Belzberg Technologies Inc · 6-K · For 6/3/02 · EX-99.2

Filed On 6/4/02   ·   SEC File 0-31068   ·   Accession Number 1125282-2-1899

Report of a Foreign Private Issuer   ·   Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report of Foreign Issuer                               3      8K 
 2: EX-99.1     Press Release                                          2±    10K 
 3: EX-99.2     Annual Report                                         41    197K 
 4: EX-99.3     Quarterly Report                                      13     77K 

EX-99.2   ·   Annual Report
Exhibit Table of Contents

EX-99.2
1st Page of 41
TOC
Top
Previous
Next
Bottom
Just 1st
 
Sponsored Ads...


                                                                    Exhibit 99.2

BELZBERG TECHNOLOGIES INC.

Annual Report 2001

EX-99.2
2nd Page of 41
TOC
1st
Previous
Next
Bottom
Just 2nd

BELZBERG TECHNOLOGIES                                                           
ANNUAL REPORT 2001                                                              

THE SCIENCE OF TRADING                                                          

Trade on any market from one screen.                                  

     Belzberg Technologies Inc. provides electronic trading systems to financial
institutions in the United States, Canada, and Europe. Our real-time order      
routing and trade execution system provides instant confirmation of executed    
transactions through our network, which connects to all North American stock and
options exchanges, Electronic Communication Networks (ECNs), and major European 
equities exchanges.                                                             

Our core range of products includes:                                  

o        The Belzberg Suite of Trading Applications combines interactive order  
      execution and fill reports with live market quotes and analysis, and
includes the following:                                       

o        Single Order Entry                                   

o        Spreadsheets-based Basket Trading Software           

o        Arbitrage Launcher                                   

o        FX calculator;                                       

o        The Belzberg Gateway processes incoming electronic orders from         
         customers and routes them to the appropriate stock or options exchange;
and                                                           

o        The Belzberg Order Management System (OMS) helps brokerage houses      
manage their order flow.                                      

     Our technology promotes the full benefits of electronic trading by enabling
straight through processing (STP), by gathering orders electronically from OMS  
systems, by delivering trade details electronically to clearing or other        
back-office accounting systems, and by connecting, on a real-time basis, to risk
management and analytic systems.                                                

  2001 has been another year of rapid growth for Belzberg Technologies. We
are pleased to report revenues of $24.5 million in 2001, up from $12 million in 
2000-an increase of 104%. We had a small deficit in 2001, from continuing       
operations before unusual items, of $768,842.                                   

    Our business plan is based upon a continually expanding core of recurring,
monthly revenue. Traditionally, we have offered a service based on a monthly    
subscription fee. In 1999, we introduced a transaction fee model, thus ensuring 
a more rapid growth of revenues. This will be part of a consistent pattern of   
growth: in the last five years our revenues have grown 1225 %.                  

The equity and equity derivative markets are quickly moving to
electronic access. Belzberg is uniquely situated to meet this growing demand for
global trading solutions.                                                       

    Safe Harbor: Except for historical information, this annual report
contains forward- looking statements that reflect the Company's current         
expectation regarding future events. These forward-looking statements involve   
risks and uncertainties that may cause actual results to differ materially from 
those statements. Those risks and uncertainties include, but are not limited to,
changing market conditions, economic, competitive, governmental and             
technological factors affecting the Company's operations, markets, products and 
prices and other factors and other risks detailed from time-to-time in the      
Company's quarterly reports, annual reports and other publications. Although the
Company believes that such statements contained in this report are reasonable,  
it can give no assurance that the Company's expectations are correct. All       
forward-looking statements are expressly qualified in their entirety by this    
Cautionary Statement.                                                           

                                                                    Page 1 of 40

EX-99.2
3rd Page of 41
TOC
1st
Previous
Next
Bottom
Just 3rd

REPORT TO SHAREHOLDERS                                                          

Belzberg Technologies Annual Report 2001                                        

 The year 2001 was, again, one of rapid growth for your company.
Revenues grew by 105% to over $24 million. Currently we are annualized at $28   
million per year and growing.                                                   

      The company had a small operating deficit for the year 2001. Several
initiatives are now underway to streamline our operations so that profits will  
flow from these revenues. These include:                                        

     Becoming a member of various exchanges and clearing corporations to
avoid the cost of using other brokerage houses' facilities to clear and execute 
trades. A critical mass of order flow has now been achieved to make             
self-clearing, and becoming a member of various US exchanges, a viable and      
important alternative.                                                          

        Additionally, we closed non-producing US offices and centralized these
operations in New York. Further cost cutting initiatives are underway, including
lowering data and network procurement expenses.                                 

    More importantly, several key alliances formed recently with large
clearing brokers, are now fueling Belzberg's growth.                            

   Many of the large houses in the United States have outsourced the
electronic trading services demanded of them by their institutional clients.    
This has created great opportunities for our company. Belzberg Technologies'    
best ambassadors for sales are often brokerage houses offering their            
institutional clients our products and services.                                

    During the year, Belzberg Technologies purchased a floor brokerage
operation on the CBOE that executes a significant percentage of the CBOE's      
monthly volume. This options division proved to be highly profitable in its own 
right, in addition to being an important catalyst in attracting customers who   
require an electronic trading system to trade equities.                         

In an economic environment, where growth has proven to be very
challenging for many companies, Belzberg Technologies continues to thrive. We   
made great progress in further establishing a strong foundation for our future  
growth. The company is positioned as a low cost electronic order execution      
provider of equities and options. This has proven to be irresistible to many    
clients who, by trading through us, can significantly reduce their cost of      
trading and, at the same time, enjoy the added bonus of state of the art        
electronic trading technology.                                                  

     Subsequent to 2001, your company completed a private placement that
netted $13.5 million, giving the company a healthy balance sheet with           
approximately $20 million of net liquid assets. This leaves the company well    
positioned to execute its strategy of being a low cost order execution provider 
in many venues, whilst offering world-class electronic trading technologies.    

