<PAGE>

                                  United States
                       Securities and Exchange Commission

                             Washington, D.C. 20549

                                    FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Period Ended October 31, 1999.

[ ] 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    0-2420
                       -----------------------------

                             Carreker-Antinori, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     75-1622836
---------------------------------------            --------------------------
(State or other jurisdiction of                        (IRS Employer
 incorporation or organization)                      Identification No.)

      4055 Valley View Lane, #1000
      Dallas, Texas                                            75244
-------------------------------------              --------------------------
      (Address of principal executive office)                (Zip Code)

                                 (972) 458-1981
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X    No
                                       ----     ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.01 Par Value --- 18,561,823 shares as of November 30, 1999.

<PAGE>

                             CARREKER-ANTINORI, INC.

                                      INDEX

<TABLE>
<CAPTION>

PART I     FINANCIAL INFORMATION                                                    PAGE
<S>                                                                                 <C>
     Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets
              at October 31, 1999 and January 31, 1999                                3

              Condensed Consolidated Statements of Operations
              for the three and nine months ended October 31, 1999
              and October 31, 1998                                                    4

              Condensed Consolidated Statements of Cash Flows
              for the nine months ended October 31, 1999
              and October 31, 1998                                                    5

              Notes to Condensed Consolidated Financial Statements                    6

     Item 2.  Management's Discussion and Analysis of Financial Condition and
                Results of Operations                                                10

     Item 3.  Quantitative and Qualitative Disclosures about Market Risk             18

PART II    OTHER INFORMATION

     Item 1.  Legal Proceedings                                                      19

     Item 2.  Changes in Securities and Use of Proceeds                              19

     Item 3.  Defaults Upon Senior Securities                                        19

     Item 4.  Submission of Matters to a Vote of Security Holders                    19

     Item 5.  Other Information                                                      19

     Item 6.  Exhibits and Reports on Form 8-K                                       19

SIGNATURES                                                                           20
</TABLE>


                                       2

<PAGE>

PART I  FINANCIAL INFORMATION

      ITEM 1.  FINANCIAL STATEMENTS

                             CARREKER-ANTINORI, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          October 31,          January 31,
                                                                              1999                 1999
                              ASSETS                                      (Unaudited)
                                                                         ---------------      ---------------
<S>                                                                       <C>                      <C>
CURRENT ASSETS:
       Cash and cash equivalents                                          $      16,405            $  20,701
       Short term investments                                                     8,677               12,849
       Accounts receivable, net                                                  40,170               27,604
       Prepaid expenses and other assets                                          1,125                  681
       Deferred income taxes                                                        736                  736
                                                                         ---------------      ---------------
                           Total current assets                                  67,113               62,571
Furniture, equipment, and leasehold improvements, net                             3,899                2,673
Software costs capitalized, net                                                   4,970                3,279
Other assets                                                                        344                  213
                                                                         ---------------      ---------------
                          Total assets                                    $      76,326            $  68,736
                                                                         ---------------      ---------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
       Accounts payable                                                     $     1,572            $   2,045
       Accrued compensation and benefits                                          1,411                  700
       Other accrued expenses                                                       902                  961
       Income taxes payable                                                       2,637                1,400
       Deferred revenue                                                           5,492                5,348
                                                                         ---------------      ---------------
                         Total current liabilities                               12,014               10,454
 Deferred income taxes                                                            1,988                1,151
                                                                         ---------------      ---------------
                         Total liabilities                                       14,002               11,605
                                                                         ---------------      ---------------
STOCKHOLDERS' EQUITY:
       Preferred Stock, $.01 par value, 2,000 shares
         authorized, none issued                                                   ----                 ----
     Common Stock, $.01 par value, 100,000 shares authorized,
         18,563 and 18,354 shares issued at October 31 and
         January 31, 1999, respectively                                             186                  184
       Additional paid-in capital                                                44,241               44,563
       Less treasury stock, at cost:
             1 shares, as of October 31, 1999                                       (6)                 ----
       Deferred compensation                                                       (332)                (568)
       Retained earnings                                                         18,235               12,952
                                                                         ---------------      ---------------
                        Total stockholders' equity                               62,324               57,131
                                                                         ---------------      ---------------
                        Total liabilities and stockholders' equity         $     76,326            $  68,736
                                                                         ---------------      ---------------
                                                                         ---------------      ---------------
</TABLE>


                             See accompanying notes.


                                       3

<PAGE>

                             CARREKER-ANTINORI, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                       Three Months Ended              Nine Months Ended
                                                                           October 31,                    October 31,
                                                                  ---------------------------    ----------------------------
                                                                        1999            1998           1999             1998
                                                                  -----------     -----------    -----------    -------------
<S>                                                               <C>                <C>           <C>              <C>
REVENUES:
        Consulting and management service fees                      $ 15,072          $ 7,273       $ 36,436        $ 18,876
        Software license fees                                          2,692            3,818          8,546          11,336
        Software maintenance fees                                      1,677            1,226          4,943           3,654
        Software implementation fees                                   1,391            2,072          4,066           5,197
        Hardware and other fees                                           34              160            230             718
                                                                  -----------     -----------    -----------    -------------
                      Total revenues                                  20,866           14,549         54,221          39,781

COSTS OF REVENUES:
        Consulting and management service fees                         8,044            4,211         19,477          11,760
        Software license fees                                            394              303          1,241             806
        Software maintenance fees                                        689              619          2,025           1,686
        Software implementation fees                                     542            1,130          1,996           2,972
        Hardware and other fees                                           23              110            183             528
                                                                  -----------     -----------    -----------    -------------
 Total cost of revenues                                                9,692            6,373         24,922          17,752
                                                                  -----------     -----------    -----------    -------------
GROSS PROFIT                                                          11,174            8,176         29,299          22,029

OPERATING COSTS AND EXPENSES:
        Selling, general and administrative                            6,907            4,984         17,839          13,262
        Research and development                                       1,313              962          3,987           3,400
                                                                  -----------     -----------    -----------    -------------
Total operating costs and expenses                                     8,220            5,946         21,826          16,662

Income from operations                                                 2,954            2,230          7,473           5,367
Other income                                                             223              366            780             589
                                                                  -----------     -----------    -----------    -------------

Income before provision for income taxes                               3,177            2,596          8,253           5,956
Provision for income taxes                                             1,144              926          2,971           2,189
                                                                  -----------     -----------    -----------    -------------
Net income                                                           $ 2,033          $ 1,670        $ 5,282         $ 3,767
                                                                  -----------     -----------    -----------    -------------
                                                                  -----------     -----------    -----------    -------------

Basic earnings per share                                              $ 0.11           $ 0.09         $ 0.29            0.24
                                                                  -----------     -----------    -----------    -------------
                                                                  -----------     -----------    -----------    -------------
Diluted earnings per share                                            $ 0.11           $ 0.09         $ 0.28            0.22
                                                                  -----------     -----------    -----------    -------------
                                                                  -----------     -----------    -----------    -------------

Shares used in computing basic earnings per share                     18,499           17,675         18,448          15,644
Shares used in computing diluted earnings per share                   18,963           18,768         18,961          17,082
</TABLE>


                             See accompanying notes.


