<PAGE>

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

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

                                   FORM 10-Q

                                ---------------
(Mark One)

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

                 For the quarterly period ended March 31, 2001

                                      OR

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

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

                       Commission file number 000-23195

                            TIER TECHNOLOGIES, INC.
            (Exact name of Registrant as specified in its charter)

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

               California                                  94-3145844
      (State or other jurisdiction                      (I.R.S. Employer
    of incorporation or organization)                  Identification No.)


                        1350 Treat Boulevard, Suite 250
                        Walnut Creek, California 94596
                   (Address of principal executive offices)
                                  (Zip Code)

                                (925) 937-3950
             (Registrant's telephone number, including area code)

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

            (1) Yes [X] No [_]                    (2) Yes [X] No [_]

As of April 30, 2001, the number of shares outstanding of the Registrant's Class
A Common Stock was 967,754 and the number of shares outstanding of the
Registrant's Class B Common Stock was 11,804,889.

This report contains a total of 26 pages of which this page is number 1.
<PAGE>

                            TIER TECHNOLOGIES, INC.

                                   FORM 10-Q

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                  Part I -- FINANCIAL INFORMATION

                                                                                                         Page
                                                                                                         ----
Item 1.   Condensed Consolidated Financial Statements (unaudited)
<S>                                                                                                      <C>
          Condensed Consolidated Balance Sheets as of March 31, 2001 and September 30,
           2000...........................................................................................    3

          Condensed Consolidated Statements of Operations for the three and six months ended
           March 31, 2001 and 2000........................................................................    4

          Condensed Consolidated Statements of Cash Flows for the six months ended
           March 31, 2001 and 2000........................................................................    5

          Notes to Condensed Consolidated Financial Statements...........................................     6

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of
           Operations.....................................................................................   11

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.....................................    23

                                                   Part II -- OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders............................................    24

Item 6.   Exhibits and Reports on Form 8-K...............................................................    25

Signatures................................................................................................   26
</TABLE>


Private Securities Litigation Reform Act Safe Harbor Statement

  Certain statements contained in this report, including statements regarding
the development of the Company's services, markets and future demand for the
Company's services, and other statements regarding matters that are not
historical facts, are "forward-looking statements" within the meaning of federal
securities laws. When used in this report, the words "believes", "expects",
"anticipates", "intends", "estimates", "shows", "will likely" and similar
expressions are intended to identify such forward-looking statements. Such
forward-looking statements include risks and uncertainties; consequently, actual
results may differ materially from those expressed or implied thereby. Factors
that could cause actual results to differ materially from those set forth herein
include, but are not limited to, those factors listed in the ''Factors that May
Affect Future Results'' section, as set forth beginning on page 17 of this
report. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date of this report. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements or factors to reflect events or circumstances
after the date of this report or to reflect the occurrence of unanticipated
events.

                                       2
<PAGE>

                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            TIER TECHNOLOGIES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (unaudited)
                                (in thousands)

<TABLE>
<CAPTION>

                                                                                               March 31,     September 30,
                                                                                                 2001            2000
                                                                                             ------------    -------------
                                                ASSETS
                                                ------
<S>                                                                                         <C>             <C>
Current assets:
  Cash and cash equivalents...............................................................        $12,839        $ 10,256
  Short-term investments..................................................................          6,521           9,657
  Accounts receivable, net................................................................         27,822          24,718
  Prepaid expenses and other current assets...............................................          3,812           3,322
                                                                                                  -------        --------
     Total current assets.................................................................         50,994          47,953
Equipment and software, net...............................................................          5,118           5,914
Notes and accrued interest receivable from related parties................................          1,943           1,924
Acquired intangible assets, net...........................................................         35,967          40,126
Other assets..............................................................................          4,952           5,245
                                                                                                  -------        --------
     Total assets.........................................................................        $98,974        $101,162
                                                                                                  =======        ========

                               LIABILITIES AND SHAREHOLDERS' EQUITY
                               ------------------------------------
Current liabilities:
  Accounts payable........................................................................        $ 3,559        $  4,314
  Accrued liabilities.....................................................................          1,445           2,389
  Accrued subcontractor expenses..........................................................          2,551           1,597
  Accrued compensation and related liabilities............................................          3,802           4,321
  Purchase price payable..................................................................          5,508          12,345
  Other current liabilities...............................................................          1,379           1,642
                                                                                                  -------        --------
     Total current liabilities............................................................         18,244          26,608
Borrowings and capital lease obligations, less current portion............................          6,209           1,385
Purchase price payable....................................................................          4,100           3,892
                                                                                                  -------        --------
     Total liabilities....................................................................         28,553          31,885
                                                                                                  -------        --------

Commitments and contingent liabilities

Shareholders' equity:
  Common stock, no par value..............................................................         66,473          65,937
  Notes receivable from shareholders......................................................         (1,773)         (1,773)
  Deferred compensation...................................................................             --            (117)
  Accumulated other comprehensive loss....................................................         (5,532)         (3,571)
  Retained earnings.......................................................................         11,253           8,801
                                                                                                  -------        --------
     Total shareholders' equity...........................................................         70,421          69,277
                                                                                                  -------        --------
     Total liabilities and shareholders' equity...........................................        $98,974        $101,162
                                                                                                  =======        ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                       3
<PAGE>

                            TIER TECHNOLOGIES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
                     (in thousands, except per share data)



<TABLE>
<CAPTION>
                                                                              Three Months               Six Months
                                                                                  Ended                    Ended
                                                                                March 31,                 March 31,
                                                                          ---------------------     ---------------------
                                                                             2001        2000         2001        2000
                                                                          ---------    --------     ---------    --------
<S>                                                                      <C>          <C>           <C>          <C>
Revenues............................................................      $31,470      $27,490       $61,791      $52,103
Cost of revenues....................................................       20,147       17,095        39,695       31,942
                                                                          -------      -------       -------      -------
Gross profit........................................................       11,323       10,395        22,096       20,161
Costs and expenses:
  Selling and marketing.............................................        2,123        1,878         3,782        3,366
  General and administrative........................................        5,877        6,093        11,139       11,762
  Other nonrecurring charges (gains), net...........................           --         (199)           --        1,551
  Depreciation and amortization.....................................        1,763        1,427         3,551        2,685
                                                                          -------      -------       -------      -------
Income from operations..............................................        1,560        1,196         3,624          797
Interest income (expense), net......................................          209          197           429          434
                                                                          -------      -------       -------      -------
Income before income taxes..........................................        1,769        1,393         4,053        1,231
Provision for income taxes..........................................          653          578         1,601        1,126
                                                                          -------      -------       -------      -------
Net income..........................................................      $ 1,116      $   815       $ 2,452      $   105
                                                                          =======      =======       =======      =======
Basic net income per share..........................................      $  0.09      $  0.07       $  0.20      $  0.01
                                                                          =======      =======       =======      =======
Shares used in computing basic net income per share.................       12,540       12,312        12,514       12,271
                                                                          =======      =======       =======      =======
Diluted net income per share........................................      $  0.08      $  0.06       $  0.19      $  0.01
                                                                          =======      =======       =======      =======
Shares used in computing diluted net income per share...............       13,254       12,961        12,942       12,877
                                                                          =======      =======       =======      =======
</TABLE>




            See Notes to Condensed Consolidated Financial Statements

                                       4
<PAGE>

                            TIER TECHNOLOGIES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                                     Six Months Ended
                                                                                                        March 31,
                                                                                                     -----------------
                                                                                                       2001      2000
                                                                                                     -------    ------
<S>                                                                                                <C>       <C>
Net cash provided by operating activities.........................................................  $ 2,233   $ 2,489
                                                                                                    -------   -------

Investing activities:
Purchases of equipment and software...............................................................   (1,257)   (1,260)
Notes and accrued interest receivable from related parties........................................     (285)     (472)
Repayment on notes and accrued interest receivable from related parties...........................      256       199
Business combinations, net of cash acquired.......................................................   (6,506)   (4,426)
Subsidiary disposal, net of cash..................................................................       --     3,303
Restricted cash...................................................................................       --       410
Purchases of available-for-sale securities........................................................   (5,524)   (1,845)
Sales of available-for-sale securities............................................................    3,696     2,316
Maturities of available-for-sale securities.......................................................    4,964     1,979
Other assets......................................................................................       --       126
                                                                                                    -------   -------
Net cash provided by (used in) investing activities...............................................   (4,656)      330
                                                                                                    -------   -------
Financing activities:
Borrowings under bank lines of credit.............................................................    5,000     1,456
Repurchase of common stock........................................................................       --      (974)
Net proceeds from issuance of common stock........................................................      429       876
Payments on capital lease obligations and notes payable to shareholders...........................     (152)     (176)
                                                                                                    -------   -------
Net cash provided by financing activities.........................................................    5,277     1,182
                                                                                                    -------   -------
Effect of exchange rate changes on cash...........................................................     (271)      (15)
                                                                                                    -------   -------
Net increase in cash and cash equivalents.........................................................    2,583     3,986
Cash and cash equivalents at beginning of period..................................................   10,256    10,121
                                                                                                    -------   -------
Cash and cash equivalents at end of period........................................................  $12,839   $14,107
                                                                                                    =======   =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
  Interest........................................................................................  $   279   $   206
                                                                                                    =======   =======
  Income taxes paid (refunded), net...............................................................  $ 1,677   $ 3,011
                                                                                                    =======   =======
Equipment acquired under capital lease obligations................................................  $    --   $    54
                                                                                                    =======   =======
Assumed liabilities related to business combinations..............................................  $    --   $ 1,393
                                                                                                    =======   =======
Class B common stock issued in business combinations..............................................  $    --   $   930
                                                                                                    =======   =======
Conversion of Class A common stock to Class B common stock........................................  $   286   $    93
                                                                                                    =======   =======
Class B common stock returned in disposal of business.............................................  $    --   $ 1,328
                                                                                                    =======   =======
</TABLE>