  The company is poised to deliver increased value to shareholders
through well planned growth and strategic acquisitions. We will continue to     
expand internationally and to create new products that will facilitate seamless 
global trading.                                                                 

       Again, I would like to thank our management, directors, and staff - a
family of over one hundred and thirty talented and dedicated professionals - for
all their efforts in bringing about our growth to date. We thank our customers  
for entrusting a crucial part of their technology. And a special thanks goes to 
those who have invested in our company and our future. All of us at Belzberg    
Technologies look forward to reporting to you on our future success.            

Sidney H. Belzberg                                                              

Chairman and CEO                                                                
June 2002                                                                       

                                                                    Page 2 of 40

EX-99.2
4th Page of 41
TOC
1st
Previous
Next
Bottom
Just 4th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

     The following discussion and analysis should be read in conjunction
with the audited consolidated financial statements of the Corporation and the   
notes thereto for the year ended December 31, 2001. This discussion and analysis
contains forward-looking statements that involve risks and uncertainties that   
could cause actual results to differ materially from those contemplated by these
forward-looking statements. Additional information concerning such risks and    
uncertainties is contained in the Corporation's filings with Canadian and United
States securities regulatory authorities.                                       

General                                                                         

The Corporation is a provider of exchange connectivity, trade 
execution, order management and routing software for the financial industry. In 
addition to its technology, through one of its wholly owned subsidiaries, an    
agency-only broker-dealer, Belzberg offers low cost trade execution.            

        The Corporation's customers, who include both broker-dealers and their
customers, use Belzberg trading software to buy and sell equities and stock     
options on a variety of stock exchanges, ECNs and through NASDAQ market makers. 
Belzberg products enable traders to execute and manage large volumes of         
transactions with great reliability and security.                               

      Major financial institutions, broker-dealers, buy-side institutions,
banks, and others use all or a subset of Belzberg trading products to automate  
their order execution, basket trading, arbitrage, retail order management, and  
real-time inventory management.                                                 

     In 2001, we expanded our business by (i) setting up a broker-dealer
(EBS) which enabled us to begin to charge our customers on a transaction fee    
basis, and (ii) acquiring a floor brokerage operation (RCS) that facilitates for
the execution of exchange-traded equity and index options and futures on the    
CBOE and other exchanges.                                                       

Selected Financial Data - 2001 (unaudited)

                                                        [Enlarge/Download Table]


      $000's except per share data                 Q1          Q2          Q3          Q4 
----------------------------------------------------------------------------------------- 
                                                                                          
Revenue                                      $  4,550    $  6,444    $  6,332    $  7,134 
Gross Margin                                    2,934       4,046       3,529       3,438 
Loss from continuing operations                  (134)       (675)       (888)     (1,194)
Loss from discontinued operations                (249)       (282)       (662)         -- 
Net loss                                     $   (383)   $   (957)   $ (1,550)   $ (1,194)
Basic and diluted loss per common share                                                   
   - from continuing operations              $  (0.01)   $  (0.06)   $  (0.08)   $  (0.11)
   - from discontinued operations               (0.02)      (0.03)      (0.06)         -- 
Basic and diluted loss per common share      $  (0.04)   $  (0.09)   $  (0.14)   $  (0.11)

Balance Sheet Data:                                                                       
   Cash and cash equivalents                 $  9,110    $  9,070    $  7,049    $  6,361 
   Working capital                             11,796       9,786       8,295       6,913 
   Total assets                                19,524      20,881      18,438      17,451 
   Long-term lease obligations                  1,733       1,573       1,561       1,502 
   Shareholders' equity                        14,553      13,618      11,849      10,805 
========================================================================================= 

  Numbers may not total due to rounding. Certain figures have been
reclassified for comparative purposes to conform to the year-end financial      
statement presentation.                                                         

                                                                    Page 3 of 40

EX-99.2
5th Page of 41
TOC
1st
Previous
Next
Bottom
Just 5th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

Selected Financial Data - 2000 (unaudited)

                                                        [Enlarge/Download Table]


          $000's except per share data                  Q1         Q2          Q3          Q4    
------------------------------------------------------------------------------------------------ 
                                                                                                 
Revenue                                              $  2,444   $  2,592    $  2,935    $  3,980 
Gross Margin                                            1,745      1,611       1,969       2,096 
Earnings (loss) from continuing operations                 35       (251)       (151)        219 
Loss from discontinued operations                          --         --         (66)       (132)
Net earnings (loss)                                  $     35   $   (251)   $   (217)   $     87 
Basic and diluted earnings (loss) per common                                                     
share                                                                                            
   - from continuing operations                      $   0.02   $  (0.04)   $  (0.02)   $   0.02 
   - from discontinued operations                          --         --       (0.01)      (0.01)
Basic and diluted earnings (loss) per common         $   0.02   $  (0.04)   $  (0.03)   $   0.01 
share                                                                                            

Balance Sheet Data:                                                                              
   Cash and cash equivalents                         $  5,530   $  4,640    $  4,050    $  5,642 
   Working capital                                      5,563      4,922       5,076       7,562 
   Total assets                                         8,926      9,250      11,443      15,460 
   Long-term lease obligations                            264        201       1,011       1,418 
   Shareholders' equity                                 7,046      6,942       7,448      10,665 
------------------------------------------------------------------------------------------------ 

  Numbers may not total due to rounding. Certain figures have been
reclassified for comparative purposes to conform to the year-end financial      
statement presentation.                                                         

Overview of Year 2001                                                           

    In 2001 revenue increased from $12.0 million in year 2000 to $24.5
million in year 2001, an increase of 105%. In year 2000, revenue increased to   
$12.0 million from $5.9 million in 1999, an increase of 102%. Belzberg has now  
had an increase in revenue for 10 consecutive fiscal quarters, except for the   
3rd quarter of 2001 when revenue declined slightly as a result of our New York  
operations being closed for one full week due to the September 11, 2001         
terrorist attack.                                                               

       In January 2001, the Corporation completed a private placement, which
netted $4.7 million (issue price of $15.00 per share). Proceeds from the        
exercise of employee options at an average price of $3.08 netted $0.2 million.  
During the year $0.8 million was utilized to purchase shares in the market under
the Corporation's normal course issuer bid at an average price over the year of 
$8.88. Cash was also utilized to purchase capital assets and to repay lease     
obligations. The overall cash position increased by $0.7 million in 2001.       

