##### Table of Contents



Securities and Exchange
CommissionWashington, D.C. 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2002

Commission file number 000-20699

|                                                      
|------------------------------------------------------
|DATATRAK International, Inc.                          
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1685364                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                               |  |           
|---------------------------------------------- |  | ----------
|6150 Parkland Boulevard
Mayfield Heights, Ohio |  | 44124     
|                                               |  |           
|(Address of principal executive offices)       |  | (Zip Code)

|                                                                  
|------------------------------------------------------------------
|(440) 443-0082
(Registrants 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 period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes
    No

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

The number of Common Shares, without par value, outstanding as of October 31,
2002 was 5,263,836.





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TABLE OF CONTENTS



|                                                                       |                                                                                               |  |  |  |  |  |  | 
|---------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I. Financial Information                                         
|                                                                       | Item 1  Financial Statements                                                                
|                                                                       | Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
|                                                                       | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                                       | Item 4. Controls and Procedures                                                              
|Part II. Other Information                                            
|                                                                       | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                            
|CERTIFICATION OF CHIEF EXECUTIVE OFFICER, DATATRAK INTERNATIONAL, INC.
|CERTIFICATION OF CHIEF FINANCIAL OFFICER, DATATRAK INTERNATIONAL, INC.
|Exhibit Index                                                         



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##### Table of Contents






Part I. Financial
Information




DATATRAK INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |             |          |  | 
|-------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --------- | ----------- | ------------- | - | ------------ | ----------- | -------- |  | 
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |             | (Note A)
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             | September 30, |   | December 31,
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             | 2002          |   | 2001        
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |             
|                                                                                 |                                                                                                                                                                                                                                                            |                                      | ASSETS    |             |               |   |              |             |          |  | 
|Current assets:                                                                  |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|                                                                                 | Cash and cash equivalents                                                                                                                                                                                                                                  |                                      | $         | 1,631,152   |               |   | $            | 2,174,445   |         
|                                                                                 | Short-term investments                                                                                                                                                                                                                                     |                                      |           | 1,782,614   |               |   |              | 3,029,582   |         
|                                                                                 | Accounts receivable, less allowances                                                                                                                                                                                                                       |                                      |           | 679,175     |               |   |              | 429,911     |         
|                                                                                 | Prepaid expenses and other current assets                                                                                                                                                                                                                  |                                      |           | 310,059     |               |   |              | 373,503     |         
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|Total current assets                                                             |                                                                                                                                                                                                                                                            |                                      | 4,403,000 |             |               |   | 6,007,441    |            
|Property and equipment, at cost
net of accumulated depreciation and amortization |                                                                                                                                                                                                                                                            |                                      | 1,934,142 |             |               |   | 1,574,211    |            
|Other assets                                                                     |                                                                                                                                                                                                                                                            |                                      | 48,278    |             |               |   | 51,918       |            
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|Total assets                                                                     |                                                                                                                                                                                                                                                            | $                                    | 6,385,420 |             |               | $ | 7,633,570    |            
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|                                                                                 |                                                                                                                                                                                                                                                            | LIABILITIES AND SHAREHOLDERS EQUITY |           |             |               |   |              |             |          | 
|Current liabilities:                                                             |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|                                                                                 | Accounts payable                                                                                                                                                                                                                                           |                                      | $         | 203,146     |               |   | $            | 253,095     |         
|                                                                                 | Current portion of capital lease obligation                                                                                                                                                                                                                |                                      |           | 136,088     |               |   |              | 129,417     |         
|                                                                                 | Accrued expenses                                                                                                                                                                                                                                           |                                      |           | 971,470     |               |   |              | 864,611     |         
|                                                                                 | Deferred revenue                                                                                                                                                                                                                                           |                                      |           | 702,364     |               |   |              | 469,275     |         
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|Total current liabilities                                                        |                                                                                                                                                                                                                                                            |                                      | 2,013,068 |             |               |   | 1,716,398    |            
|Capital lease obligation, less current portion                                   |                                                                                                                                                                                                                                                            |                                      | 59,451    |             |               |   | 162,367      |            
|Shareholders equity:                                                            |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|                                                                                 | Serial preferred shares, without par value, 1,000,000 shares
authorized, none issued                                                                                                                                                                       |                                      |           |            |               |   |              |            |         
|                                                                                 | Common share warrants                                                                                                                                                                                                                                      |                                      |           | 357,589     |               |   |              |            |         
|                                                                                 | Common shares, without par value, authorized 15,000,000
shares; issued 8,563,836 shares as of September 30, 2002
and 6,591,322 as of December 31, 2001; outstanding 5,263,836
shares as of September 30, 2002 and 3,291,322 shares as of
December 31, 2001 |                                      |           | 53,864,610  |               |   |              | 50,372,239  |         
|                                                                                 | Treasury shares, 3,300,000 shares at cost                                                                                                                                                                                                                  |                                      |           | (20,188,308 | )             |   |              | (20,188,308 | )       
|                                                                                 | Accumulated deficit                                                                                                                                                                                                                                        |                                      |           | (29,633,393 | )             |   |              | (24,341,439 | )       
|                                                                                 | Foreign currency translation                                                                                                                                                                                                                               |                                      |           | (87,597     | )             |   |              | (87,687     | )       
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|Total shareholders equity                                                       |                                                                                                                                                                                                                                                            |                                      | 4,312,901 |             |               |   | 5,754,805    |            
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            
|Total liabilities and shareholders equity                                       |                                                                                                                                                                                                                                                            | $                                    | 6,385,420 |             |               | $ | 7,633,570    |            
|                                                                                 |                                                                                                                                                                                                                                                            |                                      |           |             |               |   |              |            