            See Notes to Condensed Consolidated Financial Statements

                                       5
<PAGE>

                            TIER TECHNOLOGIES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

NOTE 1 -- BASIS OF PRESENTATION

  The accompanying condensed consolidated financial statements of Tier
Technologies, Inc. ("Tier" or the "Company") include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. In the opinion of management,
the condensed consolidated financial statements reflect all normal and recurring
adjustments which are necessary for a fair presentation of the Company's
financial position, results of operations and cash flows as of the dates and for
the periods presented. The condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Consequently, these statements do not include all the
disclosures normally required by generally accepted accounting principles for
annual financial statements nor those normally made in the Company's Annual
Report on Form 10-K. Accordingly, reference should be made to the Company's Form
10-K filed on December 7, 2000 and other reports the Company filed with the
Securities and Exchange Commission for additional disclosures, including a
summary of the Company's accounting policies, which have not materially changed.
The consolidated results of operations for the three months and six months ended
March 31, 2001 are not necessarily indicative of results that may be expected
for the fiscal year ending September 30, 2001 or any future period, and the
Company makes no representations related thereto.

  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosures of contingent assets and liabilities and the results of operations
during the reporting period. Actual results could differ materially from those
estimates.

  Certain reclassifications have been made to the prior period financial
statements to conform to the current period presentation.

NOTE 2 -- REVENUE RECOGNITION

  The majority of the Company's revenues are derived from professional
consulting and processing services billed to clients on either a time and
materials basis, a fixed price basis or a per-transaction basis. Time and
materials revenues are recognized as services are performed. Revenues from fixed
price contracts are recognized using the percentage-of-completion method of
contract accounting based on the ratio of incurred costs to total estimated
costs. Losses on contracts are recognized when they become known and reasonably
estimable. Actual results of contracts may differ from management's estimates
and such differences could be material to the consolidated financial statements.
Revenues from performance-based contracts are recognized based on fees charged
on a per-transaction basis. Most of the Company's contracts are terminable by
the client following limited notice and without significant penalty to the
client. The completion, cancellation or significant reduction in the scope of a
large project would have a material adverse effect on the Company's business,
financial condition and results of operations.  For the three months ended March
31, 2001, revenues from one client totaled approximately $6,186,000 which
represented 19.7% of total revenues. For the six months ended March 31, 2001,
revenues from the same client totaled approximately $12,263,000 which
represented 19.8% of total revenues.

  Unbilled receivables represent revenue recognized in excess of amounts billed
in accordance with contractual billing terms. Unbilled receivables were
$10,917,000 and $9,567,000 at March 31, 2001 and September 30, 2000,
respectively.  Included in long-term other assets are unbilled receivables at
March 31, 2001 and September 30, 2000 of $1,665,000 and $2,145,000,
respectively, that are not billable for more than one year under the terms of
the contracts.  Unbilled receivables for one client accounted for 14.4% of total
net accounts receivable at March 31, 2001.

  Worldwide revenues derived from sales to governmental agencies were
$38,360,000 and $30,979,000 for the six months ended March 31, 2001 and 2000,
respectively.

                                       6
<PAGE>

                            TIER TECHNOLOGIES, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                  (unaudited)

NOTE 3 -- ACQUISITION

 Simpson Fewster & Co. Pty Limited

  In March 2001, the Company released the final installment of 16,256 shares of
Class B common stock from escrow related to the acquisition of Simpson Fewster &
Co. Pty Limited.

NOTE 4 -- BANK LINES OF CREDIT

  At March 31, 2001, the Company had a $10 million revolving credit facility, of
which $2.5 million may be used for letters of credit.  The credit facility has a
maturity date of August 26, 2002. The total commitment amount is limited to 85%
of eligible accounts receivable plus 50% of up to $6 million of eligible
unbilled receivables. The credit facility is secured by first priority liens and
security interests in the Company's assets (excluding assets owned by Tier
Technologies (Australia) Pty Ltd., Simsion Bowles & Associates ("SBA") and ADC
Consultants Pty Ltd.), including a pledge of 65% of the stock of the Company's
subsidiaries excluding SBA. Interest is based on either the adjusted LIBOR rate
plus 2.5% or the lender's announced prime rate plus 0.25%, at the Company's
option and is payable monthly.  As of March 31, 2001, the interest rate was
8.25% per annum and the outstanding borrowings were $5 million. In addition,
letters of credit totaling approximately $346,000 were outstanding at March 31,
2001. Among other provisions, the credit facility requires the Company to
maintain certain minimum financial ratios. As of March 31, 2001, the Company was
in compliance with all financial ratios.

  At March 31, 2001, the Company (through one of its Australian subsidiaries)
had a credit facility that included a $1.2 million revolving line of credit with
St. George Bank Limited of Australia (based on a March 31, 2001 exchange rate of
AU $2.06 to US $1.00). Under the terms of the amended credit facility, the
principal balance of the credit line will reduce by approximately $115,000 per
quarter to a maximum line of approximately $971,000. The line of credit bears
interest at fixed rates that are set at the time of each drawdown on the line.
In December 1999, the balance of the line of credit was converted to a variable
rate loan ("Loan"). The variable rate is based upon the bank's prime rate less
1.25% (8.5% per annum as of March 31, 2001) and interest is payable monthly. As
of March 31, 2001, the outstanding balance of the Loan was approximately $1.2
million. The credit facility also provides for the issuance of letters of credit
up to $141,000. Letters of credit totaling $134,000 were outstanding as of March
31, 2001. Among other provisions, the credit facility requires the Company's
subsidiary to maintain certain minimum financial ratios. As of March 31, 2001,
the Company was not in compliance with certain provisions of this credit
facility; however, the bank has waived such noncompliance.

                                       7
<PAGE>

                            TIER TECHNOLOGIES, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                  (unaudited)

NOTE 5 -- NET INCOME PER SHARE

  The following table sets forth the computation of basic and diluted net income
per share:

<TABLE>
<CAPTION>

                                                                                   Three Months Ended        Six Months Ended
                                                                                         March 31,               March 31,
                                                                                   --------------------     -------------------
                                                                                     2001         2000        2001        2000
                                                                                   -------      -------     -------     -------
                                                                                       (in thousands, except per share data)
  <S>                                                                              <C>          <C>         <C>         <C>
  Numerator:
       Net income..............................................................    $ 1,116      $   815     $ 2,452     $   105
                                                                                   =======      =======     =======     =======
  Denominator for basic net income per share-weighted average common
    shares outstanding.........................................................     12,540       12,312      12,514      12,271
  Effects of dilutive securities:
       Common stock options....................................................        700          364         413         342
       Common stock contingently issuable......................................         14          285          15         264
                                                                                   -------      -------     -------     -------
  Denominator for diluted net income per share-adjusted weighted average
    common shares and assumed conversions......................................     13,254       12,961      12,942      12,877
                                                                                   =======      =======     =======     =======
  Basic net income per share...................................................    $  0.09      $  0.07     $  0.20     $  0.01
                                                                                   =======      =======     =======     =======
  Diluted net income per share.................................................    $  0.08      $  0.06     $  0.19     $  0.01
                                                                                   =======      =======     =======     =======
</TABLE>

  Options to purchase approximately 1,325,000 and 1,673,000 shares of Class B
common stock at exercise prices ranging from $8.63 to $17.81 per share and $7.41
to $17.81 per share, respectively, were not included in the computation of
diluted net income per share for the three months and six months ended March 31,
2001, respectively, because the options' exercise prices were greater than the
average market price of the shares for these periods.  Options to purchase
approximately 2,069,000 and 2,005,000 shares of Class B common stock at exercise
prices ranging from $7.78 to $17.81 per share and $7.06 to $17.81 per share,
respectively, were not included in the computation of diluted net income per
share for the three and six months ended March 31, 2000, respectively, because
the options' exercise prices were greater than the average market price of the
shares for these periods.

