<PAGE>
                                                   Exhibit 13

                        CONSOLIDATED FINANCIAL STATEMENTS

                            INSURQUOTE SYSTEMS, INC.

                       YEARS ENDED JUNE 30, 1999 AND 1998
                      AND ELEVEN MONTHS ENDED JUNE 30, 1997
                                      WITH
                         REPORT OF INDEPENDENT AUDITORS



<PAGE>


                            InsurQuote Systems, Inc.

                        Consolidated Financial Statements

                     Years ended June 30, 1999 and 1998 and
                        Eleven Months ended June 30, 1997






                                    CONTENTS

Report of Independent Auditors .............................................   1

Consolidated Financial Statements

Consolidated Balance Sheets ................................................   2
Consolidated Statements of Operations ......................................   4
Consolidated Statements of Shareholders' Equity (Deficit) ..................   5
Consolidated Statements of Cash Flows ......................................   6
Notes to Consolidated Financial Statements .................................   7




<PAGE>

                         Report of Independent Auditors

Board of Directors
InsurQuote Systems, Inc.

We have audited the accompanying consolidated balance sheets of InsurQuote
Systems, Inc. and subsidiary (the Company) as of June 30, 1999 and 1998, and the
related consolidated statements of operations, shareholders' equity (deficit),
and cash flows for the years then ended and eleven months ended June 30, 1997.
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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of InsurQuote
Systems, Inc. and subsidiary at June 30, 1999 and 1998, and the consolidated
results of their operations and their cash flows for the years then ended and
the eleven months ended June 30, 1997 in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred losses since
inception, has limited access to additional resources, and its continued
existence is dependent upon its ability to obtain additional financing. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

                                            Ernst & Young LLP


August 19, 1999, except for
   Note 12, as to which the date is
   February 1, 2000




                                                                               1
<PAGE>


                                             InsurQuote Systems, Inc.

                                            Consolidated Balance Sheets


<TABLE>
<CAPTION>


                                                                           JUNE 30
                                                                     1999           1998
                                                                 ------------   -------------
<S>                                                              <C>             <C>

ASSETS
Current assets:
   Cash and cash equivalents                                     $ 11,539,387    $  8,032,178
   Accounts receivable, less allowance of $313,893 in 1999 and
     $248,775 in 1998                                                 919,756         903,426
   Other                                                              335,835          68,920
                                                                 ------------    ------------
Total current assets                                               12,794,978       9,004,524

Equipment:
   Office equipment                                                 1,083,125         392,744
   Computer equipment                                               3,802,446       1,775,673
   Leasehold improvements                                             328,754         164,189
                                                                 ------------    ------------
                                                                    5,214,325       2,332,606
   Accumulated depreciation                                        (1,307,013)       (665,946)
                                                                 ------------    ------------
                                                                    3,907,312       1,666,660
Other assets, net of accumulated amortization
   of $ 3,761,102 in 1999 and $1,543,191 in 1998                    1,283,244       3,587,823
                                                                 -------------   -------------
Total assets                                                      $17,985,534     $14,259,007
                                                                 =============   =============

</TABLE>


                                                                               2
<PAGE>


<TABLE>
<CAPTION>


                                                                             JUNE 30
                                                                      1999              1998
                                                                   -------------   -------------

<S>                                                                <C>             <C>
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
   Accounts payable                                                $    821,204    $    852,748
   Accrued liabilities                                                2,270,210       1,962,563
   Current portion of notes payable to related parties                  200,000              --
   Current portion of notes payable and capital lease
       obligation                                                        59,003         229,229
   Deferred revenue                                                   2,175,216       1,524,886
                                                                      -------------------------
Total current liabilities                                             5,525,633       4,569,426

Notes payable to related parties, less current portion                8,900,000       9,100,000
Capital lease obligation, less current portion                          137,282              --
Other accrued liabilities                                               981,341         366,759


Series C redeemable convertible preferred stock; no par value;
   145,414 shares authorized, issued
   and outstanding                                                    5,000,000       5,000,000

Shareholders' deficit:
   Series A convertible preferred stock; no par value; 167,399
    shares authorized, 103,500 shares issued
    and outstanding                                                     279,000         279,000

   Series B convertible preferred stock; no par value; 705,089
    shares authorized; 603,164 shares issued
    and outstanding                                                   2,773,994       2,773,994

   Series D convertible preferred stock; no par value; 320,203
     shares authorized, issued and outstanding                        4,469,886       4,469,886
   Series F convertible preferred stock; no par value; 426,856
     shares authorized, issued and outstanding                       19,900,000              --
   Common stock; no par value; 7,000,000 shares authorized;
     1,121,309 and 970,844 issued and outstanding in 1999 and
     1998, respectively                                               1,737,285       1,717,762
   Additional paid-in-capital                                           125,000              --
   Accumulated deficit                                              (31,841,887)    (14,015,820)
   Treasury stock, 371 shares                                            (2,000)         (2,000)
                                                                    ---------------------------
Total shareholders' deficit                                          (2,558,722)     (4,777,178)
                                                                    ---------------------------
Total liabilities and shareholders' deficit                        $ 17,985,534    $ 14,259,007
                                                                    ===========================

</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               3
<PAGE>

                            InsurQuote Systems, Inc.

