EIGER TECHNOLOGY, INC.
                       CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001


<PAGE>


                             EIGER TECHNOLOGY, INC.
                                     INDEX
                          September 30, 2002 and 2001


Auditor's Report

Consolidated Financial Statements

        Balance Sheets

        Statements of Operations and Retained Earnings

        Statements of Cash Flows

Notes to the Consolidated Financial Statements


<PAGE>


                    [LETTERHEAD OF MONTEITH, MONTEITH & CO.]


                                AUDITORS' REPORT

To the Shareholders of
   Eiger Technology, Inc.:

      We have audited the consolidated balance sheets of Eiger Technology, Inc.
as at September 30, 2002 and 2001, and the consolidated statements of operations
and retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the companys management. Our responsibility
is to express an opinion on these financial statements based on our audits.

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

      In our opinion, these financial statements present fairly, in all material
respects, the financial position of Eiger Technology, Inc. as at September 30,
2002 and 2001, and the results of its operations and its cash flows for the
years then ended in accordance with accounting principles generally accepted in
Canada.

                                                Monteith, Monteith & Co.

                                                 CHARTERED ACCOUNTANTS.

Stratford, Ontario,
January 31, 2003.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                          CONSOLIDATED BALANCE SHEETS
                       as at September 30, 2002 and 2001

                                     ASSETS
                                                         2002           2001
                                                         ----           ----
                                                          $              $
Current:
  Cash                                                 1,982,000      1,847,000
  Short-term Investments (Note 4)                      1,653,000      4,146,000
  Accounts Receivable (Note 5)                         5,004,000      8,759,000
  Inventory                                            4,493,000      6,545,000
  Prepaid Expenses                                       378,000        769,000
                                                     -----------    -----------

                                                      13,510,000     22,066,000

Long-term Investments (Note 4)                         1,650,000        404,000
Capital (Note 6)                                       4,867,000      4,541,000
Goodwill                                               3,013,000      2,488,000
Other (Note 7)                                           718,000      1,222,000
                                                     -----------    -----------
                                                      23,758,000     30,721,000
                                                     ===========    ===========

                      LIABILITIES and SHAREHOLDERS' EQUITY
Current:
  Bank Indebtedness (Note 8)                           4,028,000      3,515,000
  Accounts Payable and Accrued Liabilities             4,395,000      5,616,000
  Current Portion of Long-term Debt (Note 9)             145,000        120,000
                                                     -----------    -----------
                                                       8,568,000      9,251,000
                                                     -----------    -----------
Long-term Debt (Note 9)                                  940,000      1,014,000
                                                     -----------    -----------
Non-controlling Interest                              (1,873,000)      (671,000)
                                                     -----------    -----------

Shareholders' Equity:
  Share Capital (Note 11)                             42,235,000     42,001,000
  Contributed Surplus                                    217,000        217,000
  Retained Earnings                                  (26,329,000)   (21,091,000)
                                                     -----------    -----------
                                                      16,123,000     21,127,000
                                                     -----------    -----------
                                                      23,758,000     30,721,000
                                                     ===========    ===========

On Behalf of the Board:

     "Gerry Racicot"            Director
---------------------------
      Gerry Racicot

      "Keith Attoe"             Director
---------------------------
       Keith Attoe

                            (See Accompanying Notes)


<PAGE>


                             EIGER TECHNOLOGY, INC.
          CONSOLIDATED STATEMENTS of OPERATIONS and RETAINED EARNINGS
                for the years ended September 30, 2002 and 2001

                                                         2002           2001
                                                         ----           ----
                                                          $              $
Sales                                                 19,325,000     30,070,000

Cost of Sales                                         17,146,000     27,711,000
                                                     -----------    -----------
Gross Margin                                           2,179,000      2,359,000
                                                     -----------    -----------
Expenses:
  Selling, General and Administration                  8,451,000      7,769,000
  Amortization of Capital Assets                         562,000        568,000
  Amortization of Goodwill and Other                     235,000      1,032,000
  Interest on Long-term Debt                              60,000         98,000
  Other Interest and Bank Charges                        501,000        480,000
                                                     -----------    -----------
                                                       9,809,000      9,947,000
                                                     -----------    -----------
Income (Loss) before Provision for Income Taxes       (7,630,000)    (7,588,000)
                                                     -----------    -----------
Provision for Income Taxes:
  Current                                                     --         (6,000)
  Future                                                      --        (56,000)
                                                     -----------    -----------
                                                              --        (62,000)
                                                     -----------    -----------
Income (Loss) before Unusual Items                    (7,630,000)    (7,526,000)
Non-recurring Items (Note 12)                                 --    (16,366,000)
                                                     -----------    -----------
Income (Loss) before Non-controlling Interest         (7,630,000)   (23,892,000)
Non-controlling Interest                              (2,392,000)    (3,565,000)
                                                     -----------    -----------
Net Income (Loss) for the Year                        (5,238,000)   (20,327,000)

