<PAGE>

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

                                   FORM 10-QSB

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

                  For the quarterly period ended September 30, 2001

                                       OR

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

                         Commission file number: 0-23365

                                 SonicPort, Inc.
             (Exact name of registrant as specified in its charter)

           Nevada                                              84-1290152
(State or other jurisdiction of                             (I.R.S. employer
incorporation or organization)                            identification number)

                              21621 Nordhoff Street
                          Chatsworth, California 91311
          (Address of principal executive offices, including zip code)

                                 (818) 678-4535
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                    Common Stock, par value $0.0001 per share

           Securities registered pursuant to Section 12(g) of the Act:
                                      None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

Number of shares of common stock outstanding as of September 30, 2001:
46,208,329

<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                                      CONSOLIDATED BALANCE SHEET
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


                                     ASSETS

CURRENT ASSETS
     Cash and cash equivalents                                       $   77,798
     Accounts receivable                                                106,487
     Due from related parties                                           234,265
     Prepaid expenses and other current assets                           68,847
     Net assets of discontinued operations                              114,084
                                                                     -----------

         Total current assets                                           601,481

PROPERTY AND EQUIPMENT, net                                           1,049,198
OTHER ASSETS                                                             11,003
                                                                     -----------

                  TOTAL ASSETS                                       $1,661,682
                                                                     ===========

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

                                       1
<PAGE>

<TABLE>
                                                          SONICPORT, INC. AND SUBSIDIARIES
                                                                CONSOLIDATED BALANCE SHEET
                                                            SEPTEMBER 30, 2001 (UNAUDITED)

------------------------------------------------------------------------------------------
<CAPTION>

                           LIABILITIES AND SHAREHOLDERS' DEFICIT

<S>                                                                          <C>
CURRENT LIABILITIES
     Notes payable                                                           $     28,674
     Current portion of notes payable - related parties                           853,476
     Current portion of capital lease obligations                                  10,617
     Convertible promissory notes, net of unamortized discount of $149,998      1,750,002
     Convertible promissory notes - related parties, net of
         unamortized discount of $28,125                                          596,875
     Deferred revenue                                                              77,700
     Accounts payable                                                             421,315
     Accrued expenses                                                              98,060
     Interest payable, including $5,137 to related parties                         20,811
     Due to related party                                                          61,618
                                                                             -------------

         Total current liabilities                                              3,919,148

NOTES PAYABLE - RELATED PARTIES, net of current portion                           467,735
CAPITAL LEASE OBLIGATIONS, net of current portion                                  20,132
                                                                             -------------

              Total liabilities                                                 4,407,015
                                                                             -------------

COMMITMENTS

SHAREHOLDERS' DEFICIT
     Convertible Series A preferred stock, $0.0001 par value 10,000,000
         shares authorized 640,000 shares issued and outstanding
         $2.50 liquidation preference, dividends of $48,533 in arrears                 64
     Convertible Series B preferred stock, $0.0001 par value
         700,000 shares authorized
         629,666 shares issued and outstanding
         $0.75 liquidation preference, dividends of $31,833 in arrears                 63
     Common stock, $0.0001 par value
         100,000,000 shares authorized
         46,208,329 shares issued and outstanding                                   4,621
     Common stock committed, 1,082,438 shares                                   1,082,438
     Additional paid-in capital                                                18,726,815
     Accumulated deficit                                                      (22,339,334)
     Treasury stock, at cost, 1,528,000 shares                                   (220,000)
                                                                             -------------

              Total shareholders' deficit                                      (2,745,333)
                                                                             -------------

                  TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                $  1,661,682
                                                                             =============

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

                                            2
</TABLE>
<PAGE>

<TABLE>
                                                                 SONICPORT, INC. AND SUBSIDIARIES
                                                            CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

-------------------------------------------------------------------------------------------------
<CAPTION>

                                                   For the                      For the
                                             Three Months Ended             Six Months Ended
                                                September 30,                 September 30,
                                        ---------------------------   ---------------------------
                                            2001           2000           2001           2000
                                        ------------   ------------   ------------   ------------
<S>                                     <C>            <C>            <C>            <C>
REVENUES
   Software licensing revenues          $   275,923    $   320,907    $   549,700    $   368,407
   Software maintenance revenues            164,475              -        164,475              -
   Application service provider
     revenues from affiliates               224,140              -        459,317              -
   Application service provider
     revenues                                12,095              -         12,095              -
                                        ------------   ------------   ------------   ------------

       Total revenues                       676,633        320,907      1,185,587        368,407
                                        ------------   ------------   ------------   ------------

OPERATING EXPENSES
   General and administrative             1,130,392        795,689      2,312,727      2,578,361
   Consulting - related parties              44,910        157,408         85,910        157,408
                                        ------------   ------------   ------------   ------------

     Total operating expenses             1,175,302        953,097      2,398,637      2,735,769
                                        ------------   ------------   ------------   ------------

LOSS FROM OPERATIONS                       (498,669)      (632,190)    (1,213,050)    (2,367,362)
                                        ------------   ------------   ------------   ------------

OTHER INCOME (EXPENSE)
   Financing costs                          (36,999)             -        (55,300)             -
   Interest expense                        (185,106)        (8,384)    (2,143,379)       (17,702)
   Interest expense - related parties       (28,850)             -        (37,205)             -
   Interest income                                -          3,871          2,970         10,664
   Loss on disposal of assets                     -         (7,857)             -         (7,857)
                                        ------------   ------------   ------------   ------------

     Total other income (expense)          (250,955)       (12,370)    (2,232,914)       (14,895)
                                        ------------   ------------   ------------   ------------

LOSS FROM CONTINUING OPERATIONS
   BEFORE PROVISION FOR (BENEFIT
   FROM) INCOME TAXES, DISCONTINUED
   OPERATIONS, AND EXTRAORDINARY
   ITEM                                    (749,624)      (644,560)    (3,445,964)    (2,382,257)

PROVISION FOR (BENEFIT FROM)
   INCOME TAXES                                 400           (203)           800           (203)
                                        ------------   ------------   ------------   ------------