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>

                                                                                  ELEVEN MONTHS
                                                        YEAR ENDED JUNE 30        ENDED JUNE 30
                                                       1999           1998           1997
                                                ----------------------------------------------
<S>                                               <C>             <C>             <C>
Net sales                                         $  9,918,518    $ 11,907,974    $  3,499,786

Operating Expenses
   Cost of sales                                     3,045,402       1,673,760       2,783,233
   Selling, general and administrative expenses     20,487,057      16,275,983       2,199,431
   Research and development                          3,149,276       2,077,394       1,056,123
                                                  -------------   -------------   ------------
Loss from operations                               (16,763,217)     (8,119,163)     (2,459,003)

Other income (expense):
   Interest expense                                   (879,503)       (909,960)       (352,575)
   Interest income                                     315,310         226,633          45,640
                                                  -------------   -------------   ------------
Net loss                                           (17,327,410)     (8,802,490)     (2,765,938)
Preferred stock dividend                              (498,657)        (96,700)             --
                                                  -------------   -------------   ------------
Net loss applicable to common shareholders        $(17,826,067)   $ (8,899,190)   $ (2,765,938)
                                                  =============   ============    ============
</TABLE>


SEE ACCOMPANYING NOTES.



                                                                               4
<PAGE>




                                InsurQuote Systems, Inc.

                Consolidated Statements of Shareholders' Equity (Deficit)

<TABLE>
<CAPTION>

                                                                                ADDITIONAL
                                         PREFERRED STOCK       COMMON STOCK       PAID-IN-  ACCUMULATED  TREASURY STOCK
                                          SHARES  AMOUNT    SHARES      AMOUNT   CAPITAL     DEFICIT    SHARES    AMOUNT     TOTAL
                                     ----------------------------------------------------------------------------------------------
<S>             <C> <C>               <C>     <C>           <C>     <C>             <C> <C>            <C>      <C>  <C>
Balance at July 31, 1996              706,664 $ 3,052,994   600,000 $  146,020           $ (2,350,692)                $    848,322
Net loss                                                                                   (2,765,938)                  (2,765,938)
Balance at June 30, 1997              706,664   3,052,994   600,000    146,020             (5,116,630)                  (1,917,616)
  Issuance of Common
  Stock for the purchase
  of certain assets of ACP                                   37,094     71,962                                              71,962
  Issuance of Series D,
   convertible preferred stock        320,203   4,469,886                                                                4,469,886
  Issuance of Common Stock,
   (net of issuance costs of $130,334)                      333,750  1,499,780                                           1,499,780
  Repurchase of shares                                                                                 (371) $(2,000)       (2,000)
  Preferred stock dividend                                                                    (96,700)                     (96,700)
  Net Loss                                                                                 (8,802,490)                  (8,802,490)
                                    -----------------------------------------------------------------------------------------------
Balance at June 30, 1998             1,026,867 $ 7,522,880   970,844  1,717,762           (14,015,820) (371)  (2,000) $ (4,777,178)
  Exercise of stock options and
  other                                                      150,465     19,523                                             19,523
  Issuance of Series F,
   convertible preferred stock,
   (net of issuance costs of
   $100,000)                          426,856  19,900,000                                                              19,900,000
  Issuance of warrants with
   notes payable                                                               $125,000                                   125,000
  Preferred stock dividend                                                                  (498,657)                    (498,657)
  Net Loss                                                                               (17,327,410)                 (17,327,410)
                                    -----------------------------------------------------------------------------------------------
Balance at June 30, 1999            1,453,723 $27,422,880 1,121,309 $1,737,285 $125,000 $(31,841,887) (371) $(2,000) $ (2,558,722)
                                    ===============================================================================================
</TABLE>


SEE ACCOMPANYING NOTES.


                                                                               5
<PAGE>

W08990018-SL 03/29/00 6:14 PM Draft #5
                                             InsurQuote Systems, Inc.