|        |  |                                                                                                                                                                                                                                                                                               
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note A: |  | The balance sheet at December 31, 2001 has been derived from the audited
consolidated financial statements at that date, but does not include all of
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements

See notes to condensed consolidated financial statements.

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DATATRAK INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |         |  
|-------------------------------------------- | ---------------------- | - | ------------------ | ------ | ----------------- | - | ---------- | ------ | ---- | - | ---------- | ------- | - | - | ---------- | ------- | -
|                                             |                        |   | Three Months Ended |        | Nine Months Ended
|                                             |                        |   | September 30,      |        | September 30,    
|                                             |                        |   |                    |        |                  
|                                             |                        |   | 2002               |        | 2001              |   | 2002       |        | 2001
|                                             |                        |   |                    |        |                   |   |            |        |     
|Revenue                                      |                        | $ | 1,504,867          |        |                   | $ | 476,509    |        |      | $ | 3,466,149  |         |   | $ | 1,549,689  |        
|Direct costs                                 |                        |   | 469,734            |        |                   |   | 431,749    |        |      |   | 1,410,375  |         |   |   | 1,290,210  |        
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|Gross profit                                 |                        |   | 1,035,133          |        |                   |   | 44,760     |        |      |   | 2,055,774  |         |   |   | 259,479    |        
|Selling, general and administrative expenses |                        |   | 2,176,900          |        |                   |   | 1,833,100  |        |      |   | 6,203,816  |         |   |   | 5,144,753  |        
|Special items                                |                        |   | 363,964            |        |                   |   |           |        |      |   | 363,964    |         |   |   |           |        
|Depreciation and amortization                |                        |   | 294,426            |        |                   |   | 238,569    |        |      |   | 845,713    |         |   |   | 711,127    |        
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|Loss from operations                         |                        |   | (1,800,157         | )      |                   |   | (2,026,909 | )      |      |   | (5,357,719 | )       |   |   | (5,596,401 | )      
|Other income (expense):                      |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|                                             | Interest income        |   |                    | 18,301 |                   |   |            | 71,904 |      |   |            | 79,723  |   |   |            | 342,561 |  
|                                             | Interest expense       |   |                    | (3,651 | )                 |   |            | (5,766 | )    |   |            | (14,246 | ) |   |            | (14,241 | )
|                                             | Other income (expense) |   |                    | 479    |                   |   |            | (5,932 | )    |   |            | 288     |   |   |            | (26,107 | )
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|Net loss                                     |                        | $ | (1,785,028         | )      |                   | $ | (1,966,703 | )      |      | $ | (5,291,954 | )       |   | $ | (5,294,188 | )      
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|Basic and diluted net loss per share         |                        | $ | (0.34              | )      |                   | $ | (0.60      | )      |      | $ | (1.01      | )       |   | $ | (1.61      | )      
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        
|Weighted average common shares outstanding   |                        |   | 5,263,836          |        |                   |   | 3,290,322  |        |      |   | 5,228,524  |         |   |   | 3,290,322  |        
|                                             |                        |   |                    |        |                   |   |            |        |      |   |            |         |   |   |            |        

See notes to condensed consolidated financial statements.