Retained Earnings - Beginning of Year                (21,091,000)      (764,000)
                                                     -----------    -----------

Retained Earnings - End of Year                      (26,329,000)   (21,091,000)
                                                     ===========    ===========


     Earnings per Share:
        Before Non-recurring Items:
          Basic                                            (0.15)         (0.23)
                                                     -----------    -----------
          Diluted                                          (0.15)         (0.23)
                                                     -----------    -----------

     Net Income (Loss)
          Basic                                            (0.15)         (0.59)
                                                     -----------    -----------
          Diluted                                          (0.15)         (0.59)
                                                     -----------    -----------

                            (See Accompanying Notes)


<PAGE>


                             EIGER TECHNOLOGY, INC.
                     CONSOLIDATED STATEMENTS of CASH FLOWS
                for the years ended September 30, 2002 and 2001

                                                         2002           2001
                                                         ----           ----
                                                          $              $
Cash Flows from Operating Activities:
  Net Income (Loss) for the Year                      (5,238,000)   (20,327,000)
  Items not Involving Cash:
    Non-recurring Items (Note 12)                             --     16,366,000
    Amortization                                         797,000      1,600,000
    Future Income Taxes                                       --        (56,000)
                                                     -----------    -----------
                                                      (4,441,000)    (2,417,000)
                                                     -----------    -----------
    Changes in Non-cash Working Capital Balances:
      Accounts Receivable                              3,755,000      3,280,000
      Inventory                                        2,052,000      3,203,000
      Prepaid Expenses                                   391,000        (83,000)
      Accounts Payable and Accrued Liabilities        (1,221,000)    (5,568,000)
      Income Taxes Payable                                    --        (39,000)
      Non-controlling Interest                        (1,202,000)    (3,094,000)
                                                     -----------    -----------
                                                        (666,000)    (4,718,000)
                                                     -----------    -----------

Cash Flows from Investing Activities:
  Purchase of Capital Assets                            (888,000)      (478,000)
  Long-term Investments                               (1,246,000)    (3,571,000)
  Purchase of Goodwill and Other Assets                 (256,000)    (2,531,000)
                                                     -----------    -----------
                                                      (2,390,000)    (6,580,000)
                                                     -----------    -----------

Cash Flows from Financing Activities:
  Increase (Decrease) in Long-term Debt                  (49,000)      (474,000)
  Increase (Decrease) in Bank Indebtedness               513,000        845,000
  Issuance of Share Capital (Net of Costs)               234,000      3,106,000
                                                     -----------    -----------
                                                         698,000      3,477,000
                                                     -----------    -----------
Net Cash Flows for the Year                           (2,358,000)    (7,821,000)

Cash and Cash Equivalents - Beginning of the Year      5,993,000     13,814,000
                                                     -----------    -----------
Cash and Cash Equivalents - End of the Year            3,635,000      5,993,000
                                                     ===========    ===========


Cash and Cash Equivalents Represented by:
Cash                                                   1,982,000      1,847,000
Short-term Investments                                 1,653,000      4,146,000
                                                     -----------    -----------
                                                       3,635,000      5,993,000
                                                     ===========    ===========

                            (See Accompanying Notes)


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

1.    Nature of Business:

      Eiger Technology, Inc. ("the Company") is incorporated under the laws of
      Ontario. Through its various subsidiaries, the Company offers Voice over
      Internet Protocol services to the Canadian long-distance market and
      manufactures and distributes electronic/computer peripherals and
      electronic ballasts to OEM and consumer markets worldwide.

2.    Significant Accounting Policies:

      (a)   Basis of Preparation:

            These financial statements have been prepared in accordance with
            accounting principles generally accepted in Canada ("Cdn. GAAP"). A
            reconciliation to U.S. generally accepted accounting principles
            ("U.S. GAAP") is provided in Note 13. Because a precise
            determination of assets and liabilities depends on future events,
            the preparation of periodic financial statements necessitates the
            use of estimates and approximations. Actual amounts may differ from
            these estimates.

      (b)   Principles of Consolidation:

            The accompanying consolidated financial statements include the
            accounts of Eiger Technology, Inc. and all of its subsidiary
            companies as listed in Note 3. All significant intercompany
            transactions and balances have been eliminated upon consolidation.

      (c)   Cash and Cash Equivalents:

            Cash and cash equivalents consist of cash on account and short-term
            investments with remaining maturities of three months or less at
            acquisition.

      (d)   Inventory:

            Inventory is valued at the lower of cost and net realizable value.
            Cost is determined on a first-in, first-out basis and includes the
            costs of materials and direct labour plus the applicable share of
            manufacturing overhead.

