##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-QSB



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

For the Quarterly Period Ended September 30, 2002

or



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

For the Transition Period from  to

COMMISSION FILE NUMBER: 000-28220

MIGRATEC, INC.

(Name of Small Business Issuer as Specified in its Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization) |  | 65-0125664
(I.R.S. Employer
Identification No.)

11494 LUNA ROAD, SUITE 100, DALLAS, TEXAS 75234-9421
(Address of Principal Executive Offices; Zip Code)

(972) 969-0300
(Issuers Telephone Number, Including Area Code)

The number of shares outstanding of each of the issuers classes of common equity as of November 14, 2002:

|                                         |  |                             
|---------------------------------------- |  | ----------------------------
|Title of Class                           |  | Number of Shares Outstanding
|Common Stock, $0.001 par value per share |  | 159,057,550                 

Transitional Small Business Disclosure Format (Check One): Yes [   ] No [X]





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TABLE OF CONTENTS



|                                                             |                                                                                               |                                                          |  |  |  |  |  | 
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------- | -------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                              
|                                                             | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                                                             |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                   
|                                                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS         
|                                                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS EQUITY
|                                                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS         
|                                                             |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS    
|                                                             | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                             | ITEM 3. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION                                 
|                                                             | ITEM 2. CHANGES IN SECURITIES                                                                
|                                                             | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                             | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                                  
|CERTIFICATION BY CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER
|EXHIBIT INDEX                                               
|EX-3.2 Amendment to Certificate of Incorporation            
|EX-11.1 Statement Re: Computations of Net Loss              
|EX-99.1 Certification Pursuant to 18 USC Sec. 1350          



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##### Table of Contents



INDEX

|                               |                                                                                               |                                                                                                                                                                          |    |      |   | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -- | ---- | - | 
|                               |                                                                                               |                                                                                                                                                                          |    | Page
|                               |                                                                                               |                                                                                                                                                                          |    |     
|PART I  FINANCIAL INFORMATION |                                                                                               |                                                                                                                                                                          | 1  |     
|                               | ITEM 1. FINANCIAL STATEMENTS                                                                  |                                                                                                                                                                          |    | 1    |  
|                               |                                                                                               | Consolidated Condensed Balance Sheets at September 30, 2002 (unaudited)
and December 31, 2001                                                                            |    |      | 1 | 
|                               |                                                                                               | Consolidated Condensed Statements of Operations for the three months
ended September 30, 2002 and 2001 and the nine months
ended September 30, 2002 and 2001 (unaudited) |    |      | 2 | 
|                               |                                                                                               | Consolidated Condensed Statement of Stockholders Equity for the nine
months ended September 30, 2002 (unaudited)                                                        |    |      | 3 | 
|                               |                                                                                               | Consolidated Condensed Statements of Cash Flows for the nine months
ended September 30, 2002 and 2001 (unaudited)                                                        |    |      | 4 | 
|                               |                                                                                               | Notes to Consolidated Condensed Financial Statements (unaudited)                                                                                                         |    |      | 5 | 
|                               | ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS |                                                                                                                                                                          |    | 14   |  
|                               | ITEM 3. CONTROLS AND PROCEDURES                                                               |                                                                                                                                                                          |    | 22   |  
|PART II  OTHER INFORMATION    |                                                                                               |                                                                                                                                                                          | 23 |     
|                               | ITEM 2. CHANGES IN SECURITIES                                                                 |                                                                                                                                                                          |    | 23   |  
|                               | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |                                                                                                                                                                          |    | 23   |  
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      |                                                                                                                                                                          |    | 24   |  

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##### Table of Contents






PART I  FINANCIAL INFORMATION




|        |  |                     
|------- |  | --------------------
|ITEM 1. |  | FINANCIAL STATEMENTS




MIGRATEC, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS

|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |             |            |  
|---------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------ | --------- | ----------------- | ------- | ----------- | ---------- | -
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         | September 30, 2002 |           | December 31, 2001
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                  
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         | (Unaudited)        |           |                   |         |            
|ASSETS                                         |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|CURRENT ASSETS                                 |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               | Cash                                                                                                                                                                                                                                                                        |                                                      | $       | 1,744,219          |           |                   | $       | 649,302     |           
|                                               | Accounts receivable                                                                                                                                                                                                                                                         |                                                      |         | 89,167             |           |                   |         | 15,000      |           
|                                               | Other current assets                                                                                                                                                                                                                                                        |                                                      |         | 240,503            |           |                   |         | 73,206      |           
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total current assets                                 |         |                    | 2,073,889 |                   |         |             | 737,508    |  
|PROPERTY AND EQUIPMENT, NET                    |                                                                                                                                                                                                                                                                             |                                                      | 131,910 |                    |           |                   | 145,381 |            
|OTHER ASSETS                                   |                                                                                                                                                                                                                                                                             |                                                      | 7,752   |                    |           |                   | 8,221   |            
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total Assets                                         |         | $                  | 2,213,551 |                   |         | $           | 891,110    |  
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|CURRENT LIABILITIES                            |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               | Current portion of long-term debt and notes payable                                                                                                                                                                                                                         |                                                      | $       | 11,027             |           |                   | $       | 118,763     |           
|                                               | Accounts payable                                                                                                                                                                                                                                                            |                                                      |         | 349,907            |           |                   |         | 305,663     |           
|                                               | Accrued expenses                                                                                                                                                                                                                                                            |                                                      |         | 326,562            |           |                   |         | 157,388     |           
|                                               | Obligation under capital lease                                                                                                                                                                                                                                              |                                                      |         | 2,029              |           |                   |         | 1,744       |           
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total current liabilities                            |         |                    | 689,525   |                   |         |             | 583,558    |  
|LONG-TERM LIABILITIES                          |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               | Long-term portion of notes payable                                                                                                                                                                                                                                          |                                                      |         | 1,234              |           |                   |         | 2,509,639   |           
|                                               | Long-term portion of obligation under capital lease                                                                                                                                                                                                                         |                                                      |         | 9,546              |           |                   |         | 2,459       |           
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total long-term liabilities                          |         |                    | 10,780    |                   |         |             | 2,512,098  |  
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total liabilities                                    |         |                    | 700,305   |                   |         |             | 3,095,656  |  
|MINORITY INTEREST                              |                                                                                                                                                                                                                                                                             |                                                      | (3,752  | )                  |           |                   | (3,752  | )          
|COMMITMENTS AND CONTINGENCIES                  |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|STOCKHOLDERS EQUITY (DEFICIT)                 |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               | Preferred stock 50,000,000 shares authorized; $0.001 par
value; none issued or outstanding                                                                                                                                                                                  |                                                      |         |                    |           |                   |         |             |           
|                                               | Common stock $0.001 par value; 200,000,000 shares
authorized; 158,978,498 and 128,586,361 shares issued at
September 30, 2002 and December 31, 2001, respectively;
158,978,498 and 118,721,912 shares outstanding at September
30, 2002 and December 31, 2001, respectively |                                                      |         | 158,978            |           |                   |         | 128,586     |           
|                                               | Additional paid-in capital                                                                                                                                                                                                                                                  |                                                      |         | 33,723,639         |           |                   |         | 27,911,907  |           
|                                               | Deferred stock compensation                                                                                                                                                                                                                                                 |                                                      |         | (256,250           | )         |                   |         | (769,062    | )         
|                                               | Treasury stock, at cost (9,864,449 shares in 2001)                                                                                                                                                                                                                          |                                                      |         |                   |           |                   |         | (1,777,891  | )         
|                                               | Accumulated deficit                                                                                                                                                                                                                                                         |                                                      |         | (32,109,369        | )         |                   |         | (27,694,334 | )         
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total stockholders equity (deficit)                 |         |                    | 1,516,998 |                   |         |             | (2,200,794 | )
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            
|                                               |                                                                                                                                                                                                                                                                             | Total Liabilities and Stockholders Equity (Deficit) |         | $                  | 2,213,551 |                   |         | $           | 891,110    |  
|                                               |                                                                                                                                                                                                                                                                             |                                                      |         |                    |           |                   |         |            

The accompanying notes are an integral part of these consolidated financial statements.

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MIGRATEC, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |           |          |            |  
|------------------------------------------------------------------------- | -------------------------- | ------------------------------ | ---------------------------- | ------- | ------------------ | ---------- | ----------------- | ------- | ------- | ---------- | ----------- | --------- | ------ | ---------- | ---------- | --------- | -------- | ---------- | -
|                                                                          |                            |                                |                              |         | Three Months Ended |            | Nine Months Ended
|                                                                          |                            |                                |                              |         | September 30,      |            | September 30,    
|                                                                          |                            |                                |                              |         |                    |            |                  
|                                                                          |                            |                                |                              |         | 2002               |            | 2001              |         | 2002    |            | 2001       
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |            
|REVENUES                                                                  |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          | Software licenses          |                                | $                            | 25,000  |                    |            | $                 |        |         |            | $           | 35,000    |        |            | $          |          |         
|                                                                          | Services                   |                                |                              | 138,454 |                    |            |                   | 53,500  |         |            |             | 297,275   |        |            |            | 181,833   |         
|                                                                          | Software maintenance fees  |                                |                              |        |                    |            |                   | 650     |         |            |             |          |        |            |            | 1,950     |         
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          |                            |                                | Total revenues               |         |                    | 163,454    |                   |         |         | 54,150     |             |           |        | 332,275    |            |           |          | 183,783    |  
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|COSTS AND EXPENSES                                                        |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          | Cost of revenues           |                                |                              | 120,700 |                    |            |                   | 44,725  |         |            |             | 267,665   |        |            |            | 51,408    |         
|                                                                          | Selling and marketing      |                                |                              | 412,704 |                    |            |                   | 285,601 |         |            |             | 1,088,141 |        |            |            | 1,277,676 |         
|                                                                          | Research and development   |                                |                              | 376,276 |                    |            |                   | 353,470 |         |            |             | 1,094,648 |        |            |            | 1,541,934 |         
|                                                                          | General and administrative |                                |                              | 688,992 |                    |            |                   | 590,363 |         |            |             | 2,309,376 |        |            |            | 2,127,586 |         
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          |                            |                                | Total costs and expenses     |         |                    | 1,598,672  |                   |         |         | 1,274,159  |             |           |        | 4,759,830  |            |           |          | 4,998,604  |  
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|LOSS FROM OPERATIONS                                                      |                            |                                | (1,435,218                   | )       |                    |            | (1,220,009        | )       |         |            | (4,427,555  | )         |        |            | (4,814,821 | )        
|                                                                          | Other income (expense)     |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |           |         
|                                                                          |                            | Interest and financing expense |                              |         | (2,898             | )          |                   |         | (71,424 | )          |             |           | (9,312 | )          |            |           | (172,639 | )         
|                                                                          |                            | Other income, net              |                              |         | 8,565              |            |                   |         | 6,337   |            |             |           | 21,832 |            |            |           | 7,043    |           
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          |                            |                                | Total other income (expense) |         |                    | 5,667      |                   |         |         | (65,087    | )           |           |        | 12,520     |            |           |          | (165,596   | )
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|                                                                          |                            |                                | Net loss                     |         | $                  | (1,429,551 | )                 |         | $       | (1,285,096 | )           |           | $      | (4,415,035 | )          |           | $        | (4,980,417 | )
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|NET LOSS PER COMMON SHARE (BASIC AND DILUTED)                             |                            | $                              | (0.01                        | )       |                    | $          | (0.01             | )       |         | $          | (0.03       | )         |        | $          | (0.05      | )        
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          
|WEIGHTED AVERAGE COMMON SHARES
ISSUED AND OUTSTANDING (BASIC AND
DILUTED) |                            |                                | 158,643,310                  |         |                    |            | 111,999,393       |         |         |            | 142,424,796 |           |        |            | 99,373,321 |          
|                                                                          |                            |                                |                              |         |                    |            |                   |         |         |            |             |           |        |            |            |          

The accompanying notes are an integral part of these consolidated financial statements.