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DATATRAK INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |             |          |          |  
|------------------------------------------------ | --------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------- | ---------- | ------------------------------- | -------- | --------- | ----------- | -------- | -------- | -
|                                                 |                                                                             |                                              |                                       |            | Nine Months Ended September 30,
|                                                 |                                                                             |                                              |                                       |            |                                
|                                                 |                                                                             |                                              |                                       |            | 2002                            |          | 2001     
|                                                 |                                                                             |                                              |                                       |            |                                 |          |          
|Operating Activities                             |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Net loss                                                                    |                                              | $                                     | (5,291,954 | )                               |          | $         | (5,294,188  | )       
|                                                 | Adjustments to reconcile net loss to net cash
used in operating activities: |                                              |                                       |            |                                 |          |           |             |         
|                                                 |                                                                             | Depreciation and amortization                |                                       |            | 845,713                         |          |           |             | 711,127  |         
|                                                 |                                                                             | Other                                        |                                       |            | (31,881                         | )        |           |             | (253,695 | )       
|                                                 |                                                                             | Changes in operating assets and liabilities: |                                       |            |                                 |          |           |             |          |         
|                                                 |                                                                             |                                              | Accounts receivable                   |            |                                 | (262,764 | )         |             |          | 252,695  |  
|                                                 |                                                                             |                                              | Accounts payable and accrued expenses |            |                                 | 56,910   |           |             |          | (179,191 | )
|                                                 |                                                                             |                                              | Other                                 |            |                                 | 242,105  |           |             |          | 125,452  |  
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Net cash used in operating activities                                       |                                              |                                       | (4,441,871 | )                               |          |           | (4,637,800  | )       
|Investing activities                             |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Purchases of property and equipment                                         |                                              |                                       | (1,189,522 | )                               |          |           | (626,682    | )       
|                                                 | Proceeds from sale of property and equipment                                |                                              |                                       | 1,095      |                                 |          |           |            |         
|                                                 | Maturities of short term investments                                        |                                              |                                       | 10,844,000 |                                 |          |           | 24,321,000  |         
|                                                 | Purchases of short term investments                                         |                                              |                                       | (9,540,572 | )                               |          |           | (19,353,143 | )       
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Net cash provided by investing activities                                   |                                              |                                       | 115,001    |                                 |          |           | 4,341,175   |         
|Financing activities                             |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Proceeds from issuance of common shares and stock option exercises          |                                              |                                       | 3,838,881  |                                 |          |           |            |         
|                                                 | Payments under capital lease obligation                                     |                                              |                                       | (96,245    | )                               |          |           | (70,294     | )       
|                                                 | Repayment of notes receivable, net                                          |                                              |                                       | 58,068     |                                 |          |           | 27,771      |         
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            
|                                                 | Net cash provided by (used in) financing activities                         |                                              |                                       | 3,800,704  |                                 |          |           | (42,523     | )       
|Effect of exchange rate on cash                  |                                                                             |                                              | (17,127                               | )          |                                 |          | (42,382   | )          
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            
|Decrease in cash and cash equivalents            |                                                                             |                                              | (543,293                              | )          |                                 |          | (381,530  | )          
|Cash and cash equivalents at beginning of period |                                                                             |                                              | 2,174,445                             |            |                                 |          | 2,383,244 |            
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            
|Cash and cash equivalents at end of period       |                                                                             | $                                            | 1,631,152                             |            |                                 | $        | 2,001,714 |            
|                                                 |                                                                             |                                              |                                       |            |                                 |          |           |            

See notes to condensed consolidated financial statements.

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DATATRAK INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
DATATRAK International, Inc. and subsidiaries (DATATRAK or the Company) have
been prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Companys Form 10-K for the
year ended December 31, 2001 (File No. 000-20699).

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that might affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.

2. Net Loss per Share

The following table sets forth the computation of basic and diluted
earnings per share.

|                                                                                                                                                                   |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                                                                                   |  | Three Months Ended |            | Nine Months Ended
|                                                                                                                                                                   |  | September 30,      |            | September 30,    
|                                                                                                                                                                   |  |                    |            |                  
|                                                                                                                                                                   |  | 2002               |            | 2001              |  | 2002 |            | 2001
|                                                                                                                                                                   |  |                    |            |                   |  |      |            |     
|Net loss used in the calculation of basic and
diluted earnings per share                                                                                           |  | $                  | (1,785,028 | )                 |  | $    | (1,966,703 | )    |  | $ | (5,291,954 | ) |  | $ | (5,294,188 | )
|                                                                                                                                                                   |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|Denominator for basic and diluted net loss
per share  weighted average common
shares outstanding                                                                  |  |                    | 5,263,836  |                   |  |      | 3,290,322  |      |  |   | 5,228,524  |   |  |   | 3,290,322  |  
|                                                                                                                                                                   |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|Basic and diluted net loss per share                                                                                                                               |  | $                  | (0.34      | )                 |  | $    | (0.60      | )    |  | $ | (1.01      | ) |  | $ | (1.61      | )
|                                                                                                                                                                   |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|Common share options and warrants
excluded from the computation of diluted
net loss per share because they would have
an antidilutive effect on net loss per share |  |                    | 1,232,363  |                   |  |      | 1,075,487  |      |  |   | 1,232,363  |   |  |   | 1,075,487  |  
|                                                                                                                                                                   |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  

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DATATRAK INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

3. Special items

During the third quarter of 2002, the Company recorded a special charge of
$238,320. This charge was for severance and other costs associated with
DATATRAKs staff reduction of 20 employees, whose positions were eliminated
during the third quarter of 2002. As of September 30, 2002, $10,096 of these
costs had been paid out. The unpaid balance of $228,224 is included in accrued
expenses at September 30, 2002.

On September 23, 2002 the Company announced the signing of a definitive
agreement to purchase Oriam, SA, a French Technology Firm with offices in Paris,
France and Boston, Massachusetts. Expenses totaling $125,645 associated with
this purchase agreement were recorded as special charges during September 2002.

