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

                               FORM 10-QSB
(Mark one)

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

              For the quarterly period ended June 30, 2001

                                    OR

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

               For the transition period from ____ to ____
                   Commission file number  33-1933 3-D


                               INFERTEK, INC.
           (formerly Smartsources.com, a Washington corporation,
              Smartsources.com, Inc., a Colorado corporation,
                   Innovest Capital Sources Corporation,
          Telco Communications, Inc. and Cody Capital Corporation)
    -----------------------------------------------------------------
    (Exact name of small business issuer as specified in its charter)


      Washington                                          98-0352034
---------------------------------                    ---------------------
(State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                     Identification Number)

2030 Marine Drive, Ste. 100, North Vancouver, British Columbia V7P 1V7, CANADA
------------------------------------------------------------------------------
                 (Address of principal executive offices)

                              (604) 986-0889
                        --------------------------
                       (Issuer's telephone number)


Check whether the issuer (1) filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.   Yes  [X]   No  [ ]

            APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
               PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.   Yes  [ ]   No  [ ]

                   APPLICABLE ONLY TO CORPORATE ISSUERS

As of June 30, 2001, 12,561,500 shares of common stock of the Registrant were
outstanding.

Transitional Small Business Disclosure Format (check one):   Yes [ ]   No  [X]

<Page>

PART I  - FINANCIAL INFORMATION


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

The financial statements included herein have been prepared by the Company,
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.



<Page>
<Table>
                        INFERTEK, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                      SEPTEMBER 30, 2000 and JUNE 30, 2001

<Caption>
                                             September 30,      June 30
                                                  2000           2001,
                                                              (Unaudited)
                                             -------------     ------------
<S>                                           <C>              <C>
CURRENT ASSETS
Cash and cash equivalents                     $ 3,102,100      $   160,100
Trade accounts receivable, net                    402,100          406,600
Income tax refundable                                   -           28,100
Prepaid expenses                                   40,000           79,400
                                              ------------     ------------
   Total current assets                         3,544,200          674,200

CAPITALIZED SOFTWARE COSTS and
PURCHASED SOFTWARE RIGHTS, net                    457,700          335,000
PROPERTY and EQUIPMENT, net                       867,600          792,000
OTHER ASSETS                                       38,400           46,700
                                              ------------     ------------
      TOTAL ASSETS                              4,907,900        1,847,900


CURRENT LIABILITIES
Accounts payable and accrued liabilities          259,100          289,400
Interest payable                                  197,900          120,000
Income tax payable                                186,900          101,300
Deferred revenue                                   42,900           89,200
Current portion of long-term debt               1,259,400          335,100
                                              ------------     ------------
   Total current liabilities                    1,946,200          935,000

LONG-TERM LIABILITIES
Interest payable                                        -           26,800
Long-term debt, net of current portion          2,551,800        2,446,400
Deferred tax liability                             72,500           58,800
                                              ------------     ------------
   Total liabilities                            4,570,500        3,467,000

COMMITMENTS and CONTINGENCIES
MINORITY INTEREST                               3,407,000        3,407,000
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 50 million shares authorized,
  12,055,300 and 12,561,500 shares
  outstanding on September 30, 2000 and
  June 30, 2001, respectively.                  6,871,300        7,614,100
Accumulated other comprehensive income            106,900           88,100
Accumulated equity (deficit)                   (9,311,100)     (12,310,800)
Deferred compensation                            (736,700)        (417,500)
                                              ------------     ------------
   Total stockholders' equity                  (3,069,600)      (5,026,100)
                                              ------------     ------------
      TOTAL LIABILITIES and STOCKHOLDERS'
      EQUITY                                  $ 4,907,900      $ 1,847,900
</Table>

       See accompanying notes to these consolidated financial statements.

<Page>
<Table>
                                 INFERTEK INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
                      Quarter and nine months ended June 30, 2001 and 2000


<Caption:
                                        For the three months ended      For the nine months ended
                                       ----------------------------     ----------------------------
                                          June 30,        June 30,       June 30,        June 30,
                                            2000            2001           2000            2001
                                       ------------    ------------    ------------     ------------
                                                               (UNAUDITED)
<S>                                    <C>             <C>             <C>              <C>
REVENUES                               $   499,000     $   421,900     $ 1,137,600      $ 1,088,400

COST OF SALES                              145,000          71,100         244,400          167,000
                                       ------------    ------------    ------------     ------------
GROSS PROFIT                               354,000         350,800         893,200          921,400

OPERATING EXPENSES, EXCLUSIVE OF
DEPRECIATION AND AMORTIZATION
  Research & Development                   262,600         205,800         759,500          589,900
  Sales and Marketing                      239,000         253,600         611,500          835,400
  General and Administrative               625,500         353,400       1,753,300        1,225,900
                                       ------------    ------------    ------------     ------------
                                         1,127,100         812,800       3,124,300        2,651,200
                                       ------------    ------------    ------------     ------------
OPERATING LOSS, BEFORE DEPRECIATION
AND AMORTIZATION                          (773,100)       (462,000)     (2,231,100)      (1,729,800)
                                       ------------    ------------    ------------     ------------

Depreciation and amortization               136,600          68,200         420,300          191,800
                                       ------------    ------------    ------------     ------------
OPERATING LOSS                            (909,700)       (530,200)     (2,651,400)      (1,921,600)
                                       ------------    ------------    ------------     ------------
OTHER INCOME (EXPENSE)
  Interest income                           59,700           3,300          95,200           59,200
  Interest and financing costs            (173,800)       (122,700)     (1,831,400)      (1,196,700)
  Other income (expense)                         -             200               -           12,600
                                       ------------    ------------    ------------     ------------
                                          (114,100)       (119,200)     (1,736,200)      (1,124,900)
                                       ------------    ------------    ------------     ------------
NET LOSS BEFORE INCOME TAXES            (1,023,800)       (649,400)     (4,387,600)      (3,046,500)
                                       ------------    ------------    ------------     ------------
PROVISION (RECOVERY) FOR
INCOME TAXES                                (6,100)              -         (91,800)               -
                                       ------------    ------------    ------------     ------------
NET LOSS BEFORE EXTRAORDINARY
GAIN                                    (1,017,700)       (649,400)     (4,295,800)      (3,046,500)

EXTRAORDINARY GAIN FROM DEBT
CONVERSION                                       -               -               -           46,800
                                       ------------    ------------    ------------     ------------
NET LOSS                               $(1,017,700)    $  (649,400)    $(4,295,800)     $(2,999,700)

BASIC AND DILUTED LOSS PER SHARE
Net loss per share before
  extraordinary gain                        ($0.09)         ($0.05)         ($0.36)          ($0.24)
Extraordinary gain per share                     -           $0.00               -            $0.00

Net Loss per share                          ($0.09)         ($0.05)         ($0.36)          ($0.24)

Weighted average common shares
  outstanding (basic and diluted)       11,855,600      12,561,500      11,782,600       12,516,500
</Table>

       See accompanying notes to these consolidated financial statements.