NOTE 6 -- COMPREHENSIVE INCOME (LOSS)

  The Company's comprehensive income (loss) was as follows:

<TABLE>
<CAPTION>
                                                                               Three Months Ended      Six Months Ended
                                                                                     March 31,              March 31,
                                                                                -----------------     -------------------
                                                                                  2001       2000       2001       2000
                                                                                -------     -----     -------     -------
                                                                                              (in thousands)
<S>                                                                             <C>         <C>       <C>        <C>
  Net income..................................................................  $ 1,116     $ 815     $ 2,452     $   105
  Foreign currency translation adjustment.....................................   (2,324)     (931)     (1,961 )    (1,128)
                                                                                -------     -----     -------     -------
  Total comprehensive income (loss)...........................................  $(1,208)    $(116)    $   491     $(1,023)
                                                                                =======     =====     =======     =======
</TABLE>


                                       8
<PAGE>

                            TIER TECHNOLOGIES, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                  (unaudited)

NOTE 7--OTHER NONRECURRING CHARGES (GAINS)

  In December 1999, the Company's Board of Directors approved a plan to sell or
dispose of its U.K. subsidiary, Midas Computer Software Limited ("Midas").  The
write-down of certain assets associated with this subsidiary was included in
other nonrecurring charges for the three months ended December 31, 1999.  In
March 2000, the Company completed the sale of this subsidiary for approximately
$3.7 million (based on an exchange rate of GBP 0.64 to US $1.00), net of
estimated selling expenses.  The gross proceeds, including repayment of
intercompany debt of approximately $1.4 million, amounted to approximately $2.6
million in cash and $1.3 million attributable to a release of 51,074 shares of
the Company's Class B common stock and a share guarantee on the original
acquisition.  The Company recorded a nonrecurring gain of approximately $199,000
for the three months ended March 31, 2000 as a result of the completion of this
transaction. The results of Midas' operations are reflected in the condensed
consolidated financial statements through the disposition in March 2000.

NOTE 8--ALLIANCE AGREEMENT

  In September 1999, the Company entered into a long-term strategic alliance
("Alliance Agreement"), with Siemens Business Services Limited ("SBS").  Under
this Alliance Agreement, the Company has two existing contracts - the
Application Service Center ("ASC") contract and the Consulting contract.
Effective May 1, 2001, under the amended ASC contract, the Company has committed
to utilizing a minimum amount of resources that SBS is obligated to mobilize
pursuant to the ASC contract. The Company will market the ASC's services
worldwide in exchange for fees based on the utilization of ASC resources by
third parties.  To the extent there is a shortfall in utilization, the Company's
maximum obligation under the ASC contract  for under-utilization shall not
exceed $15.3 million (based on the March 31, 2001 exchange rate of GBP 0.70 to
US $1.00) over the commitment period ending January 1, 2003.  Through March 31,
2001, there were no minimum utilization requirements under the ASC contract.
Pursuant to the Consulting contract, SBS guaranteed that it would engage the
Company to provide a minimum of $9.9 million (based on the March 31, 2001
exchange rate of GBP 0.70 to US $1.00) for consultancy services over the life of
the Consulting contract.  From September 1999 through March 31, 2001, the
Company has recognized a total of $17.7 million in revenues under the Consulting
contract (based on the March 31, 2001 exchange rate of GBP 0.70 to US $1.00).

NOTE 9--SEGMENT INFORMATION

  The Company is managed through four reportable segments:  U.S. Commercial
Services, U.S. Government Services, Australian Operations and United Kingdom
Operations.  The Company evaluates the performance of its operating segments
based on revenue and gross profit (net revenue less direct costs), while other
operating costs are evaluated on a geographic basis.  Accordingly, the Company
does not include selling and marketing expenses, general and administrative
expenses, depreciation and amortization expense not attributable to client
projects, interest income (expense), other income (expense) or income tax
expense in segment profitability.  The table below presents financial
information for the four reportable segments:

                                       9
<PAGE>

                            TIER TECHNOLOGIES, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                  (unaudited)

NOTE 9--SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>
                                                      U.S.         U.S.                   United
                                                   Commercial   Government  Australian   Kingdom
                                                    Services     Services   Operations  Operations   Total
                                                  -----------  -----------  ----------  ----------  --------
                                                                            (in thousands)
<S>                                               <C>          <C>          <C>         <C>         <C>
Three Months Ended March 31, 2001:
  Revenues......................................     $  7,517     $ 12,373    $  5,394    $  6,186  $ 31,470
  Gross profit..................................        3,448        4,726       1,883       1,266    11,323

Three Months Ended March 31, 2000:
  Revenues......................................     $  3,871     $ 12,615    $  6,986    $  4,018  $ 27,490
  Gross profit..................................        1,165        5,320       2,567       1,343    10,395

Six Months Ended March 31, 2001:
  Revenues......................................     $ 14,650     $ 24,291    $ 10,576    $ 12,274  $ 61,791
  Gross profit..................................        6,607        9,334       3,579       2,576    22,096

Six Months Ended March 31, 2000:
  Revenues......................................     $  7,373     $ 24,741    $ 13,644    $  6,345  $ 52,103
  Gross profit..................................        2,305       10,515       5,090       2,251    20,161
</TABLE>

NOTE 10--RELATED PARTY TRANSACTIONS

  In December 1998, the Company guaranteed a portion of an obligation of
James L. Bildner, the Company's Chief Executive Officer, with respect to his
California residence (the "Guaranty"). The Company's liability under the
Guaranty was capped at $1,000,000. In March 2001, the Guaranty was canceled and
the Company was released from any and all liability under the Guaranty.

NOTE 11--NEW ACCOUNTING PRONOUNCEMENTS

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101").  SAB 101 is effective no later than the fourth quarter of fiscal year
2001. The Company does not expect that the adoption of SAB 101 will have a
significant impact on the consolidated financial statements.

  In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - a
replacement of FASB Statement No. 125" ("FAS 140").  FAS 140 revises the
standards for accounting for securitizations and other transfers of financial
assets and collateral.  The accounting standards of FAS 140 are effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001.  The adoption of FAS 140 is not expected to have
an impact on the consolidated financial statements.

                                       10
<PAGE>

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

Overview

  Tier is a vertically focused global consulting firm that delivers end-to-end
business solutions to its national and multinational clients.  The Company
provides business solutions utilizing a variety of delivery offerings that are
tailored to specific client industries and governmental agencies, and include
solutions that link systems and technology improvements to increased operating
efficiencies.  Through offices located in the United States, Australia and the
United Kingdom, the Company works closely with it's Fortune 1000, government and
other clients to determine, evaluate and implement strategies that allow it to
rapidly channel emerging technologies into business operations.  The Company's
revenues increased to $61.8 million in the six months ended March 31, 2001 from
$52.1 million in the six months ended March 31, 2000. A significant portion of
the Company's revenues are derived from sales to government agencies. For the
six months ended March 31, 2001, approximately 62.1% of the Company's revenues
were derived from sales to government agencies, as compared to 59.5% for the six
months ended March 31, 2000. The Company's workforce, comprised of employees,
independent contractors and subcontractors, has grown to 957 on March 31, 2001
from 900 on March 31, 2000.

  The Company's revenues are derived primarily from professional consulting and
processing services billed to clients on either a time and materials basis, a
fixed price basis, or a per-transaction basis. Time and materials revenues are
recognized as services are performed and expenses are incurred. Fixed price
revenues are recognized using the percentage-of-completion method, based upon
the ratio of costs incurred to total estimated project costs. Revenues from
performance-based contracts are recognized based on fees charged on a per-
transaction basis. The percentage of the Company's revenues generated on a time
and materials basis was 57.8% and 50.1% for the six months ended March 31, 2001
and 2000, respectively. The percentage of the Company's revenues generated on a
fixed price basis was 17.0% and 31.4% for the six months ended March 31, 2001
and 2000, respectively. The percentage of revenues generated on a per-
transaction basis was 25.2% and 14.5% for the six months ended March 31, 2001
and 2000, respectively.  Substantially all of Tier's contracts are terminable by
the client following limited notice and without significant penalty to the
client. From time to time, in the regular course of its business, the Company
negotiates the modification, termination, renewal or transition of time and
materials, fixed price and per-transaction based contracts that may involve an
adjustment to the scope or nature of the project, billing rates, percent
complete or gross profit margins. If the Company significantly overestimates the
volume for transaction-based contracts or underestimates the resources or time
required for fixed price and per-transaction based contracts, its financial
condition and results of operations would be materially and adversely affected.
Unsatisfactory performance or unanticipated difficulties or delays in completing
projects may result in client dissatisfaction and a reduction in payment to, or
payment of damages (as a result of litigation or otherwise) by the Company,
which could have a material adverse effect upon our business, financial
condition and results of operations.