4. Operating Leases

The Company leases
certain office equipment and space. Rent expense
relating to these operating leases was approximately $330,000 and $290,000 for
the nine months ended September 30 2002 and 2001, respectively. In July 2002,
the Companys German subsidiary, DATATRAK GmbH, entered into a 10-year lease
agreement for office space in Bonn, Germany. Future minimum lease payments for
the Company under noncancelable operating leases as of September 30, 2002 are as
follows:

|                                 |  |          |           | 
|-------------------------------- |  | -------- | --------- | 
|12 months ending September 30,   |  | Payments
|                                 |  |         
|2003                             |  | $        | 435,488   | 
|2004                             |  |          | 434,135   | 
|2005                             |  |          | 444,452   | 
|2006                             |  |          | 454,772   | 
|2007                             |  |          | 465,092   | 
|Subsequent to September 30, 2007 |  |          | 1,659,986 | 
|                                 |  |          |           | 
|                                 |  | $        | 3,893,925 | 
|                                 |  |          |           | 

5. Comprehensive loss

The following table sets forth comprehensive loss.

|                             |  |                                 |            |      |  |   |            |  
|---------------------------- |  | ------------------------------- | ---------- | ---- |  | - | ---------- | -
|                             |  | Nine Months Ended September 30,
|                             |  |                                
|                             |  | 2002                            |            | 2001
|                             |  |                                 |            |     
|Net loss                     |  | $                               | (5,291,954 | )    |  | $ | (5,294,188 | )
|Foreign currency translation |  |                                 | 90         |      |  |   | 7,161      |  
|                             |  |                                 |            |      |  |   |            |  
|Comprehensive loss           |  | $                               | (5,291,864 | )    |  | $ | (5,287,027 | )
|                             |  |                                 |            |      |  |   |            |  

6. Shareholders Equity

In January 2002, the Company completed a private placement of its common
shares with certain outside investors. The Company sold 1,922,514 of its common
shares at a price of $2.25 per share. Net of expenses, the Company raised
approximately $3.8 million in cash. In conjunction with this private

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placement, DATATRAK issued 192,252 warrants to purchase common shares at a price of $2.25
per share. The warrants are fully vested as of the grant date and expire five
years from the date of grant. A non-cash charge of $371,589 to shareholders
equity was recorded as a result of stock options and warrants that were granted
and vested due to the Companys private placement of common shares.

7. Restricted Cash

The Company is party to an agreement with an unaffiliated third party to
lease certain computer equipment. The lease has been recorded as a capital
lease. Terms of the lease agreement require the Company to maintain a restricted
cash balance equal to the outstanding balance payable on the lease. The
restricted cash balance was $195,539 at September 30, 2002.

In addition, the Companys wholly owned subsidiary, DATATRAK GmbH, is
required to provide a bank guarantee to the lessor of its office space equal to
three months rent. The terms of the bank guarantee require DATATRAK GmbH to
maintain a restricted cash balance of 59,082 Euros with the bank. The US dollar
equivalent of this amount was $57,971 at September 30, 2002.

DATARKAKs total restricted cash balance was $253,510 at September 30,
2002.

8. Common Share Warrants

At June 30, 2002, the Company had outstanding warrants to purchase 192,252
common shares at a price of $2.25 per share. The warrants became exercisable on
January 4, 2002 and will expire on January 4, 2007.

9. Recently Issued Accounting Standards

In June 2002, the Financial Accounting Standards Board issued Statement No.
146, Accounting for Costs Associated with Exit or Disposal Activities
(Statement No. 146), which is effective for exit or disposal activities that
are initiated after December 31, 2002. Statement No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring) (EITF 94-3). The Company did not elect early adoption of
Statement 146, and continued to follow EITF 94-3 for the three and nine month
periods ended September 30, 2002.

10. Reclassification

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

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

The information set forth and discussed below for the three and nine month
periods ended September 30, 2002 is derived from the Condensed Consolidated
Financial Statements included elsewhere herein. The financial information set
forth and discussed below is unaudited, but in the opinion of management,
reflects all adjustments (consisting of normal recurring accruals) necessary for
a fair presentation of such information. The Companys results of operations for
a particular quarter may not be indicative of results expected during the other
quarters or for the entire year.

General

DATATRAK is a provider of software and other related services, commonly
referred to as an application service provider, or ASP. DATATRAKs customers use
the software known as DATATRAK EDC to collect and transmit clinical trial
data, commonly referred to as electronic data capture, or EDC. The Companys
services assist companies in the clinical pharmaceutical, biotechnology,
contract research organization (CRO) and medical device research industries,
in accelerating the completion of clinical trials. Approximately 53% of the
Companys assets, or approximately $3.4 million, are held in cash, cash
equivalents and short-term investments. Since commencing EDC operations in 1997,
the Company has experienced some growth in revenue but continues to record
significant losses and negative cash flow from operations. The Company is
continuing to enhance and commercialize the DATATRAK EDC software and
anticipates that its operating results will fluctuate significantly from period
to period. There can be no assurance of the Companys long-term future
prospects.