                                       Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                           YEAR ENDED JUNE 30,    ELEVEN MONTHS
                                                                                                  ENDED JUNE 30
                                                                       1999            1998           1997
                                                                  --------------  --------------   ------------

<S>                                                                <C>             <C>             <C>
OPERATING ACTIVITIES
Net loss                                                           $(17,327,410)   $ (8,802,490)   $(2,765,938)
Adjustments to reconcile net loss to net cash used in operating
   activities:
     Depreciation                                                       818,927         392,597        142,553
     Amortization                                                     2,217,911       1,247,370        295,821
     Loss from disposal of assets                                        23,258              --             --
     Interest expense on warrants                                       125,000              --             --
     Impairment of intangible assets                                         --         980,000             --
     Changes in operating assets and liabilities:
       Accounts receivable                                              (16,330)        437,179        489,616
       Other assets                                                    (180,247)        (90,260)       225,310
       Accounts payable and accrued liabilities                         392,028         989,119        356,906
       Deferred revenue                                                 650,330         248,297       (366,348)
                                                                    ------------------------------------------
Net cash used in operating activities                               (13,296,533)     (4,598,188)    (1,622,080)

INVESTING ACTIVITIES
Purchases of property and equipment                                  (2,886,552)       (889,173)      (313,598)
Acquisitions, net of working capital acquired                                --        (512,661)    (2,501,000)
                                                                     -----------------------------------------
Net cash used in investing activities                                (2,886,552)     (1,401,834)    (2,814,598)

FINANCING ACTIVITIES
Proceeds from notes payable to related parties                        3,000,000       8,900,000      6,500,000
Principal payments on notes payable to related parties               (3,000,000)     (6,519,539)        (4,291)
Principal payments on notes payable                                          --      (2,243,518)       (35,521)
Payments on debt                                                       (229,229)             --             --
Net proceeds from issuance of common stock                                   --       1,499,780             --
Proceeds from exercise of stock options                                  19,523              --             --
Proceeds from issuance of redeemable convertible
  preferred stock                                                            --       5,000,000             --
Proceeds from issuance of convertible preferred stock                19,900,000       4,469,886             --
Purchase of treasury stock                                                   --          (2,000)            --
Other                                                                        --          (3,698)        83,308
                                                                     -----------------------------------------
Net cash provided by financing activities                            19,690,294      11,100,911      6,543,496
                                                                     -----------------------------------------
Net increase in cash and cash equivalents                             3,507,209       5,100,889      2,106,818
Cash and cash equivalents at beginning of year                        8,032,178       2,931,289        824,471
                                                                     -----------------------------------------
Cash and cash equivalents at end of year                           $ 11,539,387    $  8,032,178    $ 2,931,289
                                                                     =========================================
</TABLE>

SEE ACCOMPANYING NOTES.

                                                                               6
<PAGE>


                            InsurQuote Systems, Inc.

                   Notes to Consolidated Financial Statements

                                  June 30, 1999


1.   ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

InsurQuote Systems, Inc. (the Company) commenced operations in 1989 and is
engaged in the business of developing, selling and maintaining software used by
independent insurance agents and companies to price and rate insurance coverage
offered by certain insurance companies. In July 1997, the Company acquired
certain assets of Automated Call Processing (ACP), a company principally engaged
in the business of providing automobile pricing and insurance information.

During 1997, the Company changed its fiscal year end from July 31 to June 30.
Accordingly, the statements of operations, cash flows and shareholders' equity
(deficit) for fiscal 1997 reflect results of operations and cash flows for the
eleven months ended June 30, 1997. All references to the year ended June 30,
1997 in the footnotes reflect the eleven month period then ended.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of the
Company and its wholly-owned subsidiary Insurance Automation Systems, Inc.
(IAS). All intercompany accounts and transactions have been eliminated in
consolidation.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration of
credit risk consist principally of cash, cash equivalents and accounts
receivable. Risks associated with cash and cash equivalents are mitigated by
banking with creditworthy institutions.

The Company grants credit to substantially all of its customers without
requiring collateral. The Company has established provisions for potential
credit losses that are expected to be incurred.


                                                                               7
<PAGE>

                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)


1.   ACCOUNTING POLICIES (CONTINUED)

MAJOR CUSTOMER

The Company had no net sales greater than 10% to one customer for the year ended
June 30, 1999 and net sales to one customer of 22% and 11% of consolidated net
sales for the year ended June 30, 1998 and 1997, respectively.

CASH AND CASH EQUIVALENTS

The Company considers highly liquid investments with original maturities of
three months or less to be cash equivalents.

EQUIPMENT

Equipment is stated at cost, less accumulated depreciation. Depreciation is
computed using the straight-line method over the estimated useful lives of the
respective assets, generally three to five years. Leasehold improvements are
depreciated using the straight-line method over the shorter of the estimated
useful lives of the assets or the remaining lives of the related leases.

