers, whose salary and bonus exceeded
$100,000 in  compensation  for the last fiscal  year  (collectively,  the "Named
Executives"):

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                        Long-Term
                                          Annual Compensation                      Compensation Awards
                                                                              Securities
                                                            Other Annual      Underlying      All Other
Name and Principal     Fiscal     Salary        Bonuses     Compensation     Options/SARs  Compensation (1)
     Position           Year        ($)           ($)            ($)             (#)             ($)
<S>                     <C>       <C>           <C>               <C>           <C>             <C>
Irwin Balaban (2)
  President and         2005            0            0            0                  0          60,000
   Chief Executive      2004            0            0            0             60,000               0
   Officer              2003            0            0            0                  0               0

Judy Frenkel            2005      135,000       13,500            0                  0           4,455
  Chief Operating       2004      128,000            0            0             50,000           3,874
   Officer              2003      121,000        5,000            0                  0           3,417
</TABLE>

----------

(1)   Represents  matching  contributions  made by the  Company  pursuant to the
      Company's 401(k) Plan.

(2)   Since  1983,  Mr.  Balaban  has been  Chairman  of the Board and since his
      retirement in March 1999,  has been providing  consulting  services to the
      Company under a consulting  agreement.  In his capacity as a consultant to
      the  Company,  Mr.  Balaban  assumed  the offices of  President  and Chief
      Executive Officer in July 2001.

Stock Options

      The  following  table  sets  forth  information  with  respect  to  fiscal
year-ended May 31, 2005 option values.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)

<TABLE>
<CAPTION>
                    Number of       % of Total
                    Securities     Options/SARs
                    Underlying      Granted to
                   Options/SARs    Employees in    Exercise or Base Price
    Name           Granted (#)     Fiscal Year             ($/sh)             Expiration Date
<S>                   <C>             <C>                  <C>                <C>
Irwin Balaban         50,000          21.74%               $0.57              October 5, 2009
Irwin Balaban         10,000           4.35%               $0.65              December 7, 2009
</TABLE>


                                       37
<PAGE>

      The following  table sets forth the number and value of options  exercised
by each of the Named  Executive  Officers  during the fiscal  year ended May 31,
2005 and of unexercised  options held by each of the Named Executive Officers on
May 31, 2005:

                             OPTION YEAR END VALUES

<TABLE>
<CAPTION>
                                                                 Number of Securities
                                                                Underlying Unexercised       Value of Unexercised In-
                      Shares Acquired                           Options/SARs at FY-End      the-Money Options/SARs at
                        on Exercise        Value Realized                (#)                        FY-End ($)
       Name                 (#)                  ($)          Exercisable/Unexercisable     Exercisable/Unexercisable
<S>                          <C>                 <C>              <C>                            <C>
Irwin Balaban                --                  --               125,000 / 0                    $28,500 / 0
Judy Frenkel                 --                  --                46,667 / 33,333                13,833 / 6,667
</TABLE>

Directors' Compensation

      Each non-employee director receives $1,500 for each Board meeting attended
and is reimbursed for all  out-of-pocket  expenses  incurred in connection  with
attendance at meetings of the Board or any committee  thereof.  Upon election to
the Board of Directors,  each non-employee director is granted five-year options
to purchase  5,000  shares of Common  Stock at an  exercise  price equal to fair
market  value of the Common Stock at the date of grant.  In addition,  directors
serving on either the Audit Committee or the Compensation  Committee are granted
additional  five-year  options to purchase  2,500  shares of Common  Stock at an
exercise price equal to the fair market value of the Common Stock at the date of
grant. These options vest immediately.

      During fiscal 2005, Irwin Balaban,  Robert  Friedman,  Herbert Goldman and
Lawrence Klein were each granted  five-year options to purchase 50,000 shares of
Common  Stock at an  exercise  price of $.57 per  share.  These  options  vested
immediately.