<Page>
<Table>

                    INFERTEK, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED
                Nine months ended June 30, 2000 and 2001

<Caption>
                                                    For the nine months ended
                                                   ----------------------------
                                                     June 30,       June 30,
                                                       2000           2001
                                                   ------------   ------------
                                                           (UNAUDITED)
<S>                                                <C>            <C>
CASH FROM OPERATING ACTIVITIES
------------------------------
 Net Income (Loss)                                 $(4,295,800)   $(2,999,700)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH FROM OPERATING ACTIVITIES
 Depreciation and amortization                         420,300        191,800
 Stock-based compensation                              232,000        319,200
 Accretion of debt discount                            120,500        155,500
 Accrued interest expense from intrinsic
  value of conversion feature of long-term debt      1,676,000        768,100
 Realized gain on long-term debt conversion                           (46,800)

CHANGES IN OPERATING ASSETS AND LIABILITIES
 Trade accounts receivable                            (102,900)       (21,800)
 Other assets                                          (29,300)       (37,900)
 Accounts payable and other accrued liabilities        162,900         38,100
 Accrued interest                                            -        (51,000)
 Deferred revenue                                                      60,600
 Income taxes payable and refundable                         -       (118,300)
                                                   ------------   ------------
   Net cash flows from operating activities         (1,816,300)    (1,742,200)
                                                   ------------   ------------

CASH FROM INVESTING ACTIVITIES
------------------------------
 Purchase of property and equipment                    (81,300)       (28,600)
 Purchase of capitalized software                      (80,200)       (20,800)
 Refund of deposit on property and equipment            16,100              -
                                                   ------------   ------------
   Net cash flows from investing activities           (145,400)       (49,400)
                                                   ------------   ------------

CASH FROM FINANCING ACTIVITIES
------------------------------
 Principal repayments of long-term debt                (50,400)    (1,135,600)
 Principal repayments of capital lease obligations     (14,600)       (20,000)
 Repayment of advances from stockholder                (24,600)             -
 Proceeds from long-term debt                        4,552,000
 Proceeds from issuance of common stock              1,184,200              -
                                                   ------------   ------------
   Net cash flows from financing activities          5,646,600     (1,155,600)
                                                   ------------   ------------

EFFECT OF CHANGES IN EXCHANGE RATES                    (19,500)         5,200
                                                   ------------   ------------
NET CHANGES IN CASH                                  3,665,400     (2,942,000)
CASH and CASH EQUIVALENTS, beginning of period         164,200      3,102,100
                                                   ------------   ------------
CASH and CASH EQUIVALENTS, end of period            $3,829,600       $160,100
                                                   ============   ============

Supplemental disclosure of Cash Flow information:
 Interest paid                                         $35,000       $324,500
 Income taxes paid (received)                         ($91,800)       $90,000
 Seller financing of equipment acquired through
  capital lease                                         98,000         12,700
</Table>

       See accompanying notes to these consolidated financial statements.


<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

BASIS OF PRESENTATION
---------------------
     The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial reporting and in accordance with the instructions for
Form 10-QSB and Item 310 of Regulation S-X. Accordingly, they do not include
all of the information and disclosures normally required by generally accepted
accounting principles for complete financial statements or those normally
reflected in the Company's Annual Report on Form 10-KSB. The financial
information included herein reflects all adjustments (consisting of normal
recurring adjustments) that are, in the opinion of management, necessary for a
fair presentation of results for interim periods. Results of interim periods
are not necessarily indicative of the results to be expected for a full year.

     Management has prepared the financial statements on the basis of a going
concern which reflects management's assessment through the completion of the
current fiscal year.  Therefore, the financial statements do not reflect any
adjustments that may be required should the Company determine that going
concern accounting is not appropriate.  The Company's assessment was made, in
part, upon forecasted sales resulting from contract negotiations and planned
cost and expense controls.  However, any projection of future cash needs and
cash flows are subject to substantial uncertainty.  With regards to sales
forecasts developed at the beginning of the current fiscal year, the Company is
observing that negotiations are taking longer than anticipated, thereby slowing
forecasted cash inflows.  If current cash and cash that may be generated from
future operations are insufficient to satisfy liquidity requirements,
management may be required to substantially downsize operations in order to
conserve cash, seek to sell additional debt or equity securities or obtain
additional credit facilities from lenders.  There can be no assurance that
financing of debt or equity securities will be available in amounts or terms
acceptable to the Company, if at all.

LIQUIDITY AND FINANCIAL RESOURCES
---------------------------------
     On June 30, 2001, the Company's cash and cash equivalents totaled
$160,100. The Company has experienced operating deficits since inception and
its cash position has declined when compared to the immediately preceding
quarters.  The Company seeks operating and financial stability by pursuing its
business fundamentals and has concentrated efforts during the current fiscal
year on sales and marketing activities. However, it recognizes that the timing
required to obtain purchase contracts has been longer than originally expected
and as result, anticipates it will incur operating losses in the coming
quarters. The funding of anticipated operating losses will require working
capital in excess of the Company's current cash reserves, which the Company
believes are sufficient to sustain its operations at current levels until at
least October 2001.

     To address its liquidity concerns, the company will continue to sustain a
series of cost control measures and may be required to implement further
adjustments in the coming months. The Company is also focused in closing
additional purchase orders to increase cash inflows from operations.
Notwithstanding the above, the Company may require additional funds to support
its immediate working capital demand or for other purposes and may seek to
raise additional funds through public or private equity financings or from
other sources, including traditional banking instruments and/or factoring of
accounts receivable. The Company does not currently have any commitments from
any third party to provide additional financing and there can be no assurance
that additional financing will be available on acceptable terms, if at all.
Obtaining financing upon satisfactory terms may prove difficult until the
dispute with Columbia Diversified Software Fund is resolved (see Item 1, Note 3
- Minority Interest).  If adequate funds are not available or are not available
on acceptable terms, the Company may be unable to develop or enhance our
products, take advantage of future opportunities, or respond to competitive
pressures or unanticipated requirements, which could have a material adverse
effect on its business, financial condition and operating results.  Under those
circumstances, the Company may be forced to materially reduce the scope of, or
terminate, its operations.