The Companys contracts provide a fixed price for each component or service
to be delivered, and revenue is recognized as these components or services are
delivered. Services provided by DATATRAK that are in addition to those provided
for in its contracts are billed on a fee for service basis as completed.
Generally, these contracts range in duration from one to three years. The
ultimate contract value is dependent upon the length of the customers use of
DATATRAK EDC and the services provided by DATATRAK. As services are
performed over the life of the contract, revenue is recognized per the specific
terms of each contract. Costs associated with contract revenues are recognized
as incurred. These contracts can be terminated by the customer with or without
cause. DATATRAK is entitled to payment for all work performed through the date
of notice of termination and for recovery of some or all costs incurred to
terminate a contract. The termination of a contract will not result in a
material adjustment to revenue or costs previously recognized.

Since its purchase of the DATATRAK EDC software in January 1998,
DATATRAK has recorded revenue related to a small number of contracts. At
September 30, 2002, DATATRAKs backlog was $15.1 million. Backlog includes a
$2.4 million contract that has been placed on hold, by the clinical trial
sponsor. Due to DATATRAKs early stage of development and its low level of
backlog, there can be no assurance as to its future levels of revenue.

Results of Operations

Three months ended September 30, 2002 compared with three months ended
September 30, 2001

Revenue for the three months ended September 30, 2002 increased 212.5% to
$1.5 million, as compared to $480,000 for the three months ended September 30,
2001. The increase was the result of the Companys growth and conversion of
backlog into revenue and the resulting increase in the number of clinical trials
using the DATATRAK EDC software.

Direct costs of revenue, mainly personnel costs, were $470,000 and $430,000
during the three months ended September 30, 2002 and 2001, respectively. The
9.3% increase in direct costs was mainly the result of a $30,000 increase in
other direct costs, mainly travel expenses and other costs, which are billed to
the Companys customers. DATATRAK was able to leverage its prior period
investments in

8



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##### Table of Contents



personnel, in conjunction with its increased revenue to increase
its gross margin to 68.7% compared to 10.4% in the third quarter of the prior
year.

Selling general and administrative (SG&A) expenses include all
administrative personnel costs, business and software development costs, and all
other expenses not directly chargeable to a specific contract. SG&A expenses
increased by 22.2 % to $2.2 million from $1.8 million for the three months ended
September 30, 2002 and 2001, respectively. During the three months ended
September 30, 2002, there was a $270,000 increase in personnel costs caused by
an increase in software development and corporate office personnel. Certain
initiatives the Company has undertaken resulted in $80,000 of additional
expenses during the three months ended September 30, 2002.

During the three months ended September 30, 2002, DATATRAK recorded special
charges of $360,000. Included in special items is $120,000 of expenses
associated with the Companys potential acquisition of Oriam, SA, which was
announced on September 23, 2002. Also, during the three months ended September
30, 2002, $240,000 of expenses related to the reduction of 20 employees were
recorded. This reduction in employees is expected to decrease the Companys
quarterly operating expenses by approximately $300,000 beginning in the fourth
quarter of 2002.

Depreciation and amortization expense increased to $290,000 during the
three months ended September 30, 2002 from $240,000 during the three months
ended September 30, 2001. The increase was the result of depreciating capital
expenditures associated with the building of DATATRAKs information technology
infrastructure and amortizing leasehold improvements at the Companys new
corporate headquarters.

Other income decreased to $15,000 during the three months ended September
30, 2002 from $60,000 during the three months ended September 30, 2001. Other
income includes interest income which decreased $50,000 for the three months
ended September 30, 2002, compared to September 30, 2001, due to the Companys
use of cash to fund its operating losses and other working capital needs and
decreasing interest rates on the Companys short-term investments.

Nine months ended September 30, 2002 compared with nine months ended
September 30, 2001

Revenue for the nine months ended September 30, 2002 increased 133.3% to
$3.5 million, as compared to $1.5 million for the nine months ended September
30, 2001. The increase was the result of the Companys growth and conversion of
backlog into revenue and the resulting increase in the number of clinical trials
using the DATATRAK EDC software.

Direct costs of revenue, mainly personnel costs, were $1.4 million and $1.3
million during the nine months ended September 30, 2002 and 2001, respectively.
The 7.7% increase in direct costs was mainly the result of increased personnel
costs of $130,000 caused by the addition of employees, in anticipation of
increases in backlog and revenue, to assure the quality delivery of the
Companys services. DATATRAK was able to leverage its employee costs, in
conjunction with its increased revenue to increase its gross margin to 60.0%
compared to 13.3% for the nine months ended September 30, 2001.

SG&A expenses increased by 21.6% to $6.2 million from $5.1 million for the
nine months ended September 30, 2002 and 2001, respectively. During the nine
months ended September 30, 2002, there was an $820,000 increase in personnel
costs due to increases in employees across all areas of the Company. Increases
in other expenses and certain initiatives the Company has undertaken resulted in
approximately $280,000 of additional expenses during the nine months ended
September 30, 2002.