Employment and Consulting Agreement

      As of May 30, 2002,  the Company  converted  debt  incurred  under a prior
consulting  agreement with Mr. Balaban to a promissory note, bearing interest at
3% per annum and  maturing on May 30, 2004.  As of May 30,  2003,  this note was
extended  until June 30,  2005,  under the existing  terms.  As of May 31, 2005,
$10,567  remained  unpaid  under  this note and has been  included  in  accounts
payable.

      On July 28, 2003, the Company entered into an agreement with Judy Frenkel,
the Chief Operating Officer that pertains to severance  compensation  payable to
Ms. Frankel upon the occurrence of certain employment  termination  events. This
agreement  provides Ms. Frenkel with three equal lump sum payments,  aggregating
fifty percent of her then current rate of annual base salary,  upon  termination
resulting from certain  qualifying  events,  as defined in the  agreement.  Such
qualifying  events  include but are not limited to, the failure by the surviving
corporation to offer employment to Ms. Frenkel following a change of control and
the  termination of employment of Ms.  Frenkel  without cause prior to the first
anniversary of a change in control of the Company.


                                       38
<PAGE>

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Shareholder Matters.

      The  following  table  sets  forth,  as of August  26,  2005,  the  names,
addresses  and number of shares of Common  Stock  beneficially  owned by (i) all
persons known to the  management of the Company to be beneficial  owners of more
than 5% of the  outstanding  shares of Common  Stock,  (ii) each director of the
Company,  (iii) each named Executive Officer and (iv) all executive officers and
directors of the Company as a group (except as indicated,  each beneficial owner
listed  exercises sole voting power and sole  dispositive  power over the shares
beneficially owned):

<TABLE>
<CAPTION>
                                                                           Number of Shares
                         Name and Address of                                 Beneficially      Percentage of Outstanding
                         Beneficial Owner (1)                                 Owned (2)      Shares Beneficially Owned (2)
                         --------------------                                 ---------      -----------------------------
<S>                                                                          <C>                         <C>
Irwin Balaban ...................................................            1,111,100(3)                23.81%
Judy Frenkel ....................................................              108,200(4)                 2.34
Robert B. Friedman ..............................................              160,000(5)                 3.44
Herbert Goldman .................................................            1,004,000(6)                21.54
Lawrence B. Klein ...............................................              754,000(7)                16.21
All executive officers and directors as a group (5 persons) .....            3,137,300(8)                61.62
</TABLE>

----------
      (1)   The  address  of  each  beneficial  owner  of  more  than  5% of the
            outstanding   shares  of  Common   Stock  is  c/o  Robocom   Systems
            International Inc., 511 Ocean Avenue, Massapequa, New York 11758.

      (2)   Except as  indicated  in the  footnotes  to this table,  the Company
            believes  that all  persons  named in the table have sole voting and
            investment   power  with  respect  to  all  Common  Stock  shown  as
            beneficially  owned by them.  In  accordance  with the  rules of the
            Securities and Exchange Commission (the  "Commission"),  a person or
            entity is deemed to be the beneficial owner of Common Stock that can
            be  acquired  by such  person  or  entity  within  60 days  upon the
            exercise of options or warrants  or other  rights to acquire  Common
            Stock. Each beneficial owner's percentage ownership is determined by
            assuming that options and warrants that are held by such person (but
            not those held by any other person) and which are exercisable within
            60 days have been  exercised.  The  inclusion  herein of such shares
            listed as  beneficially  owned does not  constitute  an admission of
            beneficial ownership.

      (3)   Includes  564,000 shares held by I&T Balaban L.P. and 125,000 shares
            subject to options that are presently exercisable.

      (4)   Includes  36,667  shares  subject  to  options  that  are  presently
            exercisable.

      (5)   Includes  115,000  shares  subject  to  options  that are  presently
            exercisable.

      (6)   Includes  564,000 shares held by H & N Goldman L.P.,  160,000 shares
            held by the Herbert Goldman Revocable Trust,  160,000 shares held by
            the Naomi J. Goldman  Revocable  Trust and 120,000 shares subject to
            options that are presently exercisable.

      (7)   Includes  110,000  shares  subject  to  options  that are  presently
            exercisable.