OTHER ASSETS

Other current assets include prepaid assets and deposits. Other long-term assets
are comprised primarily of purchased intangibles including contracts, software
and copyrights, goodwill and the value assigned to non-compete agreements
acquired in connection with the purchase of IAS and ACP (see Notes 3 and 4).
Software and copyrights of approximately $4.2 million and goodwill are being
amortized over a three year period based on the estimated useful life of the
technology. The value assigned to the non-compete agreements is being amortized
over three years, the term of the agreements. The value assigned to contracts
acquired is being amortized over the life of the contracts, which range from one
to three and a half years.

STOCK BASED COMPENSATION

The Company has elected to account for stock based compensation arrangements
under the provisions of Accounting Principles Board No. 25, "Accounting for
Stock Issued to Employees," rather than adopting the alternative fair value
accounting provided under Statement of Financial Accounting Standard No. 123,
"Accounting for Stock based Compensation."


                                                                               8
<PAGE>

                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



1.   ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

The Company recognizes revenue primarily from software licensing, maintenance
and related services. Revenue from software license fees is recognized when the
software is delivered, there are no uncertainties surrounding product
acceptance, the fees are fixed and determinable, and collection is considered
probable. Revenue from services and support is recognized at the time the
services and support are rendered. Revenue from maintenance contracts and
service agreements, which are typically pre-paid, is deferred when received and
recognized ratably over the term of the contract or agreement.

INCOME TAXES

The Company uses an asset and liability method of accounting for income taxes.
The provision for income taxes is based on income or loss for financial
reporting purposes as required by Statement of Financial Accounting Standards
("SFAS") No. 109, ACCOUNTING FOR INCOME TAXES.

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at June 30, 1999 and June 30, 1998, and
revenues and expenses for the years then ended. Actual results could differ from
the estimates and assumptions used.

SOFTWARE DEVELOPMENT COSTS

Software development costs have been accounted for in accordance with SFAS No.
86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR
OTHERWISE MARKETED. Under the standard, capitalization of software development
costs begins upon the establishment of technological feasibility which, for the
Company, is upon completion of a working model. To date, all such amounts have
been insignificant prior to general release of the software. Accordingly, the
Company has charged all software development costs to expenses.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

                                                                               9
<PAGE>


                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



1.   ACCOUNTING POLICIES (CONTINUED)

RECLASSIFICATIONS

Certain prior year amounts have been reclassed to conform with the current year
presentation.

2. GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has an accumulated deficit
of $31,841,887 at June 30, 1999, including a net loss of $17,327,410 in fiscal
1999 and $8,802,490 in fiscal 1998. The Company also has limited immediate
access to additional capital resources. Therefore, the Company's continued
existence is dependent upon its ability to obtain additional financing.
Management intends to seek additional financing to fund continuing operations
until such time as the Company is able to generate cash flows from sales
sufficient to fund its operations.

3. ACQUISITIONS

On March 7, 1997, the Company completed the purchase of substantially all the
assets of IAS. Accordingly, the results of operations of IAS have been
included in the Company's financial statements since the date of acquisition.
IAS is engaged in the business of designing, developing and selling
comparative rating software. The aggregate purchase price was approximately
$5.1 million consisting of $2.5 million paid at closing, the issuance of a
$1.8 million one year promissory note to the seller with the remaining
balance comprised of liabilities assumed by the Company. The promissory note
carried an interest of 9% with interest and principal due on March 7, 1998,
and was secured by substantially all of the assets of IAS. The note was paid
during 1998.

On July 1, 1997, the Company purchased certain assets of Automated Call
Processing, a company engaged in the business of providing automobile pricing
and insurance information. The aggregate purchase price of approximately $2.2
million consisted of $512,661 in cash, the issuance of a $750,000 promissory
note and 37,094 shares of common stock of the Company to the seller, with the
remaining balance comprised of liabilities assumed by the Company.


                                                                              10
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



4. OTHER ASSETS

Other assets relate primarily to intangible assets acquired in the purchase of
IAS and ACP and are comprised of the following:

<TABLE>
<CAPTION>


                                                           1999               1998
                                                  ------------------- ------------------

<S>                                                      <C>               <C>
       Software and copyrights                           $4,170,655        $4,170,655
       Goodwill, contract rights and other
         assets                                             873,691           960,359
                                                  ------------------- ------------------
                                                          5,044,346         5,131,014
       Accumulated amortization                          (3,761,102)      (1,543,191)
                                                  =================== ==================
                                                         $1,283,244        $3,587,823
                                                  =================== ==================
</TABLE>



Accumulated amortization for software and copyrights was approximately $3.15
million and $1.1 million at June 30, 1999 and 1998, respectively.