                                       4

<PAGE>

                             CARREKER-ANTINORI, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                   Nine Months Ended
                                                                                      October 31,
                                                                           -------------------------------
                                                                                  1999               1998
                                                                           ------------       ------------
<S>                                                                        <C>                <C>
OPERATING ACTIVITIES:
     Net Income                                                                $ 5,282            $ 3,767
     Adjustments to reconcile net income to net
       cash used in operating activities:
         Amortization of capitalized software                                      875                319
         Depreciation                                                            1,693                985
         Amortization of deferred compensation                                     236                188
         Deferred income taxes                                                     837                320
         Changes in assets and liabilities:
               Accounts receivable                                             (12,566)           (12,487)
               Prepaid expenses and other                                         (575)                31
               Accounts payable and accrued expenses                               180             (1,595)
               Taxes payable                                                     1,237              1,749
               Deferred revenue                                                    144               (481)
                                                                           ------------       ------------
                   Net cash used in operating activities                        (2,657)            (7,204)

INVESTING ACTIVITIES:
       Purchase of short-term investments                                          ---                (48)
       Sale of short-term investments                                            4,172                ---
       Purchase of furniture, equipment and leasehold improvements              (2,919)            (1,561)
       Software costs capitalized                                               (2,566)            (1,112)
                                                                           ------------       ------------
                  Net cash (used in) investing activities                       (1,313)            (2,721)

FINANCING ACTIVITIES:
        Purchase of treasury stock                                                (574)               (8)
        Proceeds from sale of stock                                                ---             35,837
        Proceeds from stock options exercised                                      248              3,232
                                                                           ------------       ------------
                 Net cash (used in) provided by financing activities              (326)            39,061

Net (decrease) increase in cash and cash equivalents                            (4,296)            29,138
Cash and cash equivalents at beginning of period                                20,701              2,485
                                                                           ------------       ------------
Cash and cash equivalents at end of period                                     $16,405            $31,623
                                                                           ------------       ------------
                                                                           ------------       ------------

Supplemental cash flow information:
    Cash paid for interest                                                     $   ---         $       43
                                                                           ------------       ------------
                                                                           ------------       ------------

   Cash paid for income taxes                                                   $  886             $  119
                                                                           ------------       ------------
                                                                           ------------       ------------
</TABLE>


                             See accompanying notes.


                                       5

<PAGE>

                             CARREKER-ANTINORI, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

PART I

     1.  BASIS OF PRESENTATION

                  The accompanying unaudited condensed consolidated 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
         the Company. 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. These statements should be read in conjunction with the
         audited financial statements and notes thereto for the years ended
         January 31, 1999, 1998, and 1997 included in the Company's Form 10-K
         for the fiscal year ended January 31, 1999 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.

     2.  CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid investments with
         original maturities of three months or less from the original purchase
         date to be cash equivalents. At October 31, 1999, cash equivalents
         consisted principally of highly liquid debt securities of corporations
         and municipalities.

     3.  SHORT TERM INVESTMENTS

                  The Company considers investments with maturities of greater
         than three months, when purchased, to be short-term investments based
         on the freely tradable nature of the investments, and the management's
         expectation that they will not be held for greater than one year.
         Short-term investments consist primarily of tax exempt municipal bonds.
         Management determines the appropriate classification of debt securities
         at the time of purchase and re-evaluates such designation as of each
         balance sheet date. All debt securities have been determined by
         management to be available for sale. Available for sale securities are
         stated at amortized cost, at January 31 and October 31, 1999,
         respectively, which approximates fair value. Fair value of debt
         securities is determined based upon current market value price quotes
         by security. As of October 31, 1999 all short-term investments mature
         from one to two years.

     4.  EARNINGS PER SHARE

                  Basic earnings per share is computed by using the weighted
         average number of shares of common stock outstanding during each
         period. Diluted earnings per share is computed using the weighted
         average number of shares of common stock outstanding during each
         period, and common equivalent shares consisting of stock options (using
         the treasury stock method).


                                       6
<PAGE>

                  The following table sets forth the computation of basic and
         diluted earnings per share for the three and nine months ended October
         31, 1999 and 1998 (in thousands, except per share amounts):

<TABLE>
<CAPTION>

                                                               Three Months Ended           Nine Months Ended
                                                                    October 31,                   October 31,
                                                                1999          1998           1999           1998
                                                             ----------    ----------     ----------     ----------
<S>                                                          <C>           <C>             <C>          <C>
         Basic earnings per share:
            Net income                                         $ 2,033       $ 1,670        $ 5,282       $ 3,767

            Weighted average shares outstanding                 18,499        17,675         18,448        15,644

                          Basic earnings per share              $ 0.11        $ 0.09         $ 0.29        $ 0.24
                                                             ----------    ----------     ----------     ----------
                                                             ----------    ----------     ----------     ----------
         Diluted earnings per share:
            Net income                                         $ 2,033       $ 1,670        $ 5,282       $ 3,767

            Weighted average shares outstanding                 18,499        17,675         18,448        15,644
            Assumed conversion of employee
             stock options                                         464         1,093            513         1,438
                                                             ----------    ----------     ----------    ----------
            Shares used in diluted earnings per share
             calculation                                        18,963        18,768         18,961        17,082
                                                             ----------    ----------     ----------     ----------
                                                             ----------    ----------     ----------     ----------

                     Diluted earnings per share                 $ 0.11        $ 0.09         $ 0.28        $ 0.22
                                                              ----------    ----------     ----------     ----------
                                                              ----------    ----------     ----------     ----------
</TABLE>

     5.  MANAGEMENT SERVICES

                  For the three and nine months ended October 31, 1999 and 1998,
         the Company recognized revenue for management services provided to
         related parties in the following amounts (in thousands):