      (8)   Includes  550,000  shares  subject  to  options  that are  presently
            exercisable.


                                       39
<PAGE>

Securities Authorized for Issuance under Equity Compensation Plans

            The Company's 1997 Stock Option and Long-term Incentive Compensation
Plan is the only  compensation  plan under which  shares of Common  Stock may be
issued.  The Company has no equity  compensation plans or arrangements that have
not been approved by shareholders.

            The following table sets forth  information as of May 31, 2005, with
respect to the compensation  plan under which the Company is authorized to issue
shares of its Common Stock:

                      Equity Compensation Plan Information

<TABLE>
<CAPTION>
                                                 Number of
                                              securities to be
                                                issued upon            Weighted average             Number of securities
                                                exercise of           exercise price of        remaining for future issuance
                                                outstanding              outstanding             under equity compensation
                                             options, warrants             options,             plans (excluding securities
                                                 and rights          warrants and rights         reflected in columns (a))
                                                    (a)                      (b)                            (c)
<S>                                               <C>                      <C>                            <C>
Equity compensation plans approved
   by security holders ...............            670,000                  $  0.61                        435,000
Equity compensation plans not
   approved by security holders ......                 --                       --                             --
                                                  -------                  -------                        -------
Total ................................            670,000                  $  0.61                        435,000
                                                  =======                  =======                        =======
</TABLE>

Item 12. Certain Relationships and Related Transactions.

      Pursuant to an  indemnification  agreement,  dated August __, 2005, by and
among the Company and Messrs.  Irwin Balaban,  Chairman of the Board,  President
and Chief  Executive  Officer of the  Company,  Lawrence  B.  Klein and  Herbert
Goldman,  directors of the Company, the Company agreed to indemnify such persons
for any losses  they may incur  resulting  from their  agreement  to  personally
indemnify  Avantce RSI, LLC for certain  losses it may incur in the event of the
Company's breach of its  representations,  warranties and/or covenants set forth
in the Asset Purchase Agreement, dated August 17, 2005.

      The Company leases approximately 10,000 square feet of office space, which
functions as its corporate headquarters,  in Massapequa, New York, pursuant to a
lease  between  the  Company and Robocom  Properties  Inc.  ("Properties")  that
expires on  December  31,  2010.  The  shareholders  of  Properties  are Messrs.
Balaban,  Goldman,  Klein, and two former executive officers of the Company.  In
connection therewith,  the Company incurred expenses of $168,000 in fiscal 2003,
2004 and 2005. In fiscal 2002,  $161,872 was  converted to long-term  debt as of
May 30, 2002,  bearing interest at 3% per annum and maturing on May 30, 2004. On
May 27, 2003, this long-term debt, plus the related accrued  interest of $4,856,
was exchanged  for warrants to purchase  100,000  shares of Common Stock,  at an
exercise price of $.50 per share. These stock purchase warrants can be exercised
at any time and will expire on May 31, 2008.

      Since  January 1, 1998,  the annual base rental of $168,000  payable under
the lease has been  adjusted and  thereafter  will be adjusted  each year by the
ratio of the prime rate as published in the Wall Street  Journal on January 2 of
such year to the prime rate as published  in the Wall Street  Journal on January
2, 1997, which was 8.25%. The prime rate on January 2, 2005 was 5.25%.  However,
the parties have agreed that rent will not be less than  $14,000 per month.  The
Company  believes  that  these  rental  terms are at least as  favorable  to the
Company as could be obtained from an unaffiliated third party.

      As of May 30, 2002,  the Company  converted  debt  incurred  under a prior
consulting  agreement with Irwin Balaban,  Chairman of the Board,  President and
Chief Executive Officer of the Company,  to a promissory note,


                                       40
<PAGE>

bearing  interest at 3% per annum and  maturing on May 30,  2004.  As of May 30,
2003,  this note was extended until June 30, 2005,  under the existing terms. As
of May 31, 2005,  $10,567  remained unpaid under this note and has been included
in accounts payable.