PRINCIPLES OF CONSOLIDATION AND MINORITY INTEREST
-------------------------------------------------
     On June 14, 2001 the Company changed its state of incorporation to
Washington from Colorado and on June 15, 2001, the Company's corporate name was
changed from "Smartsources.com, Inc." to "Infertek, Inc.," and its new trading
symbol on the OTC Bulletin Board is now "IFRK." One of the Company's wholly-
owned subsidiaries also changed its name, from SmartSources.com Technologies
Inc. to Infertek Technologies Inc., effective July 3, 2001.

     The consolidated financial statements of Infertek, Inc. and Subsidiaries
include the accounts of its direct and indirect wholly-owned subsidiaries:
Nifco Investments, Inc.; Infertek Technologies, Inc.; Intelli Trade, Inc.;
Infer Technologies, Inc.; and Origin Software Corporation. All material
intercompany accounts and transactions have been eliminated in consolidation.
Minority interest represents the  $3, 407, 000 value of Class B preferred stock
of Origin Software Corporation as described in Note 3.  The Company owns all
issued and outstanding common stock of these subsidiaries, which represents
100% of voting rights.

REVENUE RECOGNITION
-------------------
     The Company recognizes revenue in accordance with American Institute of
Certified Public Accountants Statement of Position (SOP) 97-2, Software Revenue
Recognition, and SOP 98-9, Modification of SOP 97-2 with Respect to Certain
Transactions.  Revenue from packaged software products is recognized when
shipped.  Maintenance and subscription revenue is recognized ratably over the
contract period.  Revenue attributable to significant support is based on the
price charged for the undelivered elements and is recognized ratably over the
related product's life cycle.  Revenue from fixed-price service contracts and
software development contracts requiring significant production, modification,
or customization are recognized using the percentage-of-completion method.
Revenue from service contracts that are based on time incurred is recognized as
work is performed.

USE OF ESTIMATES
----------------
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from those
estimates.

NET LOSS PER SHARE
------------------
     Net loss per share was computed using the weighted average number of
common shares outstanding.  Shares associated with stock options and warrants
were not included because they are antidilutive.

NEW ACCOUNTING STANDARDS
------------------------
      In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities.  Among
other provisions, SFAS No. 133 requires that entities recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
financial instruments at fair value.  Accounting for changes in fair value is
dependent on the use of the derivatives and whether such use qualifies as
hedging activity.  The standard, as amended, was adopted by the Company in
fiscal 2001 and management believes it did not have a material impact on the
financial position and results of operations of the Company.


NOTE 2 - LONG-TERM DEBT
-----------------------

LONG-TERM DEBT
--------------
     Long-term debt consists of the following:

<Table>
<Caption>
                                                September 30,      June 30,
                                                     2000            2001
                                                ------------     ------------
<S>                                             <C>              <C>
Unsecured convertible debenture,
  redeemed January 1, 2001, see
  explanation below.                            $ 3,297,800      $         -

Promissory note in the face amount
  of $2,860,000, due January 12,
  2005, at a rate of 11% compounded
  annually, see description below.                        -        2,418,500

Mortgages payable to a Canadian finance
  company in monthly installments of
  $1,000, including interest at a rate
  of 9%, collateralized by real estate of
  Technologies and guaranteed by the
  majority stockholder, due January 2001.           106,000                -

Mortgages payable to a Canadian finance
  company in monthly installments of
  $1,200, including interest at a rate
  of 7%, collateralized by real estate of
  Technologies and guaranteed by the
  majority stockholder, due June 2002.              164,400          153,000

Mortgage payable to a Canadian bank in
  monthly installments of $1,700 including
  interest at 8.75%,collateralized by real
  estate of Technologies and assignment of
  rents, guaranteed by the majority
  stockholder, due February 2002.                   149,900          138,000

Capital lease obligations payable in
  aggregate monthly installments of $4,339,
  including imputed interest at rates
  ranging from 9.7% to 11.94%, due at
  dates from October 2002 to September 2003.         93,100           72,000
                                                ------------     ------------
Total debt                                        3,811,200        2,781,500
Less current portion                             (1,259,400)        (335,100)
                                                ------------     ------------
Long-term portion                               $ 2,551,800      $ 2,446,400
</Table>

Long-term debt matures as follows:

<Table>
<Caption>

  12 months ending June 30,
  -------------------------
<S>          <C>                            <C>
             2001                           $   335,100
             2002                                26,700
             2003                                 1,300
             2004                                     0
             2005                             2,418,400
                                            -----------
                                            $ 2,781,500
</Table>


PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURE AND STOCK PURCHASE WARRANTS
----------------------------------------------------------------------
     On February 24, 2000, the Company issued a convertible debenture and
detachable stock purchase warrants for gross proceeds of $5 million.  The
debenture matured in February 2005 and bore interest at 7%, which was payable
upon maturity, or upon conversion or redemption.  The detachable warrants
entitled the holder to purchase 330,000 shares of the Company's common stock
over a five-year term at an exercise price of $11.10 per share.

     In connection with issuing the debenture and warrants, the Company paid
$325,000 of placement fees, $93,000 of legal costs, and $30,000 to the holder
of the debenture for reimbursement of a portion of their legal costs.  The
Company also issued 25,000 warrants valued at $54,300 in lieu of placement
fees. The term of the warrants was two years.

     The debenture was convertible in whole or in part into common stock any
time before maturity at a conversion price that floated with the market price
of the stock, not to exceed a fixed conversion price of $9.71. For each share
of common stock issued upon conversion, the holder of the debenture had the
option to purchase one additional share at the fixed conversion price of $9.71.

     After August 24, 2000, if the debenture was submitted for conversion and
the conversion price was below $9.71, the Company had the right to redeem the
debenture for cash at an amount equal to the value of the converted shares.

     Concurrent with placing the debenture, the Company entered into a
Registration Rights Agreement (the Registration Agreement) with the holder of
the debenture.  Pursuant to the Registration Agreement, the Company filed a
registration statement with the Securities and Exchange Commission to register
4.9 million shares of common stock that may have been acquired upon conversion
of the debenture and exercise of the detachable stock warrants and additional
investment options.

     In the event that certain circumstances pertained, including without
limitation the following, the conversion price would have been adjusted
downwards:

1.   The Company's common stock was not listed on the American Stock Exchange
or the Nasdaq Small Cap Market by October 24, 2000 or on the Nasdaq National
Market by February 24, 2001.

2.   The Company was in default of the requirements of the Registration
Agreement.

     Because the Company did not obtain the listings noted above, the
conversion price was further reduced by 2.5% of the price that would otherwise
apply for each "default period", as that term was defined in the Registration
Rights Agreement. A default period was defined, in part as each month (or
partial month),during which the number or shares issuable under terms of the
debenture, warrants and other investment options exceeded the number of shares
that would have been registered to honor the holder's conversion and exercise
rights. Because the reduction of the conversion price may be cured (1) through
an increase in the trading price of the Company's stock and, by extension, a
reduction in the number of shares that needed to be registered, or (2) by the
Company registering additional shares, this conversion feature remained
contingent, and the Company recognized no change to income for this feature.

