Pennsylvania		23-2214726
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Item 1—Financial Statements:
Balance Sheets – September 30, 2002 (Unaudited) and December 31, 2001		3
Statements of Operations – Three Months Ended September 30, 2002 and 2001 (Unaudited)		4
Statements of Operations – Nine Months Ended September 30, 2002 and 2001 (Unaudited)		5
Statements of Cash Flows – Nine Months Ended September 30, 2002 and 2001 (Unaudited)		6
Notes to the Financial Statements		7
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3—Quantitative and Qualitative Disclosures About Market Risk		31
Item 4—Controls and Procedures		31

Item 2—Changes in Securities and Use of Proceeds		33
Item 4—Submission of Matters to a Vote of Securities Holders		33
Item 6—Exhibits and Reports on Form 8-K		34
Signatures		35
Certifications		36

		September 30 2002				December 31 2001
		(unaudited)				(audited)
Assets
Current assets:
Cash and cash equivalents		$	270			$	322
Accounts receivable, net of allowance of $274 and $309 in 2002 and 2001, respectively			2,005				4,516
Other			254				251
Total current assets			2,529				5,089
Property and equipment:
Computer equipment and software			902				885
Office equipment and furniture			218				220
Leasehold improvements			117				117
			1,237				1,222
Less accumulated depreciation and amortization			(1,084	)			(965	)
Total property and equipment			153				257
Other assets:
Acquired software technology, net accumulated amortization of $1,024 and $366 in 2002 and 2001, respectively			2,489				3,147
Deferred software costs, net accumulated amortization of $1,535 and $1,461 in 2002 and 2001, respectively			3,584				3,218
Cost in excess of net assets of business acquired			1,415				1,415
Other intangibles, net accumulated amortization of $289 and $149 in 2002 and 2001, respectively			84				224
Other			61				79
Total other assets			7,633				8,083
Total assets		$	10,315			$	13,429
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt		$	456			$	300
Accounts payable			291				210
Accrued expenses			881				2,069
Deferred revenue			3,045				4,096
Total current liabilities			4,673				6,675
Long-term debt – shareholders			1,138				1,020
Other liabilities			623				493
Shareholders’ equity
Convertible preferred stock – Series F, par value $0.01, $1,000 stated value, 3,000 shares authorized, designated, issued and outstanding			–				–
Common stock, par value $0.01, authorized 48,000,000 shares, 19,802,439 and 19,405,548 issued and outstanding in 2002 and 2001, respectively			198				194
Additional paid-in capital			50,525				50,164
Accumulated deficit			(46,842	)			(45,117	)
Total shareholders’ equity			3,881				5,241
Total liabilities and shareholders’ equity		$	10,315			$	13,429

		Three months ended September 30
		2002				2001
		(unaudited)
Revenue:
Licenses and products		$	1,408			$	1,759
Services			1,626				2,059
Total revenue			3,034				3,818
Cost of revenue:
Cost of licenses and products			523				818
Cost of services			375				480
Total cost of revenue			898				1,298
Gross profit			2,136				2,520
Operating expenses:
Sales and marketing			1,222				1,518
General and administrative			574				887
Research and development			290				748
Total operating expenses			2,086				3,153
Income (loss ) from operations			50				(633	)
Other expense, net			(31	)			(47	)
Earnings (loss) before income taxes			19				(680	)
Provision for income taxes			–				–
Net earnings (loss)		$	19			$	(680	)
Per share calculation:
Net loss		$	19			$	(680	)
Preferred stock dividend			(66	)			(62	)
Net loss available to common shareholders		$	(47	)		$	(742	)
Loss per common share—
Basic and diluted		$	(0.00	)		$	(0.04	)
Weighted average number of common shares outstanding—
Basic and diluted			19,802				19,406

		Nine months ended September 30
		2002				2001
		(unaudited)
Revenue:
Licenses and products		$	3,534			$	4,687
Services			5,219				6,145
Total revenue			8,753				10,832
Cost of revenue:
Cost of licenses and products			1,651				1,777
Cost of services			1,216				1,441
Total cost of revenue			2,867				3,218
Gross profit			5,886				7,614
Operating expenses:
Sales and marketing			4,077				4,775
General and administrative			1,708				2,352
Research and development			1,491				2,377
Total operating expenses			7,276				9,504
Loss from operations			(1,390	)			(1,890	)
Other expense, net			(138	)			(130	)
Loss before income taxes			(1,528	)			(2,020	)
Provision for income taxes			–				–
Net loss		$	(1,528	)		$	(2,020	)
Per share calculation:
Net loss		$	(1,528	)		$	(2,020	)
Preferred stock dividend			(197	)			(149	)
Net loss available to common shareholders		$	(1,725	)		$	(2,169	)
Loss per common share—
Basic and diluted		$	(0.09	)		$	(0.12	)
Weighted average number of common shares outstanding—
Basic and diluted			19,717				18,746

		Nine months ended September 30
		2002				2001
		(unaudited)
Operating activities
Net loss		$	(1,528	)		$	(2,020	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation			122				106
Amortization			1,823				2,437
Reserve for doubtful accounts			35				392
Other