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MIGRATEC, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS EQUITY
Nine Months Ended September 30, 2002

|                                                                      |  |          |             |        |  |            |         |         |  |          |            |          |  |          |          |       |  |  |            |   |  |   |            |   |  |   |             |   |  |   |            |  
|--------------------------------------------------------------------- |  | -------- | ----------- | ------ |  | ---------- | ------- | ------- |  | -------- | ---------- | -------- |  | -------- | -------- | ----- |  |  | ---------- | - |  | - | ---------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                                                      |  |          |             |        |  |            |         |         |  |          |            |          |  | DEFERRED |          |       |  |  |            |   |  |   |            |   |  |   |             |   |  |  
|                                                                      |  | COMMON   |             | COMMON |  | ADDITIONAL |         | STOCK   |  | TREASURY |            | TREASURY |  | ACCUMU-  |          |       |  | 
|                                                                      |  | STOCK    |             | STOCK  |  | PAID-IN    |         | COMPEN- |  | STOCK    |            | STOCK    |  | LATED    |          |       |  | 
|                                                                      |  | (SHARES) |             | AMOUNT |  | CAPITAL    |         | SATION  |  | (SHARES) |            | AMOUNT   |  | DEFICIT  |          | TOTAL
|                                                                      |  |          |             |        |  |            |         |         |  |          |            |          |  |          |          |      
|Balance at January 1, 2002                                            |  |          | 128,586,361 |        |  | $          | 128,586 |         |  | $        | 27,911,907 |          |  | $        | (769,062 | )     |  |  | (9,864,449 | ) |  | $ | (1,777,891 | ) |  | $ | (27,694,334 | ) |  | $ | (2,200,794 | )
|Issuance of stock in connection with
private placements for cash      |  |          | 16,467,000  |        |  |            | 16,467  |         |  |          | 4,093,683  |          |  |          |         |       |  |  |           |   |  |   |           |   |  |   |            |   |  |   | 4,110,150  |  
|Issuance of stock in connection with
private equity line              |  |          | 2,643,586   |        |  |            | 2,643   |         |  |          | 780,422    |          |  |          |         |       |  |  |           |   |  |   |           |   |  |   |            |   |  |   | 783,065    |  
|Issuance of stock in connection with
exercise of options and warrants |  |          | 1,146,000   |        |  |            | 1,146   |         |  |          | 225,654    |          |  |          |         |       |  |  |           |   |  |   |           |   |  |   |            |   |  |   | 226,800    |  
|Issuance of stock in connection with
conversion of debt to equity     |  |          | 20,000,000  |        |  |            | 20,000  |         |  |          | 2,480,000  |          |  |          |         |       |  |  |           |   |  |   |           |   |  |   |            |   |  |   | 2,500,000  |  
|Deferred stock compensation expense                                   |  |          |            |        |  |            |        |         |  |          |           |          |  |          | 512,812  |       |  |  |           |   |  |   |           |   |  |   |            |   |  |   | 512,812    |  
|Retirement of treasury stock                                          |  |          | (9,864,449  | )      |  |            | (9,864  | )       |  |          | (1,768,027 | )        |  |          |         |       |  |  | 9,864,449  |   |  |   | 1,777,891  |   |  |   |            |   |  |   |           |  
|Net loss                                                              |  |          |            |        |  |            |        |         |  |          |           |          |  |          |         |       |  |  |           |   |  |   |           |   |  |   | (4,415,035  | ) |  |   | (4,415,035 | )
|                                                                      |  |          |             |        |  |            |         |         |  |          |            |          |  |          |          |       |  |  |            |   |  |   |            |   |  |   |             |   |  |   |            |  
|Balance at September 30, 2002                                         |  |          | 158,978,498 |        |  | $          | 158,978 |         |  | $        | 33,723,639 |          |  | $        | (256,250 | )     |  |  |           |   |  | $ |           |   |  | $ | (32,109,369 | ) |  | $ | 1,516,998  |  
|                                                                      |  |          |             |        |  |            |         |         |  |          |            |          |  |          |          |       |  |  |            |   |  |   |            |   |  |   |             |   |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.

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MIGRATEC, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |            |         |         |  
|----------------------------------------------------------------------- | ----------------------------------------------------------------------------- | --------------------------------------- | ------------------------------------------- | ---------- | ------------------------------- | -------- | ------- | ---------- | ------- | ------- | -
|                                                                        |                                                                               |                                         |                                             |            | Nine Months Ended September 30,
|                                                                        |                                                                               |                                         |                                             |            |                                
|                                                                        |                                                                               |                                         |                                             |            | 2002                            |          | 2001   
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Net loss                                                                      |                                         | $                                           | (4,415,035 | )                               |          | $       | (4,980,417 | )      
|                                                                        | Adjustments to reconcile net loss to net cash (used
by) operating activities: |                                         |                                             |            |                                 |          |         |            |        
|                                                                        |                                                                               | Depreciation and amortization           |                                             |            | 71,048                          |          |         |            | 91,886  |        
|                                                                        |                                                                               | Deferred stock compensation             |                                             |            | 512,812                         |          |         |            | 557,396 |        
|                                                                        |                                                                               | Financing fees                          |                                             |            |                                |          |         |            | 84,000  |        
|                                                                        |                                                                               | Warrants issued for consulting services |                                             |            |                                |          |         |            | 17,000  |        
|                                                                        |                                                                               | Warrants issued for financing fees      |                                             |            |                                |          |         |            | 32,336  |        
|                                                                        |                                                                               | Change in assets and liabilities:       |                                             |            |                                 |          |         |            |         |        
|                                                                        |                                                                               |                                         | (Increase) in accounts receivable           |            |                                 | (74,167  | )       |            |         | (35,000 | )
|                                                                        |                                                                               |                                         | (Increase) decrease in other current assets |            |                                 | (167,297 | )       |            |         | 10,893  |  
|                                                                        |                                                                               |                                         | Decrease in other assets                    |            |                                 | 265      |         |            |         |        |  
|                                                                        |                                                                               |                                         | Increase (decrease) in accounts payable     |            |                                 | 44,244   |         |            |         | (51,363 | )
|                                                                        |                                                                               |                                         | Increase in accrued expenses                |            |                                 | 169,174  |         |            |         | 334,589 |  
|                                                                        |                                                                               |                                         | (Decrease) in deferred income               |            |                                 |         |         |            |         | (55,283 | )
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Net cash (used by) operating activities                                       |                                         |                                             | (3,858,956 | )                               |          |         | (3,993,963 | )      
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Purchases of property and equipment                                           |                                         |                                             | (44,740    | )                               |          |         | (73,201    | )      
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Net cash (used in) investing activities                                       |                                         |                                             | (44,740    | )                               |          |         | (73,201    | )      
|CASH FLOWS FROM FINANCING ACTIVITIES:                                   |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Proceeds from notes payable                                                   |                                         |                                             |           |                                 |          |         | 450,000    |        
|                                                                        | Proceeds from issuance of common stock                                        |                                         |                                             | 5,120,015  |                                 |          |         | 4,816,869  |        
|                                                                        | Payments under obligation of capital lease                                    |                                         |                                             | (5,261     | )                               |          |         | (823       | )      
|                                                                        | Repayment of notes payable                                                    |                                         |                                             | (116,141   | )                               |          |         | (687,348   | )      
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Net cash provided by financing activities                                     |                                         |                                             | 4,998,613  |                                 |          |         | 4,578,698  |        
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|Net increase in cash                                                    |                                                                               |                                         | 1,094,917                                   |            |                                 |          | 511,534 |           
|Cash  beginning                                                        |                                                                               |                                         | 649,302                                     |            |                                 |          | 242,254 |           
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|Cash  ending                                                           |                                                                               | $                                       | 1,744,219                                   |            |                                 | $        | 753,788 |           
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|SUPPLEMENTAL DISCLOSURES:                                               |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Interest paid                                                                 |                                         | $                                           | 10,274     |                                 |          | $       | 37,302     |        
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Issuance of stock upon conversion of debt to equity                           |                                         | $                                           | 2,500,000  |                                 |          | $       | 1,250,000  |        
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           
|                                                                        | Purchase of equipment with capital lease                                      |                                         | $                                           | 12,633     |                                 |          | $       |           |        
|                                                                        |                                                                               |                                         |                                             |            |                                 |          |         |           

The accompanying notes are an integral part of these consolidated financial statements.

4



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##### Table of Contents






MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

MigraTEC, Inc., a Delaware corporation (MigraTEC), is a developer and
provider of software solutions and support services relating to the upgrading
or migrating of software applications, enabling them to run on newer, more
efficient operating systems and hardware platforms.

Beginning in 1999, MigraTEC redirected its strategic focus from selling
software products aimed at Y2K solutions to developing technology designed to
enable automated solutions for upgrading software applications from 32-bit to
64-bit versions of an operating system or for migrating software applications
from one operating system to another, such as from Solaris to Windows or Linux.
The majority of MigraTECs efforts prior to 2002 were related to research and
development activities.

MigraTEC licenses its solutions to systems integrators and service providers to
perform outsourced application migrations for their customers. On a limited
basis, MigraTEC deploys its solutions directly to application owners.

MigraTEC is the parent of a majority owned foreign subsidiary, One Up Computer
Services, Ltd. (One Up, Ltd.), incorporated under the laws of the Province of
Ontario, Canada. One Up, Ltd. ceased its operations in 1997. At December 31,
1999, a reserve was provided for all of the assets of One Up, Ltd. in the
amount of $36,808, which MigraTEC does not expect to be realizable.
Liabilities of One Up, Ltd. in the amount of $45,736 will remain until the
obligations are resolved.

The accompanying unaudited consolidated condensed financial statements reflect,
in the opinion of management, all adjustments (consisting only of normal,
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows of MigraTEC. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to rules and regulations promulgated by the Securities and
Exchange Commission (the Commission). These statements should be read
together with the audited financial statements and notes thereto for the years
ended December 31, 2001 and 2000, included in MigraTECs Form 10-KSB for the
fiscal year ended December 31, 2001 on file with the Commission. The results
of operations for the interim periods shown herein are not necessarily
indicative of the results to be expected for any future interim period or for
the entire year.

PRINCIPLES OF CONSOLIDATION

The consolidated condensed financial statements include the accounts of
MigraTEC and One Up, Ltd., collectively referred to as the Company.
Intercompany transactions and balances have been eliminated in consolidation.

INDUSTRY SEGMENT

The Company operates in a single industry segment, developing and providing
solutions and services for upgrading or migrating software applications.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation and
amortization. The Company provides for depreciation on a straight-line basis
over the estimated useful life of three to five years for the related assets.
Leasehold improvements are amortized over the life of the improvements or the
lease term if shorter on a straight-line basis.

Major repairs or replacements of property and equipment are capitalized.
Maintenance, repairs and minor replacements are expensed as incurred.

5



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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

CAPITALIZED SOFTWARE

The cost of purchased software is capitalized and amortized on a straight-line
basis over the estimated useful life of three years. Amortization expense in
the first nine months of 2002 and 2001 was $204 and $26,472, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Companys financial instruments include accounts receivable and accounts
payable, for which the carrying amounts approximate fair value.

COSTS OF SOFTWARE DEVELOPED FOR SALE

The Company expenses or capitalizes development costs of software to be sold in
accordance with Statement of Financial Accounting Standards No. 86, Accounting
for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed.
These development costs are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized
until the product is available for general release to customers.

INCOME TAXES

The provision for income taxes is based on pretax income as reported for
financial statement purposes. Deferred income taxes are provided in accordance
with the liability method of accounting for income taxes to recognize the tax
effects of temporary differences between financial statement and income tax
accounting. Valuation allowances are established when necessary to reduce tax
assets to the amount more likely than not to be realized.

The Company has incurred net operating losses for federal income tax purposes
and it is uncertain as to whether the Company will generate future taxable
income during the carry-forward period. Accordingly, the Companys net current
and non-current deferred tax assets have been fully reserved at September 30,
2002 and December 31, 2001.

REVENUE RECOGNITION

The Companys revenues consist of services revenues, software license fees and
software maintenance and support revenues.

Services are usually provided under time and materials contracts and agreed
upon fee arrangements. Revenues from services under time and materials
contracts and for training are recognized as services are performed. Revenues
from agreed upon fee arrangements typically have short-term durations and are
recognized upon completion and acceptance by the customer. Services revenues
in 2001 include revenue related to a multiple elements agreement between the
Company and Dell Computer Corporation for which revenue is recognized pro rata
over the contract term.

Revenues from software licenses and software maintenance and support services
are recognized in accordance with American Institute of Certified Public
Accountants Statement of Position 97-2 Software Revenue Recognition.

The Company licenses software under software license agreements. License fee
revenues are recognized when an agreement is in force, the product has been
delivered, the license fee is fixed or determinable, no significant production
modification or customization of the software is required and collectibility is
reasonably assured. Total fees under multiple element arrangements are
allocated to individual elements based on vendor-specific objective evidence of
fair value, principally determined on values when sold separately. License fee
revenue for certain application development and data access technology is
recognized upon direct shipment to the end user. If collectibility is not
considered probable, revenue is recognized when the fee is collected.