Depreciation and amortization expense increased to $850,000 during the nine
months ended September 30, 2002 from $710,000 during the nine months ended
September 30, 2001. The increase was the result of depreciating capital
expenditures associated with the building of DATATRAKs information technology
infrastructure and amortizing leasehold improvements at the Companys new
corporate headquarters.

9



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##### Table of Contents



Other income decreased to $70,000 during the nine months ended September
30, 2002 from $300,000 during the nine months ended September 30, 2001. Interest
income decreased $260,000 for the nine months ended September 30, 2002 compared
to September 30, 2001, due to the Companys use of cash to fund its operating
losses and other working capital needs and decreasing interest rates on the
Companys short-term investments. For the nine months ended September 30, 2002,
there was a $30,000 increase in foreign currency transaction adjustments
compared to the nine months ended September 30, 2001.

Liquidity and Capital Resources

Since its inception, the Companys principal sources of cash have been cash
flow from operations, proceeds from the sale of equity securities and the sale
of its Clinical Business. The Companys investing activities primarily reflect
capital expenditures and purchases and maturities of short-term investments. In
January 2002 the Company raised approximately $3.8 million in cash with the
completion of its private placement of common shares.

The Companys contracts usually require a portion of the contract amount to
be paid at the time the contract is initiated. Additional payments are generally
received, as work progresses, throughout the life of the contract. All amounts
received are recorded as a liability (deferred revenue) until work has been
completed and revenue is recognized. Cash receipts do not necessarily correspond
to costs incurred or revenue recognized. The Company typically receives a low
volume of large-dollar receipts. Accounts receivable will fluctuate due to the
timing and size of cash receipts. Accounts receivable (net of allowance for
doubtful accounts) was $680,000 at September 30, 2002 and $430,000 at December
31, 2001. Deferred revenue was $700,000 at September 30, 2002 and $470,000 at
December 31, 2001.

Cash and cash equivalents decreased $540,000 during the nine months ended
September 30, 2002. This was the result of $4.4 million used in operating
activities, offset by $3.9 provided by investing and financing activities. Cash
used for operating activities resulted from the funding of net operating losses
and other working capital needs. Investing activities included net maturities of
short-term investments of $1.3 million and $1.2 million used to purchase
property and equipment. Financing activities include $3.8 million received from
the Companys private placement of its common shares.

At September 30, 2002, the Company had working capital of $2.4 million, and
its cash, cash equivalents and short-term investments totaled $3.4 million. The
Companys working capital decreased by $1.9 million since December 31, 2001. The
decrease was primarily the result of the $1.8 million decrease in cash, cash
equivalents and short-term investments. The growth in accounts receivable was
offset by the growth in current liabilities.

The Company is responsible for funding the future enhancement and testing
of the DATATRAK EDC software. The Company will continue to invest in the
development of the DATATRAK® process. The Companys operations and the EDC
market are still in a developmental stage. DATATRAK has experienced marginal
revenue growth; however, the Company anticipates negative cash flow from
operations for the remainder of 2002, as it attempts to achieve profitability.
The Company anticipates capital and related expenditures of approximately
$200,000 through the end of the current year for continued commercialization and
product development of DATATRAK EDC, which the Company expects to fund from
existing cash and cash equivalents, maturities of short-term investments and
cash flow from operations. The Company believes that its cash and cash
equivalents, maturities of short-term investments and cash flow from operations,
together with its existing sources of equity, will be sufficient to meet its
working capital and capital expenditure requirements through December 31, 2002.

On September 23, 2002, the Company announced the signing of a definitive
agreement to purchase Oriam, SA, a French Technology Firm with offices in Paris,
France and Boston, Massachusetts. Closing of the proposed transaction is
contingent upon appropriate financing. In order to complete the purchase of
Oriam, SA and support its future working capital needs beyond December 31, 2002,
the Company will need to raise additional funds by selling debt or equity
securities or through other arrangements. Specific terms

10



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##### Table of Contents



involved with potential financing are currently being evaluated by DATATRAK and its investment advisors,
however, additional capital may not be available on acceptable terms, if at all.

Inflation

To date, the Company believes the effects of inflation have not had a
material adverse effect on its results of operations or financial condition.

Information About Forward-Looking Statements

Certain statements made in this Form 10-Q, other SEC filings or written
materials or orally by the Company or its representatives may constitute
forward-looking statements that are based on managements current beliefs,
estimates and assumptions concerning the operations, future results and
prospects of the Company and the clinical pharmaceutical research industry in
general. All statements that address operating performance, events or
developments that management anticipates will occur in the future, including
statements related to future revenue, profits, expenses, income and earnings per
share or statements expressing general optimism about future results, are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 (Exchange Act). In addition, words such as expects,
anticipates, intends, plans, believes, estimates, variations of such
words, and similar expressions are intended to identify forward-looking
statements. Forward-looking statements are subject to the safe harbors created
in the Exchange Act. Factors that may cause actual results to differ materially
from those in the forward-looking statements include the success of the
Companys fundraising efforts; the ability of the Company to absorb corporate
overhead and other fixed costs in order to successfully market the DATATRAK
EDC software; the development of and fluctuations in the market for
electronic data capture technology; the degree of the Companys success in
obtaining new contracts; the timing of payments from customers and the timing of
clinical trial sponsor decisions to conduct new clinical trials or cancel or
delay ongoing trials; governmental regulation; the early stage of the Companys
ASP operations; and general economic conditions such as the rate of employment,
inflation, interest rates and the condition of capital markets. This list of
factors is not exclusive. In addition, the Companys success depends on the
outcome of various strategic initiatives it has undertaken, all of which are
based on assumptions made by the Company concerning trends in the clinical
research market and the health care industry.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk from changes in interest rates and
foreign currency exchange rates since it funds its operations through short-term
investments and has business transactions in Euros. A summary of the Companys
market risk exposures is presented below.

