<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 July 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 ___0-24201________________

                             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 --- 18,561,886 shares as of August 31, 1999.


<PAGE>

                             CARREKER-ANTINORI, INC.

                                      INDEX
<TABLE>
<CAPTION>

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

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

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

              Condensed Consolidated Statements of Cash Flows
              for the six months ended July 31, 1999
              and July 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>

                                                                            July 31,           January 31,
                              ASSETS                                          1999                 1999
                                                                          (Unaudited)
                                                                         ---------------      ---------------
<S>                                                                      <C>                  <C>
CURRENT ASSETS:
       Cash and cash equivalents                                              $  17,994            $  20,701
       Short term investments                                                     8,677               12,849
       Accounts receivable, net                                                  34,667               27,604
       Prepaid expenses and other assets                                          1,125                  681
       Deferred income taxes                                                        736                  736
                                                                         ---------------      ---------------
                           Total current assets                                  63,199               62,571
Furniture, equipment, and leasehold improvements, net                             3,948                2,673
Software costs capitalized, net                                                   4,414                3,279
Other assets                                                                        344                  213
                                                                         ---------------      ---------------
                          Total assets                                        $  71,905            $  68,736
                                                                         ===============      ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
       Accounts payable                                                        $  1,238            $   2,045
       Accrued compensation and benefits                                            610                  700
       Other accrued expenses                                                       805                  961
       Income taxes payable                                                       2,328                1,400
       Deferred revenue                                                           4,982                5,348
                                                                         ---------------      ---------------
                         Total current liabilities                                9,963               10,454
 Deferred income taxes                                                            1,201                1,151
                                                                         ---------------      ---------------
                         Total liabilities                                       11,164               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 July 31 and January
         31, 1999, respectively                                                     186                  184
       Additional paid-in capital                                                44,770               44,563
       Less treasury stock, at cost:
             1 shares, as of July 31, 1999                                          (4)                 ----
       Deferred compensation                                                      (412)                (568)
       Retained earnings                                                         16,201               12,952
                                                                         ---------------      ---------------
                        Total stockholders' equity                               60,741               57,131
                                                                         ---------------      ---------------
                        Total liabilities and stockholders' equity            $  71,905            $  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               Six Months Ended
                                                                             July 31,                       July 31,
                                                                  ---------------------------    ----------------------------
                                                                        1999            1998           1999             1998
                                                                  -----------     -----------    -----------    -------------
<S>                                                               <C>             <C>            <C>            <C>
REVENUES:
        Consulting and management service fees                       $13,039           $ 6,589        $21,363         $ 11,603
        Software license fees                                          2,762             4,061          5,855            7,518
        Software maintenance fees                                      1,764             1,285          3,266            2,428
        Software implementation fees                                   1,232             2,136          2,675            3,125
        Hardware and other fees                                           75               227            197              558
                                                                  -----------      -----------    -----------    -------------
                      Total revenues                                  18,872            14,298         33,356           25,232

COSTS OF REVENUES:
        Consulting and management service fees                         6,162             3,905         11,433            7,549
        Software license fees                                            380               247            848              503
        Software maintenance fees                                        671               568          1,335            1,067
        Software implementation fees                                     808             1,205          1,454            1,842
        Hardware and other fees                                           60               186            161              418
                                                                  -----------      -----------    -----------    -------------
                 Total cost of revenues                                8,081             6,111         15,231           11,379

                                                                  -----------      -----------    -----------    -------------
GROSS PROFIT                                                          10,791             8,187         18,125           13,853
                                                                  -----------      -----------    -----------    -------------
OPERATING COSTS AND EXPENSES:
        Selling, general and administrative                            6,114             4,424         10,932            8,278
        Research and development                                       1,356             1,243          2,674            2,438
                                                                  -----------      -----------    -----------    -------------
                 Total operating costs and expenses                    7,470             5,667         13,606           10,716

Income from operations                                                 3,321             2,520          4,519            3,137
Other income                                                             316               205            557              223
                                                                  -----------      -----------    -----------    -------------

Income before provision for income taxes                               3,637             2,725          5,076            3,360
Provision for income taxes                                             1,351             1,011          1,827            1,263
                                                                  -----------      -----------    -----------    -------------
Net income                                                            $2,286           $ 1,714        $ 3,249          $ 2,097
                                                                  ===========      ===========    ===========    =============