   In 2001 the Corporation continued its expansion by developing new
products, building connectivity to European exchanges and through acquisition.  
In April 2001, the Corporation acquired all of the issued shares of the         
predecessor of RCS, a floor broker on the floor of the CBOE in Chicago, thereby 
acquiring access to the floor of the CBOE. The floor-brokerage operation is a   
key component of the Corporation's strategy of being able to provide customers  
with connectivity to both equity and options markets from one trading platform. 

  In May 2001, the Corporation opened its first European office by
incorporating BT(UK), a wholly owned subsidiary, in London, England. Belzberg is
now able to route orders from European customers to North American exchanges. In
due course, the Corporation intends to be able to route orders from European    
customers to European exchanges.                                                

                                                                    Page 4 of 40

EX-99.2
6th Page of 41
TOC
1st
Previous
Next
Bottom
Just 6th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

   In September 2001, the Corporation discontinued the operations of
eContracts, its only subsidiary that was not part of the business model, in     
order to fully concentrate on the core business. Revenue for this subsidiary    
commenced in the year 2001 and were insignificant. Operations in the year 2000  
were immaterial. Year 2001 revenue and expenses are disclosed as "Discontinued  
Operations".                                                                    

        In September 2001, the Corporation opened a subsidiary in Philadelphia
and located there a new President for the Corporation together with a new Vice  
President of Sales and supporting staff. Unfortunately, no additional revenue   
was generated, nor were any cost efficiencies achieved. This office was closed  
in March 2002, and the relationship with the new President and other staff      
ended.                                                                          

    As a result of the continuing strategy of the Corporation, revenue
continued to increase from the United States, reaching $15.7 million in 2001 as 
compared to $5.9 million in 2000. The Corporation anticipates that revenue from 
the United States will continue to increase at a greater rate than revenue from 
Canada.                                                                         

    In December 2001, the Corporation's renovation of both its new and
existing space at its head office in Toronto was completed, and the Corporation 
moved into the new premises. As part of this move, leasehold improvements in the
old space were demolished in order to completely rebuild the premises, and the  
remaining unamortized original cost of the leasehold improvements in this       
renovated area was written off.                                                 

        The cost of the Corporation's rapid expansion is shown in the loss for
the year of $2.9 million from continuing operations, as significant new staff   
were added and our internal data networks were upgraded significantly.          

       Total operating expenses increased from $6.3 million in 2000 to $14.7
million in 2001, an increase of 133%. Cash flow from operations however in 2001 
was a positive $12,000 as compared to a utilization of $4.1 million in 2000.    

Summary                                                                         
 2001 represented a significant improvement in the Corporation's
competitive position. The following chart gives a comparison of the changes in  
revenue over the past three years, the growth in numbers of employees, and the  
growth in revenue per employee.                                                 

                                                        [Enlarge/Download Table]

----------------------------------------------- ---------------------- ---------------------- ---------------------
                                                 Revenue by Segment per Employee for the Year Ended December 31,   
                                                                             ($000s)                               
                                                -------------------------------------------------------------------
                                                        2001                   2000                   1999         
----------------------------------------------- ---------------------- ---------------------- ---------------------
                                                                                                                   
Core Business Revenue                               $      20,787          $      11,951          $       5,904    
Brokerage Business Revenue                          $       3,673          $          --          $          --    
Total Revenue                                       $      24,460          $      11,951          $       5,904    
Number of Employees - Core Business                           109                     78                     48    
Number of Employees - Brokerage Business                       22                     --                     --    
Number of Total Employees                                     131                     78                     48    
Revenue per Employee - Core Business                $         191          $         153          $         123    
Revenue per Employee - Brokerage Business           $         167          $          --          $          --    
Total Revenue per Employee                          $         187          $         153          $         123    
----------------------------------------------- ---------------------- ---------------------- ---------------------

                                                                    Page 5 of 40

EX-99.2
7th Page of 41
TOC
1st
Previous
Next
Bottom
Just 7th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

Acquisition                                                                     

     Robert C. Sheehan & Associates, Inc. In April 2001, the Corporation
acquired all of the outstanding shares of the predecessor of RCS for cash       
consideration of $1.7 million. As of December 31, 2001, $0.4 million of the cash
consideration remained payable to the vendor of RCS, which amount was           
subsequently paid in January 2002.                                              

       RCS is a broker-dealer that executes exchange-traded equity and index
options on the CBOE and is a key component of the Corporation's strategy of     
being able to provide customers with connectivity to both equity and options    
markets from one trading platform.                                              

Consolidated Results of Continuing Operations                                   

Revenue                                                       

                                                        [Enlarge/Download Table]

========================================== ==============================================================================
                                                          Total Revenue for the Years ended December 31,                 
                                                                              ($000s)                                    
                                           ------------------------------------------------------------------------------
                                               2001          % of         2000        % of          1999        % of     
                                                            Revenue                  Revenue                   Revenue   
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
                                                                                                                         
Subscription Fees                           $   10,596        43%       $   6,080       51%      $   4,526        77%    
Transaction Fees                                 8,900        36%           3,276       27%            644        11%    
Commissions                                      3,594        15%              --       --              --        --     
Software Development and Installation              772         3%           2,059       17%            667        11%    
Other                                              598         3%             536        5%             67         1%    
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
Total Revenue                               $   24,460                  $  11,951                $   5,904               
========================================== ============= ============= ============ =========== ============ ============

       Total revenue increased from $5.9 million in 1999 to $12.0 million in
2000 (an increase of 102%), and to $24.5 million in 2001 (an increase of 105%). 
Subscription fee revenue, which is based on customers paying a fixed monthly fee
for each terminal connected to our Transactions Gateway, increased by 74% in    
2001 as compared to 2000 and accounted for 43% of total revenue in 2001 as      
compared to 51% of total revenue in 2000 and 77% of total revenue in 1999. The  
Corporation expects subscription fee revenue as a percentage of total revenue to
decrease in the future as more customers are expected to switch to a transaction
fee model. Transaction fee revenue, which is based on customers paying a fee per
transaction routed through our Transactions Gateway, increased by 172% in 2001  
as compared to 2000 and accounted for 36% of total revenue in 2001 as compared  
to 27% of total revenue in 2000 and 11% of total revenue in 1999.               