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

                                                3
</TABLE>
<PAGE>

<TABLE>
                                                                      SONICPORT, INC. AND SUBSIDIARIES
                                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                            FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

------------------------------------------------------------------------------------------------------
<CAPTION>

                                                     For the                        For the
                                               Three Months Ended              Six Months Ended
                                                  September 30,                  September 30,
                                         -----------------------------   -----------------------------
                                              2001            2000            2001            2000
                                         -------------   -------------   -------------   -------------
<S>                                      <C>             <C>             <C>             <C>
LOSS FROM CONTINUING OPERATIONS
   BEFORE DISCONTINUED OPERATIONS
   AND EXTRAORDINARY ITEM                $   (750,024)   $   (644,357)   $ (3,446,764)   $ (2,382,054)

DISCONTINUED OPERATIONS
   Income (loss) from operations of
     discontinued subsidiary, net of
     provision for income taxes of $0         140,336        (348,616)        203,391      (1,352,558)
                                         -------------   -------------   -------------   -------------

LOSS BEFORE EXTRAORDINARY ITEM               (609,688)       (992,973)     (3,243,373)     (3,734,612)

EXTRAORDINARY ITEM
   Income from forgiveness of interest
     payable                                        -               -               -          41,667
                                         -------------   -------------   -------------   -------------

                           NET LOSS      $   (609,688)   $   (992,973)   $ (3,243,373)   $ (3,692,945)
                                         =============   =============   =============   =============

BASIC AND DILUTED LOSS PER SHARE
   From continuing operations            $      (0.02)   $      (0.02)   $      (0.08)   $      (0.06)
   From discontinued operations                     -               -               -           (0.03)
   From extraordinary item                          -               -               -               -
                                         -------------   -------------   -------------   -------------

     TOTAL BASIC AND DILUTED LOSS
       PER SHARE                         $      (0.02)   $      (0.02)   $      (0.08)   $      (0.09)
                                         =============   =============   =============   =============

BASIC AND DILUTED WEIGHTED-
   AVERAGE SHARES OUTSTANDING              43,920,476      41,380,026      42,342,802      41,310,176
                                         =============   =============   =============   =============

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

                                                  4
</TABLE>
<PAGE>

<TABLE>
                                                               SONICPORT, INC. AND SUBSIDIARIES
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

-----------------------------------------------------------------------------------------------
<CAPTION>

                                                                         2001           2000
                                                                    ------------   ------------
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss from continuing operations                            $(3,446,764)   $(2,382,054)
     Adjustments to reconcile net loss from continuing operations
         to net cash used in operating activities
              Depreciation and amortization of property and
                  equipment                                             149,659        158,257
              Amortization of offering financial costs                  163,127              -
              Loss on disposal of property and equipment                      -          7,857
              Interest charges on convertible promissory notes        1,947,942              -
              Issuance of options for services rendered                       -         16,750
              Issuance of warrants for lock-up agreements                11,520              -
              Issuance of stock for services rendered                    66,800              -
              Issuance of stock for lock-up agreements                   18,874              -
              Liquidation damages on conversion of convertible
                  promissory notes                                            -         60,000
              Note payable issued for legal settlement                        -         52,500
              (Increase) decrease in
                  Accounts receivable                                    73,096       (237,142)
                  Prepaid expenses and other current assets              13,835         (4,015)
                  Other assets                                                -        (30,893)
              Increase (decrease) in
                  Accounts payable                                       77,670        263,299
                  Accrued expenses                                      (16,129)        71,830
                  Deferred revenue                                       77,700              -
                  Accrued interest                                        3,110        (30,041)
                                                                    ------------   ------------

Net cash used in continuing operating activities                       (859,560)    (2,053,652)
Net cash used in discontinued operations                               (167,415)    (2,196,181)
                                                                    ------------   ------------

Net cash used in operating activities                                (1,026,975)    (4,249,833)
                                                                    ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of property and equipment                                 (17,102)       (63,723)
     Net advances from (repayments to) related parties                 (241,090)        91,211
                                                                    ------------   ------------

Net cash provided by (used in) investing activities                    (258,192)        27,488
                                                                    ------------   ------------

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

                                               5
</TABLE>
<PAGE>

<TABLE>
                                                SONICPORT, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

--------------------------------------------------------------------------------
<CAPTION>

                                                         2001           2000
                                                     ------------   ------------
<S>                                                  <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES
     Book overdraft                                  $         -    $    37,254
     Contributed capital - affiliate                           -        228,268
     Payments on capital lease obligations                (4,203)             -
     Proceeds from notes payable                          10,000              -
     Repayment of notes payable                          (90,080)      (365,042)
     Proceeds from note payable - related party                -        313,359
     Repayment of notes payable - related party         (263,789)      (110,859)
     Proceeds from convertible promissory notes          750,000         50,000
     Repayment of convertible promissory notes          (160,000)             -
     Proceeds from common stock                          304,654        916,796
     Proceeds from committed common stock                      -         50,000
     Stock issuance costs                                (68,149)       (70,911)
     Proceeds from preferred stock                             -      2,382,000
     Redemption of preferred stock                             -       (400,000)
     Rescission of preferred stock                       (10,000)             -
     Payment of dividends                               (264,698)             -
                                                     ------------   ------------

Net cash provided by financing activities                203,735      3,030,865
                                                     ------------   ------------

Net decrease in cash and cash equivalents             (1,081,432)    (1,191,480)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         1,159,230      1,212,306
                                                     ------------   ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD             $    77,798    $    20,826
                                                     ============   ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     INTEREST PAID                                   $   109,804    $    15,630
                                                     ============   ============


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
During the six months ended September 30, 2001, the Company completed the
following:

o        certain founding shareholders of US Dataworks Inc. exchanged 1,528,000
         shares of common stock for $220,000 in notes payable.

o        recorded deferred financing costs of $891,248 related to the issuance
         of $750,000 of convertible promissory notes.

o        issued 475,000 shares of common stock valued at $190,000, which were
         committed prior to March 31, 2001.