Software maintenance and support revenues are recognized ratably over the term
of the related agreements, which in most cases is one year.

6



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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

CASH EQUIVALENTS

Cash equivalents include time deposits, certificates of deposits, and all
highly liquid debt instruments with original maturities of three months or less
when purchased.

LOSS PER SHARE

Basic earnings per share is computed only on the weighted average number of
common shares outstanding during the respective periods, and the dilutive
effect of stock options and warrants is excluded. Diluted earnings per share
is computed to show the dilutive effect, if any, of stock options and warrants
using the treasury stock method based on the average market price of the stock
during the respective periods.

The effect of stock options and warrants that aggregated 27,059,981 and
19,096,554 shares as of September 30, 2002 and 2001, respectively, would be
anti-dilutive due to the Companys losses in 2002 and 2001 and, accordingly,
are not included in the computation of diluted earnings per share for the
respective periods.

The convertible secured promissory notes discussed in Note 3 automatically
converted into 20,000,000 shares of the Companys common stock effective as of
May 14, 2002.

POTENTIAL DILUTION

The following chart demonstrates the potential dilution of our issued and
outstanding common stock as of September 30, 2002.

|                         |                                   |  |             |            |  |   |                           |        | 
|------------------------ | --------------------------------- |  | ----------- | ---------- |  | - | ------------------------- | ------ | 
|                         |                                   |  |             |            |  |   | Weighted average exercise
|                         |                                   |  |             |            |  |   | price per share          
|                         |                                   |  |             |            |  |   |                          
|Common stock outstanding |                                   |  | 158,978,498 |            |  |   |                           |       
|Warrants                 |                                   |  | 1,055,143   |            |  | $ | 0.3633                    |       
|Stock Options:           |                                   |  |             |            |  |   |                           |       
|                         | Non-Affiliates                    |  |             | 290,000    |  |   |                           | 0.6448 | 
|                         | Directors, Officers and Employees |  |             | 25,714,838 |  |   |                           | 0.3202 | 
|                         |                                   |  |             |            |  |   |                           |       
|                         |                                   |  | 186,038,479 |            |  |   |                           |       
|                         |                                   |  |             |            |  |   |                           |       

Additional dilution may result from the exercise of stock options pursuant to
additional stock option grants under the MigraTEC, Inc. Long-Term Incentive
Plan. As of September 30, 2002, options to purchase 608,976 shares of common
stock remain issuable under the plan.

USE OF ESTIMATES AND ASSUMPTIONS

Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses. Actual results could vary from estimates used.

STOCK-BASED COMPENSATION

The Company has elected to account for stock-based compensation to employees
using the intrinsic value method prescribed in Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations. Accordingly, compensation for stock options is measured as
the excess, if any, of the fair market value of the Companys stock at the date
of the grant over the amount an employee must pay to acquire the stock. Such
excess is deferred and amortized as compensation expense over the respective
vesting periods, which are principally 36 months.

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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accounts for stock-based awards issued to non-employees in
accordance with the fair value method of Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation and Emerging
Issues Task Force Issue No. 96-18. Accordingly, the Company measures the cost
of such awards based on the fair value of the options using the Black-Scholes
method option-pricing model.

NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business Combinations, (SFAS No.
141) and Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets, (SFAS No. 142) effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized but will be subject
to annual impairment tests in accordance with the statements. Other intangible
assets will continue to be amortized over their useful lives. The adoption of
SFAS Nos. 141 and 142 has not had a significant impact on the Companys
financial statements.

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, (SFAS No. 144) which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets
and supersedes Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of, and the accounting and reporting provisions of APB Opinion No.
30, Reporting the Results of Operations, for a disposal of a segment of a
business. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001. The adoption of SFAS No. 144 has not had a significant impact on the
Companys financial position or results of operations.

RECLASSIFICATIONS

Certain reclassifications have been made to prior year amounts to conform to
the current year presentation.

NOTE 2. GOING CONCERN UNCERTAINTY

The Company incurred a loss of $5,863,017 and used cash in operations of
$4,952,831 for the year ended December 31, 2001. In addition, at December 31,
2001, the Company had a net stockholders deficit of $2,200,794. The Company
incurred a loss of $4,415,035 and used cash in operations of $3,858,956 for
the first nine months of 2002. At September 30, 2002, the Company had net
stockholders equity of $1,516,998. The Companys continued existence and plans
for future growth are dependent in part upon its ability to obtain the capital
necessary to operate, primarily through the issuance of additional debt or
equity, and on its ability to effectively penetrate the developing market for
migration software, services and related products. Management believes the
Company will successfully raise additional capital in 2002 and that funds will
be available to meet the Companys obligations for at least the next 12 months.
If the Company is not able to obtain additional or alternative funding, or
generate sufficient revenues and cash flows in the near term, the Company will
be unable to continue as a going concern.

In the first nine months of 2002, the Company raised net proceeds of
$4,110,150 in private equity transactions and has received $226,800 from the
exercise of options and warrants. In addition, the Company entered into a
private equity line of credit agreement on March 27, 2001, pursuant to which
the Company can draw down, under certain conditions, up to $20,000,000 over a
20-month period, of which the Company has drawn $783,065 (net of commissions
and escrow costs) since December 31, 2001. The Company may need to raise
additional capital in the remainder of 2002 to fund expanded sales and
marketing as well as development efforts and continued operations. There can
be no assurance that the Company will successfully raise additional funds
sufficient to finance its continued operations.

The financial statements do not include any adjustments to reflect the possible
effects on recoverability and classification of assets or classification of
liabilities, which may result from the inability of the Company to continue as
a going concern.

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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 3. NOTES PAYABLE

Notes payable at September 30, 2002 and December 31, 2001, include the
following:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                    |         |                   |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | ----------------- |  | - | --------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | September 30, 2002 |         | December 31, 2001
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                    |         |                  
|Convertible secured promissory
notes to Mercury Fund No. 1,
Ltd. in the amount of
$1,775,000, dated January 25,
2000, without interest, due
January 24, 2003, collateralized
by all assets owned or
thereafter acquired, subject to
collateral rights of notes dated
December 4 and 28, 1998 and
January 4 and 27, 1999. These
notes have been converted into
shares of common stock as more
fully described below.                                                                                                                                                                                                                                                      |  | $                  |        |                   |  | $ | 1,275,000 |  
|Convertible secured promissory
notes to MT Partners, L.P. in
the amount of $1,975,000, dated
January 25, 2000, without
interest, due January 24, 2003,
collateralized by all assets
owned or thereafter acquired,
subject to collateral rights of
notes dated December 4 and 28,
1998 and January 4 and 27, 1999
These notes have been
converted into shares of common
stock as more fully described
below.                                                                                                                                                                                                                                                              |  |                    |        |                   |  |   | 1,225,000 |  
|Notes payable to BEM Capital
Partners, Inc. (assignee of MJ
Capital Partners III, L.P. as of
January 2001) in the original
aggregate amount of $250,000
Modified, extended and renewed
to increase the outstanding loan
amount to $250,000, bearing
interest at 15% per annum,
interest only payable monthly
until May 1, 2001. Thereafter
payable with monthly
installments of principal and
interest totaling $22,565 with a
final maturity of May 1, 2002
In connection with the January
26, 2001 modification, the note
holder was issued a one-year
warrant to purchase 40,000
shares of common stock at $0.01
per share. This warrant was
exercised in March 2001. |  |                    |        |                   |  |   | 108,777   |  
|Note payable to a former
employee in the amount of
$68,250, dated March 3, 1998,
bearing interest at 14%, payable
in monthly installments of
$1,000, due December 10, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                    | 12,261  |                   |  |   | 19,625    |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                    |         |                   |  |   |           |  
|Total outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                    | 12,261  |                   |  |   | 2,628,402 |  
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                    | (11,027 | )                 |  |   | (118,763  | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                    |         |                   |  |   |           |  
|Long-term portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | $                  | 1,234   |                   |  | $ | 2,509,639 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                    |         |                   |  |   |           |  

In the first quarter of 2000, the Company closed a private financing of the
Company by MT Partners, L.P., an affiliate of Cardinal Investment Company,
Inc., and Mercury Fund No. 1, Ltd., an affiliate of Mercury Ventures, Ltd.
(collectively, the Investors). The Investors have the right to designate
three directors to serve on the Companys Board of Directors. Drew R. Johnson,
William B. Patton and John W. White currently serve as the Investors
designees.

The Investors entered into a Note and Warrant Purchase Agreement with the
Company (the Agreement) pursuant to which the Investors provided $3,750,000
of private financing to the Company, evidenced by convertible secured
promissory notes of the Company. The notes, which were convertible into an
aggregate of 30,000,000 shares of common stock, did not accrue interest.
Pursuant to the Agreement, the Company issued to the Investors warrants to
purchase an aggregate of 6,000,000 shares of common stock at an exercise price
of $0.20 per share. The warrants have been exercised in full and the notes
have been fully converted.

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##### Table of Contents



MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 3. NOTES PAYABLE (continued)

In connection with this private financing, the Investors, the Company and
certain stockholders executed a Shareholders Agreement, which requires
approval of at least 70% of the Companys Board of Directors for any of the
following corporate actions:



| | 1.  |  | permitting authorization of additional series or classes of
shares of any capital stock resulting in dilution greater than 10%
when compared to the fully diluted common stock equivalent position
of the Company as of January 25, 2000;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2.  |  | disposing of all or substantially all of the properties or
assets of the Company;                                                                                                                                                        
|
| | 3.  |  | merging where such transaction involves greater than 20% of the
Companys market capitalization;                                                                                                                                         
|
| | 4.  |  | voluntarily dissolving, liquidating or partially liquidating
the Company;                                                                                                                                                                
|
| | 5.  |  | incurring additional debt in excess of $250,000;                                                                                                                                                                                         
|
| | 6.  |  | incurring any single capital expenditure in excess of $150,000;                                                                                                                                                                          
|
| | 7.  |  | declaring or paying any dividend with respect to any capital
stock of the Company;                                                                                                                                                       
|
| | 8.  |  | purchasing any capital stock of the Company;                                                                                                                                                                                             
|
| | 9.  |  | amending the employment contracts or making material changes to
the compensation or severance amounts of certain officers of the
Company;                                                                                                
|
| | 10. |  | amending, altering or repealing the Companys Certificate of
Incorporation or Bylaws; or                                                                                                                                                 
|
| | 11. |  | entering into contracts with any affiliate of the Company.                                                                                                                                                                               

Additionally, the Shareholders Agreement restricts transfers of the Companys
common stock and provides the Investors with a right of first refusal for
private transfers of shares of the Companys common stock. The Shareholders
Agreement will terminate upon the consummation of any merger, consolidation,
recapitalization or reorganization if any stock or securities received in such
merger, consolidation, recapitalization or reorganization are registered under
the Securities Exchange Act of 1934, as amended, by the agreement of all
parties or at such time as MT Partners and Mercury dispose of common stock
comprising more than 60% of their aggregate ownership as of May 1, 2000.

NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS

CAPITAL STRUCTURE

As of September 30, 2002, the Company was authorized to issue 200,000,000
shares of common stock, $0.001 par value per share, of which approximately
158,978,498 and 128,586,361 shares were issued at September 30, 2002 and
December 31, 2001, respectively; and 158,978,498 and 118,721,912 shares were
outstanding at September 30, 2002 and December 31, 2001, respectively. On
October 10, 2002, the Companys stockholders approved an amendment to the
Companys certificate of incorporation increasing the shares of common stock
that the Company is authorized to issue from 200,000,000 shares to 250,000,000
shares (see Note 7). The Company is also authorized to issue up to 50,000,000
shares of preferred stock in one or more series with such limitations and
restrictions as may be determined in its sole discretion, none of which are
issued and outstanding.

ISSUANCES OF COMMON STOCK

Private Placements

During the first nine months of 2002, the Company raised net proceeds of
$4,110,150 from private placements of 16,467,000 shares of unregistered common
stock at a weighted average price per share of $0.25. The Company issued
three-year warrants to purchase an aggregate of 300,000 shares of common stock
at $0.25 per share to Richard A. Gray, Jr., a director of the Company, for
services rendered to the Company.