  The Company has derived a significant portion of its revenues from a small
number of large clients. For some of these clients, the Company performs a
number of different projects pursuant to multiple contracts or purchase orders.
For the six months ended March 31, 2001, Siemens Business Services Limited
accounted for 19.8% of the Company's revenues. The Company anticipates that a
substantial portion of its revenues will continue to be derived from a small
number of large clients. The completion, cancellation or significant reduction
in the scope of a large project would have a material adverse effect on the
Company's business, financial condition and results of operations.

  Personnel, facility and depreciation and amortization expenses represent a
significant percentage of the Company's operating expenses and are relatively
fixed in advance of any particular quarter. The Company manages its personnel
utilization rates by carefully monitoring its needs and anticipating personnel
increases based on specific project requirements. To the extent revenues do not
increase at a rate commensurate with these additional expenses, the Company's
results of operations could be materially and adversely affected. In addition,
to the extent that the Company is unable to hire and retain salaried employees
to staff new or existing client engagements or retain hourly employees or
contractors, the Company's business, financial condition and results of
operations would be materially and adversely affected.

                                       11
<PAGE>

  From December 1996 through March 31, 2001, the Company made fifteen
acquisitions for a total cost of approximately $53.4 million in cash and shares
of Class B common stock, excluding future contingent payments. The Company also
incurred $2.5 million in compensation charges related to business combinations
resulting from these acquisitions. Generally, contingent payments are recorded
as additional purchase price at the time the payment can be determined beyond a
reasonable doubt. If a contingent payment is based, in part, on a seller's
continuing employment with the Company, the payments are recorded as
compensation expense over the vesting period when the amount is deemed probable.
These acquisitions helped the Company to expand its operations in the United
States, to establish its operations in Australia and the United Kingdom, to
broaden the Company's client base, delivery offerings and technical expertise
and to supplement its human resources.

  International operations accounted for 37.0% and 38.4% of revenues for the six
months ended March 31, 2001 and March 31, 2000, respectively. The Company
believes that the percentage of total revenues attributable to international
operations will continue to be significant. International operations may subject
the Company to foreign currency translation adjustments and transaction gains
and losses for amounts denominated in foreign currencies.

Results of Operations

  The following summarizes the Company's operating results as a percentage of
revenues for each of the periods indicated:

<TABLE>
<CAPTION>
                                                                     Three Months                   Six Months
                                                                    Ended March 31,               Ended March 31,
                                                                 --------------------          ---------------------
                                                                  2001          2000            2001           2000
                                                                 ------        ------          ------         ------
<S>                                                              <C>           <C>             <C>            <C>
Revenues...................................................      100.0%        100.0%          100.0%         100.0%
Cost of revenues...........................................       64.0%         62.2%           64.2%          61.3%
                                                                 ------        ------          ------         ------
Gross profit...............................................       36.0%         37.8%           35.8%          38.7%
Costs and expenses:
  Selling and marketing....................................        6.8%          6.8%            6.1%           6.5%
  General and administrative...............................       18.7%         22.1%           18.0%          22.5%
  Other nonrecurring charges (gains), net..................         --          (0.7%)            --            3.0%
  Depreciation and amortization............................        5.6%          5.2%            5.8%           5.2%
                                                                 ------        ------          ------         ------
Income from operations.....................................        4.9%          4.4%            5.9%           1.5%
Interest income (expense), net.............................        0.7%          0.7%            0.7%           0.8%
                                                                 ------        ------          ------         ------
Income before income taxes.................................        5.6%          5.1%            6.6%           2.3%
Provisions for income taxes................................        2.1%          2.1%            2.6%           2.1%

                                                                 ------        ------          ------         ------
Net income.................................................        3.5%          3.0%            4.0%           0.2%
                                                                 ======        ======          ======         ======
</TABLE>

Three Months Ended March 31, 2001 and March 31, 2000

  Revenues. Revenues are generated primarily by providing professional
consulting and processing services on client engagements. Revenues increased
14.5% to $31.5 million for the three months ended March 31, 2001 from $27.5
million in the three months ended March 31, 2000. Revenues for the three months
ended March 31, 2000 include $2.1 million of revenues from the Company's U.K.
subsidiary, Midas Computer Software Limited ("Midas"), which was sold in March
2000.  Excluding revenue from Midas, revenues increased 23.7% to $31.5 million
for the three months ended March 31, 2001 from $25.4 million in the three months
ended March 31, 2000. This increase resulted primarily from growth in the United
Kingdom operations resulting from increased revenues under the Alliance
Agreement with Siemens Business Services Limited and the acquisition of The SCA
Group, Inc. and Harris Chapman, partially offset by a decrease in Australian
operations resulting from the general weakness in the Australian economy.

  Gross Profit. Cost of revenues consists primarily of those costs directly
attributable to providing service to a client, including employee salaries and
incentive compensation, independent contractor and subcontractor costs, employee

                                       12
<PAGE>

benefits, payroll taxes, travel-related expenditures, and any project-related
equipment, hardware or software purchases. For payment processing center
operations, cost of revenues also include facility, equipment and direct
overhead costs. Included in cost of revenues is $375,000 and $275,000 of
depreciation and amortization for the three months ended March 31, 2001 and
2000, respectively. Gross profit increased 8.9% to $11.3 million for the three
months ended March 31, 2001 from $10.4 million in the three months ended March
31, 2000. Gross profit as a percentage of revenues decreased to 36.0% for the
three months ended March 31, 2001 as compared to 37.8% in the three months ended
March 31, 2000. Excluding the results of Midas, gross profit increased 16.1% to
$11.3 million for the three months ended March 31, 2001 from $9.8 million in the
three months ended March 31, 2000. Gross profit as a percentage of revenues,
excluding Midas, decreased to 36.0% for the three months ended March 31, 2001
from 38.3% in the three months ended March 31, 2000. This decrease in gross
profit margin resulted primarily from increased revenues from United Kingdom
operations which had a higher use of subcontractors resulting in lower gross
profit margins.

  Selling and Marketing. Selling and marketing expenses consist primarily of
personnel costs, sales commissions, advertising and marketing expenditures and
travel-related expenditures.  Selling and marketing expenses increased 13.0% to
$2.1 million for the three months ended March 31, 2001 from $1.9 million in the
three months ended March 31, 2000. As a percentage of revenues, selling and
marketing expenses were 6.8% for the three months ended March 31, 2001 and March
31, 2000. Excluding the results of Midas, selling and marketing expenses
increased 33.3% to $2.1 million for the three months ended March 31, 2001 from
$1.6 million in the three months ended March 31, 2000. Selling and marketing
expenses as a percentage of revenues, excluding Midas, increased to 6.8% for the
three months ended March 31, 2001 from 6.3% in the three months ended March 31,
2000. The increase in selling and marketing expenses both in total dollars and
as a percentage of revenues was primarily attributable to the addition of sales
and marketing personnel including labor costs associated with the Company's
increased use of "seller-doers" and investments in the Company's marketing and
branding initiatives. Seller-doers are senior level consultants who have
business development responsibilities. The Company expects selling and marketing
expenses to increase in future quarters as the Company continues to make
investments in its marketing and branding initiatives and its business
development efforts.

  General and Administrative. General and administrative expenses consist
primarily of personnel costs related to general management, administrative and
other nonbillable functions, human resources, resource management, staffing,
accounting and finance, legal, and information systems, as well as professional
fees related to legal, audit, tax, external financial reporting and investor
relations matters. General and administrative expenses decreased 3.6% to $5.9
million for the three months ended March 31, 2001 from $6.1 million in the three
months ended March 31, 2000. As a percentage of revenues, general and
administrative expenses decreased to 18.7% for the three months ended March 31,
2001 from 22.1% in the three months ended March 31, 2000. Excluding the results
of Midas, general and administrative expenses increased 2.5% to $5.9 million for
the three months ended March 31, 2001 from $5.7 million in the three months
ended March 31, 2000. General and administrative expenses as a percentage of
revenues, excluding Midas, decreased to 18.7% for the three months ended March
31, 2001 from 22.5% in the three months ended March 31, 2000. The increase in
general and administrative expenses in total dollars, excluding Midas, was
attributable primarily to increased facility costs due to expansion.  Over the
longer term, the Company expects general and administrative expenses will be 17%
to 18% of revenues.  Included in general and administrative expenses is
compensation charges related to business combinations of $58,000 for the three
months ended March 31, 2001 and 2000.  These charges resulted from the
amortization of the value of shares that were released over a three year period
in connection with the acquisition of Simpson Fewster & Co. Pty Limited.

  Other Nonrecurring Charges (Gains), Net.  The other nonrecurring gain of
$199,000 for the three months ended March 31, 2000, resulted primarily from the
completion of the sale of the Midas subsidiary.