<TABLE>
<CAPTION>

                                                     Three Months Ended                Nine Months Ended
                                                         October 31,                      October 31,
                                                 ----------------------------     -----------------------------
                                                     1999            1998            1999             1998
                                                 -------------    -----------     ------------    -------------
<S>                                                     <C>            <C>               <C>           <C>
         Infiteq, LLC                                   $ ---          $ 158             $ 51          $ 1,007
         Payment Solutions Network, Inc.                  245            296              605            1,045
         Electronic Check Clearing House
         Organization                                     250            234              755              763
</TABLE>


         The Company had net receivables from related parties at October 31 in
         the following amounts (in thousands):

<TABLE>
<CAPTION>

                                                                                        1999              1998
                                                                                        ----              ----
<S>                                                                                     <C>               <C>
         Infiteq, LLC                                                                   $ 74              $  4
         Payment Solutions Network, Inc.                                                 333               291
         Electronic Check Clearing House Organization                                     86               348
</TABLE>


                                       7
<PAGE>

     6.  SEGMENTS

                  Effective with the year ended January 31, 1999, the Company
         adopted the Financial Accounting Standards Board's Statement of
         Financial Accounting Standards No. 131, "Disclosures about Segments of
         an Enterprise and Related Information (Statement 131)."

                  The Company has three reportable segments: Revenue
         Enhancement, Payment Systems, and Emerging Solutions. The segments are
         unique due to the focus of the products and services being offered. The
         Company evaluates performance and allocates resources based on profit
         or loss from operations before income taxes, not including gains and
         losses on the Company's investment portfolio.

                  Revenue Enhancement consists primarily of yield management
         consulting, and liquidity management consulting and software. Payment
         Systems consists primarily of consolidation consulting, best practices
         consulting and software, risk management consulting and software, float
         management consulting and software, payment electronification
         consulting and software, and track and trace software. Emerging
         Solutions consists primarily of enterprise information technology
         consulting, and management services, ECCHO management services, and
         enabling technology consulting.

                  Due to the solution approach to delivering products and
         services from multiple business segments, contracts are broken down by
         segment with few transactions between reportable segments.

                  Included in corporate and unallocated are costs related to
         selling and marketing, unallocated corporate overhead expense, general
         software management, and incentive bonuses. Business segment results
         include costs for research and development as well as product royalty
         expense. Receivables, property and equipment and other assets are not
         included in the measures reviewed by the Company's chief operating
         decision-maker. Therefore, all Company assets have been included in the
         corporate and unallocated category in the following reportable segment
         disclosure. Segment information for the three month and nine month
         periods ended October 31, 1999 and 1998 is as follows (in thousands):

<TABLE>
<CAPTION>

                                                                For the three months ended October 31, 1999
                                                 -----------------------------------------------------------------------
                                                   Revenue        Payment       Emerging      Corporate
                                                  Enhancement     Systems      Solutions    & Unallocated     Total
                                                 ---------------------------- ------------------------------------------
<S>                                                  <C>           <C>           <C>          <C>              <C>
    Revenues
       Consulting and management service fees.   $     7,406   $     3,646    $    4,020   $      ----     $     15,072
       Software license fees....................         794         1,898          ----          ----            2,692
       Software maintenance fees................         382         1,295          ----          ----            1,677
       Software implementation fees.............         307         1,084          ----          ----            1,391
       Hardware and other fees..................        ----            34          ----          ----               34
                                                  -----------  ------------   -----------  -------------   -------------
          Total revenues........................     $ 8,889       $ 7,957       $ 4,020      $    ----        $ 20,866
                                                  -----------  ------------   -----------  -------------   -------------
                                                  -----------  ------------   -----------  -------------   -------------

    Income (loss) from operations                    $ 5,358       $ 1,066       $ 1,533      $ (5,003)        $  2,954

    Assets......................................     $  ----       $  ----       $  ---       $ 76,326         $ 76,326

    Depreciation and
    Amortization................................     $   129       $   287       $    21      $    523         $    960

    Capital expenditures........................     $  ----       $  ----       $  ----      $    618         $    618
</TABLE>


                                       8

<PAGE>

<TABLE>
<CAPTION>

                                                              For the three months ended October 31, 1998
                                                 -----------------------------------------------------------------------
                                                   Revenue        Payment       Emerging      Corporate
                                                  Enhancement     Systems      Solutions    & Unallocated     Total
                                                 ---------------------------- ------------------------------------------
<S>                                               <C>          <C>            <C>          <C>             <C>
    Revenues
       Consulting and management service fees.      $  4,064      $  2,015      $  1,194      $   ----        $   7,273
       Software license fees...................          999         2,819          ----          ----            3,818
       Software maintenance fees...............          221         1,005          ----          ----            1,226
       Software implementation fees............          247         1,825          ----          ----            2,072
       Hardware and other fees.................         ----           160          ----          ----              160
                                                  -----------  ------------   -----------  -------------   -------------
          Total revenues.......................     $  5,531      $  7,824       $ 1,194       $   ----       $  14,549
                                                  -----------  ------------   -----------  -------------   -------------
                                                  -----------  ------------   -----------  -------------   -------------

    Income (loss) from operations                   $  3,891      $  2,490        $  226      $ (4,377)        $  2,230

    Assets.....................................     $   ----      $  2,490        $ ----       $ 64,240       $  64,240

    Depreciation and
    Amortization...............................     $     43      $    182        $   7          $  228         $   460

    Capital expenditures.......................     $   ----      $   ----        $ ----         $  375         $   375
</TABLE>

<TABLE>
<CAPTION>

                                                                 For the nine months ended October 31, 1999
                                                 -----------------------------------------------------------------------
                                                   Revenue        Payment       Emerging      Corporate
                                                  Enhancement     Systems      Solutions    & Unallocated     Total
                                                 ---------------------------- ------------------------------------------
<S>                                              <C>           <C>            <C>          <C>             <C>
    Revenues
       Consulting and management service fees.      $ 18,262      $  9,903       $ 8,271      $   ----        $  36,436
       Software license fees...................        2,643         5,904          ----          ----            8,547
       Software maintenance fees...............        1,095         3,848          ----          ----            4,943
       Software implementation fees............          730         3,336          ----          ----            4,066
       Hardware and other fees.................         ----           230          ----          ----              230
                                                  -----------  ------------   -----------  -------------   -------------
          Total revenues.......................     $ 22,730      $ 23,221       $ 8,271      $   ----        $  54,222
                                                  -----------  ------------   -----------  -------------   -------------
                                                  -----------  ------------   -----------  -------------   -------------

    Income (loss) from operations                   $ 13,510      $  5,808       $ 2,100     $ (13,945)       $   7,473