In 2001, the Corporation acquired the predecessor of RCS, a   
broker-dealer that executes exchange-traded equity and index options on the     
CBOE. For the nine months ended December 31, 2001, RCS generated $3.6 million in
commission income that accounted for 15% of total revenue in 2001.              

        Software development and installation fees decreased by 63% in 2001 as
compared to 2000 and accounted for 3% of total revenue in 2001 as compared to   
17% of total revenue in 2000 and 11% of total revenue in 1999. The Corporation  
expects that this revenue stream will be a significantly smaller percentage of  
the overall business in future years. Other revenue which include revenue from  
connectivity to our Transactions Gateway as well as revenue from information    
distribution, increased by 12% in 2001 to $0.6 million as compared to $0.54     
million in 2000.                                                                

                                                                    Page 6 of 40

EX-99.2
8th Page of 41
TOC
1st
Previous
Next
Bottom
Just 8th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

                                                        [Enlarge/Download Table]


========================================== ==============================================================================
                                                        Revenue by Country for the Years ended December 31,              
                                                                              ($000s)                                    
                                           ------------------------------------------------------------------------------
                                               2001          % of          2000        % of         1999         % of    
                                                            Revenue                   Revenue                   Revenue  
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
                                                                                                                         
Canada                                                                                                                   
   Subscription Fees                        $    6,512        74%       $   3,213       53%      $   2,012        75%    
   Transaction Fees                              1,336        15%             558        9%            203         8%    
   Commissions                                      --        --               --       --              --        --     
   Software Development and Installation           447         5%           1,783       29%            415        15%    
   Other                                           490         6%             523        9%             50         2%    
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
   Revenue from Canada                      $    8,785                  $   6,077                $   2,680               
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------

United States                                                                                                            
   Subscription Fees                        $    4,084        26%       $   2,867       49%      $   2,514        78%    
   Transaction Fees                              7,563        48%           2,718       46%            441        14%    
   Commissions                                   3,594        23%              --       --              --        --     
   Software Development and Installation           325         2%             277        5%            252         8%    
   Other                                           109         1%              12       --              17        --     
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
   Revenue from United States               $   15,675                  $   5,874                $   3,224               
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------

   The Corporation generated approximately 64% of its revenue in the
United States and 36% of its revenue in Canada. Revenue increased in both Canada
and the United States from 2000 with significant growth occurring in the United 
States. Revenue in Canada increased from $6.1 million in 2000 to $8.8 million in
2001, an increase of 45%, compared to the 127% increase in 2000 from 1999       
revenue of $2.7 million. Revenue in the United States increased from $5.9       
million in 2000 to $15.7 million in 2001, an increase of 167%, compared to the  
82% increase in 2000 from 1999 revenue of $3.2 million. The Corporation         
anticipates that revenue from the United States will continue to increase at a  
greater rate than revenue from Canada.                                          

                                                                    Page 7 of 40

EX-99.2
9th Page of 41
TOC
1st
Previous
Next
Bottom
Just 9th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

Gross Margin                                                  

                                                                [Download Table]

============================ ================================================
                              Gross Margin for the Years Ended December 31,  
                                                 ($000s)                     
                             ------------------------------------------------
                                 2001            2000             1999       
---------------------------- -------------- ---------------- ----------------
                                                                             
Revenue                        $   24,460     $   11,951       $    5,904    
Cost of Revenue                    10,513          4,530            2,173    
---------------------------- -------------- ---------------- ----------------
Gross Margin                   $   13,947     $    7,421       $    3,731    
---------------------------- -------------- ---------------- ----------------
Gross Margin %                    57%             62%              63%       

       Gross margin as a percentage of revenue declined to 57% in 2001, from
62% in 2000 and 63% in 1999. The decline in margin is attributable to a change  
in the sales mix that now includes the lower margin brokerage business as well  
as an increase in direct costs incurred in 2001 to expand capacity and          
connectivity to new markets. The Corporation expects the margin on the brokerage
business to improve in future years as the Corporation intends to move towards  
becoming self-clearing.                                                         

Operating Expenses                                            

                                                        [Enlarge/Download Table]

========================================== ==============================================================================
                                                        Operating Expenses for the Years ended December 31,              
                                                                              ($000s)                                    
                                           ------------------------------------------------------------------------------
                                               2001          % of          2000        % of         1999         % of    
                                                            Revenue                   Revenue                   Revenue  
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
                                                                                                                         
Sales and Marketing                         $    5,072        21%       $   2,721       23%      $   1,874        32%    
Research and Development                         3,062        12%           2,011       17%          1,794        30%    
Government Assistance                               --        --           (1,150)     (10)%            --        --     
Administration                                   6,582        27%           2,676       22%          2,356        40%    
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
Total Operating Expenses                    $   14,716        60%       $   6,258       52%      $   6,024       102%    
========================================== ============= ============= ============ =========== ============ ============

         Sales and Marketing Expenses. Sales and marketing expenses totaled $5.1
million in 2001, $2.7 million in 2000 and $1.9 million in 1999. Sales and       
marketing expenses increased by $2.4 million or 86% in 2001 over 2000 and by    
$0.8 million or 45% in 2000 over 1999. As a percentage of revenue, sales and    
marketing expenses were 21% of sales in 2001, compared to 23% of sales in 2000  
and 32% of sales in 1999. The primary factors that contributed to the increase  
in sales and marketing expenses in 2001 were headcount additions and increased  
spending on advertising and promotions.                                         