  Depreciation and Amortization. Depreciation and amortization consists
primarily of expenses associated with the depreciation of equipment and
improvements and amortization of intangible assets resulting from acquisitions
and other  intellectual property. Depreciation and amortization increased 23.5%
to $1.8 million for the three months ended March 31, 2001 from $1.4 million in
the three months ended March 31, 2000. As a percentage of revenues, depreciation
and amortization increased to 5.6% for the three months ended March 31, 2001
from 5.2% in the three months ended March 31, 2000. Excluding the results of
Midas, depreciation and amortization increased 23.8% to $1.8 million for the
three months ended March 31, 2001 from $1.4 million in the three months ended
March 31, 2000. Depreciation and

                                       13
<PAGE>

amortization as a percentage of revenues, excluding Midas, was 5.6% for the
three months ended March 31, 2001 and 2000. The increase in depreciation and
amortization expense in total dollars was primarily attributable to the
amortization of increased intangible assets from business combinations. The
Company expects that depreciation and amortization will continue to increase in
absolute dollars, although it may vary as a percentage of revenues.

  Interest Income (Expense), Net. Net interest income increased 6.1% to $209,000
for the three months ended March 31, 2001 compared to net interest income of
$197,000 in the three months ended March 31, 2000. Excluding the results of
Midas, net interest income increased 3.8% to $208,000 for the three months ended
March 31, 2001 from $201,000 in the three months ended March 31, 2000.

  Provision for Income Taxes. The provision for income taxes was $653,000 for
the three months ended March 31, 2001 and $578,000 for the three months ended
March 31, 2000. For the three months ended March 31, 2001 and 2000, the
Company's effective tax rate was 36.9%, resulting in an effective tax rate for
the six months ended March 31, 2001 of 39.5%. For the three months ended March
31, 2000, the Company's effective tax rate was 41.5%. The future tax rate may
vary due to a variety of factors, including, but not limited to, the relative
income contribution by domestic and foreign operations, changes in statutory tax
rates, the amount of tax exempt interest income generated during the year, the
ability to utilize foreign tax credits and any non-deductible items related to
acquisitions or other nonrecurring charges. The Company will continue to closely
monitor its effective tax rate on a quarterly basis.

Six Months Ended March 31, 2001 and March 31, 2000

  Revenues.  Revenues increased 18.6% to $61.8 million for the six months ended
March 31, 2001 from $52.1 million in the six months ended March 31, 2000.
Excluding the results of Midas, revenues increased 26.0% to $61.8 million for
the six months ended March 31, 2001 from $49.0 million in the six months ended
March 31, 2000. This increase resulted primarily from the acquisition of The SCA
Group, Inc. and growth in the United Kingdom operations resulting from increased
revenues under the Alliance Agreement with Siemens Business Services Limited,
partially offset by a decrease in Australian operations resulting from the
general weakness in the Australian economy.

  Gross Profit.  Gross profit increased 9.6% to $22.1 million for the six months
ended March 31, 2001 from $20.2 million in the six months ended March 31, 2000.
Gross margin decreased to 35.8% for the six months ended March 31, 2001 from
38.7% in the six months ended March 31, 2000. Excluding the results of Midas,
gross profit increased 15.3% to $22.1 million for the six months ended March 31,
2001 from $19.2 in the six months ended March 31, 2000. Gross margin, excluding
Midas, decreased to 35.8% for the six months ended March 31, 2001 from 39.1% in
the six months ended March 31, 2000. The decrease in gross margin, excluding the
results of Midas, was primarily attributable to the increased revenue from
United Kingdom operations which had a higher use of subcontractors resulting in
lower gross profit margins.

  Selling and Marketing.  Selling and marketing expenses increased 12.4% to $3.8
million for the six months ended March 31, 2001 from $3.4 million in the six
months ended March 31, 2000. As a percentage of revenues, selling and marketing
expenses decreased to 6.1% for the six months ended March 31, 2001 from 6.5% in
the six months ended March 31, 2000. Excluding the results of Midas, selling and
marketing expenses increased 35.2% to $3.8 million for the six months ended
March 31, 2001 from $2.8 in the six months ended March 31, 2000. As a percentage
of revenues, selling and marketing expenses, excluding Midas, increased to 6.1%
of revenues for the six months ended March 31, 2001 from 5.7% in the six months
ended March 31, 2000. The increase in selling and marketing expenses in total
dollars, excluding the results of Midas, was primarily attributable to the
addition of sales and marketing personnel including labor costs associated with
the Company's increased use of "seller-doers" and investments in the Company's
marketing and branding initiatives.

  General and Administrative.  General and administrative expenses decreased
5.3% to $11.1 million for the six months ended March 31, 2001 from $11.8 million
in the six months ended March 31, 2000. As a percentage of revenues, general and
administrative expenses decreased to 18.0% for the six months ended March 31,
2001 from 22.5% in the six months ended March 31, 2000. Excluding the results of
Midas, general and administrative expenses increased 1.1% to $11.1 million for
the six months ended March 31, 2001 from $11.0 in the six months ended March 31,
2000. As a

                                       14
<PAGE>

percentage of revenues, general and administrative expenses, excluding Midas,
decreased to 18.0% of revenues for the six months ended March 31, 2001 from
22.5% in the six months ended March 31, 2000. The increase in general and
administrative expenses in total dollars, excluding the results of Midas, was
primarily attributable to increased facility costs and increased business travel
expenses due to expansion. Included in general and administrative expenses is
compensation charges related to business combinations of $117,000 and $118,000
for the six months ended March 31, 2001 and 2000, respectively. These charges
resulted from the amortization of the value of shares that were released over a
three year period in connection with the acquisition of Simpson Fewster & Co.
Pty Limited.

  Other Nonrecurring Charges (Gains), Net. The other nonrecurring charges of
$1.6 million for the six months ended March 31, 2000, resulted primarily from
the write-down and subsequent sale of the Midas subsidiary and severance costs
for a former officer.

  Depreciation and Amortization. Depreciation and amortization increased 32.3%
to $3.6 million for the six months ended March 31, 2001 from $2.7 million in the
six months ended March 31, 2000. As a percentage of revenues, depreciation and
amortization increased to 5.8% for the six months ended March 31, 2001 from 5.2%
in the six months ended March 31, 2000. Excluding the results of Midas,
depreciation and amortization expenses increased 41.5% to $3.6 million for the
six months ended March 31, 2001 from $2.5 million in the six months ended March
31, 2000. As a percentage of revenues, depreciation and amortization expenses,
excluding Midas, increased to 5.8% of revenues for the six months ended March
31, 2001 from 5.1% in the six months ended March 31, 2000. The increase in
depreciation and amortization expenses, excluding the results of Midas, was
primarily attributable to the amortization of increased intangible assets from
business combinations, the amortization of the costs associated with the
purchase of a project management system, and the depreciation associated with
increased capital expenditures.

  Interest Income (Expense), Net.  The Company had net interest income of
$429,000 for the six months ended March 31, 2001 compared to net interest income
of $434,000 for the six months ended March 31, 2000. Excluding the results of
Midas, net interest income decreased 2.2% to $429,000 for the six months ended
March 31, 2001 from $439,000 in the six months ended March 31, 2000. This
decrease was primarily attributable to interest expense incurred on bank
borrowings partially offset by income generated on a higher investment balance.

  Provision for Income Taxes. Provision for income taxes increased 42.2% to $1.6
million for the six months ended March 31, 2001 from $1.1 million in the six
months ended March 31, 2000. For the six months ended March 31, 2001, the
Company's effective tax rate was 39.5%. For the six months ended March 31, 2000,
the provision for income taxes was impacted by other nonrecurring charges for
which no tax benefit could be recorded. Excluding these nonrecurring charges,
the Company's effective tax rate for the six months ended March 31, 2000 would
have been 41.5%. The future tax rate may vary due to a variety of factors,
including, but not limited to, the relative income contribution by domestic and
foreign operations, changes in statutory tax rates, the amount of tax exempt
interest income generated during the year, the ability to utilize foreign tax
credits and any non-deductible items related to acquisitions or other
nonrecurring charges. The Company will continue to closely monitor its effective
tax rate on a quarterly basis.

Liquidity and Capital Resources

  The Company's principal requirement is to fund working capital to support
its growth, including potential future acquisitions, purchase price installments
due on previous acquisitions and potential contingent payments related to prior
acquisitions. The Company maintains a $10 million revolving credit facility (the
"Credit Facility"), of which $2.5 million may be used for letters of credit. The
Credit Facility expires on August 26, 2002. The Credit Facility allows the
Company to borrow the lesser of $10 million or an amount equal to 85% of
eligible accounts receivable plus 50% of up to $6 million of eligible unbilled
receivables. The Credit Facility bears interest at the adjusted LIBOR rate plus
2.5% or the lender's announced prime rate plus 0.25%, at the Company's option.
The Credit Facility is secured by first priority liens and security interests in
the Company's assets (excluding assets owned by Tier Technologies (Australia)
Pty Ltd., Simsion Bowles & Associates ("SBA") and ADC Consultants Pty Ltd.),
including a pledge of 65% of the stock of the Company's subsidiaries excluding
SBA. The Credit Facility contains certain restrictive covenants, including, but
not limited to, limitations on the amount of loans the Company may extend to
officers and employees and the incurrence of additional

                                       15
<PAGE>

debt. The Credit Facility requires the maintenance of certain financial
covenants, including a minimum quarterly net income requirement, minimum
tangible net worth, a minimum ratio of debt to tangible net worth and a minimum
quick ratio. As of March 31, 2001, the Company was in compliance with all
financial ratios. As of March 31, 2001, the interest rate was 8.25%, outstanding
borrowings totaled $5 million and outstanding letters of credit totaled
approximately $364,000.