      (e)   Investments:

            All non-consolidated investments are accounted for at cost.
            Short-term investments are written down to market value when less
            than cost. Long-term investments are written down to market value
            when a decline in market value below the carrying value is
            considered to be other than temporary.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

2.    Significant Accounting Policies - continued:

      (f)   Capital Assets:

            Capital assets are recorded at cost. Amortization is calculated on
            the declining-balance basis at the following annual rates:

                Buildings                -  4-5%
                Machinery and Equipment  -  5-10%
                Automotive Equipment     -  20-30%
                Computer Equipment       -  20-30%
                Leasehold Improvements   -  10% straight line basis

      (g)   Goodwill:

            Goodwill represents the excess of the purchase price of the Companys
            interest in subsidiary companies over the fair value of the
            underlying net identifiable assets at the time of acquisition.
            Goodwill is amortized over 10 years on a straight-line basis (40
            years for acquisitions prior to 1997). Goodwill arising on
            acquisitions after June 30, 2001 is not amortized. Management
            evaluates the expected future net cash flows of the companies at
            each reporting date and adjusts goodwill for any impairment.

      (h)   Other Assets:

            Product development costs meeting generally accepted criteria for
            deferral are written down to expected realizable value, and are
            amortized once production commences over periods ranging from three
            to ten years, depending on the anticipated economic life of the
            particular product. Deferred organization, finance, and regulatory
            approval costs are amortized over 2 to 5 years. Long-term lease
            deposits are recorded at cost.

      (i)   Income Taxes:

            Income taxes are provided using the liability method of tax
            allocation. Under this method, future tax assets and liabilities are
            determined based on differences between financial reporting and
            income tax bases of assets and liabilities, and are measured using
            the substantially enacted tax rates and laws that will be in effect
            when the differences are expected to reverse.

      (j)   Issuance of Share Capital:

            The costs of issuing share capital are netted against share capital.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

2.    Significant Accounting Policies - continued:

      (k)   Revenue Recognition:

            Sales are recorded upon shipment of goods to customers. Fees are
            recognized as services are rendered.

      (l)   Foreign Currency Translation:

            Due to the extensive degree of financing provided to its foreign
            subsidiaries by the Company, these subsidiaries are considered to be
            integrated operations. Accordingly, the temporal method of foreign
            currency translation is used. Under this method, monetary assets and
            liabilities of foreign subsidiaries are translated into Canadian
            dollars using the exchange rate in effect at the balance sheet date,
            non-monetary items are translated at historical exchange rates
            (except for items carried at market, which are translated at the
            balance sheet date exchange rate), and revenues and expenses are
            translated using average exchange rates to approximate the rates
            actually in effect at the time of the transactions. Resulting
            foreign exchange translation gains or losses are included in the
            determination of net income for the year, except for such gains or
            losses relating the translation or settlement of foreign currency
            denominated long-term monetary items which are deferred and
            amortized over the remaining life of the monetary item. There were
            no material exchange gains or losses on long-term foreign currency
            denominated monetary items during either of the reporting periods.

      (m)   Stock-based Compensation:

            No compensation expense is recognized for stock options granted to
            employees. Options are granted at the fair market value of the
            shares on the day of the grant. Any consideration paid by employees
            on the exercise of stock options is credited to share capital.

      (n)   Earnings per Share:

            Basic earnings per share is calculated based on the weighted average
            number of shares outstanding during the year. Diluted earnings per
            share is calculated using the treasury stock method based on the
            weighted average number of shares that would have been outstanding
            during the year had all the dilutive options been exercised at the
            beginning of the year, or date of issuance if later, and assuming
            that option proceeds would be used to purchase common shares at the
            average market price during the year.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

3.    Subsidiaries and Related Party Transactions:

      Eiger Technology, Inc. is related to the following corporations:

        Name of Corporation                     Nature of Relationship

        Newlook Industries Corp.                83.2% Subsidiary
        Vision Unlimited Equipment Inc.*        100% Subsidiary of Newlook
                                                Industries Corp.
        A.D.H. Custom Metal Fabricators Inc.    100% Subsidiary of Vision
                                                Unlimited Equipment Inc.
        Alexa Properties Inc.                   100% Subsidiary

        ETIFF Holdings, Inc.*                   100% Subsidiary
        K-Tronik International Corp.*           64% Subsidiary of ETIFF
                                                Holdings, Inc.
        K-Tronik North America Corp.            100% Subsidiary of K-Tronik
                                                International Corp.
        K-Tronik Asia Corp.                     100% Subsidiary of K-Tronik
                                                North America Corp.

        Alexa Korea Holdings, Inc.*             100% Subsidiary
        EigerNet, Inc.                          58.4% Subsidiary of Alexa Korea
                                                Holdings, Inc.
        Alexa (U.S.A.), Inc.*                   100% Subsidiary
        Eiger Labs Group, Inc.                  64% Subsidiary of Alexa
                                                (U.S.A.), Inc.

        Onlinetel, Inc.                         100% Subsidiary
        Onlinetel, Corp.                        100% Subsidiary

        * Inactive - holding company only

All transactions within the corporate group are in the normal course of
business, are transacted at fair market value and recorded at the carrying value
at the time, and are eliminated upon consolidation. Intercompany balances at the
financial statement date are also eliminated upon consolidation.

Service fees paid to corporations owned by management personnel during the
period totalled $456,000 (2001: $412,000).