Basic earnings per share                                              $ 0.12            $ 0.10        $  0.18          $  0.14
                                                                  ===========      ===========    ===========    =============
Diluted earnings per share                                            $ 0.12            $ 0.10        $  0.17          $  0.13
                                                                  ===========      ===========    ===========    =============

Shares used in computing basic earnings per share                     18,477            16,523         18,423           14,629
Shares used in computing diluted earnings per share                   19,078            17,736         18,961           16,239
</TABLE>


                                              See accompanying notes.


                                       4
<PAGE>

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

<TABLE>
<CAPTION>

                                                                                  Six Months Ended
                                                                                      July 31,
                                                                           -------------------------------
                                                                                  1999               1998
                                                                           ------------       ------------
<S>                                                                        <C>                <C>
OPERATING ACTIVITIES:
     Net Income                                                            $     3,249         $    2,097
     Adjustments to reconcile net income to net cash used in operating
     activities:
         Amortization of capitalized software                                      583                221
         Depreciation                                                            1,026                617
         Amortization of deferred compensation                                     156                126
         Deferred income taxes                                                      50                216
         Changes in assets and liabilities:
               Accounts receivable                                              (7,064)            (5,549)
               Prepaid expenses and other                                         (574)              (139)
               Accounts payable and accrued expenses                            (1,052)            (1,300)
               Taxes payable                                                       928                939
               Deferred revenue                                                   (366)              (620)
                                                                           ------------       ------------
                   Net cash used in operating activities                        (3,064)            (3,392)

INVESTING ACTIVITIES:
       Purchase of short-term investments                                         ----                (24)
       Sale of short-term investments                                            4,172               ----
       Purchase of furniture, equipment and leasehold improvements              (2,301)            (1,185)
       Software costs capitalized                                               (1,719)              (781)
                                                                           ------------       ------------
                  Net cash provided by (used in) investing activities              152             (1,990)

FINANCING ACTIVITIES:
        Purchase of treasury stock                                                  (4)                (8)
        Proceeds from sale of stock                                               ----             35,838
        Proceeds from stock options exercised                                      209              3,069
                                                                           ------------       ------------
                 Net cash provided by financing activities                         205             38,899

Net increase (decrease) in cash and cash equivalents                            (2,707)            33,517
Cash and cash equivalents at beginning of period                                20,701              2,485
                                                                           ------------       ------------
Cash and cash equivalents at end of period                                     $17,994            $36,002
                                                                           ============       ============

Supplemental cash flow information:
    Cash paid for interest                                                  $     ----        $        26
                                                                           ============       ============

   Cash paid for income taxes                                               $      809        $       105
                                                                           ============       ============
</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 July 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 July 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 July 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 six months ended July 31,
         1999 and 1998 (in thousands, except per share amounts):

<TABLE>
<CAPTION>

                                                                      Three Months Ended          Six Months Ended
                                                                            July 31,                   July 31,
                                                                      1999          1998          1999         1998
                                                                  ----------    ----------     ---------    ---------
<S>                                                               <C>           <C>            <C>          <C>
               Basic earnings per share:
                 Net income                                       $   2,286       $ 1,714        $3,249      $ 2,097

                 Weighted average shares outstanding                 18,477        16,523        18,423       14,629

                               Basic earnings per share              $ 0.12       $  0.10        $ 0.18      $  0.14
                                                                  ----------    ----------     ---------    ---------

               Diluted earnings per share:
                 Net income                                       $   2,286       $ 1,714        $3,249      $ 2,097

                 Weighted average shares outstanding                 18,477        16,523        18,423       14,629
                 Assumed conversion of employee stock
                     options                                            601         1,213           538        1,610
                                                                  ----------    ----------     ---------    ---------
               Shares used in diluted earnings per share
                  calculation                                        19,078        17,736        18,961       16,239
                                                                  ==========    ==========     =========    =========

                               Diluted earnings per share         $    0.12       $  0.10        $ 0.17      $  0.13
                                                                  ==========    ==========     =========    =========
</TABLE>