  The Company (through one of it's Australian subsidiaries) also maintains a
credit facility that includes a $1.2 million revolving credit line with St.
George Bank Limited of Australia (based on a March 31, 2001 exchange rate of AU
$2.06 to US $1.00). Under the terms of the amended credit facility, the
principal balance of the credit line will be reduced by approximately $115,000
per quarter to a maximum line of approximately $971,000. The line of credit
bears interest at fixed rates that are set up at the time of each drawdown on
the line. In December 1999, the balance of the line of credit was converted to a
variable rate loan ("Loan"). The variable rate is base upon the bank's prime
rate less 1.25% (8.5% per annum as of March 31, 2001) and interest is payable
monthly. As of March 31, 2001, the outstanding balance of the Loan was
approximately $1.2 million. The credit facility also provides for the issuance
of letters of credit up to $141,000. Letters of credit totaling $134,000 were
outstanding as of March 31, 2001. Among other provisions, the credit facility
requires the Company to maintain certain minimum financial ratios. As of March
31, 2001, the Company was not in compliance with certain provisions of this
credit facility; however, the bank has waived such noncompliance.

  Net cash provided by operating activities was $2.2 million in the six months
ended March 31, 2001 and $2.5 million in the six months ended March 31, 2000.
The change is primarily attributable to an increase in accounts receivable, net
of acquisitions and a decrease in accounts payable and accrued liabilities, net
of acquisitions, partially offset by a decrease in payments of Australian and
U.S. tax liabilities.

  Net cash used in investing activities was $4.7 million in the six months ended
March 31, 2001, as compared to net cash provided by investing activities of
$330,000 in the six months ended March 31, 2000. The change is primarily
attributable to an increase in purchase price payments related to prior
acquisitions and the impact of the disposition of the Midas subsidiary in the
prior year. Capital expenditures, including equipment acquired under capital
lease, but excluding assets acquired or leased through business combinations,
were approximately $1.3 million in the six months ended March 31, 2001 and $1.3
million in the six months ended March 31, 2000. The Company anticipates that it
may have increased capital expenditures depending on the number of future
payment processing center operations.

  Net cash provided by financing activities totaled $5.3 million in the six
months ended March 31, 2001 and $1.2 million in the six months ended March 31,
2000. The increase in net cash provided by financing activities resulted
primarily from increased bank borrowings and no repurchases of common stock in
the six month period ended March 31, 2001.

  The Company anticipates that its existing capital resources, including cash
provided by operating activities and available bank borrowings, will be adequate
to fund the Company's operations for at least the next 12 months. There can be
no assurance that changes will not occur that would consume available capital
resources before such time. The Company's capital requirements and capital
resources depend on numerous factors, including potential acquisitions,
contingent payments earned, new and existing contract requirements, the timing
of the receipt of accounts receivable and payments of accounts payable, the
company's ability to draw on its bank facility and employee growth. To the
extent that the Company's existing capital resources are insufficient to meet
its capital requirements, the Company will have to raise additional funds. There
can be no assurance that additional funding, if necessary, will be available on
favorable terms, if at all.

Recent Accounting Standards

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"). SAB 101 is effective no later than the fourth quarter of fiscal year
2001. The Company does not expect that the adoption of SAB 101 will have
significant impact on the consolidated financial statements.

                                       16
<PAGE>

  In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - a
replacement of FASB Statement No. 125" ("FAS 140"). FAS 140 revises the
standards of accounting and securitizations and other transfers of financial
assets and collateral. The accounting standards of FAS 140 are effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. The adoption of FAS 140 is not expected to have
an impact on the consolidated financial statements.

Factors That May Affect Future Results

  The following factors, among others, could cause actual results to differ
materially from those contained in forward-looking statements in this Form 10-Q.
Tier is referred to in this section as "we" or "us".

  Variability of Quarterly Operating Results. Our revenues and operating results
are subject to significant variation from quarter to quarter due to a number of
factors, including:

  .  the accuracy of estimates of resources required to complete ongoing
     projects,

  .  the number, size and scope of projects in which we are engaged,

  .  the contractual terms and degree of completion of such projects,

  .  start-up costs including software sublicense fees incurred in connection
     with the initiation of large projects,

  .  our ability to staff projects with salaried employees versus hourly
     employees, hourly independent contractors and sub-contractors,

  .  competitive pressures on the pricing of our services,

  .  any delays incurred in connection with, or early termination of, a project,

  .  any assessment of potential penalties or contingent obligations in
     connection with a project,

  .  employee utilization rates,

  .  the number of billable days in a particular quarter,

  .  the adequacy of provisions for losses,

  .  the accuracy of estimated transaction volume in computing transaction rates
     for payment processing center operations,

  .  demand for our services generated by strategic partnerships and certain
     prime contractors,

  .  our ability to increase both the number and size of engagements from
     existing clients, and

  .  economic conditions in the vertical and geographic markets we serve.

  The timing and realization of opportunities in our sale pipeline make the
timing and variability of revenue difficult to forecast. In addition, the
achievement of anticipated revenues is substantially dependent on our ability to
attract, on a timely basis, and retain skilled personnel. A high percentage of
our operating expenses, particularly personnel, facility and depreciation and
amortization are fixed in advance. In addition, we typically reach the annual
limitation on FICA contributions for many of our U.S. consultants before the end
of each calendar year. As a result, U.S. payroll taxes will vary significantly
from quarter to quarter during the fiscal year and will generally be higher at
the beginning of the

                                       17
<PAGE>

calendar year. Revenues are impacted by the amount of holidays and vacations
taken both within our consultant base and by our clients. As a result, revenues
will vary from quarter to quarter during the fiscal year. Because of the
variability of our quarterly operating results, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful, should not
be relied upon as indications of future performance and may result in volatility
in the price of our Class B Common Stock. In addition, our operating results may
from time to time be below the expectations of analysts and investors.

  Potential Adverse Effect on Operating Results from Dependence on Large
Projects, Limited Clients or Certain Market Sectors. The completion,
cancellation or significant reduction in the scope or imposition of significant
penalties for the Company's failure to meet scheduled requirements of a large
project or a project with certain clients would have a material adverse effect
on our business, financial condition and results of operations. Most of our
contracts are terminable by the client following limited notice and without
significant penalty to the client. We have derived, and believe that we will
continue to derive, a significant portion of our revenues from a limited number
of clients. For the six months ended March 31, 2001, Siemens Business Services
Limited ("SBS") accounted for 19.8% of the Company's revenues. The volume of
work performed for specific clients is likely to vary from period to period, and
a major client in one period may not use our services in a subsequent period. In
addition, as a result of our focus in specific vertical markets, economic and
other conditions that affect the companies in these markets could have a
material adverse effect on our business, financial condition and results of
operations.

  In addition, under a contract with SBS, the Company has committed to utilizing
a minimum number of full-time resources that SBS is obligated to mobilize. To
the extent there is a shortfall in utilization, the Company's maximum obligation
under the ASC contract for under-utilization shall not exceed $15.3 million
(based on the March 31, 2001 exchange rate of GBP 0.70 to US $1.00) over the
commitment period ending January 1, 2003.

  Dependence on Contracts with Government Agencies. For the six months ended
March 31, 2001, approximately 62.1% of our revenues were derived from sales to
government agencies. Such government agencies may be subject to budget cuts or
budgetary constraints or a reduction or discontinuation of funding. A
significant reduction in funds available for government agencies to purchase
professional services would have a material adverse effect on our business,
financial condition and results of operations. In addition, the loss of a major
government client, or any significant reduction or delay in orders by such
client, would have a material adverse effect on our business, financial
condition and results of operations.

  Inability to Attract and Retain Professional Staff Necessary to Existing and
Future Projects. If we are unable to attract, retain and train skilled
employees, such inability could impair our ability to adequately manage and
staff our existing projects and to bid for or obtain new projects, which would
have a material adverse effect on our business, financial condition and results
of operation. In addition, the failure of our employees to achieve expected
levels of performance could adversely affect our business. Our success depends
in large part upon our ability to attract, retain, train, manage and motivate
skilled employees, particularly project managers and other senior technical
personnel. There is significant competition for employees with the skills
required to perform the services we offer. In particular, qualified project
managers and senior technical and professional staff are in great demand
worldwide. In addition, we require that many of our employees travel to client
sites to perform services on our behalf, which may make a position with us less
attractive to potential employees. There can be no assurance that a sufficient
number of skilled employees will continue to be available, or that we will be
successful in training, retaining and motivating current or future employees.