     In the event the Company failed to comply with certain terms of the
debenture, the holder may have elected for the debenture to be redeemed for
cash at an amount equal to 120% of the conversion price that would otherwise
apply, plus interest and default payments.  If the rules of the National
Association of Securities Dealers (NASD) applied, in the event the number of
shares to be issued upon conversion exceeded 20% of shares outstanding at the
time the debenture was issued, the Company must have obtained stockholder
approval to issue shares in excess of this limit.  If stockholder approval was
not obtained, the amount of the debenture underlying the shares in excess of
the 20% limit would have become redeemable for cash.

     A total of $1,330,000 of the $5,000,000 gross proceeds from the private
placement was allocated to the detachable stock warrants, based upon the
relative fair value of the warrants and the debentures.  The value ascribed to
the warrants was recorded as a debt discount and an increase in common stock.
The discount was being amortized over the five-year term of the debenture using
the effective interest method. At June 30, 2000, the balance of the discount
was $1, 057, 100.

     Total issue costs, including the fair value of stock warrants issued in
lieu of finder's fees, were $502,300, of which $368,700 was allocated to the
debenture and $133,600 was allocated to the detachable warrants.  The portion
of the issue costs attributed to the debenture was recorded as a debt discount
and was being amortized over the five-year term of the debenture using the
effective interest method. The balance of the discount at June 30, 2000 was $2,
082, 200. The portion of the issue costs attributed to the warrants was
recorded as a reduction of the gross proceeds allocated to the warrants.

     At the February 24, 2000 issue date, the fair value of common shares
issuable upon conversion exceeded the gross proceeds received from issuance of
the debenture by over $2 million. Because the total number of shares that may
have been beneficially owned by the holder of the debenture and its affiliates
may not have exceeded 4.9% of outstanding common shares, the total amount of
the debenture could not have been converted at that date. Accordingly, only
$1,575,800 of the total $2 million excess was ascribed to this beneficial
conversion feature. This amount was reported as an increase in common stock
and, because the debenture could be immediately converted, as a charge to
interest expense.

     On July 12, 2000, the holder elected to convert $250,000 of the debenture
plus accrued interest into common stock. As a result of the conversion,
$170,800 of the carrying amount of the debenture and 6,800 of accrued interest
was reclassified to common stock, and the Company issued 199,700 common shares
(Note 4).

     On October 25, 2000, the holder elected to convert $100,000 of the
debenture, plus accrued interest, into common stock. As a result of the
conversion, $69,000 of long-term debt and $4,700 of accrued interest were
reclassified to common stock and the Company issued 506,200 shares (Note 4).

     On November 10, 2000, the Company received a mandatory redemption notice
from the holder of the convertible debenture, who claimed the Company failed to
obtain an effective registration statement for the shares to be issued upon
conversion within 60 days after a "Registration Trigger Date", as that term is
defined in the related Registration Rights Agreement. The holder claimed the
amount due was $22 million. ,The Company and the holder negotiated a redemption
and exchange agreement (New Agreement) to resolve the claims created in the
mandatory redemption notice.

REDEMPTION AND EXCHANGE AGREEMENT OF CONVERTIBLE DEBENTURE AND ISSUANCE OF
PROMISSORY NOTE
------------------------------------------------------------------------------
     On January 12, 2001, the Company and the holder of the convertible
debenture described in the preceding paragraph, entered into a redemption and
exchange agreement whereby the mandatory redemption notice was withdrawn, and
warrants for 330,000 shares of the Company's common stock and the amounts
payable under the convertible debenture together with the rights thereon were
cancelled in exchange for consideration tendered by the Company. Such
consideration included a single payment of $1,300,000 and the issuance of a
note in the face amount of $2,860,000. The note is due and payable on January
12, 2005, including all accrued but unpaid interest. The note provided for
interest at 11% per annum, compounded annually and calls for minimum monthly
interest payments of $20,000 beginning on January 12, 2002 through maturity. It
is understood that such payments may not be sufficient to pay all accrued
interest. The projected amount due at maturity is approximately $3.6 million.
The note provides the Company with the option to prepay all or any part of the
note. A discount on the remaining balance of the note will be given to the
Company for prepayments of principal. The discount is calculated by multiplying
4% times a fraction the denominator of which will be 360 and the numerator of
which will be the number of days from the date of the prepayment to the
maturity date. The maximum discount available, as calculated on the date of the
redemption and exchange agreement was $500,000. The discount on the promissory
note is amortized over the term of the instrument, and accretion is recorded in
the amount of $10,500 per month. The note also provides for both positive and
negative covenants and identifies specific events, which could create a default
situation that would accelerate the required payments on the note.

     Following the execution of the New Agreement described above, the Company
realized an extraordinary gain on debt conversion of $47,000.


NOTE 3 - MINORITY INTEREST
--------------------------

EXCHANGE OF CLASS B REDEEMABLE, EXCHANGEABLE PREFERRED STOCK OF ORIGIN SOFTWARE
CORPORATION
-----------------------------------------------------------------------
     In connection with the repurchase of certain software rights, the board of
directors of the Company's subsidiary, Origin Software, authorized the creation
of two types of common stock.

     Class A preferred stock has no par value, 20 million shares are authorized
and 11,670,400 shares have been issued for the sole purpose of repurchasing the
Origin software rights. The shares are nonvoting and holders of the shares are
entitled to 3% cumulative dividends. Effective October 1, 1999, all outstanding
shares were redeemed. No value was assigned to these shares.

     Class B preferred stock has a Cdn $1 par value (US$0.68), 20 million
shares are authorized and 5,000,000 shares have been issued. The shares are
nonvoting, are redeemable at the option of the holder for Cdn $1 per share, and
have a liquidation preference of Cdn $1 per shares. In the event the holder
requires the Company to redeem all or a potion of the shares, the Company may
pay for the redemption by issuing a promissory note. The terms of such a note
are not specified and would be subject to negotiation.

     Concurrent with the authorization and issuance of the Class B preferred
shares, Origin Software and the Company entered into a Share Exchange Agreement
(the Agreement) with Columbia Diversified Software Fund (Columbia), whereby
Columbia exchanged certain software rights in exchange for the 5,000,000 Class
B preferred shares. Under the Agreement, subsequent to October 1, 1999,
Columbia has the right to exchange all or part of the Class B preferred shares
for an amount of common shares of the Company with market value of Cdn $5
million (not to exceed 5 million common shares reserved for the exchange),
based on average trading price during the fourteen-day period immediately prior
to exercise. Common shares issued are to be freely tradable but 80% of the
shares will be held in trust and released ratably to Columbia over the
following four years.