     5.  MANAGEMENT SERVICES

                  For the three and six months ended July 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                 Six Months Ended
                                                          July 31,                          July 31,
                                                 ----------------------------     -----------------------------
                                                     1999            1998            1999             1998
                                                 -------------    -----------     ------------    -------------
<S>                                              <C>              <C>             <C>             <C>
         Infiteq, LLC                                $     30       $    343         $     51           $  849
         Payment Solutions Network,
         Inc.                                             180            415              359              788
         Electronic Check Clearing
         House Organization                               238            250              505              529

</TABLE>


          The Company had net receivables from related parties at July 31 in the
following amounts (in thousands):
<TABLE>

                                                                                        1999              1998
                                                                                        ----              ----
<S>                                                                                   <C>               <C>
         Infiteq, LLC                                                                 $   79            $  157
         Payment Solutions Network, Inc.                                                 330               443
         Electronic Check Clearing House Organization                                     91               466
</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 periods ended July
         31, 1999 and 1998 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                         For the three month period ended July 31, 1999
                                                 -------------------------------------------------------------------------
                                                   Revenue         Payment       Emerging       Corporate
                                                 Enhancement       Systems      Solutions     & Unallocated        Total
                                                 ------------    -----------    -----------   --------------     ---------
<S>                                              <C>              <C>           <C>           <C>                <C>
Revenues
   Consulting and management service fees          $  7,017       $  3,361       $  2,661        $   ----        $ 13,039
   Software license fees ................               612          2,150           ----            ----           2,762
   Software maintenance fees ............               374          1,390           ----            ----           1,764
   Software implementation fees .........               195          1,037           ----            ----           1,232
   Hardware and other fees ..............              ----             75           ----            ----              75
                                                   --------       --------       --------         --------       --------

      Total revenues ....................          $  8,198       $  8,013       $  2,661        $   ----        $ 18,872
                                                   ========       ========       ========         ========       ========
Income (loss) from operations                      $  5,165       $  2,363       $    649        $ (4,856)       $  3,321

Assets ..................................              ----         ------           ----        $ 71,905        $ 71,905

Depreciation and
Amortization ............................          $    130       $    328       $     14        $    340        $    812

Capital expenditures ....................          $   ----       $    ----      $   ----        $  1,119        $  1,119
</TABLE>


                                       8
<PAGE>

<TABLE>
<CAPTION>

                                                         For the three month period ended July 31, 1998
                                                ------------------------------------------------------------------
                                                  Revenue          Payment    Emerging     Corporate
                                                 Enhancement       Systems   Solutions  & Unallocated     Total
                                                ------------------------------------------------------------------
<S>                                             <C>              <C>         <C>        <C>             <C>
Revenues
   Consulting and management service fees           $  3,453      $  1,999    $  1,137   $   ----        $  6,589
   Software license fees .................             1,171         2,890        ----       ----           4,061
   Software maintenance fees .............               209         1,076        ----       ----           1,285
   Software implementation fees ..........               722         1,414        ----       ----           2,136
   Hardware and other fees ...............              ----           227        ----       ----             227
                                                    --------      --------    --------   --------        --------
      Total revenues .....................          $  5,555      $  7,606    $  1,137   $   ----        $ 14,298
                                                    ========      ========    ========   ========        ========

Income (loss) from operations                       $  3,522      $  2,111    $    250   $ (3,363)       $  2,520

Assets ...................................          $    ---      $   ----    $   ----   $ 61,569        $ 61,569

Depreciation and
Amortization .............................          $     19      $    159    $      8   $    230        $    416

Capital expenditures .....................          $   ----      $   ----    $   ----   $    911        $    911

</TABLE>

         Segment information for the six month periods ended July 31, 1999 and
         1998 is as follows (in thousands):