Interest
Rate Risk

DATATRAK has fixed income investments consisting of cash equivalents and
short-term investments, which may be affected by changes in market interest
rates. The Company does not use derivative financial instruments in its
investment portfolio. The Company places its cash equivalents and short-term
investments with high-quality financial institutions, limits the amount of
credit exposure to any one institution and has established investment guidelines
relative to diversification and maturities designed to maintain safety and
liquidity. Investments are reported at amortized cost, which approximates fair
value. A 1.0% change in interest rates during the nine months ended September
30, 2002, would have resulted in a $32,000 change in DATATRAKs interest income
during the nine month period.

Foreign
Currency Risk

DATATRAKs foreign sales and results of operations are subject to the
impact of foreign currency fluctuations. Approximately 3% of the Companys
revenue for the nine months ended September 30, 2002 was earned by the Companys
German subsidiary. The Company manages its risk to foreign currency exchange
rates by maintaining foreign currency bank accounts in currencies in which it
regularly transacts

11



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##### Table of Contents



business. DATATRAK does not currently hedge against the risk
of exchange rate fluctuations. A 1.0% fluctuation in the exchange rate between
United States dollars and the Euro at September 30, 2002, would have resulted in
a $15,000 change in the foreign currency translation amount recorded on the
Companys balance sheet, and $45,000 change in the Companys net loss for the
nine months ended September 30, 2002 due to foreign currency transactions.




Item 4. Controls and Procedures

Within 90 days prior to the date of the filing of this report, the
Companys Chief Executive Officer and Chief Financial Officer conducted an
evaluation of the effectiveness of the design and operation of the Companys
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation such officers concluded that the Companys disclosure
controls and procedures are effective to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commissions rules and forms.

There have been no significant changes in the Companys internal controls
or in other factors that could significantly affect these controls subsequent to
the date of the evaluation referred to above.




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                                  

12



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Item 6. Exhibits and Reports on Form 8-K

| |  |                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) Exhibits                                                                                                                                         
|
| |  | See the
Exhibit Index at page E - 1 of this Form 10 - Q.                                                                                             
|
| |  | (b) Reports on Form 8-K                                                                                                                              
|
| |  | No reports were filed on Form 8-K during the three months ended
September 30, 2002, other than the following:                                        
|
| |  | Current Report on Form 8-K, dated September 23, 2002, reporting under
item 5 to announce the signing of a definitive agreement to purchase
Oriam, SA.

13



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##### Table of Contents






SIGNATURES

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

|                   |  |                                                                                                                                                      
|------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|                   |  | DATATRAK International, Inc.Registrant                                                                                                               
|                  
|Date:     11/13/02 |  | /s/ Jeffrey A. GreenJeffrey A. Green,
President and Chief Executive Officer and a Director
(Principal Executive Officer)                             
|                  
|Date:     11/13/02 |  | /s/ Terry C. BlackTerry C. Black,
Vice President of Finance, Chief Financial Officer,
Treasurer and Assistant Secretary
(Principal Financial Officer)

14



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##### Table of Contents






CERTIFICATION OF CHIEF EXECUTIVE OFFICER, DATATRAK INTERNATIONAL, INC.

I, Jeffrey A. Green, Chief Executive Officer, DATATRAK International, Inc.,
certify that:



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



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



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                                                                                               
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------
|Date:     11/13/02 |  | /s/ Jeffrey A. GreenJeffrey A. Green,
   President and Chief Executive Officer and a Director
   (Principal Executive Officer)

15



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##### Table of Contents






CERTIFICATION OF CHIEF FINANCIAL OFFICER, DATATRAK INTERNATIONAL, INC.