    Assets.....................................     $   ----      $   ----       $  ----     $  76,326        $  76,326

    Depreciation and
    Amortization...............................     $    381      $    962       $    46     $   1,179        $   2,568

    Capital expenditures.......................     $   ----      $   ----       $   ----    $  $2,919         $  2,919
</TABLE>


                                       9

<PAGE>

<TABLE>
<CAPTION>

                                                                For the nine months ended October 31, 1998
                                                 -----------------------------------------------------------------------
                                                   Revenue        Payment       Emerging      Corporate
                                                  Enhancement     Systems      Solutions    & Unallocated     Total
                                                 ---------------------------- ------------------------------------------
<S>                                                <C>          <C>           <C>           <C>            <C>
    Revenues
       Consulting and management service fees.      $  8,433      $   6,638    $    3,805      $   ----        $ 18,876
       Software license fees......................     3,109          8,227          ----          ----          11,336
       Software maintenance fees..................       606          3,048          ----          ----           3,654
       Software implementation fees..............      1,353          3,844          ----          ----           5,197
       Hardware and other fees.....................     ----            718          ----          ----             718
                                                   ----------   -----------    ----------   ------------   ------------
          Total revenues.........................   $ 13,501       $ 22,475         3,805      $   ----          39,781
                                                   ----------  ------------   -----------  -------------   ------------
                                                   ----------  ------------   -----------  -------------   ------------

    Income (loss) from operations                   $  8,133       $  7,296    $    1,177      $ (11,239)     $   5,367

    Assets.......................................   $   ----       $   ----    $     ----      $  64,240      $  64,240

    Depreciation and
    Amortization.................................   $     80       $   565     $      21       $    638       $   1,304

    Capital expenditures.........................   $   ----       $  ----     $    ----       $  1,561        $  1,561
</TABLE>


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

       OVERVIEW

                  The Company is a leading provider of integrated consulting and
         software solutions that enable banks to increase their revenues, reduce
         their costs and enhance their delivery of customer services. The
         Company was founded in 1978 to provide consulting services to banks,
         and subsequently integrated software products into its banking
         solutions. With its acquisition of Antinori Software, Inc., a Georgia
         corporation ("ASI") on January 31, 1997, the Company was able to
         significantly enhance its portfolio of software products. Additionally,
         the Company acquired Genisys Operations, Inc. ("Genisys") on January
         29, 1999 which provides incremental added-value to the Company's
         product offerings. The acquisitions of ASI and Genisys were each
         accounted for as a pooling-of-interests, and accordingly, the Company's
         Condensed Consolidated Financial Statements and notes thereto, as well
         as all other financial and statistical data presented in this Form
         10-Q, have been restated to include the financial position and results
         of operations for ASI and Genisys for all periods presented.

                  MARKETS: A substantial majority of the Company's revenues are
         generated from contracts with banks with assets over $50 billion ("Tier
         I Banks") and banks with assets of between $5 billion and $50 billion
         ("Tier II Banks"). The Company also targets smaller bank holding
         companies and independent banks with assets of between $550 million and
         $5 billion.

                  SOURCE OF REVENUES: The Company derives its revenues from
         consulting and management service fees, software license fees,
         software maintenance fees, software implementation fees and hardware
         and other sales. While many customer contracts provide for both the
         performance of consulting services and the license of related
         software, some customer contracts require only the performance of
         consulting services or only a software license (and, at the election
         of the customer, related implementation services and/or annual
         software maintenance services). The Company enters into these
         contracts with its customers on a project-by-project basis. The
         Company also derives management service fees from the performance of
         certain management services on behalf of Payment Solutions Network
         (PSN), Electronic Check Clearing House Organization (ECCHO) and
         Infiteq, LLC.

                                       10

<PAGE>

                   PRODUCTS AND SERVICES: The Company offers a wide range of
         consulting services and state-of-the-art, proprietary technology
         applications designed to address the unique requirements of the banking
         industry. The Company's solutions are sold individually, or
         complementary solutions may be sold together (similarly, software
         products may be sold individually or as part of a product suite). The
         following table summarizes the divisions through which the Company's
         offerings are delivered. Each division consists of several groups.

         DIVISIONS & GROUPS             SOLUTIONS DESCRIPTION
         ------------------             ---------------------------
         REVENUE ENHANCEMENT            INCREASES CUSTOMER REVENUES

              Liquidity Management      Reduces the amount of non-earning assets
                                        that a bank maintains in reserve
                                        accounts or in cash-on-hand

              Yield Management          Improves operational work-flows,
                                        processes and pricing structures
                                        employed by a bank

         PAYMENT SYSTEMS                DECREASES CUSTOMER SERVICE COSTS WHILE
                                        IMPROVING BACK OFFICE SERVICE

              Best Practices            Delivery of total solutions for customer
                                        information management

              Consolidations            Delivery of consulting services to help
                                        customers reduce costs, improve
                                        operating efficiencies and increase
                                        economies-of-scale through operations
                                        consolidations of operations

              Float Management          Enhances bank float management through
                                        improved check collection, workflow,
                                        float allocation, and pricing

              Genisys                   Focuses on information management by
                                        utilizing the Company's proprietary
                                        barcode track and trace technology,
                                        coupled with utilizing the Internet as
                                        an information delivery vehicle

              Payment Electronification Facilitates the electronification of
                                        paper checks, while reducing costs and
                                        risks associated with the check payment
                                        process

              Risk Management           Reduces risk of loss from the check
                                        payment process as a result of
                                        operational failures, check fraud and
                                        litigation

         EMERGING SOLUTIONS             DEVELOPMENT OF NEW BUSINESS
                                        OPPORTUNITIES OR DELIVERY OF MANAGEMENT
                                        SERVICES

              ECCHO Management Services Focuses on management of the ECCHO
                                        organization

              Enabling Technologies     Focuses on developing proof
                                        of concept for new business
                                        opportunities with the criteria that
                                        once a solution is developed, it can be
                                        offered across the Company's key
                                        customer base

              Enterprise IT Services    Offers customized,
                                        enterprise-wide conversion,
                                        consolidation and integration consulting
                                        solutions in areas beyond payments
                                        systems, including subject matter and
                                        project management services, Year 2000
                                        services and IT outsourcing services