      As of May 30, 2002,  the Company  converted  debt  incurred  under a prior
consulting agreement with Herbert Goldman, a director and principal  shareholder
of the  Company  to a  promissory  note,  bearing  interest  at 3% per annum and
maturing on May 30, 2004. As of May 30, 2003,  this note was extended until June
30, 2005,  under the existing terms. As of May 31, 2005,  $2,861 remained unpaid
under this note and has been included in accounts payable.

      The Company has a line of credit from Baseboard Investments LLC, a limited
liability  company,  the  members of which  consist of the same three  principal
shareholders  and  directors  of the Company.  This line of credit  provided for
borrowings of up to $1,250,000.  As of September 24, 2004,  the Company  amended
this line of credit.  As amended,  the line  provides  for  borrowings  of up to
$500,000 and expires on September  19, 2005.  As of May 31, 2005,  no borrowings
were outstanding under the line of credit.

Item 13. Exhibits, Lists and Reports on Form 8-K.

      (a)   Exhibits.

            The exhibits  required by this item are listed on the Exhibit  Index
            attached hereto and are either filed herewith or incorporated herein
            by reference.

      (b)   Reports on Form 8-K.

            On April 14, 2005, the Company filed a Current Report on Form 8-K to
            file its press release disclosing  earnings results,  as reported in
            the  Quarterly  Report on Form 10-QSB for the fiscal  quarter  ended
            February 28, 2005.

Item 14. Principal Accountant Fees and Services.

            The Company  incurred $40,000 and $48,000 for the fiscal years ended
May 31,2004 and 2005, respectively, for audit and review service from Eisner and
Lubin  LLP.  Eisner & Lubin LLP has not  performed  any other  services  for the
Company not expressly mentioned above.

Board of Directors Pre-Approval

      The Company's Board of Directors  pre-approved  the engagement of Eisner &
Lubin LLP to act as the independent  auditor for the year ended May 31, 2005 and
through the  completion  of our annual report on Form 10-KSB for the fiscal year
ended May 31, 2006. The Board of Directors also  pre-approved  the engagement of
Eisner & Lubin LLP to provide  the audit and  audit-related  services  described
above.


                                       41
<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) 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,  in Massapequa,  New
York, on August 26, 2005.

                                        ROBOCOM SYSTEMS INTERNATIONAL INC.


                                        By: /s/ Irwin Balaban
                                            -----------------------------
                                              Irwin Balaban
                                              Chief Executive Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates stated:

<TABLE>
<CAPTION>
          Signature                                   Title                                Date
<S>                             <C>                                                   <C>

/s/Irwin Balaban                Chairman of the Board and Chief Executive Officer     August 26, 2005
-----------------------------   (Principal Executive Officer, Principal Accounting
Irwin Balaban                   Officer, and Principal Financial Officer)


/s/Lawrence B. Klein            Director                                              August 26, 2005
-----------------------------
Lawrence B. Klein


/s/Herbert Goldman              Director                                              August 26, 2005
-----------------------------
Herbert Goldman


/s/Robert B. Friedman           Director                                              August 26, 2005
-----------------------------
Robert B. Friedman
</TABLE>


                                       42
<PAGE>

                                  Exhibit Index

Exhibit
Number                               Description
-------                              -----------

2.1         Asset Purchase  Agreement dated August 17, 2005, between the Company
            and Avantce RSI, LLC  (incorporated  by reference to Exhibit 10.1 to
            the  Company's  Current  Report  on  Form  8-K  as  filed  with  the
            Commission on August 17, 2005 (File No. 0-22735)).

3.1         Restated  Certificate of Incorporation of the Company  (incorporated
            herein by  reference  to Exhibit 3.1 to the  Company's  Registration
            Statement on Form SB-2 (Registration No. 333-27587)).

3.2         Amendment  dated  November  9,  1998  to  Restated   Certificate  of
            Incorporation  of the  Company  to  reflect  name  change to Robocom
            Systems  International  Inc.  (incorporated  herein by  reference to
            Exhibit 3.2 to the  Company's  Annual  Report on Form 10-KSB for the
            year ended May 31, 1999 as filed with the  Commission  on August 25,
            1999 (File No. 0-22735)).