       Research and Development Expenses and Government Assistance. Research
and development expenses totaled $3.1 million in 2001, $2.0 million in 2000 and 
$1.8 million in 1999. Research and development expenses increased by $1.1       
million or 52% in 2001 over 2000, and by $0.2 million or 12% in 2000 over 1999. 
As a percentage of revenue, research and development expenses were 12% of sales 
in 2001, compared to 17% of sales in 2000 and 30% of sales in 1999. The primary 
factor that contributed to the increase in research and development expenses in 
2001 was headcount additions as the Corporation is committed to expand its      
product capabilities and connectivity to additional markets in order to increase
its customer base.                                                              
                                                                    Page 8 of 40

EX-99.2
10th Page of 41
TOC
1st
Previous
Next
Bottom
Just 10th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

        In 2000, the Corporation recognized a recovery of $1.2 million against
research and development expenses relating to scientific research and           
developmental assistance for the taxation years 1996 to 1999 provided by the    
Government of Canada. This amount was received in 2001. Any future              
reimbursements that the Corporation may be entitled to, will only be obtainable 
as a credit against income taxes payable in Canada.                             

       Administration Expenses. Administration expenses totaled $6.6 million
in 2001, $2.7 million in 2000 and $2.4 million in 1999. Administration expenses 
increased by $3.9 million or 146% in 2001 over 2000, and by $0.3 million or 14% 
in 2000 over 1999. As a percentage of revenue, administration expenses were 27% 
of sales in 2001, compared to 22% of sales in 2000 and 40% of sales in 1999. The
primary factors that contributed to the increase in administration expenses in  
2001 were headcount additions, costs related to additional office space in      
Toronto, Philadelphia and London, England and an increase in the administrative 
overhead to support the growth in sales and size of the Corporation.            

Other Income and Expenses                                                       

                                                        [Enlarge/Download Table]


                                                    Other Income and Expenses for the Years ended December 31,           
                                                                              ($000s)                                    
                                           ------------------------------------------------------------------------------
                                               2001          % of          2000       % of          1999        % of     
                                                            Revenue                  Revenue                   Revenue   
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
                                                                                                                         
Amortization of Capital Assets              $    1,646         6%       $     793        7%      $     220         4%    
Amortization of Goodwill                           153         1%              48        1%             --        --     
Write-down of Leasehold Improvements               153         1%              --       --             113         2%    
Interest Expense                                   466         2%             166        1%             25        --     
Interest Income                                   (312)       (1)%           (227)      (2)%            --        --     
Stock Exchange Listing Costs                        --        --              525        4%             --        --     
------------------------------------------ ------------- ------------- ------------ ----------- ------------ ------------
Other Expenses, Net                         $    2,106         9%       $   1,305       11%      $     358         6%    
========================================== ============= ============= ============ =========== ============ ============

        Amortization of Capital Assets. Amortization of capital assets totaled
$1.6 million in 2001, $0.8 million in 2000 and $0.2 million in 1999.            
Amortization of capital assets increased by $0.8 million or 107% in 2001 over   
2000 and by $0.6 million or 260% in 2000 over 1999. The increase in amortization
of capital assets in 2001 resulted from acquisitions of both owned and leased   
computer equipment of approximately $1.4 million as well as capital expenditures
on leasehold improvements and furniture of approximately $1.3 million in 2001.  
The computer equipment additions improved our high-speed connectivity between   
customers, the Corporation and a multitude of exchanges and other markets for   
live trade execution.                                                           

        Amortization of Goodwill. Amortization of goodwill totaled $153,000 in
2001, $48,000 in 2000 and nil in 1999. The increase in goodwill amortization in 
2001 resulted from the acquisition of RCS.                                      

  Effective January 1, 2002 the Corporation will cease to amortize
goodwill in accordance with the new CICA Section 3062 and will review goodwill  
annually for impairment.                                                        

   Write-down of Leasehold Improvements. During 2001 the Corporation
completed its leasehold improvements on its new expanded facilities in Toronto  
and rebuilt a portion of its existing facilities. The rebuild of the existing   
facilities resulted in a write-down of the old leasehold improvements of        
$153,000.                                                                       
                                                                    Page 9 of 40

EX-99.2
11th Page of 41
TOC
1st
Previous
Next
Bottom
Just 11th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

       Interest Expense. Interest expense totaled $466,000 in 2001, $166,000
in 2000 and $25,000 in 1999. Interest expense increased by $300,000 or 180% in  
2001 over 2000 and by $141,000 or 564% in 2000 over 1999. The increase in the   
interest expense is mainly attributable to the significant increase in capital  
lease obligations in 2001 of $1.2 million and $2.7 million in 2000. The         
Corporation utilizes capital leases to finance the significant amount of capital
expenditures required for its network infrastructure.                           

        Interest Income. Interest income totaled $312,000 in 2001, $227,000 in
2000 and nil in 1999. The increase in interest income in 2001 of $85,000        
compared with 2000 is due mainly to the cash invested following the private     
placement of common shares in January 2001.                                     

        Stock Exchange Listing Costs. Stock exchange listing costs of $525,000
relate to the costs of the Corporation's listing on the TSX in November 2000 and
the filing of the Corporation's Registration Statement on Form 20-F with the SEC
in 2000. No additional significant costs are expected.                          

        Income Taxes. Income taxes totaled $15,685, $5,063 and $9,019 in 2001,
2000 and 1999 respectively. The Corporation has net operating loss carryforwards
in Canada of approximately $3.5 million and in the United States of             
approximately $8.5 million that may be used to offset future taxable earnings.  
The benefits of these losses have not been reflected in the consolidated        
financial statements as the Corporation has recorded a valuation allowance      
against the tax benefit of these losses. The losses expire in Canada beginning  
in 2004 and expire in the United States beginning in 2011.                      

 Net Loss from Continuing Operations. As a result of the factors
discussed above, the net loss from continuing operations increased to $2.9      
million in 2001 from $0.1 million in 2000 as compared to a reduction in the loss
from 1999 of $2.7 million to $0.1 million in 2000. The loss per share from      
continuing operations increased to $0.26 per share as compared to a loss of     
$0.02 per share in 2000 and a loss of $0.38 per share in 1999.                  