     Effective January 26, 2000, Columbia notified the Company that it wished
to exercise its exchange rights, and on January 27, 2000 the Company accepted
the notice.  The exchange ratio was based on a $7.60 share price of the
Company's common stock, and on February 15, 2000, the Company issued 457,400
shares of common stock in the name of Columbia to be exchanged for the 5
million Class B preferred shares of Origin Software Corporation.  Columbia has
not yet tendered the Class B shares to the Company, and the Company has not yet
delivered the 457,400 shares of common stock. Pursuant to the Agreement, only
20% or 91,480 shares of common stock would be delivered directly to Columbia.
The remaining 80% or 365,920 shares would be held in trust and released ratably
to Columbia over the following four years.  The Company and Columbia have not
yet entered into a definitive escrow agreement for the shares that would be
held in trust.

     Columbia is contending that the Company has not performed in accordance
with the Agreement because the shares of common stock issued in Columbia's name
are currently restricted from resale pursuant to applicable securities laws.
Based on its contention, Columbia has indicated that it is withdrawing its
notice of exchange and has requested that the Company amend the Agreement.
Management believes the possibility exists that the Company may negotiate an
amendment to the Agreement and ultimately issue additional shares to Columbia,
though at present, management is unable to determine what the terms of such an
amendment might entail or estimate how many additional shares may be issued.
Management is currently conducting a series of meetings with Columbia in an
attempt to reach a resolution to this issue soon.

     Management has assessed the status of the pending exchange and Columbia's
contentions and believes that uncertainty exists about the ultimate outcome of
this matter.  Accordingly, the $3,407,000 value of the Class B preferred stock
of Origin Software continues to be presented as minority interest.


NOTE 4 - CAPITAL STOCK
----------------------

COMMON STOCK
------------
     The Company has a single class of common stock, no par value.  Authorized
shares total 50 million.  There were 12, 561, 500 shares issued and outstanding
on June 30, 2001.  During the nine months ended June 30, 2001, the Company
issued 506,200 shares of common stock.

     At June 30, 2001, a total of 5,000,000 common shares are reserved to honor
the exchange rights of holders of the Class B preferred shares of Origin
Software Corporation, though the number of shares that will ultimately by
issued to honor such rights may be significantly less than the total shares
reserved. Another 2,940,000 common shares are reserved to honor outstanding
stock options and warrants. A large number of shares were reserved to honor the
rights of the holder of the convertible debenture, detachable stock warrants
and other investment options described in Note 2. On January 24, 2001,
following the execution of the New Agreement described in Note 2, the Company
cancelled the registration statement whereby 4,719,040 common shares reserved
to honor the rights of the holder of the convertible debenture, warrants and
investment options, and other investors, had been previously registered.

STOCK OPTION INCENTIVE COMPENSATION PLAN
----------------------------------------
     Effective June 21, 1999, the Company adopted the 1999 Stock Incentive
Compensation Plan (the Plan).  Under the Plan, the Company may make grants of
incentive stock options, nonqualified stock options, and stock awards to
employees, officers, directors and consultants of the Company and its
subsidiaries for an amount of common shares equal to 10% of issued and
outstanding shares, not to exceed 4,000,000 shares. The Company has granted
3,919,000 options.  The exercise price of incentive stock options and
nonqualified stock options can be no less than the fair value of the Company's
common stock on the date of grant.  The maximum term of options is ten years;
and, unless otherwise modified by the Plan administrator, they vest over four
years.  Certain options granted to senior management during 1999 vest over two
years.

A summary of the status of the Plan at June 30, 2001 is as follows:

<Table>
<Caption>
                                                               Weighted-
                                                 Number         Average
                                               Of Shares     Exercise Price
                                               ---------     --------------
<S>                                            <C>               <C>
Options outstanding at September 30, 2000      1,385,000         $5.02
Granted                                        1,285,000         $0.15
Exercised                                              0             0
Forfeited                                        140,000         $6.34
                                               ---------         -----
Options outstanding at June 30, 2001           2,530,000         $2.34
Options exercisable at June 30, 2001             497,507         $4.51
</Table>


A summary of stock options outstanding at June 30, 2001 is as follows:

<Table>
<Caption>
               Options Outstanding                      Options Exercisable
----------------------------------------------------- -----------------------
                               Weighted-
                                Average     Weighted-   Weighted-
Range of                       Remaining     Average     Average
Exercise            Number    Contractual    Exercise     Number      Exercise
 Prices          Outstanding      Life        Price    Exercisable     Price
--------         -----------  -----------   ---------  -----------   ---------
<S>               <C>           <C>           <C>         <C>         <C>
$ 0.15            1,285,000        5          $ 0.15            0     $ 0.15
$ 2                 341,670        4          $ 2         157,919     $ 2
$ 4                 191,668        4          $ 4           7,919     $ 4
$ 5.5               395,000       3.03        $ 5.5       292,500     $ 5.5
$ 6                 191,662        4          $ 6           7,919     $ 6
$ 7                 100,000       3.5         $ 7          25,000     $ 7
$10.25               25,000       3.5         $10.25        6,250     $10.25
---------------   ---------    ----------     ------      -------     ------
$0.15 to $10.25   2,530,000    4.33 years     $ 2.34      497,507     $ 4.51
</Table>


     The Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25
"Accounting for Stock Issued to Employees" and related interpretations. This
method recognizes compensation cost as the amount by which the fair value of
the stock received exceeds the exercise price at the date of grant.

OTHER STOCK-BASED COMPENSATION
------------------------------
     During the nine months ended June 30, 2001 the Company did not issue
options, warrants or any other type of stock-based compensation.


NOTE 5 - RELATED PARTIES
------------------------
     The Company is affiliated through common ownership with the following
entities:

     kTRAVEL SOLUTIONS INC. (kTRAVEL)
     --------------------------------
     kTRAVEL is a British Columbia corporation owned by an officer of the
Company. During 2000, the Company and kTRAVEL entered into a distribution and
support and maintenance agreement whereby kTRAVEL receives 50% of deployment
fees for certain customer contracts and receives additional fees for helping
provide software support and maintenance to these customers. During the three
and nine months ended June 30, 2001, a total of $35,500 and $145,000 fees,
respectively, were incurred to Ktravel. There were accounts payable due to
kTRAVEL of $62,000 at June 30, 2001.

     VISTA STRATEGIC MANAGEMENT, INC. (VISTA)
     ----------------------------------------
     Vista is an Ontario corporation partially owned by a Director of the
Company. During the three and nine months ended June 30, 2001, Vista provided
strategic marketing services to the Company in the amounts of $35,000 and
$131,000, respectively. There were accounts payable due to Vista in the amount
of $28,000 at June 30, 2001.