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

4.    Investments:

      (a)   Short-term Investments:

      Short-term investments are comprised of Canadian money market funds and
      short-term commercial paper plus accrued interest, having a market value
      equivalent to their cost amount.

      (b)   Long-term Investments:                            2002        2001
                                                              ----        ----
                                                               $           $

      Advances to Lexatec VR Systems Inc. (Note 10)          123,000     324,000
      Subsidiary long-term portfolio equity investments    1,527,000          --
      Subsidiary long-term investment in debt securities          --      80,000
      Other                                                       --          --
                                                           ---------   ---------
                                                           1,650,000     404,000
                                                           =========   =========

      The advances noted above are non-interest bearing, and have no specific
      terms of repayment.

5.    Accounts Receivable:

      Accounts receivable are reported net of an allowance for doubtful accounts
      of $2,373,000 (2001: $196,000).

6.    Capital Assets:

                                                  2002                    2001
                                   ---------------------------------   ---------
                                              Accumulated   Net Book    Net Book
                                      Cost    Amortization   Value       Value
                                   ---------------------------------   ---------
                                       $           $           $           $
      Land                           217,000          --     217,000     159,000
      Buildings                    1,060,000     150,000     910,000     920,000
      Machinery and Equipment      5,497,000   2,549,000   2,948,000   2,315,000
      Furniture and Fixtures         652,000     397,000     255,000     428,000
      Automotive Equipment           157,000      62,000      95,000     118,000
      Leasehold Improvements         116,000       4,000     112,000     116,000
      Computer Hardware              409,000     134,000     275,000     283,000
      Computer Software               58,000       3,000      55,000     202,000
                                   ---------------------------------   ---------
                                   8,166,000   3,299,000   4,867,000   4,541,000
                                   =============================================


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

7.    Other:

                                                            2002         2001
                                                            ----         ----
                                                             $            $

      Product Development Costs                                 --      298,000
      Non-interest Bearing Long-term Deposits              409,000      682,000
      Regulatory Approval                                  153,000      174,000
      Other                                                156,000       68,000
                                                         ---------    ---------

                                                           718,000    1,222,000
                                                         =========    =========

8.    Bank Indebtedness :

      Foreign subsidiary lines of credit balances totalling $4,028,000 (Cdn.),
      bear interest at rates ranging from 5 - 7.25%, are secured by short-term
      investments, inventory and equipment, and are repayable upon demand.

9.    Long-term Debt:

                                                            2002         2001
                                                            ----         ----
                                                             $            $

      Royal Bank of Canada term loan repayable in
      monthly instalments of $10,000 plus interest
      calculated at Royal Bank prime plus 1/4%             625,000      745,000

      Shin Han Bank (Korea) term loan repayable                 --      303,000

      KiUp Bank (Korea) term loan repayable in
      monthly instalments of $2,083 plus interest
      calculated at 5.9% per annum                         375,000           --

      Other                                                 85,000       86,000
                                                        ----------   ----------

                                                         1,085,000    1,134,000

      Less: Current Portion                               (145,000)    (120,000)
                                                        ----------   ----------

                                                           940,000    1,014,000
                                                        ==========   ==========

      Principal payments required on long-term debt for the next five years are
      as follows: 2003: $145,000; 2004: $230,000; 2005: $145,000; 2006:
      $145,000; 2007: $145,000.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

10.   Financial Instruments:

      (a)   Fair Value:

      Cash and cash equivalents, short-term investments, accounts receivable and
      payable, and bank indebtedness are carried at cost which approximates fair
      value due to their short time to maturity. Management believes the
      carrying value of long-term investments to be equivalent to their fair
      market value. The fair values of the Company's long-term debt obligations,
      based on current rates for debt with similar terms and maturities, are
      approximately the same as their carrying values.

      (b)   Interest Rate Risk:

      The Company is not exposed to significant interest rate risk due to the
      short-term maturity of its current monetary assets and liabilities. The
      Company's interest rate risk pertaining to its long-term debt obligations
      is not considered to be significant due to the relatively low amounts
      involved.

      (c)   Credit Risk:

      The Company's financial assets that are exposed to credit risk consist
      primarily of short-term investments, accounts receivable, and long-term
      investments.

      Short-term investments consist solely of money market funds and short-term
      commercial paper issued by investment-rated Canadian financial
      institutions which are invested for terms not exceeding 90 days.

      The Company, in the normal course of business, is exposed to credit risk
      from its customers. Management believes that sufficient allowance has been
      made for bad debts in these financial statements based on a review of
      accounts on an individual basis. The concentration of credit risk in trade
      accounts receivable is not considered to be significant due to the
      Company's large client base.