<TABLE>
<CAPTION>

                                                          For the six month period ended July 31, 1999
                                                ------------------------------------------------------------------------
                                                   Revenue          Payment     Emerging       Corporate
                                                 Enhancement        Systems    Solutions     & Unallocated     Total
                                                ------------------------------------------------------------------------
<S>                                             <C>                <C>         <C>           <C>             <C>
Revenues
   Consulting and management service fees           $ 10,855       $  6,257     $  4,251        $   ----      $ 21,363
   Software license fees .................             1,850          4,005         ----            ----         5,855
   Software maintenance fees .............               713          2,553         ----            ----         3,266
   Software implementation fees ..........               423          2,252         ----            ----         2,675
   Hardware and other fees ...............                              197         ----            ----           197
                                                    --------       ---------    ---------       --------     ---------
      Total revenues .....................          $ 13,841       $ 15,264     $  4,251        $   ----     $  33,356
                                                    ========       =========    =========       ========     =========

Income (loss) from operations                       $  8,152       $  4,583     $    567        $ (8,783)    $   4,519

Assets ...................................          $   ---        $   ----     $   ----        $ 71,905     $  71,905

Depreciation and
Amortization .............................          $   252        $    676     $     25        $    656     $   1,609

Capital expenditures .....................          $   ---        $   ----     $   ----        $  2,301     $   2,301

</TABLE>


                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                  For the six month period ended July 31, 1998
                                                 --------------------------------------------------------------------------------
                                                    Revenue          Payment        Emerging         Corporate
                                                  Enhancement        Systems        Solutions      & Unallocated          Total
                                                 --------------------------------------------------------------------------------
<S>                                              <C>                <C>             <C>            <C>                   <C>
Revenues
   Consulting and management service fees           $ 4,369          $ 4,622          $ 2,612             ----           $11,603
   Software license fees .................            2,110            5,408             ----             ----             7,518
   Software maintenance fees .............              384            2,044             ----             ----             2,428
   Software implementation fees ..........            1,106            2,019             ----             ----             3,125
   Hardware and other fees ...............               --              558             ----             ----               558
                                                   --------          -------          -------          --------          --------
      Total revenues .....................          $ 7,969          $14,651          $ 2,612             ----           $25,232
                                                   ========          =======          =======          ========          ========

Income (loss) from operations                       $ 4,243          $ 4,806          $   951          $(6,863)          $ 3,137

Assets ...................................          $  ----          $  ----          $  ----          $61,569           $61,569

Depreciation and
Amortization .............................          $    37          $   382          $    15          $   410           $   844

Capital expenditures .....................          $    --          $    --          $    --          $ 1,185           $ 1,185
</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
         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, Inc. (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.

<TABLE>
<CAPTION>
         DIVISIONS & GROUPS                          SOLUTIONS DESCRIPTION
         ---------------------------------           ------------------------------------------
         REVENUE ENHANCEMENT                         INCREASES CUSTOMER REVENUES
         <S>                                         <C>
                  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
</TABLE>

                  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          Six Months Ended
                                                                                 July 31,                   July 31,
                                                                         -------------------------    ----------------------
                                                                                1999         1998        1999          1998
                                                                         ------------    ---------    --------    ----------
<S>                                                                      <C>             <C>          <C>         <C>
         Revenues:
                 Consulting and management service fees                         69.2%         46.1%      64.0%         46.0%
                 Software license fees                                          14.6          28.4       17.6          29.8
                 Software maintenance fees                                       9.3           9.0        9.8           9.6
                 Software implementation fees                                    6.5          14.9        8.0          12.4
                 Hardware and other fees                                          .4           1.6         .6           2.2
                                                                         ------------    ---------- ----------    ----------
                               Total revenues                                  100.0         100.0      100.0         100.0

         Costs of revenues:
                 Consulting and management service fees                         32.7          27.3       34.3          29.9
                 Software license fees                                           2.0           1.7        2.5           2.0
                 Software maintenance fees                                       3.6           4.0        4.0           4.2
                 Software implementation fees                                    4.3           8.4        4.4           7.3
                 Hardware and other fees                                          .3           1.3         .5           1.7
                                                                         ------------    ---------- ----------    ----------
                          Total cost of revenues                                42.9          42.7       45.7          45.1

                                                                         ------------    ---------- ----------    ----------
         Gross profit                                                           57.1          57.3       54.3          54.9
                                                                         ------------    ---------- ----------    ----------

         Operating costs and expenses:
                 Selling general and administrative                             32.4          30.9       32.7          32.8
                 Research and development                                        7.2           8.7        8.0           9.7
                                                                         ------------    ---------- ----------    ----------
                          Total operating costs and expenses                    39.6          39.6       40.7          42.5