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

                                       6
</TABLE>
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)

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


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES (CONTINUED)
During the six months ended September 30, 2000, the Company completed the
following:

o        purchased capitalized software valued at $1,040,000 and telephone
         equipment valued at $87,500 from an affiliate in exchange for a note
         payable of $1,127,500.

o        note holders converted $500,000 of convertible promissory notes and
         related finance charges totaling $60,000 into 224,000 shares of common
         stock.

o        exchanged certain shares of committed common stock for 2,463,095 shares
         of common stock valued at $4,946,112.

o        disposed of an asset with a cost of $9,284 and accumulated depreciation
         of $5,713, incurring a loss on sale of property and equipment of
         $3,571.

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

                                       7
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 1 - ORGANIZATION AND BUSINESS

         General
         -------
         Sonicport, Inc. ("Sonicport") is a financial services company
         specializing in the integration of proprietary software applications
         with Applications Service Provider ("ASP") services. Sonicport's wholly
         owned subsidiary, US Dataworks Inc. ("Dataworks"), develops, markets,
         and supports transaction processing software for Windows NT computer
         systems. Its customer base includes many of the largest financial
         institutions as well as credit card companies, government institutions,
         and high-volume merchants in the United States. It also has a strategic
         alliance with CheckFree Corporation (NASDAQ: CKFR) to license
         Dataworks' software for its banking customers and Thomson Financial
         Publishing, a unit of Thomson Corporation (TSE: TOC), to incorporate
         its EPICWare database into Dataworks products.

         Acquisition
         -----------
         Effective March 31, 2001 and with a closing date of April 2, 2001,
         Sonicport acquired 100%, or 3,571,429 shares, of the outstanding common
         stock of Dataworks (formerly known as Allstate Dataworks, Inc.) in
         exchange for 14,666,667 new shares of Sonicport's common stock and
         warrants to purchase 1,000,000 shares of Sonicport's common stock. The
         warrants have an exercise price of $0.73, vest immediately, and expire
         on April 2, 2006. In addition, certain shareholders of Sonicport
         transferred their ownership in 4,000,000 shares of Sonicport's common
         stock to the shareholders of Dataworks and committed to return
         2,200,000 shares of Sonicport's common stock to Sonicport in exchange
         for promissory notes in the amount of $220,000. These shareholders had
         returned 1,528,000 shares at September 30, 2001. Of the Dataworks
         shares, 878,572 were acquired from officers of Dataworks who are also
         officers of Sonicport.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation
         ---------------------------
         The consolidated financial statements include the accounts of
         Sonicport, Inc. and its wholly owned subsidiaries, Sonicport.com, Inc.
         (the California corporation), Sonicport POP's, Inc. (a California
         corporation), and US Dataworks, Inc. (a Delaware corporation)
         (collectively, the "Company"). All intercompany accounts and
         transactions have been eliminated.

                                       8
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Basis of Presentation
         ---------------------
         The unaudited, consolidated financial statements have been prepared in
         conformity with generally accepted accounting principles for interim
         financial information and with Regulation S-B. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles for complete financial statements. In
         the opinion of management, all normal, recurring adjustments considered
         necessary for a fair presentation have been included. The unaudited,
         consolidated financial statements should be read in conjunction with
         the audited financial statements and notes thereto included in the
         Company's Annual Report on Form 10-KSB for the year ended March 31,
         2001. The results of operations for the six months ended September 30,
         2001 are not necessarily indicative of the results that may be expected
         for the year ended March 31, 2002.

         Revenue Recognition
         -------------------
         The Company recognizes revenues in accordance with the provisions of
         the American Institute of Certified Public Accountants' Statement of
         Position 97-2, "Software Revenue Recognition." The Company licenses its
         software products under nonexclusive, nontransferable license
         agreements. For software arrangements that require significant
         production, modification, or customization, the entire arrangement is
         accounted for in conformity with Accounting Research Bulletin No. 45,
         "Long-Term Construction-Type Contracts," using the relevant guidance
         Statement of Position 81-1, "Accounting for Performance of
         Construction-Type Contracts and Certain Production-Type Contracts." For
         those arrangements that do not require significant production,
         modification, or customization, revenue is recognized when a license
         agreement has been signed, delivery of the software product has
         occurred, the related fee is fixed or determinable, and collectability
         is probable.

         In December 1999, Securities and Exchange Commission ("SEC") Staff
         Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
         Statements," was issued. SAB No. 101 provides the SEC staff's views in
         applying generally accepted accounting principles to selected revenue
         recognition issues, including software revenue recognition. The Company
         adopted SAB No. 101 in the fourth quarter of year ended March 31, 2001.
         Management does not expect the adoption of SAB No. 101 will have a
         material effect on the Company's financial position or results of
         operations.

         Advertising Expense
         -------------------
         Advertising costs are charged to expense as incurred. For the six
         months ended September 30, 2001 and 2000, the Company recorded
         advertising expense of $11,600 and $882,071, respectively.

                                       9
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Loss per Share
         --------------
         The Company calculates loss per share in accordance with SFAS No. 128,
         "Earnings per Share." Basic loss per share is computed by dividing the
         loss available to common shareholders by the weighted-average number of
         common shares outstanding. Diluted loss per share is computed similar
         to basic loss per share except that the denominator is increased to
         include the number of additional common shares that would have been
         outstanding if the potential common shares had been issued and if the
         additional common shares were dilutive.