NOTE 6 - SEGMENT INFORMATION
----------------------------

SEGMENT INFORMATION
-------------------
     The Company's primary operations consist of the development and sale of
trade compliance software products to entities subject to the North American
Free Trade Agreement and the development and implementation of internet-based
content management software.  Other services include international trade
consulting.  Management assesses the operations of its software sales and
development activities and its consulting activities as separate segments.  The
following tables and schedules summarize certain information about these
segments.
<Table>
<Caption>
                                      Software Sales and Development
                                      ------------------------------   International
                                       International                       Trade
                                           Trade         K-Server        Consulting       Total
                                       --------------  ------------    -------------   ------------
<S>                                    <C>              <C>              <C>           <C>
THREE MONTHS ENDED JUNE 30, 2000
External revenues                      $   91,000       $ 240,000        $ 168,000     $  499,000
Inter-segment revenues                          -               -                -              -
Segment income (loss) before tax          (90,700)       (198,000)          81,200       (207,500)
Segment assets                          1,633,500         659,000          195,000      2,487,500

THREE MONTHS ENDED JUNE 30, 2001
External revenues                          18,100         261,400          142,400        421,900
Inter-segment revenues                          -               -                -              -
Segment income (loss) before tax          (51,700)       (104,600)          (4,600)      (160,900)
Segment assets                            738,300         700,300          257,600      1,696,200

NINE MONTHS ENDED JUNE 30, 2000
External revenues                         182,000         531,500          424,100      1,137,600
Inter-segment revenues                          -               -                -              -
Segment income (loss) before tax         (413,500)       (503,000)         150,000       (766,500)
Segment assets                          1,633,500         659,000          195,000      2,487,500

NINE MONTHS ENDED JUNE 30, 2001
External revenues                          72,600         572,000          443,800      1,088,400
Inter-segment revenues                          -               -                -              -
Segment income (loss) before tax         (173,400)       (579,600)         115,600       (637,400)
Segment assets                            738,300         700,300          257,600      1,696,200
</Table>


<Page>
<Table>
<Caption>
                                              Three months ended June 30,
                                            --------------------------------
                                                 2000                2001
                                            -------------       ------------
<S>                                         <C>                   <C>
Total income (loss) before tax for
  reportable segments                         ($207,500)          ($160,800)
Corporate headquarters expenses                (816,300)           (488,600)
Consolidated totals                         ($1,023,800)          ($649,400)

<Caption>
                                              Nine months ended June 30,
                                            -------------------------------
                                                 2000                2001
                                            -------------       ------------
<S>                                         <C>                 <C>
Total income (loss) before tax for
  reportable segments                         ($766,500)          $(637,200)
Corporate headquarters expenses              (3,621,100)         (2,362,500)
Consolidated totals                         ($4,387,600)        ($2,999,700)
</Table>



NOTE 7 - COMMITMENT AND CONTINGENCIES
-------------------------------------

PENDING SHARE EXCHANGE
----------------------
     As described in Note 3, the Company and its subsidiary, Origin Software
Corporation, have entered into a Share Exchange Agreement (the Agreement) with
Columbia Diversified Software Fund Limited Partnership (Columbia). During 2000,
Columbia gave notice of its intention to exercise its exchange rights under the
Agreement. However, the exchange was not completed as contemplated, and
Columbia subsequently contended that the Company has not complied with the
terms of the Agreement, because the shares to be delivered to Columbia upon
completion of the exchange were restricted from resale under applicable
securities laws.

     Management believes the possibility exists that the Company may negotiate
an amendment to the Agreement and ultimately issue additional shares to
Columbia, though at present, management is unable to determine what the terms
of such an amendment might entail or estimate how many additional shares may be
issued. Management is currently conducting a series of meetings with Columbia
in an attempt to resolve this issue.
<Page>

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

     Those statements contained in the Quarterly Report on Form 10-QSB which
are not historical facts are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  When included in the Quarterly Report, the words "if,"
"should," "may," "there can be no assurance that," "expect," "we seek" and
analogous expressions are intended to identify forward-looking statements.
Such statements inherently are subject to a variety of uncertainties and risks
that could cause actual outcome to differ materially from those anticipated.
These forward-looking statements speak only as of the date of this Quarterly
Report.  Registrant expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statement
contained in this Quarterly Report to reflect any change in registrant's
expectations with regard to the same or any change in events, conditions or
circumstances on which any statement is based.

OPERATIONS ANALYSIS:
-------------------
     During the quarter ended June 30, 2001 we had consolidated revenues of
$421,900, operating expenses of $812,800 and an operating loss before interest
and depreciation of  $462,000.

     Revenues for the three months ended June 30, 2001 decreased 15% as
compared to 2000 revenues for the same period, which totaled $499,000. The
decrease is a result of the delay in securing new contracts for k-Server and a
reduction in sales in the International Trade Products Division, where
potential clients have delayed or cancelled their software acquisition budgets
in light of the economic slowdown experienced in the current fiscal year.

     Cost of sales for the quarter ended June 30, 2001 totaled $71,100 as
compared to $145,000 for the quarter ended June 30, 2000, when a significant
portion of cost of sales came from the cost purchasing certain software that
was immediately resold to a client of the Company.

     Operating expenses include research and development, sales and marketing,
and general and administrative expenses. The aggregate of these costs, in the
sum of $812,800 for the quarter ended June 30, 2001, decreased 28% when
compared to the same period in the previous fiscal year. The decrease was a
result of reduced staff levels at all levels in the organization and the
implementation of strict cost-control measures to preserve cash. Management
believes that the cost-control strategies that have been implemented throughout
the organization have not hindered the company's ability to actively pursue new
contracts, or its ability to deliver on those contracts when they are executed.

     Research and development costs for the three months ended June 30, 2001
totaled $205,800 as compared to $262,600 for the same period in the previous
fiscal year. This was the result of economies of scale and process efficiencies
in the kServerT department, reduced staff levels and cost-control measurements.

     In the quarter ended June 30, 2001 sales and marketing costs increased to
$253,600 when compared to costs incurred in the third quarter of fiscal 2000 of
$239,000 mainly as a result of an increase in the allowance for doubtful
accounts stemming from certain accounts receivables held by the International
Trade Consulting Division for which payment is contingent on certain events
outside of the control of the Company.  Also, the company continues to incur
significant business development costs aimed at increasing its revenue base in
the coming quarters.