                  PRICING METHODS AND REVENUE RECOGNITION: The Company employs
         varying pricing methods for each of its four sources of revenue,
         resulting in a number of different revenue recognition practices.
         Consulting and management services are priced on (i) a time and
         materials basis (revenue is recognized as the services are performed),
         (ii) a fixed-price basis (revenue is recognized on a
         percentage-of-completion basis) and (iii) on a value-priced basis. In
         the case of value-priced contracts, the Company is paid, on an agreed
         upon basis with the customer, either a specified percentage of the
         projected


                                       11

<PAGE>

         increased revenues or decreased costs that are expected to be derived
         by the customer over a period of up to twelve months following
         implementation of the Company's solution, or the actual increased
         revenues and/or decreased costs experienced by the customer over a
         period of up to twelve months following implementation of the Company's
         solution, subject in either case to a ceiling, if any is agreed to, on
         the total amount of payments to be made to the Company. Revenues
         generated in connection with value-priced contracts based upon
         projected results are recognized only upon completion of all services
         and agreement upon the actual fee to be paid (even though billings for
         such services may be delayed by mutual agreement for periods generally
         not to exceed twelve months). When fees are to be paid based on a
         percentage of actual revenues or savings, revenues are recognized only
         upon the completion of all services and as the amounts of actual
         revenues or savings are confirmed to the Company by the customer.
         Software license fees are priced on a fixed-price basis (with revenue
         recognized upon delivery, subject to certain conditions), on a
         value-priced basis (with revenue recognized in a fashion similar to
         that for consulting and management service fees) and in some cases on a
         per-transaction basis (with the related revenue being recognized and
         due on a monthly basis). Software maintenance and implementation fees
         are priced on a time and materials basis or on a fixed-price basis, and
         the related revenues are recognized on the basis consistent with that
         applied to consulting and management service fees. Finally, hardware
         sales are priced on the basis of the Company's cost plus a specified
         percentage, and related revenues are recognized upon shipment of the
         hardware.

                  All statements other than statements of historical fact
         contained in this report, including statements in this "Management's
         Discussion and Analysis of Financial Condition and Results of
         Operations" concerning the Company's financial position and liquidity,
         results of operations, prospects for future growth, and other matters
         are forward-looking statements. Although the Company believes that the
         expectations reflected in such forward-looking statements are
         reasonable, no assurance can be given that such expectations will prove
         correct. Factors that could cause the Company's results to differ
         materially from the results discussed in, or contemplated by, such
         forward-looking statements include the risks described under "Risk
         Factors" in the Company's Form 10-K for the fiscal year ended January
         31, 1999, on file with the Commission. Such risks include, without
         limitation, the risks associated with the Company's dependence on the
         banking industry, fluctuations in quarterly operating results, customer
         concentration, customer project risks, the Company's ability to manage
         growth, market acceptance of the Company's solutions, the absence of
         long-term agreements with customers, the potential for software and/or
         solutions defects, competition within the markets in which the Company
         competes, the Company's use of independent contractors, the Company's
         dependence on key personnel, the Company's ability to attract and
         retain qualified personnel, the impact of technological advances on the
         Company's business, the Company's dependence on proprietary technology
         and the risks associated with infringement, Year 2000 issues, the
         potential for liability claims, the risks associated with potential
         strategic alliances or acquisitions, government regulation and the
         risks associated with international operations. All forward-looking
         statements in this report are expressly qualified in their entirety by
         the cautionary statements in this paragraph, in "Risk Factors" (as set
         forth in the aforementioned Form 10-K) and elsewhere in this report.


                                       12

<PAGE>

       RESULTS OF OPERATIONS

                  The following table sets forth for the periods indicated, the
         percentages that selected items in the unaudited condensed consolidated
         statements of operations bear to total revenues. The period to period
         comparisons of financial results are not necessarily indicative of
         future results.

<TABLE>
<CAPTION>
                                                               Three Months Ended           Nine Months Ended
                                                                  October 31,                  October 31,
                                                            -------------------------    ------------------------
                                                                   1999         1998        1999          1998
                                                            ------------    ---------    --------    ----------
<S>                                                          <C>            <C>           <C>         <C>
         Revenues:
                 Consulting and management service fees            72.2%         50.0%      67.2%         47.4%
                 Software license fees                             12.9          26.2       15.8          28.5
                 Software maintenance fees                          8.0           8.4        9.1           9.2
                 Software implementation fees                       6.7          14.2        7.5          13.1
                 Hardware and other fees                            0.2           1.1        0.4           1.8
                                                            ------------    ---------- ----------    ----------
                               Total revenues                     100.0         100.0      100.0         100.0

         Costs of revenues:
                 Consulting and management service fees            38.6          28.9       36.0          29.6
                 Software license fees                              1.9           2.1        2.3           2.0
                 Software maintenance fees                          3.3           4.3        3.7           4.2
                 Software implementation fees                       2.6           7.8        3.7           7.5
                 Hardware and other fees                            0.1           0.8        0.3           1.3
                                                            ------------    ---------- ----------    ----------
                          Total cost of revenues                   46.4          43.8       46.0          44.6

                                                            ------------    ---------- ----------    ----------
         Gross profit                                              53.6          56.2       54.0          55.4
                                                            ------------    ---------- ----------    ----------

         Operating costs and expenses:
                 Selling general and administrative                33.1          34.3       32.9          33.3
                 Research and development                           6.3           6.6        7.4           8.6
                                                            ------------    ---------- ----------    ----------
                          Total operating costs and expenses       39.4          40.9       40.3          41.9

         Income from operations                                    14.2          15.3       13.7          13.5

         Other income (expense)                                     1.0           2.5        1.5           1.5
                                                            ------------    ---------- ----------    ----------

         Income before provisions for income taxes                 15.2          17.8       15.2          15.0
         Provision from income taxes                                5.5           6.3        5.5           5.5

                                                            ---------------    --------- -------------    --------
         Net income                                                 9.7%         11.5%       9.7%          9.5%
                                                            ---------------    --------- -------------    --------
                                                            ---------------    --------- -------------    --------
</TABLE>

         REVENUES

                  REVENUES: The Company's total revenues increased 43.4% to
         $20.9 million for the quarter ended October 31, 1999 from $14.5 million
         for the quarter ended October 31, 1998. The Company's total revenues
         increased 36.3% to $54.2 million for the nine months ended October 31,
         1999 from $39.8 million for the nine months ended October 31, 1998.