  Inability to Manage Growth. If we are unable to manage our growth effectively,
such inability would have a material adverse effect on the quality of our
services, our ability to retain key personnel, and our business, financial
condition and results of operations. Our growth has placed, and is expected to
continue to place, significant demands on our management, financial, staffing
and other resources. We have expanded geographically by opening new offices
domestically and abroad, and intend to open additional offices. Our ability to
manage growth effectively will require us to continue to develop and improve our
operational, financial and other internal systems, as well as our business
development capabilities, and to train, motivate and manage our employees. In
addition, as the average size and number of our projects continues to increase,
we must be able to manage such projects effectively. There can be no assurance
that our rate of growth will continue or that we will be successful in managing
any such growth.

                                       18
<PAGE>

  Failure to Estimate Accurately Fixed Price and Transaction-Based Contracts.
Our failure to estimate accurately the resources or time required for a fixed
price project or the expected volume of transactions under a transaction-based
contract could have a material adverse effect on our business, financial
condition and results of operations. Under fixed price contracts, we receive our
fee if we meet specified objectives such as completing certain components of a
system installation. For transaction-based contracts, we receive our fee on a
per-transaction basis, such as the number of child support payments processed.
To earn a profit on these contracts, we rely upon accurately estimating costs
involved and assessing the probability of meeting the specified objectives or
realizing the expected number of transactions within the contracted time period.
If we fail to estimate accurately the factors upon which we base our contract
pricing, we may incur losses on these contracts. During the six months ended
March 31, 2001, 17.0% of our revenues were generated on a fixed price basis and
25.2% of our revenues were generated from transaction-based contracts. We
believe that the percentage of revenues attributable to fixed price and
transaction-based contracts will continue to be significant.

  Potential Failure to Identify, Acquire or Integrate New Acquisitions. An
important component of our business strategy is to expand our presence in new or
existing markets by acquiring additional businesses. Since December 1996, we
have acquired fifteen businesses. There can be no assurance that we will be able
to identify, acquire or profitably manage additional businesses or to integrate
successfully any acquired businesses without substantial expense, delay or other
operational or financial problems. Acquisitions involve a number of special
risks, including:

  .  diversion of management's attention,

  .  failure to retain key personnel,

  .  increased general and administrative expenses,

  .  client dissatisfaction or performance problems with an acquired firm,

  .  assumption of unknown liabilities, and

  .  other unanticipated events or circumstances.

  Any of these risks could have a material adverse effect on our business,
financial condition and results of operations.

  Substantial Competition in the IT and Consulting Services Market. The IT and
consulting services markets are highly competitive and are served by numerous
international, national and local firms. There can be no assurance that we will
be able to compete effectively in these markets. Market participants include
systems consulting and integration firms, including national accounting firms
and related entities, the internal information systems groups of our prospective
clients, professional services companies, hardware and application software
vendors, and divisions of large integrated technology companies and outsourcing
companies. Many of these competitors have significantly greater financial,
technical and marketing resources, generate greater revenues and have greater
name recognition than we do. In addition, there are relatively low barriers to
entry into the IT and consulting services markets, and we have faced, and expect
to continue to face, additional competition from new entrants into the IT and
consulting services markets.

  We believe that the principal competitive factors in the IT and consulting
services markets include:

  .  reputation,

  .  project management expertise,

  .  industry expertise,

                                       19
<PAGE>

  .  speed of development and implementations,

  .  technical expertise,

  .  competitive pricing, and

  .  the ability to deliver results on a fixed price and transaction basis as
     well as a time and materials basis.

  We believe that our ability to compete also depends in part on a number of
competitive factors outside our control, including:

  .  the ability of our clients or competitors to hire, retain and motivate
     project managers and other senior technical staff,

  .  the ownership by competitors of software used by potential clients,

  .  the price at which others offer comparable services,

  .  the ability of our clients to perform the services themselves, and

  .  the extent of our competitors' responsiveness to client needs.

  Our inability to compete effectively on these competitive factors would have a
material adverse effect on our business, financial condition and results of
operations.

  Dependence on Key Personnel. Our success depends in large part upon the
continued services of a number of key employees. Although we have entered into
employment agreements with certain key employees, these employees and other key
employees who have not entered into employment agreements may terminate their
employment agreements at any time. The loss of the services of any key employee
could have a material adverse effect on our business. In addition, if one or
more of our key employees resigns to join a competitor or to form a competing
company, the loss of such personnel and any resulting loss of existing or
potential clients to any such competitor could have a material adverse effect on
our business, financial condition and results of operations.

  Control of Company and Corporate Actions by Principal Shareholders.
Concentration of voting control could have the effect of delaying or preventing
a change in control of us and may affect the market price of our stock. All of
the holders of Class A Common Stock have entered into a Voting Trust with
respect to their shares of Class A Common Stock, which represents 45.1% of the
total common stock voting power at March 31, 2001. All power to vote shares held
in the Voting Trust has been vested in the Voting Trust's trustee, James L.
Bildner. The voting power held in the Voting Trust combined with the Class B
Common Stock owned by Mr. Bildner and vested options to acquire both Class A and
Class B Common Stock held by Mr. Bildner represents 47.5% of the total common
stock voting power outstanding at March 31, 2001. As a result, Mr. Bildner may
be able to control the outcome of all corporate actions requiring shareholder
approval, including, without limitation, changes in our equity incentive plan,
the election of a majority of our directors, proxy contests, mergers, tender
offers, open-market purchase programs or other purchases of common stock that
could give holders of our Class B Common Stock the opportunity to realize a
premium over the then-prevailing market price for their shares of Class B Common
Stock.

  Potential Costs or Claims Resulting from Project Performance. Many of our
engagements involve projects that are critical to the operations of our clients'
businesses and provide benefits that may be difficult to quantify. The failure
by us, or of the prime contractor on an engagement in which we are a
subcontractor, to meet a client's expectations in the performance of the
engagement could damage our reputation and adversely affect our ability to
attract new business, and could have a material adverse effect upon our
business, financial condition and results of operations. We have undertaken, and
may in the future undertake, projects in which we guarantee performance based
upon defined operating specifications or guaranteed delivery dates.
Unsatisfactory performance or unanticipated difficulties or delays in completing
such

                                       20
<PAGE>

projects may result in client dissatisfaction and a reduction in payment to, or
payment of damages (as a result of litigation or otherwise) by us, which could
have a material adverse effect upon our business, financial condition and
results of operations. In addition, unanticipated delays could necessitate the
use of more resources than we initially budgeted for a particular project, which
also could have a material adverse effect upon our business, financial condition
and results of operations.

  Delay or Failure to Develop New Solutions. Our success will depend in part on
our ability to develop solutions that keep pace with continuing changes in
technology, evolving industry standards and changing client preferences. There
can be no assurance that we will be successful in developing such solutions in a
timely manner or that if developed we will be successful in the marketplace.
Delay in developing or failure to develop new solutions would have a material
adverse effect on our business, financial condition and results of operations.

  Failure to Manage and Expand International Operations. For the six months
ended March 31, 2001, international operations accounted for 37.0% of our total
revenues. We believe that the percentage of total revenues attributable to
international operations will continue to be significant. As a result, we may
expand our existing international operations and may enter additional
international markets, which will require significant management attention and
financial resources and could adversely affect our operating margins and
earnings. In order to expand international operations, we will need to hire
additional personnel and develop relationships with potential international
clients through acquisition or otherwise. To the extent that we are unable to do
so on a timely basis, our growth in international markets would be limited, and
our business, financial condition and results of operations would be materially
and adversely affected.

  Our international business operations are subject to a number of additional
risks, including, but not limited to:

  .  fluctuations in the value of foreign currencies,

  .  difficulties in building and managing foreign operations,

  .  difficulties in enforcing agreements and collecting receivables through
     foreign legal systems,

  .  longer payment cycles, and

  .  unexpected regulatory, economic or political changes in foreign markets.

  There can be no assurance that these factors will not have a material adverse
effect on our business, financial condition and results of operations.

  Potential Volatility of Stock Price. A public market for our Class B Common
Stock has existed only since the initial public offering of the Class B Common
Stock in December 1997. There can be no assurance that an active public market
will be sustained. The market for securities of early stage companies has been
highly volatile in recent years as a result of factors often unrelated to a
company's operations, including:

  .  quarterly variations in operating results,

  .  announcements of technological innovations or new products or services
     by us or our competitors,

  .  general conditions in the IT industry or the industries in which our
     clients compete,

  .  changes in earnings estimates by securities analysts or the Company, and

  .  general economic conditions such as recessions or high interest rates.

                                       21
<PAGE>

  Further, in the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against the issuing company. Such litigation could result in
substantial costs and a diversion of management's attention and resources, which
could have a material adverse effect on our business, financial condition and
results of operations. Any adverse determination in such litigation could also
subject us to significant liabilities. There can be no assurance that such
litigation will not be instituted in the future against us.