     General and administrative expenses decreased 44%, from $625,500 to
$353,400 in the third quarter of fiscal 2000 and 2001, respectively. The
company has significantly reduced its legal expenses and other administrative
costs. Other cost reductions in traveling, investor relations and a leaner
corporate staff contributed to the decrease.

     Amortization and depreciation costs decreased from $136,600 in the third
quarter of fiscal 2000 to $68,200 in the third quarter of fiscal 2001. The
reduction is primarily the result of the lower carrying value of the ORIGIN(TM)
software acquired in May 1999, which was marked down in fiscal 2000.

     Interest expense for the three months ended June 30, 2001 was $122,700, a
29% decrease from the $173,800 interest expense from the same period in fiscal
year 2000, which results from a reduction in the Company's outstanding balances
due on its mortgages and from a reduction of accrued interest due to the
holders of a promissory note as compared to the accrual of interest computed
last year in relationship with a convertible debenture that was then
outstanding.

     Net loss during the third quarter of fiscal 2001 was $649,400. In the
quarter ended June 30, 2000, we reported a net loss of $1,017,700. The decrease
in the net loss was primarily a result of the reduction in operating and
interest expenses aimed at achieving operating efficiency.

     During the nine months ended June 30, 2001 the company had consolidated
revenues of $1,088,400, operating expenses of $2,651,200 and an operating loss
before interest and depreciation of  $1,729,800.

     Revenues for the nine months ended June 30, 2001 decreased slightly by 4%
to $1,088,400, as compared to 2000 revenues for the same period, which totaled
$1,137,600.

     Cost of sales for the nine months ended June 30, 2001 totaled $167,000 as
compared to $244,400 for the nine months ended June 30, 2001, when a
significant portion of cost of sales came from the cost purchasing certain
software that was immediately resold to a client of the Company

     Operating expenses include research and development, sales and marketing,
and general and administrative expenses. These costs totaled $2,651,200 in the
nine months ended June 30, 2001, a $473,100 or 15% reduction from the same
period in the previous fiscal year. The decrease was a result of reduced staff
levels at all levels in the organization and cost-control measures to reduce
the rate of cash expenditures.

     Research and development costs for the nine months ended June 30, 2001
totaled $589,900 as compared to $759,500 for the same period in the previous
fiscal year. This was the result of economies of scale and process efficiencies
in the kServerT department, reduced staff levels and cost-control measurements.
The kServer division has been able to deploy its product effectively and in a
timely manner upon the receipt of orders.

     Sales and marketing costs increased 37% during the nine months ended June
30, 2001 as compared to the nine months ended June 30, 2000, to $835,400 from
$611,500, respectively. The increase is mainly a result of increased
distribution costs associated with the delivery of kServer contracts and an
increase in the allowance for doubtful accounts. However, certain marketing and
sales costs, including traveling and printed materials, decreased from the
fiscal 2000 nine months period to the fiscal 2001 nine months period.

     General and administrative expenses decreased 30%, from $1,753,300 to
$1,225,900 for the nine months ended June 30, 2000 to the nine months ended
June 30, 2001, respectively. The company has considerably reduced its legal
expenses and other administrative costs. Other cost reductions in traveling,
investor relations, together with a leaner corporate staff contributed to the
decrease.

     Amortization and depreciation costs decreased from $420,300 for the nine
months ended June 30, 2000 to $191,800 expensed in the nine months ended June
30, 2001. The reduction is fundamentally the result of the lower carrying value
of the ORIGIN(TM) software acquired in May 1999, which was marked down in
fiscal 2000.

     Interest expense for the nine months ended June 30, 2001 was $1,196,700 a
significant decrease from the $1,831,400 interest expense from the same period
in fiscal year 2000. In the nine months ended June 30, 2000, the company issued
a $5 million convertible debenture, which bore interest at a rate of 7% per
annum. In addition to the interest charge at 7%, the debenture included a
beneficial conversion feature that was immediately exercisable. This
circumstance resulted in the immediate recognition of over $1,575,000 of
interest expense related to the conversion feature during that period. During
the quarter ended December 31, 2000 the company incurred $946,000 of interest
expense, related in part to the accrual of interest on the debenture at 7% per
annum and to an interest charge in the amount of $768,100 that resulted from
the resolution of a contingently adjustable beneficial conversion feature of
such instrument. For the six months ended June 30, 2001, as described above,
interest charges related to a promissory note in the face amount of $2,860,000
totaled $146,850.

     Net loss during the nine months ended June 30, 2001 was $2,999,700. In the
nine months ended June 30, 2000, we reported a net loss of $4,295,800. The
decrease in the net loss was primarily a result of the reduction in interest
expense and the implementation of cost-control measurements to achieve
operating efficiency.

INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY:
------------------------------------------
     On June 30, 2001, our cash and cash equivalents totaled $160,100. This
represents a $351,300 decline as compared to our cash holdings on March 31,
2001 of $511,400. The primary factor affecting the decline in cash holdings was
an operating deficit in the quarter ended June 30, 2001, as cash outlays were
greater than cash inflows from existing contracts and the generation of new
business in the period.

     On June 30, 2001, the Company had negative working capital of ($260,800)
and a current ratio of 0.72 to 1. The working capital position declined when
compared to the balance at March 31, 2001 when working capital was $392,000.
The current ratio decreased when compared to the current ratio of 1.69-to-1 at
March 31, 2001.  The decrease in working capital is a direct result of the
operating deficit experienced during the quarter.

     We seek operating and financial stability by pursuing our business
fundamentals and have concentrated our efforts during the current fiscal year
on sales and marketing activities. Substantial efforts have been devoted to
foster a strategic relationship with IBM Canada to co-market the k-Server
technology in the Canadian public sector market. During the quarter ended June
30, 2001 we secured a series of contracts that have already contributed and are
expected to continue contributing towards revenue growth. We believe that the
Company has been -and will continue to be- well-positioned to deliver product
and services in a timely manner upon execution of purchase contracts; however,
we also recognize that the timing required to obtain purchase contracts has
been longer than originally expected and as result, we anticipate to incur
operating losses in the coming quarters. The funding of anticipated operating
losses will require working capital in excess of the Company's current cash
reserves, which the Company believes are sufficient to sustain its operations
at current levels until at least October 2001.

     Management is actively involved in monitoring the profitability and
performance of the different segments of the company. The International Trade
Products Division was not able to meet its software sales quota for the quarter
and as a result, personnel layoffs were again required during the quarter. We
anticipate that the division's projected operating expenses for the coming
quarters will be covered from the revenue generated from recurring technical
support contracts.

     The company has been able to sustain a series of cost control measures
that were implemented in the previous fiscal quarter throughout the
organization to reduce the rate of operating cash expenditures and may be
required to implement further adjustments in the coming months. The goal to
reduce working capital requirements as compared to fiscal 2000 levels continues
to be a corporate priority and management feels that progress was made in the
quarter and six months ended June 30, 2001 towards that goal.