      The Company is also exposed to credit risk with respect to its long-term
      advances to Lexatec VR Systems Inc. and certain subsidiary investments.
      Advances to Lexatec VR Systems Inc. are partially secured by a pledge of
      reciprocal shareholdings.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

11.   Share Capital:

      Authorized: 100,000,000 Common Shares

      Issued:

<TABLE>
<CAPTION>
                                                2002                        2001
                                      ------------------------    ------------------------
                                      No. of Shs.       $         No. of Shs.       $
                                      -----------                 -----------

<S>                                   <C>           <C>           <C>           <C>
      Beginning of Year:              36,215,853    42,543,000    33,945,858    39,437,000

      Issued: - private placement             --            --        70,000     1,839,000
              - exercise of options      310,000       209,000       400,000       350,000
              - acquisitions                  --            --     1,799,995       936,000
              - other                     90,000        47,000            --            --
              - costs of issue                              --                     (19,000)

      End of Year:                    36,615,853    42,799,000    36,215,853    42,543,000
                                     -------------------------   -------------------------

      Reciprocal Shareholdings          (568,049)     (564,000)     (526,929)     (542,000)
                                     -------------------------   -------------------------

      Net per Balance Sheets          35,047,804    42,235,000    35,688,924    42,001,000
                                     =========================   =========================
</TABLE>

      The Company awards unconditional stock options to employees, officers,
      directors and others at the recommendation of the CEO as approved by the
      shareholders. Options are granted at the fair market value of the shares
      on the day granted, and vest immediately. The following is a continuity
      schedule of outstanding options for the reporting periods, where WAEP
      refers to "weighted average exercise price".

                                       2002                        2001
                            -----------------------     -----------------------
                            No. of Options     WAEP     No. of Options     WAEP
                            --------------     ----     --------------     ----
                                                $                           $

      Beginning of Year:      3,446,000        2.29       1,713,000        3.37

      Granted                 1,075,000        0.55       2,133,000        1.16
      Exercised                (310,000)        .67        (400,000)        .88
      Expired                  (300,000)       2.02              --          --
                              ---------                   ---------

      End of Year:            3,911,000        1.96       3,446,000        2.29
                              =========                   =========


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

11.   Share Capital - continued:

      Stock options were exercised during the year at prices ranging from $0.50
      to $ 0.75. The weighted average contractual life for options outstanding
      at year end was 1,224 days.

      During the year, proceeds from exercised stock options of $209,000 was
      credited to share capital (2001: $350,000). No amounts were recognized as
      compensation expense with respect to stock options granted or exercised in
      either of the reporting periods.

      Stock options have been granted to the CEO of K-Tronik North America Corp.
      contingent upon meeting sales quotas for that company as tabled below:

                                                 Number of
      Monthly Sales for Six                       Options
      Consecutive Months                        Exercisable   Total    Excercise
      Units of Ballasts                         Per Plateau Cumulative   Price
      ----------------------------------------- ----------- ---------- ---------

      50,000 per month for 6 consecutive months    70,000      70,000     .60
      60,000 per month for 6 consecutive months    70,000     140,000     .60
      70,000 per month for 6 consecutive months    70,000     210,000     .60
      80,000 per month for 6 consecutive months    70,000     280,000     .60
      90,000 per month for 6 consecutive months    70,000     350,000     .60

      No shares were issued in fiscal 2002 or fiscal 2001 as a result of this
      agreement.

      Management agreed to issue shares of the Company to four members of the
      management team of EigerNet, Inc. and Eiger Labs Group Inc. as performance
      earn out consideration contingent upon achieving the criteria tabled below
      for the combined results of those two companies:

                                                                    Common
         Year         Gross Sales             Net Income            Shares
         ----      -----------------       -----------------      ---------
         1999       $27 million U.S.       $1.0 million U.S.        600,000
         2000       $70 million U.S.       $2.5 million U.S.        750,000
         2001       $80 million U.S.       $3.5 million U.S.        750,000
         2002       $90 million U.S.       $4.0 million U.S.        900,000
         2003      $110 million U.S.       $4.5 million U.S.      1,000,000

      600,000 shares were issued in fiscal 2000 as a result of this agreement
      based on the operating results for 1999. No shares have been issued since
      that time, and none will be issued in fiscal 2003 pursuant to this
      agreement as the sales and income criteria have not been met.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

11.   Share Capital - continued:

      In connection with the Company's acquisition of Onlinetel, Inc. in fiscal
      2001, the share exchange agreement allows that additional shares of Eiger
      Technology, Inc. may be issued to the former shareholders of Onlinetel,
      Inc. if certain earn out provisions are met as follows:

              Fiscal        Gross            Net           Common
               Year        Revenue          Income         Shares
               ----        -------          ------         ------
                              $               $              #

               2002       19,083,000       2,442,000      1,800,000
               2003       37,348,000       6,213,000      1,800,000
               2004       50,849,000       9,353,000      1,800,000
               2005       59,867,000      13,849,000      1,800,000

      Unmet earn out targets may be carried forward and met on a cumulative
      basis. The targets for fiscal 2002 were not met and are not being carried
      forward.