                  CONSULTING AND MANAGEMENT SERVICE FEES: Revenues from
         consulting and management service fees increased 107.2% to $15.1million
         for the quarter ended October 31, 1999 from $7.3 million for the
         quarter ended October 31, 1998. Revenues from consulting and management
         service fees increased 93.0% to $36.4 million for the nine months ended
         October 31, 1999 from $18.9 million for the nine months ended October
         31, 1998. Consulting and management service fees have grown as a result
         of continued demand for time and material services as well as value
         priced revenue enhancement consulting. The Company has expanded the use
         of value priced engagements due to their improved margins as well as
         their favorable reception from customers. Revenues related to value
         priced opportunities tend to fluctuate period-to-period and are likely
         to fluctuate in future periods.


                                       13
<PAGE>

                  SOFTWARE LICENSE FEES: Revenues from software license fees
         decreased 29.5% to $2.7 million for the quarter ended October 31, 1999
         from $3.8 million for the quarter ended October 31, 1998. Revenues from
         software license fees decreased 24.6% to $8.5 million for the nine
         months ended October 31, 1999 from $11.3 million for the nine months
         ended October 31, 1998. Software license fees continued at reduced
         levels over the prior year periods as many of the Company's bank
         customers have limited moving new systems into production as they
         continue to commit resources to Year 2000 renovation and testing.
         Certain product offerings requiring limited client resources continue
         to experience significant demand while other, more intrusive product
         offerings have experienced reduced demand in light of the Year 2000
         commitments of the Company's bank customers. To date, sales of software
         licenses have principally been derived from direct sales to customers.

                  SOFTWARE MAINTENANCE FEES: Revenues from software maintenance
         fees increased 36.8% to $1.7 million for the quarter ended October 31,
         1999 from $1.2 million for the quarter ended October 31, 1998. Revenues
         from software maintenance fees increased 35.3% to $4.9 million for the
         nine months ended October 31, 1999 from $3.7 million for the nine
         months ended October 31, 1998. Increases in software maintenance fees
         have been driven by continued growth in the installed customer base
         resulting in growth in the number of customers under maintenance
         contracts.

                  SOFTWARE IMPLEMENTATION FEES: Revenues from software
         implementation fees decreased 32.9% to $1.4 million for the quarter
         ended October 31, 1999 from $2.1 million for the quarter ended October
         31, 1998. Revenues from software implementation fees decreased 21.8% to
         $4.1 million for the nine months ended October 31, 1999 from $5.2
         million for the nine months ended October 31, 1998. Decreases in
         software implementation fees have been driven by reduced sales levels
         of software licenses, resulting in a reduction in the number of
         customers requiring implementation services.

                  HARDWARE AND OTHER FEES: Revenues from hardware sales
         decreased 79.1% to $34,000 for the quarter ended October 31, 1999 from
         $160,000 for the quarter ended October 31, 1998. Revenues from hardware
         sales decreased 67.9% to $230,000 for the nine months ended October 31,
         1999 from $718,000 for the nine months ended October 31, 1998. The
         Company sells hardware at the request of its customers, but does not
         consider hardware sales to be a meaningful part of its business.

         COST OF REVENUES

                  COST OF CONSULTING AND MANAGEMENT SERVICES: Cost of consulting
         and management services increased 91.0% to $8.0 million for the quarter
         ended October 31, 1999 from $4.2 million for the quarter ended October
         31, 1998. Cost of consulting and management services increased 65.6% to
         $19.5 million for the nine months ended October 31, 1999 from $11.8
         million for the nine months ended October 31, 1998. Cost of consulting
         and management services as a percentage of consulting and management
         service fees decreased to 53.4% for the three months ended October 31,
         1999 from 57.9% for the three months ended October 31, 1998. Cost of
         consulting and management services as a percentage of consulting and
         management service fees decreased to 53.5% for the nine months ended
         October 31, 1999 from 62.3% for the nine months ended October 31, 1998.
         Reductions in the cost of consulting and management services as a
         percentage of consulting and management services fees reflects
         continued growth in value priced engagements. Cost of consulting and
         management services consists primarily of personnel costs associated
         with time and material and value priced contracts.

                  COST OF SOFTWARE LICENSES: Cost of software licenses increased
         29.9% to $394,000 for the quarter ended October 31, 1999 from $303,000
         for the quarter ended October 31, 1998. Cost of software licenses
         increased 54.0% to $1.2 million for the nine months ended October 31,
         1999 from $806,000 for the nine months ended October 31, 1998. Cost of
         software licenses as a percentage of software license fees increased to
         14.6% for the three months ended October 31, 1999 from 7.9% for the
         three months ended October 31, 1998. Cost of the software licenses as a
         percentage of software license fees increased to 14.5% for the nine
         months ended October 31, 1999 from 7.1% for the nine months ended
         October 31, 1998. Costs of software licenses includes amortization
         costs relating to capitalized software, as well as royalty costs
         associated with sales of liquidity management and consolidation
         software products. Increases in cost of software licenses as a
         percentage of software license fees reflect an increase in software
         amortization cost, and a decrease in license fees.


                                       14
<PAGE>

                  COST OF SOFTWARE MAINTENANCE: Cost of software maintenance
         increased 11.4% to $690,000 for the quarter ended October 31, 1999 from
         $619,000 for the quarter ended October 31, 1998. Cost of software
         maintenance increased 20.1% to $2.0 million for the nine months ended
         October 31, 1999 from $1.7 million for the nine months ended October
         31, 1998. Cost of software maintenance consists primarily of personnel
         costs associated with providing customer support for software products
         sold. Increases in costs associated with software maintenance reflect
         staffing increases to support increased customer support and
         maintenance revenue.

                  COST OF SOFTWARE IMPLEMENTATION: Cost of software
         implementation decreased 52.0% to $542,000 for the quarter ended
         October 31, 1999 from $1.1 million for the quarter ended October 31,
         1998. Cost of software implementation decreased 32.8% to $2.0 million
         for the nine months ended October 31, 1999 from $3.0 million for the
         nine months ended October 31, 1998. Cost of software implementation
         consists primarily of personnel costs associated with implementation,
         training, and providing customer support for software products sold.
         Decreases in costs associated with software implementation reflect
         reductions in sales of software implementation services.

                  COST OF HARDWARE AND OTHER FEES: Cost of hardware decreased
         79.2% to $23,000 for the quarter ended October 31, 1999 from $110,000
         for the quarter ended October 31, 1998. Cost of hardware decreased
         65.3% to $183,000 for the nine months ended October 31, 1999 from
         $528,000 for the nine months ended October 31, 1998. These decreases
         reflect reductions in the amount of hardware sold during the
         respective periods over the prior year periods.