During fiscal year 1998 certain intangible assets purchased in conjunction with
the acquisition of ACP became impaired when a customer failed to renew contracts
which would have provided the Company with a future revenue stream. As a result,
the accompanying 1998 financial statements reflect a charge to selling, general
and administrative expenses of $980,000 to adjust the value of the intangible
assets to their estimated fair values based on a discounted cash flow projection
of expected future revenues from remaining contracts with the customer. Revenue
and expenses associated with the impairment represented approximately 27% of
1998 net sales and 10% of 1998 total operating expenses.


                                                                              11
<PAGE>

                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)

5. NOTES PAYABLE

Notes payable to related parties represent amounts that are payable to certain
stockholders and directors of the Company and consisted of the following:

<TABLE>
<CAPTION>
                                                                                  JUNE 30,
                                                                             1999            1998
                                                                       ---------------------------------
<S>                                                                   <C>                <C>
     Unsecured note payable, interest at 10.5%, interest payable
     monthly, principal due in full on June 6, 2000.                  $    100,000       $   100,000

     Unsecured note payable, interest at 10.5%, interest payable
     monthly, principal due in full on
     March 28, 2000.                                                       100,000           100,000

     Unsecured subordinated note payable, interest at 7.5%,
     interest payable quarterly, principal due in full on
     February 10, 2003.                                                  8,900,000         8,900,000

                                                                     -----------------------------------
                                                                         9,100,000         9,100,000
     Less current portion                                                 (200,000)                -
                                                                     -----------------------------------
                                                                        $8,900,000        $9,100,000
                                                                     ===================================
</TABLE>


In January 1999, the Company borrowed $3,000,000 from a board member. The note
carried an interest rate of 12% and included a detachable warrant to purchase
9,604 shares of Series B preferred stock with an exercise price of $37.48 per
share. The note was repaid in March 1999. As of June 30, 1999, the warrant
remained outstanding.

Maturities of notes payable and notes payable to related parties for each of the
next five fiscal years ended June 30 and thereafter are as follows:

<TABLE>

         <S>                                <C>
          2000                               $     200,000
          2001                                           -
          2002                                           -
          2003                                   8,900,000
          2004 and thereafter                            -
                                             -------------
                                                $9,100,000
</TABLE>
                                             =============

The Company paid approximately $881,000, $950,000 and $235,000 in cash for
interest for the years ended June 30, 1999 and 1998 and eleven months ended June
30, 1997, respectively.


                                                                            12
<PAGE>


                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



6. INCOME TAXES

As of June 30, 1999, the Company had federal and state net operating loss
carryforwards of approximately $26,953,000 and $26,573,000, respectively. The
Company also had federal research and development tax credit carryforwards of
approximately $419,000. The net operating loss and credit carryforwards will
expire at various dates beginning in 2005 through 2019, if not utilized.

Utilization of the net operating losses and credits may be subject to a
substantial annual limitation due to the "change in ownership" provisions of the
Internal Revenue Code of 1986 and similar state provisions. The annual
limitation may result in the expiration of net operating losses and credits
before utilization.

As of June 30, 1999 and 1998, the Company had deferred tax assets of
approximately $11,641,000 and $5,371,000, respectively, and deferred tax
liabilities of approximately $8,000 and $16,000 as of June 30, 1999 and 1998,
respectively. The net deferred tax assets have been fully offset by a valuation
allowance. The net valuation allowance was increased by $6,278,000 during the
year ended June 30, 1999. Deferred tax assets relate primarily to: 1) net
operating loss carryforwards; 2) research credits; and 3) use of extended tax
amortization periods for intangible assets.

7. COMMITMENTS

The Company has various operating and capital lease commitments. Future minimum
lease payments under these commitments for each of the next five fiscal years
and thereafter are as follows:

<TABLE>
<CAPTION>

                                                        Operating            Capital
                                                  -----------------------------------
<S>                                                <C>                   <C>
     2000                                          $   1,108,773         $    75,845
     2001                                                967,596              76,083
     2002                                                731,496              70,217
     2003                                                493,313               5,712
     2004 and thereafter                                 431,200               1,190
                                                  -----------------------------------
     Total future minimum lease payments           $   3,732,378             229,047
                                                  ==============
     Less amount representing interest                                       (32,762)
                                                                          -----------
                                                                             196,285
Less current portion                                                         (59,003)
                                                                          -----------
Long-term capital lease obligation                                       $   137,282
                                                                          ===========
</TABLE>


                                                                              13
<PAGE>


                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



7. COMMITMENTS (CONTINUED)

The operating lease agreements are subject to predetermined rate increases in
accordance with the signed rental agreements. Rent expense under operating
leases for the year ended June 30, 1999 and 1998 and eleven months ended June
30, 1997 was approximately $888,000, $618,000 and $191,000, respectively.

Equipment under capital lease, net of accumulated depreciation of $9,000 and
$45,000, was approximately $194,000 and $135,000 at June 30, 1999 and June 30,
1998, respectively.