12.   Non-recurring Items:

<TABLE>
<CAPTION>
                                                                     2002       2001
                                                                     ----       ----
                                                                      $          $

<S>                                                                   <C>    <C>
      Charge for impairment in value of consolidated goodwill           --    6,500,000

      Charge for impairment in value of long-term loans receivable      --    7,003,000

      Non-recurring charge for impairment in value of inventory         --      566,000

      Charge for impairment in value of capital assets                  --      184,000

      Charge for decline in value of long-term investments
      in shares of other corporations                                   --      982,000

      Charge for impairment in value of deferred product
      development costs                                                 --    1,131,000
                                                                ----------   ----------

                                                                        --   16,366,000
                                                                ==========   ==========
</TABLE>

      Due to unfavourable economic conditions, particularly in the Republic of
      South Korea, the Company experienced significant and long-term decline in
      the value of the asset groups noted above.


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

13.   Reconciliation to U.S. GAAP:

      These financial statements have been prepared in accordance with
      accounting principles generally accepted in Canada ("Cdn. GAAP").
      Significant differences under U.S. GAAP are discussed below.

      For fiscal years beginning after December 15, 1998, U.S. GAAP requires
      that all organization costs (including those previously deferred) be
      expensed currently. Also, all product development costs are to be expensed
      as incurred.

      U.S. GAAP requires the measurement and reporting of "comprehensive
      income". Comprehensive income includes net income and all other changes to
      Shareholders' Equity other than amounts received from or paid to
      shareholders. The only reportable comprehensive income item for the
      Company relates to foreign currency translation adjustments as described
      below.

      U.S. GAAP requires the use of the current rate method of foreign currency
      translation, with any resulting foreign exchange translation adjustments
      forming part of comprehensive income for the year and accumulating as a
      separate component of shareholders' equity.

      APB Opinion 25 requires the intrinsic value based method be used to
      measure stock option compensation. As the Company grants stock options at
      fair market value, no compensation is recognized. SFAS No. 123 requires
      pro-forma disclosure of net income and earnings per share as if the fair
      value method had been applied.

      Reconciliations to U.S. GAAP are as follows:

<TABLE>
<CAPTION>
                                                                 2002           2001
                                                                 ----           ----
                                                                  $              $
<S>                                                           <C>           <C>
Net Income (Loss):
         - per Cdn. GAAP                                      (5,238,000)   (20,327,000)

         - expense deferred product development costs net
           of portion relating to non-controlling interest       298,000        856,000
         - expense deferred organization costs net of
           portion relating to non-controlling interest               --        219,000
         - foreign currency translation adjustment               341,000        191,000
         - future income tax savings related to above           (100,000)      (347,000)
                                                             -----------    -----------

         - per U.S. GAAP                                      (4,699,000)   (19,408,000)
                                                             -----------    -----------

         Comprehensive item - foreign exchange adjustment       (341,000)      (191,000)
                                                             -----------    -----------

         Comprehensive Income                                 (5,040,000)   (19,599,000)
                                                             ===========    ===========
</TABLE>


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                          September 30, 2002 and 2001

13.   Reconciliation to U.S. GAAP - continued:

<TABLE>
<CAPTION>
                                                                        2002           2001
                                                                        ----           ----
                                                                         $              $
      Retained Earnings:
<S>                                                                 <C>            <C>
            - per Cdn. GAAP                                         (26,329,000)   (21,091,000)
            - expense deferred product development costs
              net of portion relating to non-controlling interest            --       (298,000)
            - foreign currency translation adjustments                  667,000        326,000
            - future income tax savings related to above                     --        100,000
                                                                    -----------    -----------

            - per U.S. GAAP                                         (25,662,000)   (20,963,000)
                                                                    ===========    ===========

      Accumulated Other Comprehensive Items:
            - per Cdn. GAAP                                                  --             --
            - foreign currency translation adjustments                 (667,000)      (326,000)
                                                                    -----------    -----------

            - per U.S. GAAP                                            (667,000)      (326,000)
                                                                    ===========    ===========

      Total Assets:
            - per Cdn GAAP                                            23758,000     30,721,000
            - expense deferred product development costs                     --       (298,000)
            - increase in future income tax assets                           --        100,000
                                                                    -----------    -----------

            - per U.S. GAAP                                          23,758,000     30,523,000
                                                                    ===========    ===========

      Earnings per Share:
      Basic                                                                (.14)          (.59)
                                                                    -----------    -----------

      Fully Diluted                                                        (.14)          (.59)
                                                                    -----------    -----------
</TABLE>

        Pro-forma Disclosure (SFAS No. 123):

            Had SFAS No. 123 been followed, net income would have decreased by
            $285,000 in fiscal 2002 (2001: $1,766,000), and basic and fully
            diluted earnings per share would have been (.15) and (.15)
            respectively (2001: (.64) and (.64)).