         The following potential common shares have been excluded from the
         computation of diluted net loss per share for the periods presented
         because the effect would have been anti-dilutive:

                                                                  For the
                                                              Six Months Ended
                                                               September 30,
                                                          ----------------------
                                                             2001        2000
                                                          ----------  ----------

         Options outstanding under the Company's stock
             option plans                                 2,960,000   1,278,250
         Options granted outside the Company's stock
             option plans                                 1,050,250   1,050,250
         Warrants issued in conjunction with convertible
             Series B preferred stock                       642,999           -
         Warrants issued in conjunction with private
             placements                                     687,358     509,333
         Warrants issued as a financing cost for notes
             payable and convertible notes payable        1,600,000      74,000
         Warrants issued in conjunction with lock-up
             agreement                                      369,789           -
         Warrants issued for services rendered              500,000           -
         Warrants issued as part of the acquisition of
             Dataworks                                    1,000,000           -
         Convertible Series A preferred stock               640,000     640,000
         Convertible Series B preferred stock               629,666     509,333

                                       10
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Recently Issued Accounting Pronouncements
         -----------------------------------------
         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
         Retirement Obligations." This statement applies to legal obligations
         associated with the retirement of long-lived assets that result from
         the acquisition, construction, development, and/or the normal operation
         of long-lived assets, except for certain obligations of lessees. This
         statement is not applicable to the Company.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets." This statement addresses
         financial accounting and reporting for the impairment or disposal of
         long-lived assets. This statement replaces SFAS No. 121, "Accounting
         for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed of," the accounting and reporting provisions of APB No. 30,
         "Reporting the Results of Operations - Reporting the Effects of
         Disposal of a Segment of a Business, and Extraordinary, Unusual, and
         Infrequently Occurring Events and Transactions," for the disposal of a
         segment of a business, and amends Accounting Research Bulletin No. 51,
         "Consolidated Financial Statements," to eliminate the exception to
         consolidation for a subsidiary for which control is likely to be
         temporary. The Company does not expect adoption of SFAS No. 144 to have
         a material impact, if any, on its financial position or results of
         operations.


NOTE 3 - DISPOSAL OF OPERATIONS

         Effective July 31, 2001, management of the Company formally decided to
         start shutting down the operations of the Company's Internet service
         provider, SeeYouOnline. All assets of SeeYouOnline were retained by the
         Company, except for $69,694 of accounts receivable, net of an allowance
         for doubtful accounts of $92,223, $128,817 of prepaid expenses, $12,012
         of due from related party, $197,324 of accounts payable, and $36,975 of
         deferred revenue. As a result, the operations of SeeYouOnline through
         September 30, 2001 are reported as discontinued operations. The results
         from discontinued operations included total revenues of $220,521 and
         net income from operations of $203,391 for the six months ended
         September 30, 2001. SeeYouOnline ceased providing Internet access
         services on August 15, 2001.

                                       11
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at September 30, 2001 consisted of the
         following:

             Furniture and fixtures                       $   89,636
             Telephone equipment                             121,064
             Computer equipment                              219,216
             Computer software                             1,040,000
             Leasehold improvements                            6,575
                                                          -----------

                                                           1,476,491
             Less accumulated depreciation
               and amortization                              427,293
                                                          -----------

                 TOTAL                                    $1,049,198
                                                          ===========

         Depreciation and amortization expense for the six months ended
         September 30, 2001 and 2000 was $149,659 and $158,257, respectively.


NOTE 5 - NOTES PAYABLE

         On July 1, 2000, the Company entered into a note payable agreement for
         $52,500. The note is for a 20-month term and bears interest at 10% per
         annum. Principal and interest are due monthly. As of September 30,
         2001, the balance on the note payable was $18,674.

         During April 2001, the Company paid off notes payable in the amounts of
         $47,000 and $30,000.

         On September 6, 2001, the Company entered into a note payable agreement
         for $10,000. The note payable is for a one-year term and bears interest
         at 10% per annum. Interest is due monthly.


NOTE 6 - NOTES PAYABLE - RELATED PARTIES

         On April 2, 2001, the Company refinanced a note payable issued by
         Dataworks on July 12, 2000. The new note is for $1,315,000, which
         includes the previous note for $1,127,500, accrued interest for
         $136,000, and $51,500 of the amount due to related party as of March
         31, 2001. The note is for a two-year term and bears interest at 10% per
         annum. Interest and principal payments are due monthly. As of September
         30, 2001, the outstanding balance on the note payable was $1,062,211.

                                       12
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 6 - NOTES PAYABLE - RELATED PARTIES (CONTINUED)

         On April 2, 2001, as part of the Share Agreement between Sonicport and
         Dataworks, two shareholders exchanged 2,200,000 shares of Sonicport's
         common stock for two-year promissory notes, bearing interest at 10% per
         annum, in the amount of $220,000. The principal amount of the notes and
         accrued interest are due when the Company has raised cumulative gross
         proceeds from debt and/or equity financing of $5,000,000. If $5,000,000
         has not been raised by the second anniversary date of the notes, the
         principal and accrued interest will be forgiven.


NOTE 7 - CONVERTIBLE PROMISSORY NOTES

         On March 14, 2001, March 26, 2001, March 27, 2001, and May 15, 2001,
         the Company entered into Subscription Agreements for gross proceeds of
         $375,000, $1,000,000, $125,000, and $400,000, respectively. Each unit
         consisted of a convertible promissory note and a warrant to purchase
         one share of the Company's common stock for each dollar borrowed by the
         Company. The holder of the note has the option to convert the note at
         any time after 90 following the issuance date of the note.

         The Company has the option to redeem the notes at any time prior to the
         notes' maturity dates at 125% of the face value of the notes if the
         notes are redeemed within 90 days of the issuance dates of the notes or
         at 110% of the face value of the notes if the notes are redeemed more
         than 90 days from the issuance date of the notes. The notes are
         convertible at the lesser of 80% of the average closing price for the
         20 trading days immediately preceding the conversion date or $0.40 per
         share. The notes earn interest at 10% per annum, and the remaining
         interest payments are due quarterly on November 15, 2001, February 15,
         2002, and May 15, 2002. Principal and any unpaid interest are due on
         March 14, 2002, March 26, 2002, March 27, 2002, and May 15, 2002,
         respectively.

         In accordance with generally accepted accounting principles, the
         difference between the conversion price and the Company's stock price
         on the date of issuance of the notes is considered to be interest
         expense. It will be recognized in the statement of operations during
         the period from the issuance of the notes to the time at which the
         notes first become convertible. The Company recognized interest expense
         of $1,692,812 in the statement of operations for the six months ended
         September 30, 2001.