       Loss from Discontinued Operations. In September 2001, the Corporation
ceased operations of its wholly-owned subsidiary, eContracts, a developer and   
supplier of on-line procurement and supply chain integration solutions.         
Accordingly, the consolidated financial statements for all periods presented    
have reflected this business separately from continuing operations. The         
Corporation recorded a loss from discontinued operations in 2001 of $1.2 million
which included an impairment charge for goodwill of $0.3 million, a stock       
compensation expense of $0.1 million relating to contingent stock consideration 
paid and a loss from the operations of eContracts of $0.8 million.              

Liquidity and Capital Resources                                                 

      As of year-end the Corporation had cash and cash equivalents of $6.4
million, an increase of $0.8 million or 14% from the $5.6 million at the 2000   
year-end. Cash generated from continuing operations for the 2001 year was       
$12,000 as compared to cash utilized by continuing operations in the 2000 year  
of $4.1 million. The Corporation has a demand operating facility of $1 million  
that may be used to finance general corporate requirements and a demand facility
of US $0.6 million that may be used to finance leasehold improvements in the    
Corporation's United States operations. As of year-end the Corporation had      
utilized $0.7 million of the Canadian facility and utilized the remaining       
Canadian facility subsequent to year-end. The Corporation believes that its     
working capital of $6.9 million will be sufficient to meet the anticipated daily
cash requirements throughout fiscal 2002, although the Corporation may seek to  
raise additional capital in 2002 to fund expansion plans or potential           
acquisitions.                                                                   

    The Corporation used $2.1 million for investing activities in 2001
compared to using $0.7 million in 2000. This increase was attributable to the   
acquisition of RCS that was paid for in cash as well as capital expenditures on 
leasehold improvements and furniture and equipment at the Toronto corporate     
office of approximately $1.3 million. The Corporation also incurred significant 
capital expenditures for computer equipment in 2001 of approximately $1.4       
million, of which approximately $1.2 million was financed through a capital     
leasing program. In 2000, the Corporation received proceeds of $0.8 million on  
the sale and lease-back of certain computer equipment.                          

                                                                 Page 10 of 40

EX-99.2
12th Page of 41
TOC
1st
Previous
Next
Bottom
Just 12th

MANAGEMENT'S DISCUSSION AND ANALYSIS                                            
Belzberg Technologies Annual Report 2001                                        

The Corporation operates a large enterprise network providing 
connectivity between its clients, its offices and high-speed access to a        
multitude of destinations for live trade execution and as a result anticipates  
continuing capital expenditures on computer equipment during 2002, such capital 
expenditures to be funded through a capital leasing program.                    

The Corporation generated cash of $3.6 million from financing 
activities in 2001 compared to generating cash of $10.6 million in 2000. In     
2001, the Corporation issued 333,334 Common Shares from treasury for net        
proceeds of $4.7 million in private placements and repurchased 91,900 Common    
Shares for cancellation under a normal course issuer bid for a cost of $0.8     
million. In 2000, the Corporation issued 2,013,800 Common Shares from treasury  
for net proceeds of $7.6 million and issued 1,800,000 share purchase warrants   
for proceeds of $1.8 million in private placements. The Corporation issued      
66,600 Common Shares in 2001 upon the exercise of stock options by employees for
proceeds of $205,000 and issued 899,000 Common Shares in 2000 upon the exercise 
of stock options by employees and directors for proceeds of $3.2 million.       

         The Corporation made repayments under capital lease obligations of $1.1
million in 2001 and repayments under capital lease obligations of $0.8 million  
in 2000. The Corporation received proceeds of $0.7 million from a bank loan in  
2001 and repaid $0.1 million of the loan in 2001. The Corporation repaid a note 
payable of $1.2 million in 2000.                                                

        Subsequent to year-end the TSX approved a normal course issuer bid for
the Corporation to repurchase, at its discretion, up to 553,000 of its common   
shares in 2002.                                                                 

Future Outlook                                                                  

  The Corporation intends to continue its present revenue model by
concentrating on developing connectivity to exchanges around the world and      
promoting its transaction based fee model. While the Corporation expects that   
subscription fee revenue will continue to increase at a modest rate, transaction
fee based revenue is expected to continue to increase. As well, continued       
expansion in the United States is expected to generate an increasing percentage 
of revenue.                                                                     

         The acquisition of RCS proved to be a successful strategy in giving the
Corporation not only an additional revenue stream but also access to potential  
new customers. The Corporation will look favourably upon possible future similar
acquisitions.                                                                   

    Building connectivity to an increasing number of destinations will
remain a priority.                                                              

         The Corporation expects to realize improving gross profit margins as it
intends to move towards becoming self-clearing, thereby making each transaction 
more profitable.                                                                

The Corporation expects that its London office will provide an
opportunity to increase European business.                                      

  The Corporation faces a number of risks in its business that are
identified under "Risk Factors". The occurrence of one or more of the events    
described therein may have a materially adverse effect upon the Corporation's   
results of operations, financial condition and future prospects.                

                                                                   Page 11 of 40

EX-99.2
13th Page of 41
TOC
1st
Previous
Next
Bottom
Just 13th

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING                             
Belzberg Technologies Annual Report 2001                                        

        Management of Belzberg Technologies is responsible for the preparation
and integrity of the financial statements as well as the information contained  
in this report. The following financial statements of Belzberg Technologies have
been prepared in accordance with Canadian generally accepted accounting         
principles and United States generally accepted auditing standards that involve 
management's best estimates and judgments based on available information.       

     Belzberg Technologies' accounting procedures and related systems of
internal control are designed to provide reasonable assurance that its assets   
are safeguarded and its financial records are reliable. In recognizing that the 
Company is responsible for both the integrity and objectivity of the financial  
statements, management is satisfied that the financial statements have been     
prepared according to and within reasonable limits of materiality and that the  
financial information throughout this report is consistent with these.          

