These consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles (“GAAP”). The unaudited balance sheet as at September 30, 2004 and the unaudited statements of operations, deficit and cash flows for the three and nine-month periods ended September  30, 2004 and 2003 reflect all adjustments which, in the opinion of management, are necessary to present a fair statement of the results of the interim periods presented. The results of operations and cash flows for any quarter are not necessarily indicative of the results or cash flows for an entire year. These interim consolidated financial statements follow the same accounting policies and methods of their application as described in note 2 of the annual audited consolidated financial statements for the year ended December 31, 2003, except as described in note 2 below. The interim consolidated financial statements do not include all disclosures required for annual financial statements and should be read in conjunction with the most recent annual audited consolidated financial statements of Optimal Group Inc. (formerly Optimal Robotics Corp.) (the “Company”) as at and for the year ended December 31, 2003.

All amounts in the attached notes are unaudited unless specifically identified.

    (a)     Discontinued operations:

As a result of the sale of the U-Scan® self-checkout business referred to in note 3 (c), the results of discontinued operations are included in the net loss but recorded separately for current and prior periods. The balance sheet presents the current and long-term assets and liabilities related to the discontinued operations for the current and prior periods.

    (b)     Revenue recognition:

As a result of the business acquisitions and disposals referred to in note 3, the Company is engaged in payment services, and, in addition, provides hardware maintenance and repair outsourcing services throughout North America.

Revenues from payment services are recognized at the time services are rendered. Revenue from merchants is recorded gross of the fees paid to the acquiring processing suppliers. Revenues for set-up fees are deferred and recognized over the expected term of the customer relationship.

Revenues from repair services are recognized at the time the services are rendered. Revenues from maintenance contracts are deferred and amortized ratably over the term of the contract.

    (c)    Amortization:

Intangibles are being amortized using the straight-line method over the following periods:

Amortization of property and equipment is provided for over the estimated useful lives of the assets using the straight-line method at the following annual rates:

  (d)      Stock-based compensation:

Effective January 1, 2003, the Company adopted the fair value-based method to account for stock-based compensation and other stock-based payments. Under the fair value-based method, compensation cost is measured at fair value at the date of grant and is expensed over the award’s vesting period.

    (d)     Stock-based compensation (continued):

 In accordance with the standard, the following disclosure is required to report the pro forma net earnings (loss) and earnings (loss) per share as if the fair value-based method had been used to account for employee stock options granted during fiscal 2002:

There were no stock options granted in the three and nine-month periods ended September 30, 2003. The pro forma adjustment for fiscal 2003 relates to the amortization of the remaining balance of compensation cost for stock options granted during fiscal 2002 due to the cancellation of all options outstanding in July 2003.

    (e)     Asset retirement obligations:

On January 1, 2004, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants relating to asset retirement obligations. This standard was established for the recognition, measurement and disclosure of liabilities for asset retirement obligations and the associated retirement cost. The standard applies to legal obligations associated with the retirement of a tangible long-lived asset that results from acquisition, development or normal operations. The standard requires an entity to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and when a reasonable estimate of fair value can be made. An entity is subsequently required to allocate the asset retirement cost to expense using a systematic and rational method over its estimated life. The adoption of this standard did not have an impact on the Company’s financial statements.

    (a)     Systech Retail Systems:

On February 27, 2004, the Company acquired the hardware service division of Systech Retail Systems (“Systech”). The Company believes that the combination of this division with Optimal’s existing service organization will contribute positively to the Company’s financial results in 2004.

The net assets acquired for cash were approximately $3.5 million. The acquisition is accounted for by the Company using the purchase method and the results of Systech are consolidated with those of the Company from the date of acquisition.

    (a)     Systech Retail Systems (continued):

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of finalizing its valuation of the net assets acquired, including goodwill and other intangible assets; thus, the allocation of the purchase price is subject to refinement.

During the quarter ended June 30, 2004, the Company adjusted the fair value of inventories acquired at the date of acquisition to $745,728 from $3,620,125 for service parts that could not be used by the Company, increased accrued liabilities assumed by $475,078 for accrued vacation due to Systech employees at the date of acquisition and recorded a value of $612,332 as the estimated fair value of the customer contracts and customer relationships. During the quarter ended September 30, 2004, the Company made the following additional adjustments to the purchase price equation at date of acquisition: increased the value of inventories by $4,558, decreased accrued liabilities by $92,607 and deferred revenue by $9,598.

    (b)     Terra Payments Inc.:

Effective April 6, 2004, the Company completed a Combination Agreement with Terra Payments Inc. (“Terra”), a publicly-traded company that offers proprietary technology and services to businesses to accept credit card, electronic check and direct debit payments. Terra processes credit card payments for non-face-to-face transactions, including mail-order/telephone order, licensed online gaming and other online merchants, as well as for retail point-of-sale merchants. Terra also processes checks and direct debits online and by telephone. The Company believes that this transaction will provide a platform for enhanced growth and profitability.