                                       13
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 7 - CONVERTIBLE PROMISSORY NOTES (CONTINUED)

         Each warrant entitles the holder to purchase one share of the Company's
         common stock at $1 per share, and it expires three years from the date
         of issuance. The Company allocates the proceeds received from debt or
         convertible debt with detachable warrants using the relative fair value
         of the individual elements at the time of issuance. The amount
         allocated to the warrants as a debt discount was calculated at $285,000
         using the interest method and will be recognized as interest expense
         over the period until the notes mature or are converted. In the event
         the debt is settled prior to the maturity date, an expense will be
         recognized based on the difference between the carrying amount and the
         amount of the payment. During the six months ended September 30, 2001,
         the Company recognized $135,000 in interest expense.


NOTE 8 - CONVERTIBLE PROMISSORY NOTES - RELATED PARTIES

         On March 14, 2001, the Company entered into a Subscription Agreement
         for one, 10% convertible promissory note in the amount of $375,000 with
         a third party who became a director of the Company on June 27, 2001.
         Each unit consisted of a convertible promissory note and a warrant to
         purchase one share of the Company's common stock for each dollar
         borrowed by the Company. The holder of the note has the option to
         convert the note at any time after 90 days following the issuance date
         of the note.

         The Company has the option to redeem the notes at any time prior to the
         notes' maturity date at 125% of the face value of the notes if the
         notes are redeemed within 90 days of the issuance date of the notes or
         at 110% of the face value of the notes if the notes are redeemed more
         than 90 days from the issuance date of the notes. The notes are
         convertible at the lesser of 80% of the average closing price for the
         20 trading days immediately preceding the conversion date or $0.40 per
         share. The notes earn interest at 10% per annum, and the principal and
         any unpaid interest are due on March 14, 2002.

         In accordance with generally accepted accounting principles, the
         difference between the conversion price and the Company's stock price
         on the date of issuance of the notes is considered to be interest
         expense. It will be recognized in the statement of operations during
         the period from the issuance of the notes to the time at which the
         notes first become convertible. The Company recognized interest expense
         of $195,313 in the statement of operations for the six months ended
         September 30, 2001.

                                       14
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 8 - CONVERTIBLE PROMISSORY NOTES - RELATED PARTIES (CONTINUED)

         Each warrant entitles the holder to purchase one share of the Company's
         common stock at $1 per share, and it expires three years from the date
         of issuance. The Company allocates the proceeds received from debt or
         convertible debt with detachable warrants using the relative fair value
         of the individual elements at the time of issuance. The amount
         allocated to the warrants as a debt discount was calculated at $56,250
         using the interest method and will be recognized as interest expense
         over the period until the notes mature or are converted. In the event
         the debt is settled prior to the maturity date, an expense will be
         recognized based on the difference between the carrying amount and the
         amount of the payment. During the six months ended September 30, 2001,
         the Company recognized $28,125 in interest expense.


NOTE 9 - SHAREHOLDERS' DEFICIT

         Convertible Series B Preferred Stock
         ------------------------------------
         In May 2001, an investor in the Company's Convertible Series B
         Preferred Stock rescinded its acquisition and returned 13,333 shares to
         the Company in exchange for its investment of $10,000.

         Payment of Dividends
         --------------------
         During the six months ended September 30, 2001, the Company declared
         and paid dividends of $264,698 on the Company's convertible Series A
         and B preferred stock.

         Issuance of Committed Shares
         ----------------------------
         During the six months ended September 30, 2001, the Company issued
         475,000 shares of common stock valued at $190,000 that had been
         committed at March 31, 2001.

         Stock for Lock-Up Agreements
         ----------------------------
         During the six months ended September 30, 2001, the Company issued
         197,666 shares of common stock to certain purchasers of the Company's
         common stock. The shares were valued at $18,875 and were issued as
         consideration for the purchasers to enter into lock-up agreements for
         the sale of their shares of common stock.

         Stock Options
         -------------
         During the six months ended September 30, 2001, the Company granted
         1,425,000 stock options to certain employees and non-employees at
         exercise prices between $0.54 and $1.25.

         Sale of Common Stock
         --------------------
         During the six months ended September 30, 2001, the Company issued
         286,853 shares of common stock for proceeds of $104,654.

                                       15
<PAGE>

                                                SONICPORT, INC. AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2001 (UNAUDITED)

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


NOTE 9 - SHAREHOLDERS' DEFICIT (CONTINUED)

         Sale of Common Stock (Continued)
         --------------------
         In August 2001, the Company issued 200,000 units in a private placement
         for gross proceeds of $200,000. Each unit consisted of four shares of
         the Company's common stock and a warrant to purchase one share of the
         Company's common stock. The warrant has an exercise price of $0.70 per
         share, vests immediately upon issuance and expires three years from the
         date of issuance. The Company allocates the proceeds received from
         equity with detachable warrants using the relative fair value of the
         individual elements at the time of issuance. Of the $200,000 received,
         $55,072 has been allocated to the issuance of the warrants.

         Warrants for Lock-Up Agreements
         -------------------------------
         During June 2001, the Company issued 60,000 warrants to certain
         purchasers of the Company's common stock as consideration for the
         purchasers to enter into lock-up agreements for the sale of their
         shares of common stock. The warrants have an exercise price of $1, vest
         immediately, and expire three years from the date of issuance. The
         warrants were valued at $11,520 using the Black-Scholes option pricing
         model and were recognized as financing costs in the statement of
         operations for the six months ended September 30, 2001.


NOTE 10 - SEGMENT INFORMATION

         The Company has two business units that have separate management and
         reporting infrastructures that offer different products and services.
         The business units have been aggregated into two reportable segments:
         ASP and Licensing. The ASP group sells application service provider
         services to third parties. The Licensing group licenses the Company's
         RemitWorks and RemoteWorks software products to third parties and
         performs credit information verification services for an affiliated
         company using software purchased from that affiliated company. Most
         corporate expenses, such as internal administrative costs, legal
         expenses, and debt issuance costs, are included in the ASP group.