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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS (continued)

Private Equity Line

On March 27, 2001, the Company and Ironhead Investments Inc. (Ironhead)
entered into a Common Stock Purchase Agreement (the Stock Purchase Agreement)
establishing a private equity line of credit. Ironhead has committed to
purchase from the Company shares of common stock at a maximum purchase price of
up to $20,000,000 over a twenty-month period beginning with the date on which
these shares were registered with the Securities and Exchange Commission. The
number of shares actually issuable by the Company and the price per share to be
paid by Ironhead are dependent upon a defined trading volume of the Companys
common stock and a defined average trading price (net of a 6% discount).
During the first nine months of 2002, the Company issued 2,643,586 shares of
common stock under the Stock Purchase Agreement at a weighted average price per
share of $0.3138, yielding proceeds of $783,065 (net of commissions and escrow
costs).

In connection with the equity line of credit, Ironhead and GKN Securities
(GKN) were issued five-year warrants to purchase an aggregate of 650,000
shares of the Companys common stock at an exercise price of $0.42 per share.
None of these warrants have been exercised as of September 30, 2002. The
Company engaged GKN as a sales agent to facilitate this transaction. GKN
receives a 5% placement fee for each draw under the equity line of credit.

The Company is prevented from issuing shares to Ironhead to the extent Ironhead
would beneficially own more than 9.9% of the then outstanding common stock.
Any resale of shares by Ironhead would reduce the number of shares beneficially
owned by Ironhead and would enable the Company to issue additional shares to
Ironhead without violating this condition.

Exercise Of Options And Warrants

During the first nine months of 2002, the Company issued 1,146,000 shares of
common stock upon exercise of options and warrants yielding proceeds of
$226,800.

STOCK OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES

During the first nine months of 2002, outside directors, officers and employees
were granted options to purchase common stock of the Company pursuant to the
MigraTEC, Inc. Long-Term Incentive Plan (the Plan). The terms of such grants
are summarized below:

|                         |                        |        |            |           |          |       |              |        |  |  |   |           | 
|------------------------ | ---------------------- | ------ | ---------- | --------- | -------- | ----- | ------------ | ------ |  |  | - | --------- | 
|                         |                        |        |            |           |          |       | Option Price
|                         |                        |        |            |           |          |       |             
|                         |                        |        | Number of  |           |          |       |              |        |  |  |  
|                         |                        |        | Underlying |           | Weighted |       |              |        | 
|Range of Exercise Prices |                        | Shares |            | Average   |          | Total
|                         |                        |        |            |           |          |      
|Granted at market value  |                        |        |            |           |          |       |              |        |  |  |   |          
|                         | Directors              |        |            |           |          |       |              |        |  |  |   |           | 
|                         | $0.20 to $0.33         |        |            | 1,500,000 |          |       | $            | 0.2867 |  |  | $ | 430,000   | 
|                         | Officers
and Employees |        |            |           |          |       |              |        |  |  |   |           | 
|                         | $0.22
to $0.34         |        |            | 8,566,168 |          |       | $            | 0.2791 |  |  | $ | 2,391,034 | 

On May 21, 2002, the Board of Directors amended the Plan to increase the number
of shares of common stock authorized and reserved for issuance under the Plan
from 14,000,000 shares to 21,900,000 shares, effective as of January 1, 2002.
The stockholders approved the amendment on October 10, 2002 (see Note 7).

In 2000, the Company recorded deferred stock compensation of $2,975,000 for the
difference between the exercise price and the market value of the Companys
common stock underlying certain options granted. This amount is being
amortized over the vesting period of the individual options, which vesting
periods vary from immediate to three years. Stock compensation expense charged
to operations was $512,812 and $557,396 for the first nine months of 2002 and
2001, respectively.

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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS (continued)

TOTAL OPTIONS AND WARRANTS OUTSTANDING

At September 30, 2002, the Company had options and warrants outstanding for the
purchase of shares of common stock as follows:

|               |                                   |  |            |            | 
|-------------- | --------------------------------- |  | ---------- | ---------- | 
|Warrants       |                                   |  | 1,055,143  |           
|Stock Options: |                                   |  |            |           
|               | Non-Affiliates                    |  |            | 290,000    | 
|               | Directors, Officers and Employees |  |            | 25,714,838 | 
|               |                                   |  |            |           
|Total          |                                   |  | 27,059,981 |           
|               |                                   |  |            |           

All of the warrants and stock options granted to non-affiliates are vested and
exercisable as of September 30, 2002.

NOTE 5. RELATED PARTY TRANSACTIONS

In connection with Mercury Fund No. 1, Ltd.s and MT Partners, L.P.s,
three-stage, $3,750,000 investment in the Company, completed May 1, 2000,
Mercury and MT Partners have the right to designate three directors to serve on
the Companys Board of Directors. Drew R. Johnson, William B. Patton, Jr. and
John W. White currently serve as the designees of Mercury and MT Partners. The
notes related to the investment were convertible into an aggregate of
30,000,000 shares of common stock, at the election of Mercury and MT Partners,
on the basis of one share of common stock for each $0.125 in principal amount
of the notes outstanding at the time of conversion. The notes did not accrue
interest. In connection with the notes, Mercury and MT Partners were issued
warrants to purchase an aggregate of 6,000,000 shares of common stock at an
exercise price of $0.20 per share. The warrants have been exercised in full
and the notes have been fully converted.

In March and May 2002, the Company issued three-year warrants to purchase an
aggregate of 300,000 shares of common stock at $0.25 per share to Richard A.
Gray, Jr., a director of the Company, for services rendered to the Company.

NOTE 6. COMMITMENTS AND CONTINGENCIES

On April 12, 2000, the Company executed a non-cancelable operating lease for
its office facility for a term of 39 months beginning May 1, 2000. This lease
was modified on November 16, 2000 to increase leased space and extend the term
of the lease through February 2004. The modified lease provides for a monthly
base rent of $18,720. At the end of the lease term, the Company has the right
to renew the lease for an additional 60 months at the then prevailing rental
rates. The following is a summary of future base rents as of September 30,
2002.

|                          |  |        |         | 
|------------------------- |  | ------ | ------- | 
|Year ending September 30, |  | Amount
|                          |  |       
|2003                      |  | $      | 224,640 | 
|2004                      |  |        | 93,600  | 
|                          |  |        |         | 
|                          |  | $      | 318,240 | 
|                          |  |        |         | 

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MIGRATEC, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

NOTE 6. COMMITMENTS AND CONTINGENCIES (continued)

On February 20, 2002, the Company executed a non-cancelable capital lease for
office equipment for a term of 60 months. The following is a summary of future
minimum lease payments together with the present value of the net minimum lease
payments as of September 30, 2002.

|                                            |  |        |        |  
|------------------------------------------- |  | ------ | ------ | -
|Year ending September 30,                   |  | Amount
|                                            |  |       
|2003                                        |  | $      | 3,541  |  
|2004                                        |  |        | 3,541  |  
|2005                                        |  |        | 3,541  |  
|2006                                        |  |        | 3,541  |  
|2007                                        |  |        | 1,476  |  
|                                            |  |        |        |  
|Total minimum lease payments                |  |        | 15,640 |  
|Less: Amount representing
interest          |  |        | (4,065 | )
|                                            |  |        |        |  
|Present value of net minimum
lease payments |  | $      | 11,575 |  
|                                            |  |        |        |  

On July 24, 1998, Carroll Independent School District filed suit against the
Company in District Court, Tarrant County, Texas, seeking payment for business
and personal property taxes (Carroll Independent School District v. One Up
Corporation, Cause No. L-14690). Judgment was entered on January 27, 2000 for
Carroll ISD in the amount of $89,853, which included interest and court costs.

From time to time the Company is party to what it believes is routine
litigation and proceedings that may be considered as part of the ordinary
course of its business. Currently, the Company is not aware of any current or
pending litigation or proceedings that would have a material adverse effect on
the Companys business, results of operations or financial condition.

NOTE 7. SUBSEQUENT EVENT

On October 10, 2002, the Company held its 2002 Annual Meeting of Stockholders.
The stockholders approved an amendment to the Companys certificate of
incorporation increasing the number of shares of common stock, par value $0.001
per share, that the Company is authorized to issue from 200,000,000 shares to
250,000,000 shares. The stockholders also approved the amendment to the
MigraTEC, Inc. Long-Term Incentive Plan which increased the number of shares of
common stock, par value $0.001 per share, authorized and reserved for issuance
under the Plan from 14,000,000 shares to 21,900,000 shares.

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|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our consolidated financial
condition and results of operations for the three months ended September 30,
2002 and 2001 and the nine months ended September 30, 2002 and 2001,
respectively. It should be read in conjunction with our interim consolidated
financial statements and notes thereto included elsewhere in this report and
our Annual Report on Form 10-KSB for the year ended December 31, 2001.

A Note About Forward-Looking Statements

All statements, other than statements of historical fact, included in or
incorporated by reference into this report, are forward-looking statements.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as may, will, expect, intend,
estimate, anticipate, plan, such, or believe. The forward-looking
statements included in this report are based on current expectations that
involve numerous risks and uncertainties. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive, and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which
are beyond our control.

Based upon changing conditions, should any one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, estimated or projected.
Although management believes that the expectations reflected in such
forward-looking statements are accurate, no assurance can be given that such
expectations will occur. In light of the significant uncertainties inherent in
the forward-looking statements included in this report, the inclusion of such
information should not be regarded as representation by us, management or any
other person that our objectives will be achieved.

Key factors that could cause actual results to differ materially from our
expectations, estimates of costs, projected results or anticipated results
include, but are not limited to, the following risks:



| |  |  | we may not be able to generate sufficient cash flows to fund
operations or to obtain additional financing on favorable terms;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------
|
| |  |  | we may not be able to
effectively penetrate our target markets for migration products and
services;                          
|
| |  |  | we may not be able to successfully develop and/or protect our technology;                                                    
|
| |  |  | we may not be able to effectively control increases in expenses associated with sales growth and other costs;                
|
| |  |  | management may not be able to successfully implement our business plan and sales strategy;                                   
|
| |  |  | we may not be able to attract and retain a skilled and cohesive management group; and                                        
|
| |  |  | unfavorable changes in economic and industry conditions and regulatory requirements may develop.                             

Critical Accounting Policies And Estimates

General

Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with generally accepted accounting principles. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate our estimates and judgments, including those
related to revenue recognition, bad debts, capitalization of costs to develop
software for sale, and income taxes. We base our estimates on historical
experience and on various other assumptions that management believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

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We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.

Revenue Recognition

Our current revenues consist of services revenues, software license fees
and software maintenance and support revenues.

Services are usually provided under time and materials contracts and
agreed upon fixed or variable fee arrangements. Revenues from services under
time and materials contracts and for training are recognized as services are
performed. Revenues from agreed upon fee arrangements typically have
short-term durations and are recognized upon completion and acceptance by the
customer.

Revenues from software licenses and software maintenance and support
services are recognized in accordance with American Institute of Certified
Public Accountants Statement of Position 97-2 Software Revenue Recognition.

We license software under software license agreements. License fee
revenues are recognized when an agreement is in force, the product has been
delivered, the license fee is fixed or determinable, no significant production
modification or customization of the software is required and collectibility is
reasonably assured. Total fees under multiple element arrangements are
allocated to individual elements based on vendor-specific objective evidence of
fair value, principally determined on values when sold separately. License fee
revenue for certain application development and data access technology is
recognized upon direct shipment to the end user. If collectibility is not
considered probable, revenue is recognized when the fee is collected.

Software maintenance and support revenues are recognized ratably over the
term of the related agreements, which in most cases is one year.

Bad Debt

We maintain allowances for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. If
the financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required.

Costs of Software Developed for Sale

We expense or capitalize development costs of software to be sold in
accordance with Statement of Financial Accounting Standards No. 86, Accounting
for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed.
These development costs are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized
until the product is available for general release to customers. During 2001
and the first nine months of 2002, costs related to development were included
in research and development costs. No costs were capitalized in 2001 or the
first nine months of 2002. Other research and development expenditures relate
to our on going efforts to extend our product lines and evaluate future
products, such as computer language conversion software which would convert
code written in one computer language to another (e.g., from C and C++ to
Java or managed C#).

Income Taxes

We record a valuation allowance to reduce our deferred tax assets to the
amount that is more likely than not to be realized. At September 30, 2002, a
full valuation allowance has been recorded. While we have considered future
taxable income and ongoing prudent and feasible tax planning strategies in
assessing the need for the valuation allowance, in the event we were to
determine that we would be able to realize our deferred tax assets in the
future in excess of our net recorded amount, an adjustment to the deferred tax
asset would increase income in the period such determination was made.