8. SHAREHOLDERS' DEFICIT

PREFERRED STOCK

The Company has authorized 3,000,000 shares of preferred stock without par
value, of which 167,399 shares have been designated as Series A, 705,089 shares
have been designated as Series B, 145,414 shares have been designated as Series
C, 320,203 shares have been designated as Series D, 100 shares have been
designated as Series E, of which none have been issued, 426,856 shares have been
designated as Series F, and 1,234,939 shares are undesignated as of June 30,
1999.

The Series A, Series B, Series D and Series E preferred stock are non-cumulative
voting shares that are entitled to receive an annual dividend at a rate of
$0.2426, $0.4139, $0.8250 and $0.8065 per share, respectively. The Series F
preferred stock is cumulative, voting and is entitled to receive an annual
dividend at a rate of $2.3427 per share. Series C shareholders purchasing shares
in the initial sale of these shares are entitled to an annual dividend rate of
$1.7190 per share. Dividends on preferred stock Series A, B, D and E, are
non-cumulative and are not payable unless declared. Dividends on Series C and F
preferred stock are cumulative and are accrued quarterly from the date of
issuance. The Company cannot make distributions nor declare dividends on its
common stock unless and until dividends, including accrued but unpaid dividends
on Series C preferred stock, are paid or declared and set apart, upon all shares
of preferred stock. As of June 30, 1999, the Board has not declared any
dividends payable on preferred or common stock.


                                                                              14
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)


8. SHAREHOLDERS' DEFICIT (CONTINUED)

PREFERRED STOCK (CONTINUED)

CONVERSION PRIVILEGES

Each share of preferred stock is convertible at any time, at the option of the
holder, into fully paid and nonassessable shares of common stock that is equal
to the original issue price for such series divided by the conversion price. The
conversion rate is subject to adjustment in a number of circumstances, including
subsequent issuances of common stock. At June 30, 1999 and June 30, 1998 each
share of preferred stock was convertible into one share of common stock.

Each share of Series A and B preferred stock automatically will be converted
into shares of common stock, based upon the current conversion rate, immediately
upon the closing of a fully underwritten public offering under the Securities
Act of 1933, as amended, that results in net proceeds to the Company of at least
$20 million.

Each share of Series D preferred automatically shall be converted into shares of
common stock at the then-effective conversion rate, immediately prior to the
consummation of the purchase of securities of the Company by the holder of the
Series D preferred stock pursuant to the exercise of the option held by that
investor to purchase additional stock of the Company.

Each share of Series E preferred automatically shall be converted to common
stock at the then-effective conversion rate, immediately prior to any sale,
assignment, transfer, pledge, encumbrance or disposition of the Company to any
person or entity other than the holder of the Series E preferred, its parent or
majority-owned subsidiary.

Each share of Series F preferred automatically shall be converted to common
stock at the then-effective conversion rate upon a majority vote of the Series F
holders or upon the closing of a fully underwritten public offering with an
initial public offering per share of at least the Series F preferred conversion
price plus accumulated but unpaid dividends on the Series F preferred.

VOTING RIGHTS

Series A and B preferred shareholders are entitled to vote on all matters with
the common shareholders and are entitled to the number of votes equal to the
number of common shares into which their preferred shares are convertible.



                                                                              15
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)

8. SHAREHOLDERS' DEFICIT (CONTINUED)

PREFERRED STOCK (CONTINUED)

VOTING RIGHTS (CONTINUED)

Series C and D preferred shareholders are not entitled to vote such shares for
the election of directors or on any other matter except (i) any amendment to the
Articles of Incorporation that alters the rights, preferences or privileges of
that series of preferred stock and (ii) following the closing of the exercise of
the option described below, each holder of shares of Series C preferred shall be
entitled to the number of votes equal to the number of common stock into which
such shares of Series C preferred held by such holder of Series C preferred
could then be converted.

Series E and Series F preferred shareholders are entitled to vote on all matters
with common shareholders and are entitled to a number of votes based on a
calculation of Series E and Series F preferred outstanding and total common
stock outstanding.

Except as outlined above, preferred shareholders are entitled to vote on all
matters with the common shareholders. Each share of common stock is entitled to
one vote.

OTHER RIGHTS

In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, holders of preferred stock are entitled to
payment in an amount equal to approximately $2.70 per share or $279,000, $4.60
per share or $2,774,000, $34.38 per share or $4,999,333, $13.96 per share or
$4,470,033, $10.00 per share and $46.85 per share or $20,000,000 for Series A,
Series B, Series C, Series D, Series E and Series F, respectively, plus all
declared and unpaid dividends, or accrued but unpaid dividends for Series C and
Series F preferred stock, before any payment will be made to common
shareholders. If the assets to be distributed to the holders of preferred stock
are insufficient, then the assets will be distributed ratably to the holders of
the preferred stock.