     The Audit Committee is appointed by the Board and consists of three
directors of which two are independent. The Committee meets periodically with   
management, as well as the external auditors, to discuss internal controls over 
the financial reporting process, auditing matters, and financial reporting      
issues, to satisfy itself that each party is discharging its responsibilities   
effectively, and to review the annual report, the consolidated financial        
statements, and the external auditors' report. The Committee reports its        
findings to the Board for consideration when approving the consolidated         
financial statements for issuance to the shareholders. The Committee also       
considers, for review by the Board and approval by the shareholders, the        
engagement or re-appointment of the external auditors.                          

    Deloitte and Touche LLP have been appointed Belzberg Technologies'
auditors. The Board of Directors of Belzberg Technologies and the management    
team have reviewed and approved the financial statements and information        
contained in this report. The auditor's report on the accompanying financial    
statements follows.                                                             

                                                                   Page 12 of 40

EX-99.2
14th Page of 41
TOC
1st
Previous
Next
Bottom
Just 14th

[LETTERHEAD OF DELOITTE & TOUCHE] 

Auditors' Report                                                                

To the Shareholders of                                                          
Belzberg Technologies Inc.                                                      

We have audited the consolidated balance sheets of Belzberg Technologies Inc.   
(the "Corporation") as at December 31, 2001 and 2000 and the consolidated       
statements of operations and deficit and of cash flows for each of the years in 
the three-year period ended December 31, 2001. These financial statements are   
the responsibility of the Corporation's management. Our responsibility is to    
express an opinion on these financial statements based on our audits.           

We conducted our audits in accordance with Canadian generally accepted auditing 
standards and United States generally accepted auditing standards. Those        
standards require that we plan and perform an audit to obtain reasonable        
assurance whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and  
disclosures in the financial statements. An audit also includes assessing the   
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our 
audits provide a reasonable basis for our opinion.                              

In our opinion, these consolidated financial statements present fairly, in all  
material respects, the financial position of the Corporation as at December 31, 
2001 and 2000 and the results of its operations and its cash flows for each of  
the years in the three-year period ended December 31, 2001 in accordance with   
Canadian generally accepted accounting principles.                              

/s/ Deloitte & Touche LLP                                                       

Chartered Accountants                                                           

Toronto, Ontario                                                                
March 1, 2002                                                                   

                                                                   Page 13 of 40

EX-99.2
15th Page of 41
TOC
1st
Previous
Next
Bottom
Just 15th

BELZBERG TECHNOLOGIES INC.                                                      
Consolidated Balance Sheets                                                     
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


                                                                      2001           2000     
                                                                  ------------   ------------ 
                                                                                              
ASSETS                                                                                        

CURRENT                                                                                       
     Cash and cash equivalents                                    $  6,361,427   $  5,641,924 
     Accounts receivable (Note 3)                                    4,715,206      3,718,582 
     Government assistance receivable                                       --      1,149,779 
     Prepaid expenses and other receivables                            970,681        316,708 
                                                                  ------------   ------------ 
                                                                    12,047,314     10,826,993 

RESTRICTED CASH (Note 4)                                                    --         81,000 

CAPITAL ASSETS (Note 5)                                              4,647,962      3,751,182 

GOODWILL, net of accumulated amortization                                                     
     of $142,838 and $47,711, respectively (Note 6)                    755,239        800,350 
                                                                  ------------   ------------ 
                                                                  $ 17,450,515   $ 15,459,525 
                                                                  ============   ============ 

LIABILITIES                                                                                   

CURRENT                                                                                       
     Accounts payable and accrued liabilities                     $  1,961,393   $  1,370,967 
     Consideration payable (Note 6)                                    362,674             -- 
     Deferred revenue                                                  786,870      1,031,144 
     Bank loan (Note 8)                                                633,211             -- 
     Current portion of obligations under capital lease (Note 9)     1,390,296        862,286 
                                                                  ------------   ------------ 
                                                                     5,134,444      3,264,397 

DEFERRED REVENUE                                                         9,224        112,424 

OBLIGATIONS UNDER CAPITAL LEASE (Note 9)                             1,502,138      1,418,091 
                                                                  ------------   ------------ 
                                                                     6,645,806      4,794,912 
                                                                  ------------   ------------ 

COMMITMENTS (Note 14)                                                                         

SHAREHOLDERS' EQUITY                                                                          

CAPITAL STOCK (Note 10)                                             22,813,253     17,957,181 

WARRANTS (Note 10(d))                                                1,782,900      1,782,900 

DEFICIT                                                            (13,791,444)    (9,075,468)
                                                                  ------------   ------------ 
                                                                    10,804,709     10,664,613 
                                                                  ------------   ------------ 
                                                                  $ 17,450,515   $ 15,459,525 
                                                                  ============   ============ 

APPROVED ON BEHALF OF THE BOARD                                                 
"Sidney H. Belzberg"                                                            
.......................................... Director                             
"Alicia Belzberg"                                                               
.......................................... Director                             

                                                                   Page 14 of 40

EX-99.2
16th Page of 41
TOC
1st
Previous
Next
Bottom
Just 16th

BELZBERG TECHNOLOGIES INC.                                                      
Consolidated Statements of Operations and Deficit                               
Years ended December 31, 2001, 2000, and 1999                                   
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


                                                         2001           2000           1999     
                                                     ------------   ------------   ------------ 
                                                                                                
REVENUE                                              $ 24,460,071   $ 11,951,029   $  5,904,099 

COST OF REVENUE                                        10,512,684      4,529,979      2,172,738 
                                                     ------------   ------------   ------------ 
GROSS MARGIN                                           13,947,387      7,421,050      3,731,361 
                                                     ------------   ------------   ------------ 

OPERATING EXPENSES                                                                              
     Sales and marketing                                5,071,933      2,721,046      1,874,096 
     Research and development                                                                   
        Expenditures                                    3,061,699      2,010,663      1,794,081 
        Government assistance                                  --     (1,149,779)            -- 
     Administration                                     6,582,597      2,676,014      2,356,019 
                                                     ------------   ------------   ------------ 
                                                       14,716,229      6,257,944      6,024,196 
                                                     ------------   ------------   ------------ 