         OPERATING COSTS AND EXPENSES

                  SELLING GENERAL AND ADMINISTRATIVE: Selling, general and
         administrative expenses generally consist of personnel costs associated
         with selling, marketing, general management and software management, as
         well as fees for professional services and other related costs.
         Selling, general and administrative expenses increased 38.6% to $6.9
         million for the quarter ended October 31, 1999 from $5.0 million for
         the quarter ended October 31, 1998. Selling general and administrative
         expenses increased 34.5% to $17.8 million for the nine months ended
         October 31, 1999 from $13.3 million for the nine months ended October
         31, 1998. The increase in these expenses reflected growth in additional
         management, marketing, and administrative staff over the prior periods
         to support the Company's expanding operations.

                  RESEARCH AND DEVELOPMENT: Research and development expenses
         increased 36.5% to $1.3 million for the quarter ended October 31, 1999
         from $1.0 million for the quarter ended October 31, 1998. Research and
         development expenses increased 17.3% to $4.0 million for the nine
         months ended October 31, 1999 from $3.4 million for the nine months
         ended October 31, 1998. Increases in research and development expense
         reflect a higher level of software development activity.

                  OTHER INCOME: Other income decreased 39.0% to $223,000 for the
         quarter ended October 31, 1999 from $366,000 for the quarter ended
         October 31, 1998. Other income increased 32.4% to $780,000 for the nine
         months ended October 31, 1999 from $589,000 for the nine months ended
         October 31, 1998. Other income consists primarily of interest income on
         tax-exempt short-term investments partially offset by interest expense
         on the Company's debt. The increases in the dollar amount of other
         income were primarily due to interest earned on higher balances of
         cash, cash equivalents and short-term investments resulting from net
         proceeds of the initial public offering of the Company's common stock
         which was completed in May 1998.

                  PROVISION FOR INCOME TAXES: The provision for income taxes is
         based on the estimated annual effective tax rate, and includes federal
         and state income taxes. The Company's effective income tax rate was
         36.0% for the three and nine months ended October 31, 1999.


                                       15
<PAGE>

     LIQUIDITY AND CAPITAL RESOURCES

                  As of October 31, 1999, the Company had $55.1 million of
         working capital, including $16.4 million in cash, and cash equivalents,
         as compared to $52.1 million of working capital as of January 31, 1999,
         including $20.7 million of cash and cash equivalents. Operating
         activities consumed $2.7 million of available cash for the nine months
         ended October 31, 1999 as compared to $7.2 million for the nine months
         ended October 31, 1998, largely through growth in accounts receivable
         of $12.5 million and through increases of accounts payable and accrued
         expenses of $1.6 million.

                  Average days' sales outstanding fluctuate for a variety of
         reasons, including the timing of billings specified by contractual
         agreement, and receivables for non-revenue related activities.

                  The following table contains the quarterly days sales
         outstanding (DSO) with a comparative column which adds reimbursed
         expenses to the revenue portion of the computation:

<TABLE>
<CAPTION>

                                                                            DSO Including Expense
                            Quarter Ended                    DSO               Reimbursements*
                    ------------------------------ ------------------------ -----------------------
<S>                                                          <C>                     <C>
                          January 31, 1999                   163                     151
                           April 30, 1999                    175                     158
                            July 31, 1999                    169                     155
                          October 31, 1999                   177                     160
</TABLE>

                  * Includes reimbursements for travel and out of pocket
         expenses which are not considered revenue, but are included in
         outstanding receivables.

                  Cash consumed by investing activities during the period ended
         October 31, 1999, of $1.3 million was generated by the sale of
         short-term investments of $4.2 million, less $2.9 million used to
         purchase furniture, equipment, and leasehold improvements due to growth
         in staff, and $2.6 million invested in capitalized software.

                  Cash consumed by financing activities for the period ended
         October 31, 1999, was $326,000 and resulted primarily from 248,000
         received through the exercise of stock options offset by $574,000 used
         to re-purchase shares of company stock.

                  The Company no longer maintains a revolving credit facility in
         light of its substantial liquid working capital.

                  The Company's future liquidity and capital requirements will
         depend upon numerous factors. The Company believes its current cash and
         cash equivalents and short-term investment balances and cash generated
         from operations will be sufficient to meet the Company's operating and
         capital requirement through at least October 2000. However, there can
         be no assurance that the Company will not require additional financing
         within this time frame. The Company's forecast of the period of time
         through which its financial resources will be adequate to support its
         operations is a forward-looking statement that involves risk and
         uncertainties, and actual results could vary. The failure of the
         Company to raise capital when needed could have a material adverse
         effect on the Company's business, financial condition and results of
         operation.

     YEAR 2000

         STATE OF READINESS

                  The Company has performed a company-wide evaluation to assess
         the ability of its products and its information technology ("IT") and
         non-IT systems to properly function and execute transactions in the
         Year 2000. The Company's Year 2000 Project is divided into three major
         sections: (a) Infrastructure, which includes internal management
         information systems, computers, servers, networks to support the
         business and any non-IT systems used in the operation of the business;
         (b) Third Party Suppliers, which


                                       16
<PAGE>

         includes those suppliers that provide the Company with software
         applications that are used in concert with the Company's products and
         service suppliers, such as Internet service providers and computer
         testing resources; and (c) Company Products and Services, which
         includes those products and services that generate revenue for the
         Company. The Project has been divided into six phases: (1) Awareness
         and Communication; (2) Inventory; (3) Assessment; (4) Renovation; (5)
         Testing; and (6) Rollout. As discussed below, the Company has
         substantially completed the all phases of the Year 2000 Project for its
         Infrastructure, Third Party Suppliers and Customer Products and
         Services.

         INFRASTRUCTURE

                  The Company has completed the inventory, assessment,
         renovation and testing of its IT and non-IT systems and is
         substantially complete with validation of test results and compliance
         information for these systems. The Company has distributed a letter to
         each of its vendors that supply systems or software for its IT and
         non-IT systems to determine the vendors' Year 2000 status. A majority
         of the recipients have responded to the letter, and most of the
         respondents have given assurances that their products and services are
         able to function in the context of the Year 2000 Problem. The Company
         continues to assess responses and continues to communicate with vendors
         that are material to the Company's operations to gain satisfactory
         assurances. If such assurances are not obtained, the Company will seek
         alternatives, including contracting with other vendors.