On the fifth anniversary of the issuance of Series C preferred stock, the
Company is to redeem all outstanding shares of Series C preferred at a
redemption price per share equal to the liquidation preferences together with
accrued and unpaid dividends. In the event the Company anticipates a public
offering and to the extend the Company has sufficient funds, the Company may
elect to redeem any or all of the outstanding shares of Series C preferred
stock.




                                                                              16
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)

8. SHAREHOLDERS' DEFICIT (CONTINUED)

PREFERRED STOCK (CONTINUED)

OTHER RIGHTS (CONTINUED)

In March 1999, the Company entered into a securities purchase agreement with an
investor wherein the Company received net proceeds of $19,900,000 in exchange
for 426,856 shares of Series F preferred stock. Under the terms of this
agreement, if any person acquires voting control or all or substantially all of
the capital stock or assets of the Company, the investor may require the
acquiring person to purchase the Series F preferred stock from the investor at a
pre-determined price per share or the fair market value, whichever is greater.

In February 1998, the Company entered into a securities purchase agreement with
an investor wherein the Company received $20,000,000 in exchange for 145,414
shares of Series C preferred stock, 320,203 shares of Series D preferred stock,
333,750 shares of common stock and a promissory note for $8,900,000.
Additionally, under the terms of the securities purchase agreement, at any time
after July 1, 2000 and until as late as July 1, 2010, under certain conditions,
the investor has the option to purchase sufficient shares of the Company's
common stock at the then fair market value to cause the investor to have at
least a 51% voting interest in the Company. This right is terminated if not
exercised prior to the closing of an initial public offering of the Company's
common stock. If this right is exercised, Series E preferred stock carrying
super voting rights will be issued to the investor. All classes of stock issued
in this transaction are subject to certain anti-dilution provisions. The Company
also issued a warrant to purchase 440,350 shares of common stock in connection
with this agreement.

STOCK OPTIONS

The Company has an Employee Stock Option Plan (the Plan) for which 579,000
common shares have been reserved. The Plan allows grants of incentive options
and nonqualified options to purchase common shares at a price that is not less
than the fair market value on the date of grant. The option prices are
determined by the Board of Directors. Generally, the options have a ten year
life from the date of grant and vest pursuant to one of the following schedules:
1) year 5-40%; year 6-40%; year 7-20%, 2) 1/36th per month vests beginning one
month after the grant date, 3) 25% vests on the first anniversary of the grant
date and the remainder vests quarterly thereafter based on a four year vesting
and 4) 1/12th per month vests beginning one month after the grant date.

                                                                              17
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)


8. SHAREHOLDERS' DEFICIT (CONTINUED)

STOCK OPTIONS (CONTINUED)

Pro forma information regarding net loss and loss per share has been determined
as if the Company had accounted for its employee stock options under the fair
market value method. The fair value of these options was estimated at the date
of grant using a Minimum Value option pricing model with the following weighted
average assumptions for fiscal years ended June 30, 1999 and 1998, respectively;
risk-free interest rate of approximately 6% and 6.1%; dividend yield of 0% and a
weighted-average expected life of the option of 8 years.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized over the options' vesting period. Because the effect of
SFAS No. 123, ACCOUNTING FOR STOCK BASED COMPENSATION is prospective, the
initial impact on pro forma net income (loss) may not be representative of
compensation expense in future years. The effect on the Company's pro forma
results for each of the fiscal years ended June 30, 1999 and 1998 was not
material (LESS THAN 1% impact on net loss).

A summary of stock option activity, and related information for the years ended
June 30, 1999 and 1998 and eleven months ended June 30, 1997 follows:

<TABLE>
<CAPTION>


                                                   1999                        1998                         1997
                                        --------------------------- ---------------------------- ---------------------------
                                                    WEIGHTED-AVERAGE             WEIGHTED-AVERAGE           WEIGHTED-AVERAGE
                                                       EXERCISE                       EXERCISE                    EXERCISE
                                                        PRICE                          PRICE                       PRICE
                                           OPTIONS                      OPTIONS                    OPTIONS
                                        -------------- ------------ -------------- ------------- ------------ -------------
<S>                                        <C>            <C>          <C>             <C>        <C>             <C>
Outstanding at beginning of year            398,636        $0.18        401,224         $0.15      395,724         $0.13
Granted                                      98,682         5.25          5,137          1.94        5,500          4.61
Exercised                                  (150,465)        0.13              -             -            -             -
Canceled                                     (1,630)        0.11         (7,725)         0.10            -             -
                                        --------------              -------------                ------------
Outstanding at end of year                  345,223        $1.65        398,636         $0.18      401,244         $0.20
                                        ==============              ==============               ============