         Income from operations                                                 17.5          17.7       13.6          12.4

         Other income (expense)                                                  1.7           1.4        1.7            .9
                                                                         ------------    ---------- ----------    ----------

         Income before provisions for income taxes                              19.2          19.1       15.3          13.3
         Provision from income taxes                                             7.2           7.1        5.5           5.0

                                                                         ------------    ---------- ----------    ----------
         Net income                                                             12.0%         12.0%       9.8%          8.3%
                                                                         ============    ========== ==========     =========
</TABLE>

         REVENUES

                  REVENUES: The Company's total revenues increased 32.0% to
         $18.9 million for the quarter ended July 31, 1999 from $14.3 million
         for the quarter ended July 31, 1998. The Company's total revenues
         increased 32.2% to $33.4 million for the six months ended July 31, 1999
         from $25.2 million for the six months ended July 31, 1998.

                  CONSULTING AND MANAGEMENT SERVICE FEES: Revenues from
         consulting and management service fees increased 97.9% to $13.0 million
         for the quarter ended July 31, 1999 from $6.6 million for the quarter
         ended July 31, 1998. Revenues from consulting and management service
         fees increased 84.1% to $21.4 million for the six months ended July 31,
         1999 from $11.6 million for the six months ended July 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 32.0% to $2.8 million for the quarter ended July 31, 1999
         from $4.1 million for the quarter ended July 31, 1998. Revenues from
         software license fees decreased 22.1% to $5.9 million for the six
         months ended July 31, 1999 from $7.5 million for the six months ended
         July 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 37.3% to $1.8 million for the quarter ended July 31,
         1999 from $1.3 million for the quarter ended July 31, 1998. Revenues
         from software maintenance fees increased 34.5% to $3.3 million for the
         six months ended July 31, 1999 from $2.4 million for the six months
         ended July 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 42.3% to $1.2 million for the quarter
         ended July 31, 1999 from $2.1 million for the quarter ended July 31,
         1998. Revenues from software implementation fees decreased 14.4% to
         $2.7 million for the six months ended July 31, 1999 from $3.1 million
         for the six months ended July 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 67.2% to $74,000 for the quarter ended July 31, 1999 from
         $227,000 for the quarter ended July 31, 1998. Revenues from hardware
         sales decreased 64.7% to $197,000 for the six months ended July 31,
         1999 from $558,000 for the six months ended July 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 57.8% to $6.2 million for the quarter
         ended July 31, 1999 from $3.9 million for the quarter ended July 31,
         1998. Cost of consulting and management services increased 51.5% to
         $11.4 million for the six months ended July 31, 1999 from $7.5 million
         for the six months ended July 31, 1998. Cost of consulting and
         management services as a percentage of consulting and management
         service fees decreased to 47.3% for the three months ended July 31,
         1999 from 59.3% for the three months ended July 31, 1998. Cost of
         consulting and management services as a percentage of consulting and
         management service fees decreased to 53.5% for the six months ended
         July 31, 1999 from 65.1% for the six months ended July 31, 1998. Cost
         of consulting and management services as a percentage of consulting and
         management services fees reflects continued growth in value priced
         engagements and a declining reliance on time and material contracts.
         Cost of consulting and management services consists primarily of
         personnel costs associated with time and material contracts and value
         priced efforts.

                  COST OF SOFTWARE LICENSES: Cost of software licenses increased
         53.9% to $380,000 for the quarter ended July 31, 1999 from $247,000 for
         the quarter ended July 31, 1998. Cost of software licenses increased
         68.5% to $848,000 for the six months ended July 31, 1999 from $503,000
         for the six months ended July 31, 1998. Cost of software licenses as a
         percentage of software license fees increased to 13.8% for the three
         months ended July 31, 1999 from 6.1% for the three months ended July
         31, 1998. Cost of the software licenses as a percentage of software
         license fees increased to 14.5% for the six months ended July 31, 1999
         from 6.7% for the six months ended July 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.