         Summarized financial information concerning the Company's reportable
         segments for the six months ended September 30, 2001 is as follows:

<TABLE>
<CAPTION>
                                                         ASP           Licensing       Consolidated
                                                  ----------------- ---------------- -----------------
<S>                                               <C>               <C>              <C>
             Identifiable assets                  $        253,479  $     1,408,203  $      1,661,682
             Sales to unaffiliated customers      $         12,095  $       714,175  $        726,270
             Net loss                             $     (3,032,608) $      (210,765) $     (3,243,373)
</TABLE>


                                       16

<PAGE>

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

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: ALL FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE COVERED BY AND TO
QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THE SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS
SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD-LOOKING
STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN.
THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR
FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND
THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE
FOREGOING INVOLVE JUDGEMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE
ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE
TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF
WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE
REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING,
CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN, AFFECT THE
COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES
INHERENT IN THE FORWARD-LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF
ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR
ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

Overview of the Company's Business

SonicPort, Inc. ("Sonicport" or the "Company") is a financial services
application service provider specializing in integrating transaction processing
software, supported by broadband hosting, technical expertise and customer
service. Additional value-added services include customer software development
and strategic marketing and planning. Effective April 2, 2001, the Company
acquired US Dataworks, Inc. ("Dataworks"). Dataworks is a leading developer of
transaction processing software serving the banking and Automated Clearing House
(ACH) processing industries. Dataworks develops, markets and supports
transaction-processing software for Windows NT computer systems. Dataworks
enables organizations to transition from traditional paper-based payment and
billing processes to electronic solutions. Dataworks is able to generate primary
revenue from the licensing and collecting of transaction fees from its core
products; Remoteworks, Remitworks, MICRworks, and Returnworks. Dataworks'
systems are designed to integrate with solutions and service offerings of other
financial software service companies and financial institutions in order to
minimize the expense of adding features or customization. Dataworks also has a
strategic alliance with CheckFree Corporation (NASDAQ:CKFR)("Checkfree") to
license Dataworks' software for its banking customers and Thomson Financial
Publishing, a unit of Thomson Corporation (TSE:TOC) ("Thomson") to incorporate
Thomson's EPICWare database into Dataworks' products.

In August 2001, Dataworks and Checkfree renewed their business alliance to
provide an end-to-end solution for converting checks to ACH transactions. Under
the agreement, Checkfree will provide marketing and strategic support for all
Dataworks products. Dataworks will continue system development and provide
integration services and daily product support. As the leader in ACH processing
software, Checkfree will fully leverage the capabilities of the Dataworks
software while providing banks of all sizes a cost-effective alternative with a
high-capacity level. This relationship with Checkfree will provide Dataworks an
entry point for the entire product line into a very dynamic market that will
benefit from this new expanded teaming of the combined resources of the two
companies.

With the combination of the high quality systems of Checkfree and the innovative
Dataworks solutions, a compelling case is made for large corporations to process
their check conversions in-house rather than use outside service providers. The
benefits of the combined systems includes seamless compatibility, automated
in-house processing, industry-leading return item decisioning based on corporate
parameters and item history, a flexible resubmit calendar with timing determined
by the originator, automated return fee generation that reduces collection time,
and monthly analysis reports to assist the originator in improving return
processing compared with other corporations.

                                       17
<PAGE>

The systems incorporate Thomson's EPICWare database and the recently announced
"1FOR1" database co-developed with Thomson. These databases significantly reduce
the number of returns experienced in the conversion process.

Sonicport has secured contracts with over twenty clients for the use of
Remoteworks, the Company's innovative Internet-based check processing software.
The contracts are composed of monthly recurring subscription payments based on
the number of transactions posted. Under the new contracts, Sonicport will make
Remoteworks available via the Internet, giving a broad spectrum of business
clients access to the entire Dataworks-branded check truncation suite.

Results of Operations

The Company recognized revenues of $676,633 for the three months ended September
30, 2001 as compared with $320,907 for the three months ended September 30,
2000. Revenues for the six months ended September 30, 2001 were $1,185,587 as
compared with $368,407 for the six months ended September 30, 2000. The increase
in revenue was due to the following:

*        The Company's Application Service Provider ("ASP") became operational
         in April 2001, bringing in revenues of $236,235 for the quarter ending
         September 30, 2001, and revenues of $471,412 for the six months ended
         September 30, 2001.
*        Licensing and maintenance revenues to unrelated third parties increased
         for the three months ended September 30, 2001 from $320,907 in 2000 to
         $440,398 in 2001, and increased by $345,768 for the six months ended
         September 30, 2001, from $368,407 in 2000 to $714,175 in 2001 due to
         further expansion of the customer base within Dataworks.

Total operating expenses for the three months ended September 30, 2001 were
$1,175,302 as compared with $953,097 for the three months ended September 30,
2000. This is an increase of $222,205 due principally to the ramping up of the
Application Service Provider, which required the hiring of employees and the
related office costs, the new costs for marketing and advertising for the ASP,
an increase in costs for investor/public relations, and the related costs of
securing lock-up agreements with current investors. While the costs for the
current quarter have increased, the total operating expenses for the six months
ended September 30 have decreased by $337,132, from $2,735,769 in 2000 to
$2,398,637 in 2001.

Other expenses, including interest expense and financing costs, were increased
during the second quarter ending September 2001, to $250,955 for the three
months ended September 30, 2001 compared to $12,370 for the three months ended
September 30, 2000. These expenses also increased for the six months ending
September 30, 2001, from $14,895 to $2,232,914. This is attributable to the
financing costs related to the issuance of the notes payable and related 90-day
convertible features of the promissory notes issued from March 2001 through May
2001.

The ISP business had income from operations of $140,336 for the three months
ended September 30, 2001 compared to a loss of $348,616 for the three month
period ended September 30, 2000. This discontinued operation recognized income
of $203,391 for the six months ended September 30, 2001 as compared with a loss
of $1,352,558 for the six months ended September 30, 2000. In April 2000 the
Company began operations of its Internet service provider. Revenues remained low
and costs continued to increase. The Company discontinued operations of this
service in August 2001. The cessation of this division will increase profit
margins and the overall operating performance of the Company.