Results of Operations

Management believes that the net loss for the nine months ended September
30, 2002 was primarily due to the limited growth in demand for software
migration technology and services, which, in managements opinion, is a
reflection of the dramatic slowdown in all aspects of information technology
(IT) spending that is currently impacting numerous segments of the domestic
economy. Management believes the continued slow adoption of industry standard
64-bit

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##### Table of Contents



computing is a contributing factor as well. We believe this slowdown can be
attributed, in part, to companies taking short-term cash preservation actions.
Nonetheless, in our opinion, in the medium and long term, demand for software
migration technology and services will outgrow the IT market as a whole, as
such technology and services become more critical to reductions in IT
infrastructure costs sought by corporate leaders.

During the third quarter of 2002 we made solid progress. We realized the
first revenue from our strategic relationship with HP, and took significant
steps toward realizing revenue from other strategic accounts. We started the
quarter by adding key talent to our Board of Directors with the July 1, 2002
appointment of John W. White, the former Chief Information Officer of both
Compaq and Texas Instruments, to our Board of Directors. Knowing that
increased market visibility will be critical to achieving our market potential,
during the quarter we added the Bohle Company, a Los Angeles based,
high-technology public and market relations firm, to our team. Their mission
is to increase our profile in the media, especially with the technology press,
and with potential customers and strategic partners. We look forward to
working closely with the Bohle Company to ensure our market success. We also
participated in four of the industrys leading trade shows and conferences,
including Linux World in San Francisco, Microsofts Server Developers
Conference in Redmond, AMDs Developers Conference in Sunnyvale and HPs HP
World Conference in Los Angeles. These shows all proved to be great
opportunities to increase industry awareness of our products, to network and to
strengthen and deepen our strategic relationships. Most importantly, however,
during the third quarter, we believe the market continued to validate three key
aspects of our corporate strategy.

First, the transition to low total cost of ownership (TCO) platforms (a
transition that is important to our strategy and which only a year ago did not
receive much attention), is rapidly moving to the forefront of IT news and, in
our opinion, is regarded as a very important element of the corporate worlds
strategy for reducing IT costs. As a result, we are focusing our attention on
the corporate world and more specifically, the financial services sector, led
by the large Wall Street firms, and the public sector, led by the federal
government. We expect the demand for migration products and services to
increase dramatically as these sectors begin to successfully transition to low
TCO platforms.

Second, we are beginning to reap benefits from our leveraged sales model
which focuses on the original equipment manufacturers (OEMs) whose future
depends on successfully penetrating the enterprise computing market. These
OEMs are increasingly introducing us to their prime customers for pilot
projects. While the number and frequency of such pilot projects continues to
fall short of our expectations (another reflection, in managements opinion, of
the overall IT spending environment), we are confident, and believe our OEM
partners are as well, that the pilot phase is key to demonstrating to the
corporate world that migration of the enterprise environment to lower TCO
platforms is a viable way to achieve the dramatically decreased costs offered
by standardizing on lower TCO platforms. Because the majority of custom code
resides in the corporate world, successful pilot projects are critical to
achieving high volumes of corporate custom applications.

Third, our strategic approach of diversifying our focus to include
multiple chip technologies and operating environments is proving to be
beneficial as well. For instance, at the enterprise level, we facilitate
migrations from Unix to both Windows and Linux to accommodate the use of
various operating systems. With respect to hardware, we have built solid
relationships with Intel and, as announced in early July 2000, AMD. This is
driven by our strategic assumption that low volume, high cost proprietary
Reduced Instruction Set Computing (RISC) based chips would be displaced in
high-end servers by increasingly powerful, high volume and therefore
significantly lower cost, industry standard chips made primarily by Intel and
AMD.

Feedback from the market is clear to us:



| |  |  | Reducing TCO is imperative for the corporate IT world.                                                             
| | - |  | -------------------------------------------------------------------------------------------------------------------
|
| |  |  | Standardizing on industry standard technology is an important element in realizing those savings.                  
|
| |  |  | Standardization cannot take place unless large amounts of custom
software applications can be migrated
efficiently.
|
| |  |  | The process for migrating must be manageable, predictable and cost
effective.                                      

The OEMs with which we have been developing relationships have indicated
to us that we continue to be the only organization of which they are aware that
has the technology and methodologies available today that can provide a roadmap
for the migration paths that we support and make the migrations manageable, predictable and cost effective.

16



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Additional highlights for the third quarter of 2002 include the following:



| |  |  | In addition to signing a revenue producing agreement with HP, we
successfully completed a migration project for a local Fortune 500
company.                                                                                                                 
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In September 2002 we were a featured company at the Red Chip Partners
investment conference in New York City. We are encouraged by the
feedback received from the conference and expect to take a higher
profile in the capital markets in the coming months.
|
| |  |  | On the technology front, we introduced two new versions of our
industry leading 64Express software.
These two versions (64Express for Opteron and 64Express for Itanium 2)
will help us more effectively serve the 32-bit to 64-bit market as it
develops.

We continue to expect that in excess of ninety percent of our 2002 revenue
will be cross-platform as opposed to 32-bit to 64-bit migration and that
revenue from pilot projects, consulting services and partner enablement will
outpace revenue from software license sales by about the same margin. The
point at which we have positive cash flow continues to be dependent on the rate
at which the IT sector recovers and projects aimed at lowering IT operating
costs are approved.

In summary, despite the downturn in the economy and technology markets and
the attendant delays in revenue production, as discussed at our 2002 Annual
Meeting of Stockholders, our sales pipeline is expanding and management
believes we are positioned for significant revenue increases in 2003.

Three Months Ended September 30, 2002 Compared To Three Months Ended September
30, 2001

Revenues

During the quarter ended September 30, 2002, our revenues consisted of
services and software license revenues. Revenues in the third quarter of 2002
increased to $163,454, as compared to $54,150 for the third quarter of 2001.
Revenues in the third quarter of 2002 consisted of $138,454 and $25,000 from
services and software licenses, respectively, whereas, in the third quarter of
2001 revenues consisted of services and software maintenance fees of $53,500
and $650, respectively. Services revenue in the third quarter of 2002
consisted of revenues from SRT Consulting, Inc., Red Hat and
NTT Comware. Software license revenues resulted from the sale of a license to
H-P. Services revenues in the third quarter of 2001 resulted from
agreements with Pivotech Systems, Inc. and Unisys Corporation.

Costs And Expenses

Our total costs and expenses increased 25% to $1,598,672 during the third
quarter of 2002, as compared to $1,274,159 for the third quarter of 2001.

The majority of our costs and expenses are related to personnel costs.
Our operating expenses were higher in the third quarter of 2002 as compared to
the third quarter of 2001 because we employed an average of 37 individuals
(including five interns and a marketing consultant) during the third quarter of
2002, as compared to an average of 30 individuals in the third quarter of 2001.

Costs of revenues during the third quarter of 2002 were $120,700, as
compared to $44,725 for the third quarter of 2001. During the third quarter of
2002, three services engagements were either in process or completed, whereas
we had only two service engagements during the third quarter of 2001.

Selling and marketing expenses increased 45% to $412,704 during the third
quarter of 2002, as compared to $285,601 for the third quarter of 2001.
Salaries, related employee benefits and subcontractor fees increased an
aggregate of $85,770 for the third quarter of 2002 as compared to the third
quarter of 2001. These increases can be attributed primarily to the fact that
during the third quarter of 2002, we hired additional selling and marketing
employees in anticipation of growing demand for our products and services.

Research and development expenses increased 6% to $376,276 during the
third quarter of 2002, as compared to $353,470 for the third quarter of 2001.
This increase is due primarily to normal salary increases.

General and administrative expenses increased to $688,992 during the third
quarter of 2002, as compared to $590,363 for the third quarter of 2001. This
increase resulted from increases in personnel costs, general insurance costs
and legal fees. Additionally, we have incurred costs in connection with the 2002
Annual Meeting of Stockholders, whereas in 2001, the Company did not incur any
such costs.

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In 2000, we issued options to purchase shares of common stock to
directors, officers and employees, some of which have exercise prices less than
the fair market value at the date of grant. The aggregate excess of the fair
market value as compared to the exercise price at the date of grant was
deferred and is being amortized as compensation expense over the respective
vesting periods. The amount amortized as compensation expense in the third
quarter of 2002 and 2001 was $170,938. This compensation expense was allocated
$160,938 and $10,000 to general and administrative costs and research and
development costs, respectively, in the third quarter of 2002 and 2001.

Interest and Financing Expense

Our interest and financing expense decreased to $2,898 during the third
quarter of 2002, as compared to $71,424 for the third quarter of 2001.
Interest expense decreased to $2,898 during the third quarter of 2002, as
compared to $19,824 for the third quarter of 2001 due to the fact that we had a
greater amount of interest bearing debt outstanding with interest rates ranging
from 4.5% to 15% in the third quarter of 2001 as compared to 2002.

Financing fees were $51,600 during the third quarter of 2001, as compared
to $0 for the third quarter of 2002. Financing fees during the third quarter
of 2001 included $44,000 incurred in connection with options granted to EAI,
and $7,600 incurred in connection with warrants granted to The Glebe Group.

Other Income

Other income in the third quarter of 2002 increased to $8,565, as compared
to $6,337 in the third quarter of 2001. In the third quarter of 2002, we were
able to invest in short-term interest-bearing investments using funds received
from private equity transactions and the exercise of options and warrants which
occurred during the first nine months of 2002, whereas, during the first nine
months of 2001, we did not have excess cash to invest.

Provision For Income Taxes

As a result of operating losses for 2002 and 2001, we did not incur a
federal income tax obligation for the quarters ended September 30, 2002 and
2001. No tax benefit was recorded during the third quarters of 2002 and 2001
due to the uncertainty that sufficient taxable income will be generated during
the carry forward period to realize the benefit of the net deferred tax asset.
The carry forward period will expire in 2018.

Net Loss

For the quarter ended September 30, 2002, we incurred a net loss of
$1,429,551, or $0.01 per share, as compared to a net loss of $1,285,096, or
$0.01 per share, for the quarter ended September 30, 2001.

Nine Months Ended September 30, 2002 Compared To Nine Months Ended September
30, 2001

Revenues

In the first nine months of 2002, our revenues consisted of services and
software license revenues. For the nine months ended September 30, 2002, our
revenues increased to $332,275, as compared to $183,783 for the nine months
ended September 30, 2001. Revenues in the first nine months of 2002 consisted
of $297,275 and $35,000 from services and software licenses, respectively,
whereas, in the first nine months of 2001 revenues consisted of services and
software maintenance fees of $181,833 and $1,950, respectively. Services
revenue in the first nine months of 2002 consisted of revenues from
agreements with SRT Consulting, Inc., Sector 7, USA, Inc., Microsoft
Corporation, Red Hat and NTT Comware. Software license revenues resulted from
the sale of licenses to AMD and H-P. Services revenues in the first nine
months of 2001 resulted from agreements with Dell Computer Corporation, Labtec,
Inc., Unisys Corporation and Pivotech Systems, Inc.

Costs And Expenses

Our total costs and expenses decreased 5% to $4,759,830 during the first
nine months of 2002, as compared to $4,998,604 for the first nine months of
2001.

The majority of our costs and expenses are related to personnel costs.
Our operating expenses were lower in the first nine months of 2002 as compared
to the first nine months of 2001 because we employed an average of 33
individuals
(including five interns and a marketing consultant engaged in the third
quarter) during the first nine months of 2002, as compared to an average of 37
individuals in the first nine months of 2001.

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Costs of revenues during the first nine months of 2002 were $267,665, as
compared to $51,408 for the first nine months of 2001. During the first nine
months of 2002, five services engagements were either in process or completed,
whereas we had four service engagements during the first nine months of 2001.

Selling and marketing expenses decreased 15% to $1,088,141 during the
first nine months of 2002, as compared to $1,277,676 for the first nine months
of 2001. Advertising and marketing costs decreased $219,126 in the first nine
months of 2002 as compared to the first nine months of 2001. We anticipated
slower market demand for our products in 2001 and reduced general advertising
and marketing costs until the third quarter of 2002 at which time selling and
marketing expenses increased. This increase was in anticipation of a growing
demand for our products and services.

Research and development expenses decreased 29% to $1,094,648 during the
first nine months of 2002, as compared to $1,541,934 for the first nine months
of 2001. This decrease is due primarily to our initial migration products
becoming more fully developed, enabling us to reduce our research and
development staff by ten individuals in May 2001. This represented a 48%
decrease in research and development staffing levels. In future periods we
will continue to incur research and development expenses in order to expand our
current product line and to continue to develop new products.