3.3         Amended and Restated By-laws of the Company  (incorporated herein by
            reference to Exhibit 3.2 to the Company's  Registration Statement on
            Form SB-2 (Registration No. 333-27587)).

10.1        Lease   Agreement,   dated  December  21,  1989,   between   Robocom
            Properties,  Inc.  and the  Company  relating  to 511 Ocean  Avenue,
            Massapequa,  New York  (incorporated  herein by reference to Exhibit
            10.7  to  the   Company's   Registration   Statement  on  Form  SB-2
            (Registration No. 333-27587)).

10.2        1997  Stock  Option  and  Long-Term   Incentive   Compensation  Plan
            (incorporated  herein by reference to Exhibit 10.14 to the Company's
            Registration Statement on Form SB-2 (Registration No. 333-27587)).

10.3        Amended  and  Restated  Promissory  Note dated May 30, 2003 from the
            Company  to Irwin  Balaban  (incorporated  herein  by  reference  to
            Exhibit 10.7 to the  Company's  Annual Report on Form 10-KSB for the
            year ended May 31, 2003 as filed with the  Commission  on August 18,
            2003 (File No. 0-22735)).

10.4        Amended  and  Restated  Promissory  Note dated May 30, 2003 from the
            Company to Herbert  Goldman  (incorporated  herein by  reference  to
            Exhibit 10.9 to the  Company's  Annual Report on Form 10-KSB for the
            year ended May 31, 2003 as filed with the  Commission  on August 18,
            2003 (File No. 0-22735)).

10.5        Stock  Purchase  Warrant  Agreement  dated May 27, 2003  between the
            Company  and  Robocom  Properties,   Inc.  (incorporated  herein  by
            reference to Exhibit  10.11 to the  Company's  Annual Report on Form
            10-KSB for the year ended May 31, 2003 as filed with the  Commission
            on August 18, 2003 (File No. 0-22735)).

10.6        Severance Agreement dated July 18, 2003 between the Company and Judy
            Frenkel  (incorporated  herein by reference to Exhibit  10.12 to the
            Company's  Annual  Report on Form  10-KSB for the year ended May 31,
            2003 as filed  with the  Commission  on August  18,  2003  (File No.
            0-22735)).

10.7        Amended  Revolving  Line of Credit  dated  September  24,  2004 from
            Baseboard  Investments,  LLC.  (incorporated  herein by reference to
            Exhibit 10.7 to the  Company's  Current  Report filed on Form 8-K as
            filed with the Commission on September 24, 2004 (File No. 0-22735)).

10.8        Promissory  Note  in  favor  of  Baseboard  Investments,  LLC  dated
            September 24, 2004 (incorporated herein by reference to Exhibit 10.8
            to the Company's  Current Report filed on Form 8-K as filed with the
            Commission on September 24, 2004 (File No. 0-22735)).


                                       43
<PAGE>

Exhibit
Number                               Description
-------                              -----------

10.9        Indemnification  Agreement  dated as of August 17,  2005,  among the
            Company, Irwin Balaban, Herbert Goldman and Lawrence B. Klein.

14.1        Robocom  Systems  International  Inc.  Code of Ethics  and  Business
            Conduct  (incorporated  herein by  reference  to Exhibit 14.1 to the
            Company's  Current  Report  filed  on Form  8-K as  filed  with  the
            Commission on September 24, 2004 (File No. 0-22735)).

14.2        Robocom  Systems  International  Inc.  Code of Ethics for  Financial
            Executives  and  Employees  (incorporated  herein  by  reference  to
            Exhibit 14.2 to the  Company's  Current  Report filed on Form 8-K as
            filed with the Commission on September 24, 2004 (File No. 0-22735)).

31.1        Certification of the Company's Chief Executive Officer and principal
            accounting  officer,  Irwin Balaban,  pursuant to Section 302 of the
            Sarbanes-Oxley Act of 2002.

32.1        Certification of the Company's Chief Executive Officer and principal
            accounting  officer,  Irwin Balaban,  pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.


                                       44