Net loss for the quarter ended September 30, 2001 decreased by $383,285 from a
net loss of $992,973 in September 2000 to a net loss of $609,688 for the same
period in 2001. For the six months ended September 30, 2001, the net loss has
decreased by $449,572 from $3,692,945 in 2000, to $3,243,373 in 2001. The
decrease is primarily due to significantly higher sales from the operation of
the ASP and the increased revenues due to the increasing client base of
Dataworks and the decrease in overhead costs including moving to a new location,
the consolidation of the workforce, and the discontinuance of the ISP
operations.

Liquidity and Capital Resources

As of September 30, 2001, the Company had $77,798 in cash and cash equivalents.

The Company's working deficit at September 30, 2001 was $3,317,667 as compared
with $227,537 at September 30, 2000, an increase in the working deficit of
$3,090,130 during the 12-month period.

                                       18
<PAGE>

The Company continues its efforts to raise funds for working capital and the
development of the Company's operations through private placements of equity,
although no assurance can be given that funds will be available. To the extent
of a shortfall in required funds, the Company may be required to curtail the
implementation of its business plan, and reduce or cease operations.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK

The Company operates in a rapidly changing environment that involves numerous
risks, some of which are beyond the Company's control. The following discussion
highlights some of these risks.

Revenue Growth and Economic Conditions

The revenue growth and profitability of the Company's business depends on the
overall demand for computer software and services in the product segments in
which the Company competes. Because the Company's sales are primarily to major
banking and government customers, the Company's business also depends on general
economic and business conditions. A softening of demand caused by a weakening of
the economy may result in decreased revenues or lower growth rates. There can be
no assurances that the Company will be able to effectively promote future
license revenue growth in its application business.

Expected Potential Fluctuation in Plan of Operations

The Company expects that its operating results may fluctuate significantly as a
result of a variety of factors, many of which are outside the Company's control.
Factors that may affect the Company's quarterly operating results include:
(i)the Company's ability to attract and retain clients and maintain their
satisfaction; (ii) the announcement or introduction of new software, services
and products by the Company or its competitors; (iii) the success of the
Company's brand building and marketing campaigns; (iv) price competition; (v)the
Company's ability to upgrade and develop its systems and infrastructure to
accommodate growth; (vi) the Company's ability to attract new personnel in a
timely and effective manner; (vii) technical difficulties or service
interruptions; (viii) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business, operations and
infrastructure; (ix) consumer trends; (x) governmental regulation by federal or
local governments; and (xi) general economic conditions as well as economic
conditions specific to the financial services industry.

Because of the emerging nature of the markets in which the Company competes, it
is difficult for the Company to forecast its revenues or earnings accurately.
The Company's current and future expense levels expectations are based largely
on its investment plans and estimates of future revenues and are, to a large
extent, fixed. The Company may be unable to adjust spending in a timely manner
to compensate for any unexpected revenue shortfall. Accordingly, any significant
shortfall in revenues relative to the Company's planned expenditures would have
an immediate adverse effect on the Company's business, results of operations and
financial condition. Further, as a strategic response to changes in the
competitive environment, the Company may from time to time make certain pricing,
service or marketing decisions that could have a material adverse effect on its
business, results of operations and financial condition.

                                       19
<PAGE>

Competition

The primary competitive factors determining success in the financial services
software market are:
         o        reputation for reliability and service
         o        effective customer support
         o        pricing
         o        easy-to-use software
         o        geographic coverage

The market for financial services software is relatively new, highly
competitive, rapidly evolving and subject to rapid technological change. While
relatively new, the market is already highly competitive and characterized by an
increasing number of entrants who have introduced or developed products and
services similar to those offered by the Company. The Company expects
competition not only to persist but also to increase. Increased competition may
result in price reductions, reduced margins and loss of market share. The
Company has identified eleven competitive vendors in the market; Bank One,
BankServ, CheckAGAIN, CheckFast, Inc., The EFT Network, Inc., eFunds
Corporation, Equifax Check Solutions, Global eTelecom, Inc., Integrated Check
Technologies, LML Payment Systems, Princeton eCom, Provident Bank,
SolutranXpressCheX, Inc., and RCK Services.

Some of the current and potential competitors have longer operating histories,
larger installed customer bases, greater name recognition, and longer
relationships with clients and significantly greater financial, technical,
marketing and public relations resources than the Company does. At any time the
Company's current and potential competitors could increase their resource
commitments to Sonicport's markets. The Company expects to face additional
competition from new market entrants in the future, as the barriers to entry
into this business are also relatively low. The Company's current or future
competitors may also be better positioned to address technological and market
developments or may react more favorably to technological changes. The Company
competes on the basis of a number of factors, including the breadth and quality
of services, creative design and systems engineering expertise, pricing, and
technological innovation and understanding clients' strategies and needs. Many
of these factors are beyond the Company's control. Existing or future
competitors may develop or offer strategic services that provide significant
technological, creative, performance, price or other advantages over the
services offered by Sonicport. As a result, the Company's financial condition,
operating results and business could be adversely affected and the value of the
investment in the Company could be reduced significantly.

                                       20
<PAGE>

No Assurance of Profitability

The Company believes that the planned growth and profitability will depend in
large part on its ability to promote its brand name and gain and expand clients
for whom the Company would provide its ASP services and licensing agreements.
Accordingly, the Company intends to invest heavily in marketing and promotion,
development of its clients, development of its marketing technology and
operating infrastructure development.

Dependence on Key Personnel

The Company's performance is substantially dependent on the continued services
and on the performance of its senior management and other key personnel. The
Company's performance also depends on the Company's ability to retain and
motivate its other officers and key employees. The loss of the services of any
of its executive officers or other key employees could have a material adverse
effect on the Company's business, results of operations and financial condition.
The Company's future success also depends on its ability to identify, attract,
hire, train, retain and motivate other highly skilled technical, managerial,
marketing and customer service personnel. Competition for such personnel is
intense, and there can be no assurance that the Company will be able to
successfully attract, integrate or retain sufficiently qualified personnel. The
failure to retain and attract the necessary personnel could have a material
adverse effect on the Company's business, results of operations and financial
condition.