<PAGE>


                             EIGER TECHNOLOGY, INC.
                 NOTES to the CONSOLIDATED FINANCIAL STATEMENTS
                           September 30, 2002 and 2001

14.   Cash Payments of Interest and Income Taxes:

                                            2002        2001
                                            ----        ----
                                             $           $

            Interest                      538,000     555,000
                                          =======     =======
            Income Taxes                       --      15,000
                                          =======     =======

15.   Commitments:

      As at September 30, 2002, the Company had commitments under the terms of
      various operating leases requiring annual rental payments as follows:
      2003: $551,000; 2004: $347,000; 2005: $160,000; 2006: $160,000; 2007:
      $160,000.

16.   Segmented Information:

      Management has identified four reportable segments: "ADH", "K-Tronik",
      "Onlinetel" and "Eiger". Segmentation is determined on the basis of the
      types of goods and services provided and geographic location.

      "ADH" consists of A.D.H. Custom Metal Fabricators Inc. and Alexa
      Properties Inc. A.D.H. Custom Metal Fabricators Inc. is a manufacturer of
      fluorescent light fixtures, data racks and other metal cabinetry. Alexa
      Properties Inc. owns the land and manufacturing facility in Stratford,
      Ontario.

      "K-Tronik" includes K-Tronik North America Corp., a distributor of
      electronic ballasts based in Hackensack, New Jersey, and K-Tronik Asia
      Corp., a manufacturer of electronic ballasts operating in Korea.

      "Onlinetel" consists of Onlinetel, Corp. and Onlinetel Inc. which provide
      Voice over Internet Protocol services to the Canadian long distance
      market.

      "Eiger" includes Eiger Labs Group, Inc. and EierNet, Inc. Both of these
      companies are involved in the production and distribution of electronic
      communications products. EigerNet, Inc. is located in South Korea, while
      Eiger Labs Group, Inc. operates out of California.

      Segmented financial information is presented on the following two pages.

<PAGE>


                             EIGER TECHNOLOGY, INC.
                              SEGMENTED INFORMATION
                               September 30, 2002

<TABLE>
<CAPTION>
                                                                                                                         Totals per
                                                                                                 All       Reconciling   Financial
                                              ADH       K-Tronik     Onlinetel     Eiger        Others        Items      Statements
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------
                                               $           $             $           $           $             $              $
<S>                                        <C>         <C>          <C>          <C>          <C>          <C>           <C>
Sales:
  External:
    - Domestic                             1,310,000           --    1,869,000           --           --                  3,179,000
    - Foreign                                108,000   10,107,000       48,000    5,882,000           --            --   16,145,000
  Intersegment                                    --           --           --           --           --            --           --
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------
                                           1,418,000   10,107,000    1,917,000    5,882,000           --            --   19,324,000

Cost of Sales                              1,342,000    8,023,000    1,615,000    6,358,000           --      (193,000)  17,145,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

Gross Margin                                  76,000    2,084,000      302,000     (476,000)          --       193,000    2,179,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

Expenses:
  Operations and Administration              314,000    2,890,000    1,573,000    2,242,000    1,237,000       193,000    8,449,000
  Amortization of Capital and Other Assets   164,000      147,000      252,000      202,000       33,000            --      798,000
  Interest on Long-term Debt                  39,000           --           --       21,000         --              --       60,000
  Other Interest and Bank Charges              5,000      351,000       12,000      127,000        7,000            --      502,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------
                                             522,000    3,388,000    1,837,000    2,592,000    1,277,000       193,000    9,809,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

Income (Loss) before Taxes                  (446,000)  (1,304,000)  (1,535,000)  (3,068,000)  (1,277,000)           --   (7,630,000)

Provision for Income Taxes                        --           --           --           --           --            --           --
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

Income (Loss) before Non-recurring Items    (446,000)  (1,304,000)  (1,535,000)  (3,068,000)  (1,277,000)           --   (7,630,000)

Non-recurring Items                               --           --           --           --           --            --           --

Non-controlling Interest                      34,000      443,000           --    1,915,000           --            --    2,392,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

Net Income (Loss) for the Year              (412,000)    (861,000)  (1,535,000)  (1,153,000)  (1,277,000)           --   (5,238,000)
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========

Cash Flows:
  From Operating Activities                 (331,000)    (147,000)    (660,000)    (698,000)  (1,271,000)    2,441,000     (666,000)

  From Investing Activities                  144,000           --   (1,380,000)     593,000   (1,622,000)     (125,000)  (2,390,000)

  From Financing Activities                  107,000      442,000    1,909,000      323,000      233,000    (2,316,000)     698,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

                                             (80,000)     295,000     (131,000)     218,000   (2,660,000)           --   (2,358,000)
Cash and Cash Equivalents:
  Beginning of the Year                      312,000      147,000      208,000    1,461,000    3,865,000            --    5,993,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

End of the Year                              232,000      442,000       77,000    1,679,000    1,205,000            --    3,635,000
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========

Expenditures on Capital Assets
  and Goodwill during the Year               614,000           --      794,000      235,000        5,000            --    1,648,000
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========