        THIRD PARTY SUPPLIERS

                  The Company has taken an inventory of the applications from
         third party suppliers that are used in conjunction with the Company's
         products. The Company has contacted significant third-party suppliers
         in an effort to assess the state of their Year 2000 readiness. The
         Company has received information, or tested all of the applications
         from third-party suppliers used in the its products. Only one supplier
         has not been willing to certify the Year 2000 compliance of its
         application, although internal tests have disclosed no Year 2000
         problems with this application. Because its bank customers require
         certifications regarding Year 2000 compliance, the Company has
         communicated with this supplier to determine a solution to this
         certification issue. The Company has been given access to the source
         code and has concluded its own remediation and risk evaluation in
         conjunction with the testing already conducted.

         COMPANY PRODUCTS AND SERVICES

                  All of the Company's software products have been tested and
         confirmed as compliant. The Company has a Web site to identify each
         product and its compliant release number and status. The Company also
         has transmitted letters to its customers notifying them of their
         current Year 2000 readiness status and outlining the steps, if any,
         needed for the customer to receive Year 2000 compliant software. As a
         result of the stringent requirements placed on the Company's bank
         customers by the Office of Comptroller and Currency (the "OCC") and the
         Federal Financial Industry Examiners Council (the "FFIEC"), these
         customers are requiring documented evidence of Year 2000 Compliance of
         the Company's products. The Company currently has established a process
         to archive the results of its compliance tests and to document this
         test information in a format suitable for external distribution.

         COSTS

                  Through and including the third quarter of fiscal 1999, the
         Company has spent approximately $860,000 relating to labor costs for
         its Year 2000 Project. The Company has incurred no material replacement
         costs for non-compliant systems because it did not accelerate its
         replacement of any systems as a result of the Year 2000 issue. The
         Company currently estimates that its costs remaining through January
         31, 2000 relating to the Year 2000 Project will be less than $50,000,
         the majority of which will be spent on the documentation process
         required by the Company's bank customers. Other costs, including
         replacement of non-compliant hardware and other equipment, are expected
         to be less than $200,000. Funds for the Year 2000 Project are expected
         to be paid for out of operations.


                                       17
<PAGE>

         RISKS

                  If the Company does not successfully complete its Year 2000
         Project, it could have a material adverse effect on the Company's
         ability to market, sell and implement its software products and
         consulting services, which could have a material adverse effect on its
         financial condition and results of operations. The Company's customer
         base is primarily in the banking industry. Because members of this
         industry are heavily regulated and audited for their Year 2000
         compliance efforts, the Company does not consider the possibility of
         Year 2000 noncompliance by banks to be reasonably likely. The OCC has
         published guidance criteria that all banks be complete with Year 2000
         renovation and unit testing by December 1998, thus allowing the entire
         year of 1999 for system testing. However, the operations and financial
         condition of banks is significantly dependent on the results of
         operations and financial condition of the their customers. If customers
         of banks experience a material adverse effect as a result of Year 2000
         issues, banks, and consequently the Company, could be adversely
         affected. There can be no assurance that third parties will be Year
         2000 compliant in a timely manner. The Company is anticipating that
         many of its bank customers will not move any new systems into
         production during the last half of 1999. During this period, only
         current system bug fixes and Year 2000 compliant releases will be sent
         into the bank's production environment. Banks will continue to contract
         for new business solutions, especially those that result in new bank
         revenues. During this period, banks also will continue to initiate
         efforts that precede the implementation of a new business software
         solution. The Company is currently assessing the impact this will have
         on the Company's operations.

         CONTINGENCY PLAN

                  Contingency plans have been completed and evaluated by Core
         Competency Managers. Preparations are underway to pre-stage information
         and resources for the Year 2000 event.

         RECENTLY ISSUED ACCOUNTING STANDARDS

                  The Accounting Standards Executive Committee of the American
         Institute of Certified Public Accountants has issued Statement of
         Position No. 98-9 "Modification of SOP 97-2, Software Revenue
         Recognition, with Respect to Certain Transactions" ("SOP 98-9"), which
         amends certain provisions of Statement of Position No. 97-2 "Software
         Revenue Recognition" ("SOP 97-2"). The new SOP 98-9 will be effective
         for all transactions entered into by the Company subsequent to January
         31, 2000. The Company is currently reviewing the impact of applying SOP
         98-9.

                  In June 1998, the FASB issued SFAS No. 133, ACCOUNTING FOR
         DERIVATIVE INSTRUMENTS and HEDGING ACTIVITIES ("SFAS 133"), which is
         required to be adopted in years beginning after June 15, 2000. Because
         the Company does not use derivatives, management does not anticipate
         that the adoption of the new statement will have an effect on earnings
         or the financial position of the Company.

     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                  INTEREST RATES. The Company invests its cash in a variety of
         financial instruments, primarily tax advantaged variable rate and
         fixed rate obligations of state and local municipalities, and
         educational entities and agencies. These investments are denominated
         in U.S. dollars.

                  The Company accounts for its investment instruments in
         accordance with Statement of Financial Accounting Standards No. 115,
         "Accounting for Certain Investments in Debt and Equity Securities"
         ("SFAS 115"). All of the cash equivalents and short-term investments
         are treated as available-for-sale under SFAS 115.

                  Investments in both fixed rate and floating rate interest
         earning instruments carry a degree of interest rate risk. Fixed rate
         securities may have their fair market value adversely impacted due to a
         rise in interest rates, while floating rate securities may produce less
         income than expected if interest rates fall. Due in part to these
         factors, the Company's future investment income may fall short of
         expectations due to changes in interest rates or the Company may suffer
         losses in principal if forced to sell securities which have seen a
         decline in market value due to changes in interest rates. The Company's
         investment securities are held for purposes other than trading. While
         certain of the investment securities had maturities in excess of one
         year, the Company intends to liquidate such securities if necessary
         within one year. The weighted-average interest rate on investment
         securities at October 31, 1999 was 5.82%.


                                       18
<PAGE>

         Amortized costs of short-term investments held at October 31, 1999 was
         $8.7 million, which approximates fair value.

PART II   OTHER INFORMATION

     ITEM 1.    LEGAL PROCEEDINGS

         None

     ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

     ITEM 5.  OTHER INFORMATION

         NONE

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)      Exhibits

                   None

          (b)      Reports on Form 8-K

                   None


                                       19

<PAGE>

SIGNATURES

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

                             CARREKER-ANTINORI, INC.

By:   /s/ John D. Carreker, Jr.                    Date:  December 15, 1999
  ---------------------------------                       ------------------
     John D. Carreker, Jr.
     Chairman of the Board and
     Chief Executive Officer

By:   /s/ Terry L. Gage                            Date:  December 15, 1999
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     Terry L. Gage
     Executive Vice President and
     Chief Financial Officer


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