Weighted-average fair value of
    options granted during the year          $2.00                       $0.75                       $1.82

</TABLE>


                                                                              18
<PAGE>




                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)



8. SHAREHOLDERS' DEFICIT (CONTINUED)

STOCK OPTIONS (CONTINUED)

Exercise prices for options outstanding as of June 30, 1999 ranged from $0.10 to
$11.37. There were approximately 29,000 exercisable options outstanding at June
30, 1999. The weighted average remaining contractual life of the options is 6
years. Below are the segregated exercise prices as of June 30, 1999:

<TABLE>
<CAPTION>

                                                          RANGE OF EXERCISE PRICES
                               -------------------------------------------------------------------------------

                                  $0.10-0.51          $1.94-3.32             $4.43           $9.37-11.37
                               -------------------- ------------------- ------------------- ------------------

<S>                               <C>                 <C>                 <C>                <C>
Options outstanding                246,489             49,234              20,000             29,500
Weighted-average exercise
   price of options
   outstanding                       $0.15              $2.50               $4.43             $10.86
Weighted-average remaining
   contractual life of
   options outstanding              5 years            8 years             9 years           10 years

</TABLE>

WARRANTS

During 1995, the Company received $300,000 from an investor upon the issuance of
three $100,000 promissory notes. Attached to each of these notes are warrants to
purchase shares of Series A preferred stock at $3.13 per share. As of June 30,
1999, warrants to purchase 63,899 shares of Series A preferred stock remain
outstanding. The warrants expire five years from debt issuance dates which were
December 30, 1994, March 28, 1995 and June 6, 1995.

In connection with previous debt agreements, the Company issued warrants to
purchase 7,693 and 84,628 shares of Series B preferred stock which expire on
December 23, 2001 and February 25, 2002, respectively. Under the terms of each
issuance, half of the shares are exercisable at $16.13 per share and the
remaining shares are exercisable at $48.87 per share.

During fiscal 1998, in connection with the issuance of a $8,900,000 promissory
note, the Company issued a warrant to the investor to acquire an additional
440,350 shares of common stock at a price of $20.21 per share. The warrant is
exercisable by the holder through February 10, 2008.


                                                                              19
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)


8. SHAREHOLDERS' DEFICIT (CONTINUED)

WARRANTS

As discussed in Note 5, 9,604 warrants with an exercise price of $37.48 were
issued in connection with a related party note payable.

In connection with a software development agreement, the Company issued warrants
to purchase 10,000 shares of common stock which expire on January 1, 2004, with
an exercise price of $5.06 per share. Under the terms of the agreement, the
warrant shall become exercisable ratably over a three year period.

9. EMPLOYEE BENEFIT PLAN

In 1998, the Company formally adopted a retirement plan that is qualified under
Section 401(k) of the Internal Revenue Code, which covers all eligible
employees. Participants may contribute a portion of their compensation not
exceeding a limit set annually by the Internal Revenue Service. The Company
makes a matching contribution based on the contribution made by the employee.
Total expense under the plan was approximately $87,000, $61,700 and $10,300 for
the years ended June 30, 1999 and 1998 and eleven months ended June 30, 1997,
respectively.

10. RELATED PARTY TRANSACTION

The Company is obligated to pay one of its shareholders commissions for the sale
of certain of its products and services under a sales agreement. Commissions
incurred during the year ended June 30, 1999 totaled approximately $381,000. In
addition, the Company incurred interest expense totaling approximately $667,500
on a note payable to the same shareholder. See Note 4. As of June 30, 1999 and
1998, the Company had accrued interest to this shareholder of $93,000 and
$91,000, respectively.

11. YEAR 2000 ISSUE - UNAUDITED

The Company has developed a plan to modify its information technology to be
ready for the year 2000 and has converted the majority of critical data
processing systems. The Company currently expects the project to be
substantially complete by November 1999 and to cost less than $75,000. This
estimate includes internal costs, and the costs to upgrade and replace systems.
The Company does not expect this project to have a significant effect on
operations.




                                                                              20
<PAGE>



                            InsurQuote Systems, Inc.

             Notes to Consolidated Financial Statements (continued)

12. SUBSEQUENT EVENT

On February 1, 2000, the Company signed a definitive agreement to merge with
ChannelPoint, Inc., a software development company. In connection with the
merger, each shareholder of the Company will receive shares of ChannelPoint
common stock in the following ratios based on the respective series of common or
preferred stock held at the time of the merger: common stock - 3.60916; Series A
- 3.75266; Series B - 3.85400; Series C - 5.62254; Series D - 4.35237; and
Series F - 6.21775. The merger is expected to close prior to March 31, 2000.

                                                                       21