General and administrative expenses increased 9% to $2,309,376 during the
first nine months of 2002, as compared to $2,127,586 for the first nine months
of 2001. This increase resulted from increases in personnel costs, general
insurance costs and legal fees. Additionally, we have incurred costs in
connection with the 2002 Annual Meeting of Stockholders, whereas in 2001, the
Company did not incur any such costs.

In 2000, we issued options to purchase shares of common stock to
directors, officers and employees, some of which have exercise prices less than
the fair market value at the date of grant. The aggregate excess of the fair
market value as compared to the exercise price at the date of grant was
deferred and is being amortized as compensation expense over the respective
vesting periods. The amount amortized as compensation expense in the first
nine months of 2002 was $512,812 as compared to $557,396 for the first nine
months of 2001. This compensation expense was allocated $482,812 and $30,000
to general and administrative and research and development costs, respectively,
in the first nine months of 2002, whereas, in the first nine months of 2001,
such compensation expense was allocated $482,813, $44,583 and $30,000 to
general and administrative, selling and marketing, and research and development
costs, respectively.

Interest and Financing Expenses

Our interest and financing expenses decreased to $9,312 during the first
nine months of 2002, as compared to $172,639 for the first nine months of 2001.
Interest expense decreased to $9,312 during the first nine months of 2002, as
compared to $56,303 for the first nine months of 2001, due to the fact that we
had a greater amount of interest bearing debt outstanding with interest rates
ranging from 4.5% to 15% in 2001 as compared to 2002.

Financing fees decreased to $0 during the first nine months of 2002, as
compared to $116,336 for the first nine months of 2001, due to additional
working capital requirements in 2001.

Other Income

Other income in the first nine months of 2002 increased to $21,832, as
compared to $7,043 in the first nine months of 2001. In the first nine months
of 2002, we were able to invest in short-term interest-bearing investments
using funds received from private equity transactions and the exercise of
options and warrants which occurred in the first nine months of 2002, whereas,
in the first nine months of 2001, we did not have excess cash to invest.

Provision For Income Taxes

As a result of operating losses for 2002 and 2001, we did not incur a
federal income tax obligation for the nine months ended September 30, 2002 and
2001. No tax benefit was recorded during the first nine months of 2002 or 2001
due to the uncertainty that sufficient taxable income will be generated during
the carry forward period to realize the benefit of the net deferred tax asset.
The carry forward period will expire in 2018.

Net Loss

For the nine months ended September 30, 2002, we incurred a net loss of
$4,415,035, or $0.03 per share, as compared to a net loss of $4,980,417, or
$0.05 per share, for the nine months ended September 30, 2001.

19



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##### Table of Contents



Capital Raised in 2002

During the first nine months of 2002, we raised approximately $5,120,015
from the following sources:



| |  |  | We issued 2,643,586 shares of unregistered common stock
under the Common Stock Purchase Agreement with Ironhead
Investments Inc. (see Liquity and Capital Resources). These
shares were sold in five transactions and raised $783,065 (net of
commissions and escrow costs of $46,480) with a weighted average
price per share of $0.3138.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | We issued 1,146,000 shares of common stock upon
exercise of previously issued options and warrants yielding
proceeds of $226,800 with a weighted average price per share of
$0.20.                                                                                                                                                        
|
| |  |  | We issued 16,467,000 shares of unregistered common
stock in connection with completed private placements yielding
net proceeds of $4,110,150 with a weighted average price per
share of $0.25.                                                                                                                                            

Potential Dilution

The following chart demonstrates the potential dilution of our issued and
outstanding common stock as of September 30, 2002.

|                         |                                   |  |             |            |  |   |                           |        | 
|------------------------ | --------------------------------- |  | ----------- | ---------- |  | - | ------------------------- | ------ | 
|                         |                                   |  |             |            |  |   | Weighted average exercise
|                         |                                   |  |             |            |  |   | price per share          
|                         |                                   |  |             |            |  |   |                          
|Common stock outstanding |                                   |  | 158,978,498 |            |  |   |                           |       
|Warrants                 |                                   |  | 1,055,143   |            |  | $ | 0.3633                    |       
|Stock Options:           |                                   |  |             |            |  |   |                           |       
|                         | Non-Affiliates                    |  |             | 290,000    |  |   |                           | 0.6448 | 
|                         | Directors, Officers and Employees |  |             | 25,714,838 |  |   |                           | 0.3202 | 
|                         |                                   |  |             |            |  |   |                           |       
|                         |                                   |  | 186,038,479 |            |  |   |                           |       
|                         |                                   |  |             |            |  |   |                           |       

Additional dilution may result from the exercise of stock options pursuant to
additional stock option grants under the MigraTEC, Inc. Long-Term Incentive
Plan. As of September 30, 2002, options to purchase 608,976 shares of common
stock remain issuable under the plan.

Liquidity and Capital Resources

For the first nine months of 2002, the net cash used in operating
activities of $3,858,956 resulted from our net loss of $4,415,035, which
included non-cash charges for depreciation, and amortization of $71,048 and
charges for deferred stock compensation of $512,812. For the first nine months
of 2001, the net cash used in operating activities of $3,993,963 resulted from
our net loss of $4,980,417, which included non-cash charges for depreciation
and amortization of $91,886 and deferred stock compensation of $557,396.

As of September 30, 2002, we had cash of $1,744,219 and $89,167 in
outstanding accounts receivable, compared to cash of $649,302 and $15,000 in
outstanding accounts receivable at December 31, 2001.

20



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##### Table of Contents



As of September 30, 2002, our contractual cash obligations and the periods
in which payments under such cash obligations are due are as follows:

|                                   |  |                        |         |      |  |           |         |       |  |   |         |         |  |   |       | 
|---------------------------------- |  | ---------------------- | ------- | ---- |  | --------- | ------- | ----- |  | - | ------- | ------- |  | - | ----- | 
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  |                        |         |      |  | Less      |         |       |  |   |         |         |  |  
|                                   |  |                        |         |      |  | than 1    |         |       |  |   |         | After 3
|Contractual Obligations            |  | Total                  |         | year |  | 1-3 years |         | years
|                                   |  |                        |         |      |  |           |         |      
|Long -Term Debt                    |  | $                      | 12,261  |      |  | $         | 11,027  |       |  | $ | 1,234   |         |  | $ |      | 
|Capital Lease Obligations          |  |                        | 11,575  |      |  |           | 2,029   |       |  |   | 8,122   |         |  |   | 1,424 | 
|Operating Leases                   |  |                        | 318,240 |      |  |           | 224,640 |       |  |   | 93,600  |         |  |   |      | 
|                                   |  |                        |         |      |  |           |         |       |  |   |         |         |  |   |       | 
|Total Contractual Cash Obligations |  | $                      | 342,076 |      |  | $         | 237,696 |       |  | $ | 102,956 |         |  | $ | 1,424 | 
|                                   |  |                        |         |      |  |           |         |       |  |   |         |         |  |   |       | 

During the nine months ended September 30, 2002, we had net cash provided
by financing activities of $4,998,613 consisting of $5,120,015 in connection
with the issuance of common stock. The cash proceeds were offset by $121,402
expended for the repayment of principal of notes payable and an obligation
under a capital lease. During the nine months ended September 30, 2001, we had
net cash provided by financing activities of $4,578,698, consisting of proceeds
from notes payable in the aggregate amount of $450,000 and $4,816,869 in
connection with the issuance of common stock. The cash proceeds were offset by
$688,171 expended for the repayment of principal of notes payable and an
obligation under a capital lease.

On March 27, 2001, we entered into a Common Stock Purchase Agreement with
Ironhead Investments Inc. establishing a private equity line of credit.
Ironhead has committed to purchase from us shares of common stock at a maximum
purchase price of up to $20,000,000 over a twenty-month period beginning with
the date on which these shares were registered with the Securities and Exchange
Commission. The number of shares actually issuable by us and the price per
share to be paid by Ironhead are dependent upon a defined trading volume of our
common stock and a defined average trading price (net of a 6% discount).
During the first nine months of 2002, we raised proceeds of $783,065 (net of
commissions and escrow costs) under this arrangement through the sale of
2,643,586 shares of common stock at a weighted average price per share of
$0.3138.

In connection with the private equity line of credit, Ironhead and GKN
Securities were issued five-year warrants to purchase an aggregate of 650,000
shares of our common stock at an exercise price of $0.42 per share. We engaged
GKN as an agent to facilitate this transaction. GKN receives a 5% placement
fee for each draw under the equity line of credit.

We are prevented from issuing shares to Ironhead to the extent Ironhead
would beneficially own more than 9.9% of the then outstanding common stock.
Any resale of shares by Ironhead would reduce the number of shares beneficially
owned by Ironhead and would enable us to issue additional shares to Ironhead
without violating this condition.

We had substantial operating losses during the first nine months of 2002
and the prior three years. For the years ended December 31, 2001, 2000 and
1999, we incurred net losses of $5,863,017, $10,193,130 and $4,184,078,
respectively. At September 30, 2002, we had an accumulated deficit of
$32,109,369.

We may raise additional capital to fund expanded sales and marketing
efforts and other normal operating costs. We may need additional capital over
the next 12 months to further develop and aggressively market our new products
and services. Results of operations in the future will be influenced by
numerous factors including, but not limited to:



| |  |  | internal technological developments and those of our technology and marketing associates;                     
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | the continued and accelerated movement of the IT industry to low TCO platforms;                               
|
| |  |  | the successful introduction and acceptance of Intels 64-bit
chips, Itanium, Itanium 2 and AMDs Opteron chip;
|
| |  |  | rapid and wide-spread adoption of automated migration technology;                                             

21



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| |  |  | further development and protection of our proprietary software products and services;     
| | - |  | ------------------------------------------------------------------------------------------
|
| |  |  | expansion of our marketing program and market acceptance of our products and services;    
|
| |  |  | capacity to further identify us as a provider of migration products;                      
|
| |  |  | our ability to control increases in expenses associated with sales growth and other costs;
|
| |  |  | the availability of substantial additional funding; and                                   
|
| |  |  | our ability to attract and maintain a skilled and cohesive management group.              

Our continued existence and plans for future growth are dependent, in
part, upon our ability to obtain the capital necessary to operate, primarily
through the generation of revenue and supplemented through the issuance of
additional debt or equity. If we are not able to generate sufficient revenues
and cash flows in the near term or obtain additional or alternative funding, we
will be unable to continue as a going concern. During the nine months ended
September 30, 2002, we have completed private placements of 16,467,000 shares
of unregistered common stock yielding net proceeds of $4,110,150, issued
1,146,000 shares of common stock upon exercise of options and warrants yielding
proceeds of $226,800 and issued 2,643,586 shares of common stock in connection
with the private equity line yielding proceeds of $783,065 (net of commissions
and escrow costs). As a result of these transactions, we believe that funds
will be available to meet our obligations for at least twelve months from the
date of our most recent balance sheet. Beyond that, in the event we are unable
to obtain additional capital from either profitable operations or capital
sources, we may be forced to significantly reduce or discontinue our current
operations.




|        |  |                        
|------- |  | -----------------------
|ITEM 3. |  | CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of filing of this report, we
carried out an evaluation, under the supervision and with the participation of
management, including our Chief Executive and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Exchange Act. Based upon that
evaluation, our Chief Executive and Chief Financial Officer concluded that our
disclosure controls and procedures were effective in timely providing him with
material information relating to us (including our consolidated subsidiary)
required to be included in our Exchange Act filings.

There have been no significant changes in our internal controls or in
other factors which could significantly affect internal controls subsequent to
the date we carried out our evaluation.

22



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##### Table of Contents






PART II  OTHER INFORMATION




|        |  |                      
|------- |  | ---------------------
|ITEM 2. |  | CHANGES IN SECURITIES

During the three months ended September 30, 2002, we sold our unregistered
securities in the transaction described below.

Between July 2, 2002 and September 20, 2002, we issued an aggregate of
607,067 shares of common stock at a weighted average price of $0.2958 per share
to one investor under the private equity line. These shares are registered for
resale under our Registration Statement on Form SB-2 (File No. 333-57830). We
issued such securities in transactions not involving a public offering in
reliance upon the exemption set forth in Section 4(2) of the Securities Act and
the safe harbor provided by Rule 506 of Regulation D promulgated thereunder.