Risk of System Failures

The Company's success with respect to its financial services products, and in
particular its ability to provide high quality customer service, will depend on
the efficient and uninterrupted operation of its computer and communications
hardware systems. These systems and operations are generally vulnerable to
damage or interruption from earthquakes, floods, fires, power loss,
telecommunication failures, break-ins, sabotage, intentional acts of vandalism
and similar events. Despite any precautions taken by, or planned by the Company,
the occurrence of a natural disaster or other unanticipated problems could
result in interruptions in the services provided by the Company. In addition,
failure to provide the data communications capacity required by the Company, as
a result of human error, natural disaster or other operational disruption, could
result in interruptions in the Company's service. Any damage to or failure of
the systems of the Company could result in reductions in, or terminations of the
ASP service, which could have a material adverse effect on the Company's
business, results of operations and financial condition. In the case of frequent
or persistent system failures, the Company's reputation and name brand could be
materially adversely affected.

Rapid Technological Change

Rapidly changing technology, evolving industry standards, introductions and
enhancements and changing customer demands characterize the market in which the
Company competes. The Company's future success will depend on its ability to
adapt to rapidly changing technologies, to adapt its services to evolving
industry standards and to continually improve the performance, features and
reliability of its service in response to competitive service and product
offerings and evolving demands of the marketplace. The failure of the Company to
adapt to such changes would have a material adverse effect on the Company's
business, results of operations and financial condition.

                                       21
<PAGE>

Legal Liability to Sonicport Clients

Many of the Company's engagements involve the development and implementation of
software that are important to the Company's future clients' businesses. The
Company's failure or inability to meet a client's expectations in the
performance of services could injure Sonicport's business reputation or result
in a claim for substantial damages against the Company regardless of its
responsibility for such failure. In addition, the services Sonicport will
provide for its clients may include confidential or proprietary client
information. Although the Company has implemented policies to prevent such
client information from being disclosed to unauthorized parties or used
inappropriately, any such unauthorized disclosure or use could result in a claim
against the Company for substantial damages. The Company's contractual
provisions attempting to limit such damages may not be enforceable in all
instances or may otherwise fail to protect the Company from liability for
damages.

Possible Volatility of Stock Price

The trading price of the Common Stock might be highly volatile and could be
subject to wide fluctuations in response to factors such as actual or
anticipated variations in the Company's quarterly operating results,
announcements of technological innovations, or new services by the Company or
its competitors, changes in financial estimates by securities analysts,
announcements by the Company or its competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments, additions or
departures of key personnel, sales of Common Stock or other securities of the
Company in the open market and other events or factors, many of which are beyond
the Company's control. There can be no assurance that these trading prices and
valuations will be sustained. These broad market and industry factors may
materially and adversely affect the market price of the Common Stock, regardless
of the Company's operating performance. Market fluctuations, as well as general
political and economic conditions such as recession or interest rate or currency
rate fluctuations, may also adversely affect the market price of the Common
Stock.

Control by Principal Stockholders, Executive Officers and Directors

The Company's executive officers and directors (and their affiliates), in the
aggregate, own more than 61% of the Company's outstanding Common Stock. As a
result, such persons, acting together, have the ability to control all matters
submitted to stockholders of the Company for approval (including the election
and removal of directors and any merger, consolidation or sale of all or
substantially all of the Company's assets) and to control the management and
affairs of the Company. Accordingly, such concentration of ownership may have
the effect of delaying, deferring or preventing a change in control of the
Company, impede a merger, consolidation, takeover or other business combination
involving the Company or discourage a potential acquirer from making a tender
offer or otherwise attempting to obtain control of the Company, which in turn
could have an adverse effect on the market price of the Company's Common Stock.

                                       22
<PAGE>

Shares Eligible for Future Sale

As of September 30, 2001, there were approximately 46,208,329 shares of Common
Stock outstanding, of which at least 36,133,221 are restricted securities
("Restricted Securities") under the Securities Act, a majority of which are held
by affiliates of the Company. These Restricted Securities will be eligible for
sale from time to time upon expiration of applicable holding periods under Rule
144 under the Securities Act. If such holders sell in the public market, such
sales could have a material adverse effect on the market price of the Company's
Common Stock. In general, under Rule 144, subject to the satisfaction of certain
other conditions, a person, including an affiliate of the Company, who has
beneficially owned restricted shares of Common Stock for at least one year is
entitled to sell, in certain brokerage transactions, within any three-month
period, a number of shares that does not exceed the greater of 1% of the total
number of outstanding shares of the same class, or if the Common Stock is quoted
on AMEX or a stock exchange, the average weekly trading volume during the four
calendar weeks immediately preceding the sale. A person who presently is not and
who has not been an affiliate of the Company for at least three months
immediately preceding the sale and who has beneficially owned the shares of
Common Stock for at least two years is entitled to sell such shares under Rule
144 without regard to any of the volume limitations described above.

Enforcement of the Company's Intellectual Property Rights

The Company relies on a combination of patent, trademark trade secrets,
confidentiality procedures and contractual procedures to protect its
intellectual property rights. Despite the Company's efforts to protect its
intellectual property rights, it may be possible for unauthorized third parties
to obtain and use technology or other information that the Company regards as
proprietary. These can also be no assurances that the Company's intellectual
property rights would survive a legal challenge to their validity or provide
significant protection for the Company.

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<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

No legal proceedings of a material nature to which the Company is a party were
pending during the reporting period.

ITEM 2.  Changes in Securities.  None.

ITEM 3.  Defaults upon Senior Securities.  None.

ITEM 4.  Submission of Matter to a Vote of Security Holders.  None.

ITEM 5.  Other Information.  None.

ITEM 6.  Exhibits and Reports on Form 8-K. None.

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                   SONICPORT, INC.

                                             By:   /s/  Richard Shapiro
                                                   ------------------------
                                                   Chief Financial Officer
November 19, 2001


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