I, Terry C. Black, Chief Financial Officer, DATATRAK International, Inc.,
certify that:



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



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



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                                                                                                                               
|------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date:     11/13/02 |  | /s/ Terry C. BlackTerry C. Black,
   Vice President of Finance, Chief Financial Officer,
   Treasurer and Assistant Secretary
   (Principal Financial Officer)

16



---



##### Table of Contents






Exhibit Index

|            |  |                                                                                                                          |  |      |    |  
|----------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | ---- | -- | -
|Exhibit No. |  | Description                                                                                                              |  | Page
|            |  |                                                                                                                          |  |     
|4.1         |  | Specimen Certificate of the Companys Common Shares, without par value                                                   |  |      | (1 | )
|            |  |                                                                                                                          |  |      |    |  
|4.2         |  | Second Amended and Restated Registration Agreement, dated July 15, 1994, as
amended on June 1, 1995 and February 5, 1996 |  |      | (2 | )
|            |  |                                                                                                                          |  |      |    |  
|10.1        |  | Amended and Restated 1994 Directors Share Option Plan*                                                                  |  |      | (3 | )
|            |  |                                                                                                                          |  |      |    |  
|10.2        |  | Amended and Restated 1996 Outside Directors Stock Option Plan*                                                          |  |      | (3 | )
|            |  |                                                                                                                          |  |      |    |  
|10.3        |  | Amendment No. 2 to the Amended and Restated 1996 Outside Directors Stock
Option Plan*                                   |  |      | (4 | )
|            |  |                                                                                                                          |  |      |    |  
|10.4        |  | Amended and Restated 1992 Share Incentive Plan*                                                                          |  |      | (3 | )
|            |  |                                                                                                                          |  |      |    |  
|10.5        |  | Amended and Restated 1996 Key Employees and Consultants Stock Option Plan*                                              |  |      | (3 | )
|            |  |                                                                                                                          |  |      |    |  
|10.6        |  | Amendment No. 2 to the Amended and Restated 1996 Key Employees and
Consultants Stock Option Plan*                       |  |      | (5 | )
|            |  |                                                                                                                          |  |      |    |  
|10.7        |  | Amendment No. 3 to the Amended and Restated 1996 Key Employees and
Consultants Stock Option Plan*                       |  |      | (9 | )
|            |  |                                                                                                                          |  |      |    |  
|10.8        |  | Form of Indemnification Agreement*                                                                                       |  |      | (2 | )
|            |  |                                                                                                                          |  |      |    |  
|10.9        |  | Employment Agreement between the Company and Jeffrey A. Green, dated
February 5, 2001*                                   |  |      | (6 | )
|            |  |                                                                                                                          |  |      |    |  
|10.10       |  | Employment Agreement between the Company and Terry C. Black, dated
February 5, 2001*                                     |  |      | (6 | )
|            |  |                                                                                                                          |  |      |    |  
|10.11       |  | Separation Agreement between the Company and Terry C. Black, dated
December 22, 1998*                                    |  |      | (7 | )
|            |  |                                                                                                                          |  |      |    |  
|10.12       |  | Employment Agreement between the Company and Wolfgang Summa, dated
December 29, 2000*                                    |  |      | (6 | )
|            |  |                                                                                                                          |  |      |    |  
|10.13       |  | DATATRAK International, Inc. Retirement Savings Plan*                                                                    |  |      | (8 | )
|            |  |                                                                                                                          |  |      |    |  
|10.14       |  | 1999 Outside Director Stock Option Plan*                                                                                 |  |      | (5 | )



---

|*   |  | Management compensatory plan or arrangement.                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) |  | Incorporated herein by reference to the Companys Form 10-K for the year
ended December 31, 1999 (File No. 000-20699).                                                                                                                   
|   
|(2) |  | Incorporated herein by reference to the Companys Form 1 Registration
Statement filed on March 8, 1996, as amended by Amendment No. 1 filed on
May 10, 1996 and as amended by Amendment No. 2 filed on June 10, 1996 (File
No. 333-2140).

E-1





---



##### Table of Contents



Exhibit Index

|            |  |                                                                                                                                   |  |     
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Exhibit No. |  | Description                                                                                                                       |  | Page
|            |  |                                                                                                                                   |  |     
|(3)         |  | Incorporated herein by reference to the Companys Form S-8 Registration
Statement filed on November 13, 1996 (File No. 333-16061) |  |     
|            |  |                                                                                                                                   |  |     
|(4)         |  | Incorporated herein by reference to the Companys Schedule 14A filed on
March 17, 1999 (File No. 000-20699)                       |  |     
|            |  |                                                                                                                                   |  |     
|(5)         |  | Incorporated herein by reference to the Companys Schedule 14A filed on
April 28, 2000 (File No. 000-20699)                       |  |     
|            |  |                                                                                                                                   |  |     
|(6)         |  | Incorporated herein by reference to the Companys Form 10-K for the year
ended December 31, 2000 (File No. 000-20699)             |  |     
|            |  |                                                                                                                                   |  |     
|(7)         |  | Incorporated herein by reference to the Companys Form 10-K for the year
ended December 31, 1998 (File No. 000-20699)             |  |     
|            |  |                                                                                                                                   |  |     
|(8)         |  | Incorporated herein by reference to the Companys Form S-8 Registration
Statement filed on April 30, 1997 (File No. 333-26251)    |  |     
|            |  |                                                                                                                                   |  |     
|(9)         |  | Incorporated herein by reference to the Companys Schedule 14A filed on May
7, 2002 (File No. 000-20699)                          |  |     

E-2