                                       14
<PAGE>

                  COST OF SOFTWARE MAINTENANCE: Cost of software maintenance
         increased 18.2% to $671,000 for the quarter ended July 31, 1999 from
         $568,000 for the quarter ended July 31, 1998. Cost of software
         maintenance increased 25.2% to $1.3 million for the six months ended
         July 31, 1999 from $1.1 million for the six months ended July 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 32.9% to $800,000 for the quarter ended July
         31, 1999 from $1.2 million for the quarter ended July 31, 1998. Cost of
         software implementation decreased 21.0% to $1.5 million for the six
         months ended July 31, 1999 from $1.8 million for the six months ended
         July 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 staffing
         required to support delivery of these services.

                  COST OF HARDWARE AND OTHER FEES: Cost of hardware decreased
         67.9% to $60,000 for the quarter ended July 31, 1999 from $186,000 for
         the quarter ended July 31, 1998. Cost of hardware decreased 61.6% to
         $161,000 for the six months ended July 31, 1999 from $418,000 for the
         six months ended July 31, 1998. Decreases for the quarter and six
         months ended 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 38.2% to $6.1 million for
         the quarter ended July 31, 1999 from $4.4 million for the quarter ended
         July 31, 1998. Selling general and administrative expenses increased
         32.1% to $10.9 million for the six months ended July 31, 1999 from $8.3
         million for the six months ended July 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 9.1% to $1.4 million for the quarter ended July 31, 1999 from
         $1.2 million for the quarter ended July 31, 1998. Research and
         development expenses increased 9.7% to $2.7 million for the six months
         ended July 31, 1999 from $2.4 million for the six months ended July 31,
         1998. Increases in research and development expense reflect a higher
         level of software development activity.

                  OTHER INCOME: Other income increased 54.0% to $316,000 for the
         quarter ended July 31, 1999 from $205,000 for the quarter ended July
         31, 1998. Other income increased 149.4% to $557,000 for the six months
         ended July 31, 1999 from $223,000 for the six months ended July 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
         37.1% and 36.0% for the three and six months ended July 31, 1999.


                                       15
<PAGE>

     LIQUIDITY AND CAPITAL RESOURCES

                  As of July 31, 1999, the Company had $53.2 million of working
         capital, including $18.0 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 $3.1 million of available cash for the six months
         ended July 31, 1999 as compared to $3.4 million for the six months
         ended July 31, 1998, largely through growth in accounts receivable of
         $7.1 million and through reductions of accounts payable and accrued
         expenses of $1.1 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
</TABLE>

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

                  Cash provided by investing activities during the period ended
         July 31, 1999, of $152,000 was generated by the sale of short-term
         investments of $4.2 million, less $2.3 million used to purchase
         furniture, equipment, and leasehold improvements due to growth in
         staff, and $1.7 million invested in capitalized software.

                  Cash provided by financing activities for the period ended
         July 31, 1999, was $205,000 and resulted primarily from the exercise of
         stock options.

                  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 July 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 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


                                       16
<PAGE>

         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 first four phases of the Year 2000 Project
         for its Infrastructure, Third Party Suppliers and Customer Products and
         Services. All phases of the Project are expected to be completed by
         September 30, 1999.

         INFRASTRUCTURE

                  The Company has completed the inventory, assessment and
         renovation phases of its IT and non-IT systems and is substantially
         complete with the testing phase for these systems. The Testing and
         Rollout phases of the Project are expected to be completed by September
         30, 1999. 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 is assessing these
         responses and will continue 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 is establishing 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 second quarter of fiscal 1999, the
         Company has spent approximately $805,000 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

                  A contingency planning process is underway and is anticipated
         to be complete by September 30, 1999 in preparation for Year 2000
         related events.

         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 July 31, 1999 was 5.82%.


                                       18
<PAGE>

         Amortized costs of short-term investments held at July 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

                    NUMBER           EXHIBIT DESCRIPTION
                   -------           -----------------------
                    27.1             Financial Data Schedule

              (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:  September 14, 1999
  -----------------------------------------             -----------------------
    John D. Carreker, Jr.
    Chairman of the Board and
    Chief Executive Officer




By:             /s/ Terry L. Gage                  Date:   September 14, 1999
  -----------------------------------------             -----------------------
    Terry L. Gage
    Executive Vice President and
    Chief Financial Officer


                                       20