  Insufficient Insurance Coverage for Potential Claims. Any failure in a
client's system could result in a claim against us for substantial damages,
regardless of our responsibility for such failure. There can be no assurance
that the limitations of liability set forth in our service contracts will be
enforceable or will otherwise protect us from liability for damages. Although we
maintain general liability insurance coverage, including coverage for errors or
omissions, there can be no assurance that such coverage will continue to be
available on reasonable terms, will be available in sufficient amounts to cover
one or more claims or that the insurer will not disclaim coverage as to any
future claim. The successful assertion for one or more claims against us that
exceed available insurance coverage or changes in our insurance policies,
including premium increases or the imposition of large deductible or co-
insurance requirements, would adversely affect our business, financial condition
and results of operations.

  Dependence on Third Parties in Performing Certain Client Engagements. We
sometimes perform client engagements using third parties. We often join with
other organizations to bid and perform an engagement. In these engagements, we
may engage subcontractors or we may act as a subcontractor to the prime
contractor of the engagement. We also use third party software or technology
providers to jointly bid and perform engagements. In these situations, we depend
on the software, resources and technology of these third parties in order to
perform the engagement. There can be no assurance that actions or failures
attributable to these third parties or to the prime contractor or subcontractor
will not also negatively affect our business, financial condition or results of
operations. In addition, the refusal or inability of these third parties to
permit continued use of their software, resources or technology by us, or the
discontinuance or termination by the prime contractor of our services or the
services of a key subcontractor, would have a material adverse effect on our
business, financial condition and results of operations.

  Inability to Protect Proprietary Intellectual Property. The steps we take to
protect our intellectual property rights may be inadequate to avoid the loss or
misappropriation of such information, or to detect unauthorized use of such
information. We rely on a combination of trade secrets, nondisclosure and other
contractual arrangements, and copyright and trademark laws to protect our
intellectual property rights. We also enter into confidentiality agreements with
our employees, generally require that our consultants and clients enter into
such agreements and limit access to our proprietary information.

  Issues relating to the ownership of, and rights to use, software and
application frameworks can be complicated, and there can be no assurance that
disputes will not arise that affect our ability to resell or reuse such software
and application frameworks. A portion of our business involves the development
of software applications for specific client engagements. Ownership of such
software is the subject of negotiation with each particular client and is
typically assigned to the client. We also develop software application
frameworks, and may retain ownership or marketing rights to these application
frameworks, which may be adapted through further customization for future client
projects. Certain clients have prohibited us from marketing the software and
application frameworks developed for them entirely or for specified periods of
time or to specified third parties, and there can be no assurance that clients
will not demand similar or other restrictions in the future.

  Although we believe that our services and products do not infringe on the
intellectual property rights of others, there can be no assurance that such a
claim will not be asserted against us in the future, or that if asserted, any
such claim will be successfully defended. The loss or misappropriation of our
intellectual property or the unsuccessful defense of any claim of infringement
could have a material adverse effect on our business, financial condition and
results of operations.

  Facilities, Systems and Operations Interruption or Failure. Any system
failure, including network, software or hardware failure, whether caused by us,
a third party service provider, unauthorized intruders and hackers, computer
viruses, power outages or natural disasters, could cause interruptions or delays
in our business or loss of data. Although

                                       22
<PAGE>

we maintain property insurance and business interruption insurance, we cannot
guarantee that our insurance will be adequate to compensate us for all losses
that may occur as a result of any system failure.

  Power Shortages. California has experienced shortages in the available
power supply. We are currently exploring alternatives to ensure continuous and
reliable sources of power in the event of blackouts. Such alternatives may not
be implemented in a timely manner. Shortages may also affect our employees,
vendors and customers.

  Issuance of Preferred Stock May Prevent Change in Control and Adversely Affect
Market Price for Class B Common Stock. The Board of Directors has the authority
to issue preferred stock and to determine the preferences, limitations and
relative rights of shares of preferred stock and to fix the number of shares
constituting any series and the designation of such series, without any further
vote or action by our shareholders. The preferred stock could be issued with
voting, liquidation, dividend and other rights superior to the rights of our
Class B Common Stock. The potential issuance of preferred stock may delay or
prevent a change in control of us, discourage bids for the Class B Common Stock
at a premium over the market price and adversely affect the market price and the
voting and other rights of the holders of our Class B Common Stock.

  No Current Intention to Declare or Pay Dividends. We have never declared or
paid cash dividends on our capital stock and do not anticipate paying any cash
dividends in the foreseeable future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  Market risk represents the risk of loss that may impact the financial
position, results of operations or cash flows of the Company due to adverse
changes in market prices and rates. The Company is exposed to market risk
because of changes in foreign currency exchange rates as measured against the
U.S. dollar and currencies of the Company's subsidiaries and operations in
Australia and the United Kingdom.

  Foreign Currency Exchange Rate Risk. The Company has wholly owned subsidiaries
in Australia and conducts operations in the United Kingdom through a U.S.-
incorporated subsidiary. Revenues from these operations are typically
denominated in Australian Dollars or British Pounds, respectively, thereby
potentially affecting the Company's financial position, results of operations
and cash flows due to fluctuations in exchange rates. The Company does not
anticipate that near-term changes in exchange rates will have a material impact
on future earnings, fair values or cash flows of the Company and has not engaged
in foreign currency hedging transactions for the six months ended March 31,
2001. There can be no assurance that a sudden and significant decline in the
value of the Australian Dollar or British Pound would not have a material
adverse effect on the Company's financial condition and results of operations.

  Interest Rate Sensitivity. The Company maintains a portfolio of cash
equivalents and investments in a variety of securities including: certificates
of deposit, money market funds and government and non-government debt
securities. These available-for-sale securities are subject to interest rate
risk and may fall in value if market interest rates increase. If market interest
rates increase immediately and uniformly by 10 percentage points from levels at
March 31, 2001, the fair value of the portfolio would decline by $349,000. We
anticipate having the ability to hold our fixed income investments until
maturity, and therefore do not expect our operating results or cash flows to be
affected to any significant degree by the effect of a sudden change in market
interest rates on our securities portfolio.

                                       23
<PAGE>

                          PART II. OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  The following proposals were adopted or rejected by the margins indicated at
Tier's Annual Meeting of Shareholders held on January 22, 2001.

<TABLE>
<CAPTION>
                                                      Voted            Votes                            Broker
                    Proposal                           For           Withheld        Abstentions       Non-Votes
                    --------                          -----          --------        -----------       ---------
<S>                                                   <C>            <C>             <C>               <C>
1.  To elect a Board of Directors to hold
    office until the next Annual Meeting of
    Shareholders or until their respective
    successors have been elected or approved:
       - James L. Bildner....................       20,967,479        981,228                  -               -
       - Samuel Cabot III (a)................        9,619,339        978,228                  -               -
       - Ronald L. Rossetti (a)..............        9,617,739        979,828                  -               -
       - Morgan P. Guenther .................       20,970,479        978,228                  -               -
       - William C. VanFaasen ...............       20,967,879        980,828                  -               -

2.  To approve an amendment to the Company's
    Amended and Restated 1996 Equity Incentive
    Plan to increase the number of shares of
    Class B Common Stock authorized and reserved
    for issuance under such plan from 5,989,333
    to 6,989,333 shares......................       15,848,253      3,508,096             40,094       3,491,013

3.  To ratify the selection of
    PricewaterhouseCoopers LLP as independent
    auditors of the Company for its fiscal year
    ending September 30, 2001................       21,935,658          9,004              4,045         938,749

--------------------------------------------------------------------------------------------------------------------
</TABLE>

(a)  Class B Director


                                       24
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

     Exhibit
      Number                        Description
     -------                        -----------
      10.1       Amended and Restated 1996 Equity Incentive Plan *

      10.2       Third Amended and Restated Employment Agreement by and Between
                 the Registrant and James L. Bildner *

      10.76      Bank of America Guaranty Cancellation

      10.77      Incentive Compensation Plan *

* Management contract or compensatory plan required to be filed as an exhibit
to this report.

     (b) Reports on Form 8-K.

     The Company did not file any reports on Form 8-K during the three months
ended March 31, 2001.

                                       25
<PAGE>

                                   SIGNATURE

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

                                  Tier Technologies, Inc.

Dated: May 11, 2001




                         By:                /s/ LAURA B. DEPOLE
                            ----------------------------------------------------
                                              Laura B. DePole
                                          Chief Financial Officer
                            (Duly Authorized Officer and Principal Financial and
                                            Accounting Officer)

                                       26
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number                                                  Description                                               Page
------                                                  -----------                                               -----
<S>                                                                                                               <C>
  10.1     Amended and Restated 1996 Equity Incentive Plan *

  10.2     Third Amended and Restated Employment Agreement by and Between the Registrant and James L. Bildner *

  10.76    Bank of America Guaranty Cancellation

  10.77    Incentive Compensation Plan *

         * Management contract or compensatory plan required to be filed as an exhibit to this report.
</TABLE>