     Notwithstanding the above, we may require additional funds to support our
immediate working capital demand or for other purposes and may seek to raise
additional funds through public or private equity financings or from other
sources including traditional banking instruments and/or factoring of accounts
receivable. The Company does not currently have any commitments from any third
party to provide additional financing and there can be no assurance that
additional financing will be available on acceptable terms, if at all.
Obtaining financing upon satisfactory terms may prove difficult until the
dispute with Columbia Diversified Software Fund is resolved (see Item 1, Note 3
- Minority Interest).  If adequate funds are not available or are not available
on acceptable terms, we may be unable to develop or enhance our products, take
advantage of future opportunities, or respond to competitive pressures or
unanticipated requirements, which could have a material adverse effect on our
business, financial condition and operating results.  Under those
circumstances, we may be forced to materially reduce the scope of, or
terminate, our operations. Should we proceed with additional financing on
unsatisfactory terms, the interests of existing shareholders may be diluted,
perhaps significantly so.

     Capital investing activities during the nine months ended June 30, 2001
consisted primarily of purchases of property and equipment, principally
computer hardware and software. Capital expenditures, including those under
capital leases, totaled $223,500 in fiscal 2000 and $62,100 in the nine months
ended June 30, 2001. We do not expect to incur significant capital expenditures
in the remaining months of the current fiscal year.

     To date, we have not invested in derivative securities or any other
financial instruments that involve a high level of complexity or risk. We
expect that in the future, cash in excess of current requirements will continue
to be invested in high credit-quality, interest-bearing securities.

     There are no legal or practical restrictions on the ability of the
subsidiaries to transfer funds to the parent company (Infertek, Inc.)

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities" ("SFAS No. 133"). SFAS No. 133 is effective for all fiscal quarters
beginning with the quarter ending June 30, 2000. SFAS No.133 establishes
accounting and reporting standards for derivative instruments, including other
contracts, and for hedging activities. We adopted SFAS No. 133 in the quarter
ended December 31, 2000 and its adoption did not have an impact on our results
of operations, financial position or cash flows.

MATERIAL COMMITMENTS:
--------------------
     The Company has not undertaken any material commitments for expenditures
as of June 30, 2001.

TRENDS OR UNCERTAINTIES:
-----------------------
     There are no known trends or uncertainties that will have a material
impact on revenues.


<Page>

                         PART II - OTHER INFORMATION
                         ---------------------------

ITEM 1. LEGAL PROCEEDINGS
-------------------------

REPURCHASE OF ORIGIN SOFTWARE AND ISSUANCE OF PREFERRED SHARES:
--------------------------------------------------------------
     In connection with the repurchase of certain software rights from Columbia
Diversified Software Fund (Columbia), the Company's subsidiary, Origin
Software, issued 5 million shares of Class B preferred stock. Concurrent with
the authorization and issuance of the Class B preferred shares, Origin Software
and the Company entered into a Share Exchange Agreement (the Agreement) with
Columbia Diversified Software Fund (Columbia), whereby Columbia exchanged
certain software rights in exchange for the 5,000,000 Class B preferred shares.
Under the Agreement, subsequent to October 1, 1999, Columbia has the right to
exchange all or part of the Class B preferred shares for an amount of common
shares of the Company with market value of Cdn $5 million (not to exceed 5
million common shares reserved for the exchange), based on average trading
price during the fourteen-day period immediately prior to exercise. Common
shares issued are to be freely tradable but 80%of the shares will be held in
trust and released ratably to Columbia over the following four years.

     Effective January 26, 2000, Columbia notified the Company that it wished
to exercise its exchange rights, and on January 27, 2000 the Company accepted
the notice.  The exchange ratio was based on a $7.60 share price of the
Company's common stock, and on February 15, 2000, the Company issued 457,400
shares of common stock in the name of Columbia to be exchanged for the 5
million Class B preferred shares of Origin Software Corporation.  Columbia has
not yet tendered the Class B shares to the Company, and the Company has not yet
delivered the 457,400 shares of common stock. Pursuant to the Agreement only
20% or 91,480 shares of common stock would be delivered directly to Columbia.
The remaining 80% or 365,920 shares would be held in trust and released ratably
to Columbia over the following four years.  The Company and Columbia have not
yet entered into a definitive escrow agreement for the shares that would be
held in trust.

     Columbia is contending that the Company has not performed in accordance
with the Agreement because the shares of common stock issued in Columbia's name
are currently restricted from resale pursuant to applicable securities laws.
Based on its contention, Columbia has indicated that it is withdrawing its
notice of exchange and has requested that the Company amend the Agreement.
Management believes the possibility exists that the Company may negotiate an
amendment to the Agreement and ultimately issue additional shares to Columbia,
though at present, management is unable to determine what the terms of such an
amendment might entail or estimate how many additional shares may be issued.
Management is currently conducting a series of meetings with Columbia in an
attempt to reach a resolution to this issue soon.

     Management has assessed the status of the pending exchange and Columbia's
contentions and believes that uncertainty exists about the ultimate outcome of
this matter.  Accordingly, the $3,407,000 value of the Class B preferred stock
of Origin Software continues to be presented as minority interest.

     No litigation related to this transaction has started.


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
-----------------------------------------------------------
     On June 14, 2001, the Company held its 2001 Annual Meeting of
Shareholders, at which the Company's shareholders approved the following:

     1.   Election of the following directors: Nathan Nifco, Charles K. Kelly,
David C. Walker and Anna Stylianides.

          FOR - 8,726,477            ABSTAIN - 23,199
          AGAINST - 0                BROKER NON-VOTE - 0

     2.   Appointment of Moss Adams LLP, independent certified public
accountants, to serve as auditors of the Company for the fiscal year ending
September 30, 2001.

          FOR - 8,731,554            ABSTAIN - 426,
          AGAINST - 0                BROKER NON-VOTE - 0

     3.   Change in the Company's state of incorporation from Colorado to
Washington.

          FOR - 6,332,549            ABSTAIN - 200
          AGAINST - 6,230            BROKER NON-VOTE - 0


ITEM 5. OTHER INFORMATION
-------------------------

     None.


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

EXHIBITS

10.1   Master Relationship Agreement between Infertek Technologies Inc.,
       kTravel Solutions Inc. and Uniglobe Travel (Benelux) NV.

11.0   Computation of Earnings Per Share

<Page>
                                SIGNATURES

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

                                        INFERTEK, INC.


DATE:  August 14, 2001                  By: /s/Nathan Nifco
                                           -------------------------------
                                           Nathan Nifco
                                           Chairman and C. E. O.