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

We held our 2002 Annual Meeting of Stockholders on October 10, 2002. The
matters voted upon at the meeting were as follows:



|(i) |  | The election of six directors to serve until the next annual meeting of
stockholders or until their successors are elected and qualified. The
number of votes cast for, the number of votes withheld and the number of
broker non-votes with respect to the election of each nominee, were as
follows:
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                       |  |     |             |                          |  |  |           |  |  |  |   | 
|---------------------- |  | --- | ----------- | ------------------------ |  |  | --------- |  |  |  | - | 
|NAME                   |  | FOR |             | AGAINST/ABSTAIN/WITHHOLD
|                       |  |     |             |                          | 
|William B. Patton, Jr. |  |     | 139,684,206 |                          |  |  | 1,028,860 |  |  |  |  | 
|W. Curtis Overstreet   |  |     | 139,631,621 |                          |  |  | 1,081,445 |  |  |  |  | 
|Drew R. Johnson        |  |     | 138,757,780 |                          |  |  | 1,955,286 |  |  |  |  | 
|T. Ulrich Brechbühl    |  |     | 139,589,621 |                          |  |  | 1,123,445 |  |  |  |  | 
|John W. White          |  |     | 139,697,406 |                          |  |  | 1,015,660 |  |  |  |  | 
|Richard
A. Gray, Jr.   |  |     | 139,705,291 |                          |  |  | 1,007,775 |  |  |  |   | 

The stockholders elected each of the nominees to our Board of Directors.



|(ii) |  | The approval of the amendment to our certificate of incorporation
increasing the number of shares of common stock, par value $0.001 per
share, that we are authorized to issue from 200,000,000 shares to
250,000,000 shares. The number of votes cast for, the number of votes
cast against, the number of abstentions and the number of broker non-votes
with respect to such matter were as follows:
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |     |             |         |  |         |           |                  |  |  |         |  |  |  |   | 
| |  | --- | ----------- | ------- |  | ------- | --------- | ---------------- |  |  | ------- |  |  |  | - | 
| |  | FOR |             | AGAINST |  | ABSTAIN |           | BROKER NON-VOTES
| |  |     |             |         |  |         |           |                 
| |  |     | 135,574,686 |         |  |         | 4,786,834 |                  |  |  | 351,546 |  |  |  |  | 

The stockholders approved the amendment to our certificate of incorporation.



|(iii) |  | The approval of the amendment to the MigraTEC, Inc. Long-Term Incentive
Plan, increasing the number of shares of our common stock, par value
$0.001 per share, authorized and reserved for issuance under the plan from
14,000,000 shares to 21,900,000 shares. The number of votes cast for, the
number of votes cast against, the number of abstentions and the number of
broker non-votes with respect to such matter were as follows:
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |     |             |         |  |         |           |                  |  |  |         |  |  |  |   | 
| |  | --- | ----------- | ------- |  | ------- | --------- | ---------------- |  |  | ------- |  |  |  | - | 
| |  | FOR |             | AGAINST |  | ABSTAIN |           | BROKER NON-VOTES
| |  |     |             |         |  |         |           |                 
| |  |     | 134,170,223 |         |  |         | 6,216,914 |                  |  |  | 325,929 |  |  |  |  | 

The stockholders approved the amendment to the MigraTEC, Inc. Long-Term
Incentive Plan.

23



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##### Table of Contents






|        |  |                                 
|------- |  | --------------------------------
|ITEM 6. |  | EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                            
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The exhibits required to be furnished pursuant to this Item 6(a) are listed
in the Exhibit Table below.                                                                                                                                                                                                                                                             
|   
|(b) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | On August 14, 2002, we filed a report on Form 8-K reporting the submission to
the SEC of the certification by our chief executive and chief financial
officers, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, of our report on Form 10-QSB for the
quarter ended June 30, 2002 filed on August 14, 2002.

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##### Table of Contents



EXHIBIT TABLE

|        |  |                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                  
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                  
|3.1     |  | Certificate of Incorporation (incorporated herein by reference to
Exhibit 3.1 to MigraTECs registration statement on Form SB-2 filed
August 31, 2000, File No. 333-44946).                                                                                                                      
|3.2     |  | Certificate of Amendment to MigraTECs Certificate of Incorporation
(filed herewith).                                                                                                                                                                                                            
|3.3     |  | Bylaws (incorporated herein by reference to Exhibit 3.2 to MigraTECs
registration statement on Form SB-2 filed August 31, 2000, File No.
333-44946).                                                                                                                                            
|4.1     |  | Form of Common Stock Certificate (incorporated herein by reference to
Exhibit 4.1 to Amendment No. 1 to MigraTECs registration statement on
Form SB-2 filed November 13, 2000, File No. 333-44946).                                                                                             
|10.1    |  | Employment Agreement between MigraTEC, Inc. and W. Curtis Overstreet
dated, April 10, 1997 (incorporated herein by reference to Exhibit 10.3
to Amendment No. 1 to MigraTECs registration statement on Form SB-2
filed May 7, 1999, File No. 333-65093).                                        
|10.2    |  | Employment Agreement between MigraTEC, Inc. and Rick J. Johnson,
dated July 1, 1997 (incorporated herein by reference to Exhibit 10.5 to
Amendment No. 1 to MigraTECs registration statement on Form SB-2 filed
May 7, 1999, File No. 333-65093).                                               
|10.3    |  | MigraTEC, Inc. 1999 Stock Option Plan (incorporated herein by
reference to Exhibit 4 to MigraTECs Form S-8 filed March 12, 1999,
File No. 333-74309).                                                                                                                                           
|10.4    |  | Stock Option Agreements between MigraTEC, Inc. and each of Rick J.
Johnson and Richard A. Gray, Jr., dated as of May 1, 1998 (incorporated
herein by reference to Exhibit 1 to MigraTECs Form S-8 filed October
19, 1999, File No. 333-89291).                                                  
|10.5    |  | Letter Agreements regarding Modification of Stock Option Agreements
between MigraTEC, Inc. and each of Rick J. Johnson and Richard A. Gray,
Jr., dated as of September 7, 1999 (incorporated herein by reference to
Exhibit 2 to MigraTECs Form S-8 filed October 19, 1999, File No.
333-89291).
|10.6    |  | Stock Option Agreement between MigraTEC, Inc. and EAI Partners, Inc.,
dated as of August 6, 1999 (incorporated herein by reference to Exhibit
10.5 to Amendment No. 1 to MigraTECs registration statement on Form
SB-2 filed November 13, 2000, File No. 333-44946).                            
|10.7    |  | Form of Nonqualified Stock Option Agreement between MigraTEC, Inc.
and Richard A. Gray, Jr., dated as of January 31, 2000 (incorporated
herein by reference to Exhibit 10.8 to Amendment No. 1 to MigraTECs
registration statement on Form SB-2 filed November 13, 2000, File No.
333-44946).   
|10.8    |  | MigraTEC, Inc. Long-Term Incentive Plan, as amended and restated
incorporated herein by reference to Exhibit 10.8 to MigraTECs Form
10-QSB for the quarter ended June 30, 2002 filed August 14, 2002, File
No. 000-28220).                                                                      
|10.9    |  | Form of Stock Option Agreement pursuant to the MigraTEC, Inc.
Long-Term Incentive Plan, as amended and restated (incorporated herein
by reference to Exhibit 99.2 to MigraTECs Form S-8 filed November 6,
2000, File No. 333-49398).                                                            
|10.10   |  | Warrant Agreement between MigraTEC, Inc. and MT Partners, L.P. and
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.9 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).            

25



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.11   |  | Form of Warrant to MT Partners, L.P. and Mercury Fund No. 1, Ltd.
(incorporated herein by reference to Exhibit 4.2 to MigraTECs Form
10-KSB for the year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                                                                      
|10.12   |  | $1,975,000 Convertible Secured Promissory Note by MigraTEC, Inc. to
MT Partners, L.P., dated as of January 25, 2000 (incorporated herein by
reference to Exhibit 10.10 to MigraTECs Form 10-KSB for the year ended
December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                  
|10.13   |  | $1,775,000 Convertible Secured Promissory Note by MigraTEC, Inc. to
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.11 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                           
|10.14   |  | Security Agreement between MigraTEC, Inc. and MT Partners, L.P. and
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.12 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                           
|10.15   |  | Shareholders Agreement between MigraTEC, Inc., MT Partners, L.P.,
Mercury Fund No. 1, Ltd. and certain stockholders, dated as of January
25, 2000 (incorporated herein by reference to Exhibit 10.13 to
MigraTECs Form 10-KSB for the year ended December 31, 1999 filed April
14, 2000, File No. 000-28220).                                                                                                                                                                                                    
|10.16   |  | Registration Rights Agreement between MigraTEC, Inc. and MT
Partners, L.P. and Mercury Fund No. 1, Ltd., dated as of January 25,
2000 (incorporated herein by reference to Exhibit 10.14 to MigraTECs
Form 10-KSB for the year ended December 31, 1999 filed April 14, 2000,
File No. 000-28220).                                                                                                                                                                                                                
|10.17   |  | Form of Director Indemnification Agreement between MigraTEC, Inc.
and each of Kevin C. Howe, Drew R. Johnson, W. Curtis Overstreet and
Richard A. Gray, Jr., dated as of January 25, 2000, and each of William
B. Patton, Jr., T. Ulrich Brechbühl and John W. White, dated as of
January 29, 2002, February 11, 2002, and July 1, 2002, respectively
(incorporated herein by reference to Exhibit 10.15 to MigraTECs Form
10-KSB for the year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).
|10.18   |  | Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of MT Partners, L.P., dated February 28, 2000
(incorporated herein by reference to Exhibit 10.16 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                      
|10.19   |  | Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of Mercury Fund No. 1, Ltd., dated February 28, 2000
(incorporated herein by reference to Exhibit 10.17 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                               
|10.20   |  | Office Lease Agreement between MigraTEC, Inc. and Charter Crown
Plaza Partners, L.P., dated as of April 12, 2000 (incorporated herein by
reference to Exhibit 10.16 to MigraTECs Form 10-KSB for the year ended
December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                     
|10.21   |  | Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of MT Partners, L.P., dated June 1, 2000 (incorporated
herein by reference to Exhibit 10.19 to MigraTECs Form 10-KSB for the
year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                           
|10.22   |  | Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of Mercury Fund No. 1, Ltd., dated June 1, 2000
(incorporated herein by reference to Exhibit 10.20 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                    
|10.23   |  | Lease Modification Agreement Number One between MigraTEC, Inc. and
Charter Crown Plaza Partners, L.P., dated November 16, 2000
(incorporated herein by reference to Exhibit 10.21 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                       
|10.24   |  | Stock Option Amendment Agreement between MigraTEC, Inc. and EAI
Partners, Inc., dated January 2, 2001 (incorporated herein by reference
to Exhibit 10.24 to MigraTECs Form 10-KSB for the year ended December
31, 2000 filed March 22, 2001, File No. 000-28220).                                                                                                                                                                                                                                                

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|        |  |                                                                                                                                                                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                              
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                              
|10.25   |  | Modification, Renewal and Extension of Note and Security Agreement
between MigraTEC, Inc. and BEM Capital Partners, Inc., dated January 26,
2001 (incorporated herein by reference to Exhibit 10.25 to MigraTECs
Form 10-KSB for the year ended December 31, 2000 filed March 22, 2001,
File No. 000-28220).                
|10.26   |  | Assignment and Assumption Agreement between MJ Capital Partners III,
L.P. and BEM Capital Partners, L.P., dated January 26, 2001
(incorporated herein by reference to Exhibit 10.26 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                
|10.27   |  | Common Stock Purchase Warrant for 40,000 shares of common stock
issued to BEM Capital Partners, L.P. dated, January 31, 2001
(incorporated herein by reference to Exhibit 10.27 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                    
|10.28   |  | Form of Stock Purchase Warrant issued to GKN Securities Corp. and
its designees (incorporated herein by reference to Exhibit 10.28 to
MigraTECs registration statement on Form SB-2 filed March 29, 2001,
File No. 333-57830).                                                                                              
|10.29   |  | Stock Purchase Warrant for 325,000 shares of common stock issued to
Ironhead Investments Inc. (incorporated herein by reference to Exhibit
10.29 to MigraTECs registration statement on Form SB-2 filed March 29,
2001, File No. 333-57830).                                                                                
|10.30   |  | Common Stock Purchase Agreement between MigraTEC, Inc. and Ironhead
Investments Inc., dated as of March 27, 2001 (incorporated herein by
reference to Exhibit 10.30 to MigraTECs registration statement on Form
SB-2 filed March 29, 2001, File No. 333-57830).                                                             
|10.31   |  | Escrow Agreement among MigraTEC, Inc., Ironhead Investments Inc. and
Epstein Becker & Green, P.C., dated as of March 27, 2001 (incorporated
herein by reference to Exhibit 10.31 to MigraTECs registration
statement on Form SB-2 filed March 29, 2001, File
No. 333-57830).                                                
|10.32   |  | Registration Rights Agreement between MigraTEC, Inc. and Ironhead
Investments Inc., dated as of March 27, 2001 (incorporated herein by
reference to Exhibit 10.32 to MigraTECs registration statement on Form
SB-2 filed March 29, 2001, File No. 333-57830).                                                               
|10.33   |  | Stock Purchase Warrants issued to Richard A. Gray, Jr. for 175,450
and 124,550 shares of common stock, dated as of March 31, 2002 and May
14, 2002, respectively (incorporated herein by reference to Exhibit
10.35 to MigraTECs Form 10-QSB for the quarter ended June 30, 2002
filed August 14, 2002, File No. 000-28220).
|11.1    |  | Statement re: Computations of Net Loss per Share (filed herewith).                                                                                                                                                                                                                                                           
|99.1    |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).                                                                                                                                                                                     