Balance of Capital Assets and
  Goodwill - End of the Year
    - Domestic                             2,323,000           --    2,579,000           --      107,000            --    5,009,000
    - Foreign                                     --    1,338,000           --    1,533,000           --            --    2,871,000
                                           ---------   ----------   ----------   ----------   ----------   -----------   ----------

                                           2,323,000    1,338,000    2,579,000    1,533,000      107,000            --    7,880,000
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========

Amount of Investment in Investees
Subject to Significant Influence                  --           --           --           --           --            --           --
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========

Total Assets                               3,573,000    7,012,000    3,870,000    8,579,000   34,261,000   (33,537,000)  23,758,000
                                           =========   ==========   ==========   ==========   ==========   ===========   ==========
</TABLE>


<PAGE>


                             EIGER TECHNOLOGY, INC.
                              SEGMENTED INFORMATION
                               September 30, 2001

<TABLE>
<CAPTION>
                                                                                                                        Totals per
                                                                                                All       Reconciling   Financial
                                              ADH       K-Tronik    Onlinetel     Eiger        Others        Items      Statements
                                           ---------   ----------  ----------   ----------   ----------   -----------   ----------
                                               $           $            $           $            $             $             $
<S>                                        <C>         <C>          <C>          <C>         <C>           <C>         <C>
Sales:
  External:
    - Domestic                             2,301,000           --     234,000            --           --            --    2,535,000
    - Foreign                                     --   10,107,000          --    17,428,000           --            --   27,535,000
  Intersegment                                    --           --          --            --           --            --           --
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------
                                           2,301,000   10,107,000     234,000    17,428,000           --            --   30,070,000

Cost of Sales                              2,004,000    7,934,000          --    17,958,000           --      (185,000)  27,711,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

Gross Margin                                 297,000    2,173,000     234,000      (530,000)          --            --    2,359,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

Expenses:
  Operations and Administration              509,000    3,014,000     335,000     3,394,000      777,000      (260,000)   7,769,000
  Amortization of Capital and Other Assets   210,000      655,000      28,000       676,000       31,000            --    1,600,000
  Interest on Long-term Debt                  65,000           --          --        33,000           --            --       98,000
  Other Interest and Bank Charges             56,000      360,000          --        61,000        3,000            --      480,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------
                                             840,000    4,029,000     363,000     4,164,000      811,000            --    9,947,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

Income (Loss) before Taxes                  (543,000)  (1,856,000)   (129,000)   (4,694,000)    (811,000)           --   (7,588,000)

Provision for Income Taxes                   (72,000)      15,000          --       (20,000)          --        15,000      (62,000)
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

Income (Loss) before Non-recurring Items    (471,000)  (1,871,000)   (129,000)   (4,674,000)    (811,000)           --   (7,526,000)

Non-recurring Items                         (136,000)  (1,048,000)         --    (8,691,000)  (6,491,000)           --  (16,366,000)

Non-controlling Interest                       2,000    1,245,000          --     2,318,000           --            --    3,565,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

Net Income (Loss) for the Year              (605,000)  (1,674,000)   (129,000)  (11,047,000)  (7,302,000)           --  (20,327,000)
                                           =========   ==========   =========   ===========  ===========   ===========  ===========

Cash Flows:
  From Operating Activities                 (224,000)  (1,892,000)   (303,000)   (1,399,000)    (900,000)           --   (4,718,000)

  From Investing Activities                  (32,000)    (112,000)   (158,000)   (2,282,000) (10,801,000)    6,805,000   (6,580,000)

  From Financing Activities                  568,000    1,705,000     669,000     4,205,000    3,135,000    (6,805,000)   3,477,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

                                             312,000     (299,000)    208,000       524,000   (8,566,000)           --   (7,821,000)
Cash and Cash Equivalents:
  Beginning of the Year                           --      446,000          --       937,000   12,431,000            --   13,814,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

  End of the Year                            312,000      147,000     208,000     1,461,000    3,865,000            --    5,993,000
                                           =========   ==========   =========   ===========  ===========   ===========  ===========

Expenditures on Capital Assets
  and Goodwill during the Year                32,000      207,000   1,472,000        43,000       38,000            --    1,792,000
                                           =========   ==========   =========   ===========  ===========   ===========  ===========

Balance of Capital Assets and
  Goodwill - End of the Year
    - Domestic                             1,803,000           --   2,037,000            --      116,000            --    3,956,000
    - Foreign                                     --    1,596,000          --     1,477,000           --            --    3,073,000
                                           ---------   ----------   ---------   -----------  -----------   -----------  -----------

                                           1,803,000    1,596,000   2,037,000     1,477,000      116,000            --    7,029,000
                                           =========   ==========   =========   ===========  ===========   ===========  ===========

Amount of Investment in Investees
  Subject to Significant Influence                --           --          --            --           --            --           --
                                           =========   ==========   =========   ===========  ===========   ===========  ===========

Total Assets                               4,428,000    8,440,000   2,423,000    14,351,000   35,402,000   (34,323,000)  30,721,000
                                           =========   ==========   =========   ===========  ===========   ===========  ===========
</TABLE>