27



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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|               |  |                                                                                    |  |                         
|-------------- |  | ---------------------------------------------------------------------------------- |  | ------------------------
|MIGRATEC, INC. |  |                                                                                   
|               |  |                                                                                    |  |                         
|By:            |  | /s/ T. Ulrich Brechbühl                                                            |  | Dated: November 14, 2002
|               |  |                                                                                    |  |                         
|               |  | T. Ulrich Brechbühl
Chief Executive Officer, President and Chief Financial Officer |  |                         

28



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CERTIFICATION BY CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER

I, T. Ulrich Brechbühl, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of MigraTEC,
Inc.;                                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                        



| | a. |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|4. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|5. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                                                        
|----------------------- |  | -----------------------------------------------------------------------
|Date: November 14, 2002 |  | /s/ T. Ulrich Brechbühl                                                
|                        |  |                                                                        
|                        |  | T. Ulrich Brechbühl
Chief Executive Officer and Chief Financial Officer

29



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EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                  
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                  
|3.1     |  | Certificate of Incorporation (incorporated herein by reference to
Exhibit 3.1 to MigraTECs registration statement on Form SB-2 filed
August 31, 2000, File No. 333-44946).                                                                                                                      
|3.2     |  | Certificate of Amendment to MigraTECs Certificate of Incorporation
(filed herewith).                                                                                                                                                                                                            
|3.3     |  | Bylaws (incorporated herein by reference to Exhibit 3.2 to MigraTECs
registration statement on Form SB-2 filed August 31, 2000, File No.
333-44946).                                                                                                                                            
|4.1     |  | Form of Common Stock Certificate (incorporated herein by reference to
Exhibit 4.1 to Amendment No. 1 to MigraTECs registration statement on
Form SB-2 filed November 13, 2000, File No. 333-44946).                                                                                             
|10.1    |  | Employment Agreement between MigraTEC, Inc. and W. Curtis Overstreet
dated, April 10, 1997 (incorporated herein by reference to Exhibit 10.3
to Amendment No. 1 to MigraTECs registration statement on Form SB-2
filed May 7, 1999, File No. 333-65093).                                        
|10.2    |  | Employment Agreement between MigraTEC, Inc. and Rick J. Johnson,
dated July 1, 1997 (incorporated herein by reference to Exhibit 10.5 to
Amendment No. 1 to MigraTECs registration statement on Form SB-2 filed
May 7, 1999, File No. 333-65093).                                               
|10.3    |  | MigraTEC, Inc. 1999 Stock Option Plan (incorporated herein by
reference to Exhibit 4 to MigraTECs Form S-8 filed March 12, 1999, File
No. 333-74309).                                                                                                                                           
|10.4    |  | Stock Option Agreements between MigraTEC, Inc. and each of Rick J.
Johnson and Richard A. Gray, Jr., dated as of May 1, 1998 (incorporated
herein by reference to Exhibit 1 to MigraTECs Form S-8 filed October
19, 1999, File No. 333-89291).                                                  
|10.5    |  | Letter Agreements regarding Modification of Stock Option Agreements
between MigraTEC, Inc. and each of Rick J. Johnson and Richard A. Gray,
Jr., dated as of September 7, 1999 (incorporated herein by reference to
Exhibit 2 to MigraTECs Form S-8 filed October 19, 1999, File No.
333-89291).
|10.6    |  | Stock Option Agreement between MigraTEC, Inc. and EAI Partners, Inc.,
dated as of August 6, 1999 (incorporated herein by reference to Exhibit
10.5 to Amendment No. 1 to MigraTECs registration statement on Form
SB-2 filed November 13, 2000, File No. 333-44946).                            
|10.7    |  | Form of Nonqualified Stock Option Agreement between MigraTEC, Inc.
and Richard A. Gray, Jr., dated as of January 31, 2000 (incorporated
herein by reference to Exhibit 10.8 to Amendment No. 1 to MigraTECs
registration statement on Form SB-2 filed November 13, 2000, File No.
333-44946).   
|10.8    |  | MigraTEC, Inc. Long-Term Incentive Plan, as amended and restated
incorporated herein by reference to Exhibit 10.8 to MigraTECs Form
10-QSB for the quarter ended June 30, 2002 filed August 14, 2002, File
No. 000-28220).                                                                      
|10.9    |  | Form of Stock Option Agreement pursuant to the MigraTEC, Inc.
Long-Term Incentive Plan, as amended and restated (incorporated herein
by reference to Exhibit 99.2 to MigraTECs Form S-8 filed November 6,
2000, File No. 333-49398).                                                            
|10.10   |  | Warrant Agreement between MigraTEC, Inc. and MT Partners, L.P. and
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.9 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).            





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.11   |  | Form of Warrant to MT Partners, L.P. and Mercury Fund No. 1, Ltd.
(incorporated herein by reference to Exhibit 4.2 to MigraTECs Form
10-KSB for the year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                                                                     
|10.12   |  | $1,975,000 Convertible Secured Promissory Note by MigraTEC, Inc. to
MT Partners, L.P., dated as of January 25, 2000 (incorporated herein by
reference to Exhibit 10.10 to MigraTECs Form 10-KSB for the year ended
December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                 
|10.13   |  | $1,775,000 Convertible Secured Promissory Note by MigraTEC, Inc. to
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.11 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                          
|10.14   |  | Security Agreement between MigraTEC, Inc. and MT Partners, L.P. and
Mercury Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
herein by reference to Exhibit 10.12 to MigraTECs Form 10-KSB for the
year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                          
|10.15   |  | Shareholders Agreement between MigraTEC, Inc., MT Partners, L.P.,
Mercury Fund No. 1, Ltd. and certain stockholders, dated as of January
25, 2000 (incorporated herein by reference to Exhibit 10.13 to
MigraTECs Form 10-KSB for the year ended December 31, 1999 filed April
14, 2000, File No. 000-28220).                                                                                                                                                                                                   
|10.16   |  | Registration Rights Agreement between MigraTEC, Inc. and MT
Partners, L.P. and Mercury Fund No. 1, Ltd., dated as of January 25,
2000 (incorporated herein by reference to Exhibit 10.14 to MigraTECs
Form 10-KSB for the year ended December 31, 1999 filed April 14, 2000,
File No. 000-28220).                                                                                                                                                                                                               
|10.17   |  | Form of Director Indemnification Agreement between MigraTEC, Inc.
and each of Kevin C. Howe, Drew R. Johnson, W. Curtis Overstreet and
Richard A. Gray, Jr., dated as of January 25, 2000, and each of William
B. Patton, Jr., T. Ulrich Brechbühl and John W. White, dated as of
January 29, 2002, February 11, 2002 and July 1, 2002, respectively
(incorporated herein by reference to Exhibit 10.15 to MigraTECs Form
10-KSB for the year ended December 31, 1999 filed April 14, 2000, File
No. 000-28220).
|10.18   |  | Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of MT Partners, L.P., dated February 28, 2000
(incorporated herein by reference to Exhibit 10.16 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                     
|10.19   |  | Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of Mercury Fund No. 1, Ltd., dated February 28, 2000
(incorporated herein by reference to Exhibit 10.17 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                              
|10.20   |  | Office Lease Agreement between MigraTEC, Inc. and Charter Crown
Plaza Partners, L.P., dated as of April 12, 2000 (incorporated herein by
reference to Exhibit 10.16 to MigraTECs Form 10-KSB for the year ended
December 31, 1999 filed April 14, 2000, File
No. 000-28220).                                                                                                                                                                                                                                    
|10.21   |  | Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of MT Partners, L.P., dated June 1, 2000 (incorporated
herein by reference to Exhibit 10.19 to MigraTECs Form 10-KSB for the
year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                          
|10.22   |  | Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC,
Inc. in favor of Mercury Fund No. 1, Ltd., dated June 1, 2000
(incorporated herein by reference to Exhibit 10.20 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                   
|10.23   |  | Lease Modification Agreement Number One between MigraTEC, Inc. and
Charter Crown Plaza Partners, L.P., dated November 16, 2000
(incorporated herein by reference to Exhibit 10.21 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                                                                                                                                                                                                      





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                              
|NUMBER  |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                              
|10.24   |  | Stock Option Amendment Agreement between MigraTEC, Inc. and EAI
Partners, Inc., dated January 2, 2001 (incorporated herein by reference
to Exhibit 10.24 to MigraTECs Form 10-KSB for the year ended December
31, 2000 filed March 22, 2001, File No. 000-28220).                                                           
|10.25   |  | Modification, Renewal and Extension of Note and Security Agreement
between MigraTEC, Inc. and BEM Capital Partners, Inc., dated January 26,
2001 (incorporated herein by reference to Exhibit 10.25 to MigraTECs
Form 10-KSB for the year ended December 31, 2000 filed March 22, 2001,
File No. 000-28220).                
|10.26   |  | Assignment and Assumption Agreement between MJ Capital Partners III,
L.P. and BEM Capital Partners, L.P., dated January 26, 2001
(incorporated herein by reference to Exhibit 10.26 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                
|10.27   |  | Common Stock Purchase Warrant for 40,000 shares of common stock
issued to BEM Capital Partners, L.P. dated, January 31, 2001
(incorporated herein by reference to Exhibit 10.27 to MigraTECs Form
10-KSB for the year ended December 31, 2000 filed March 22, 2001, File
No. 000-28220).                                    
|10.28   |  | Form of Stock Purchase Warrant issued to GKN Securities Corp. and
its designees (incorporated herein by reference to Exhibit 10.28 to
MigraTECs registration statement on Form SB-2 filed March 29, 2001,
File No. 333-57830).                                                                                              
|10.29   |  | Stock Purchase Warrant for 325,000 shares of common stock issued to
Ironhead Investments Inc. (incorporated herein by reference to Exhibit
10.29 to MigraTECs registration statement on Form SB-2 filed March 29,
2001, File No. 333-57830).                                                                                
|10.30   |  | Common Stock Purchase Agreement between MigraTEC, Inc. and Ironhead
Investments Inc., dated as of March 27, 2001 (incorporated herein by
reference to Exhibit 10.30 to MigraTECs registration statement on Form
SB-2 filed March 29, 2001, File No. 333-57830).                                                             
|10.31   |  | Escrow Agreement among MigraTEC, Inc., Ironhead Investments Inc. and
Epstein Becker & Green, P.C., dated as of March 27, 2001 (incorporated
herein by reference to Exhibit 10.31 to MigraTECs registration
statement on Form SB-2 filed March 29, 2001, File
No. 333-57830).                                                
|10.32   |  | Registration Rights Agreement between MigraTEC, Inc. and Ironhead
Investments Inc., dated as of March 27, 2001 (incorporated herein by
reference to Exhibit 10.32 to MigraTECs registration statement on Form
SB-2 filed March 29, 2001, File No. 333-57830).                                                               
|10.33   |  | Stock Purchase Warrants issued to Richard A. Gray, Jr. for 175,450
and 124,550 shares of common stock, dated as of March 31, 2002 and May
14, 2002, respectively (incorporated herein by reference to Exhibit
10.35 to MigraTECs Form 10-QSB for the quarter ended June 30, 2002
filed August 14, 2002, File No. 000-28220).
|11.1    |  | Statement re: Computations of Net Loss per Share (filed herewith).                                                                                                                                                                                                                                                           
|99.1    |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).