OPERATING EARNINGS (LOSS) FROM CONTINUING                                                       
     OPERATIONS BEFORE UNDERNOTED ITEMS                  (768,842)     1,163,106     (2,292,835)

        Amortization                                    1,799,338        841,279        219,591 
        Write-down of leasehold improvements              153,195             --        112,500 
        Interest expense                                  466,048        166,393         25,123 
        Stock exchange listing costs                           --        525,198             -- 
        Interest income                                  (311,965)      (226,993)            -- 
                                                     ------------   ------------   ------------ 

LOSS FROM CONTINUING OPERATIONS                                                                 
     BEFORE INCOME TAXES                               (2,875,458)      (142,771)    (2,650,049)

INCOME TAXES (Note 11)                                     15,685          5,063          9,019 
                                                     ------------   ------------   ------------ 

LOSS FROM CONTINUING OPERATIONS                        (2,891,143)      (147,834)    (2,659,068)

LOSS FROM DISCONTINUED OPERATIONS (Note 7)             (1,193,301)      (198,228)            -- 
                                                     ------------   ------------   ------------ 

NET LOSS                                               (4,084,444)      (346,062)    (2,659,068)

DEFICIT, BEGINNING OF YEAR                             (9,075,468)    (8,729,406)    (6,070,338)

PREMIUM ON REPURCHASE OF COMMON SHARES (Note 10(a))      (631,532)            --             -- 
                                                     ------------   ------------   ------------ 
DEFICIT, END OF YEAR                                 $(13,791,444)  $ (9,075,468)  $ (8,729,406)
                                                     ============   ============   ============ 

LOSS PER SHARE FROM CONTINUING OPERATIONS                                                       
     Basic and diluted                               $      (0.26)  $      (0.02)  $      (0.38)
                                                     ============   ============   ============ 

LOSS PER SHARE                                                                                  
     Basic and diluted                               $      (0.37)  $      (0.04)  $      (0.38)
                                                     ============   ============   ============ 

WEIGHTED AVERAGE NUMBER OF                                                                      
     OUTSTANDING COMMON SHARES                         10,998,383      9,635,780      7,015,635 
                                                     ============   ============   ============ 


                                                                   Page 15 of 40

EX-99.2
17th Page of 41
TOC
1st
Previous
Next
Bottom
Just 17th

BELZBERG TECHNOLOGIES INC.                                                      
Consolidated Statements of Cash Flows                                           
Years ended December 31, 2001, 2000, and 1999                                   
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


                                                                                2001           2000           1999 
                                                                        ------------   ------------   ------------ 
                                                                                                                   
CASH PROVIDED BY (USED FOR)                                                                                        
OPERATING ACTIVITIES                                                                                               
     Loss from continuing operations                                    $ (2,891,143)  $   (147,834)  $ (2,659,068)
     Items not affecting cash                                                                                      
        Amortization of capital assets                                     1,646,540        793,568        219,591 
        Amortization of goodwill                                             152,798         47,711             -- 
        Amortization of gain on sale and leaseback of capital assets        (104,684)       (28,370)            -- 
        Write-down of leasehold improvements                                 153,195             --        112,500 
        Services rendered for capital stock consideration (Note 10)               --        200,000             -- 
     Changes in non-cash working capital items (Note 12)                   1,055,293     (4,974,393)       898,384 
                                                                        ------------   ------------   ------------ 
                                                                              11,999     (4,109,318)    (1,428,593)
                                                                        ------------   ------------   ------------ 

INVESTING ACTIVITIES                                                                                               
     Purchase of capital assets                                           (1,466,424)    (1,295,030)      (582,592)
     Proceeds from disposal of capital assets                                     --        767,020             -- 
     Acquisitions, net of cash acquired (Note 6)                            (683,440)      (183,050)            -- 
                                                                        ------------   ------------   ------------ 
                                                                          (2,149,864)      (711,060)      (582,592)
                                                                        ------------   ------------   ------------ 
FINANCING ACTIVITIES                                                                                               
     Note payable                                                                 --             --      1,154,640 
     Repayment of note payable                                                    --     (1,154,640)            -- 
     Repayment of obligations under capital lease                         (1,122,347)      (815,322)      (146,213)
     Proceeds from bank loan                                                 744,442             --             -- 
     Repayment of bank loan                                                 (111,231)            --             -- 
     Net proceeds from issuance of common shares                           4,698,991      7,588,241        321,775 
     Proceeds from the exercise of stock options                             205,000      3,210,000        775,757 
     Repurchase of common stock                                             (816,011)            --             -- 
     Proceeds on issuance of warrants                                             --      1,782,900             -- 
                                                                        ------------   ------------   ------------ 
                                                                           3,598,844     10,611,179      2,105,959 
                                                                        ------------   ------------   ------------ 

NET INCREASE IN CASH FROM CONTINUING OPERATIONS                            1,460,979      5,790,801         94,774 

NET CASH UTILIZED BY DISCONTINUED OPERATIONS                                (741,476)      (131,833)            -- 
                                                                        ------------   ------------   ------------ 

NET INCREASE IN CASH AND CASH EQUIVALENTS                                    719,503      5,658,968         94,774 

CASH AND CASH EQUIVALENTS (BANK                                                                                    
     INDEBTEDNESS), BEGINNING OF YEAR                                      5,641,924        (17,044)      (111,818)
                                                                        ------------   ------------   ------------ 
CASH AND CASH EQUIVALENTS (BANK                                                                                    
     INDEBTEDNESS), END OF YEAR                                         $  6,361,427   $  5,641,924   $    (17,044)
                                                                        ============   ============   ============ 

CASH EQUIVALENTS:                                                                                                  
     Cash                                                               $  4,705,375   $  1,962,776   $         -- 
     Short-term investments                                                1,656,052      3,679,148             -- 
                                                                        ------------   ------------   ------------ 
                                                                        $  6,361,427   $  5,641,924   $         -- 
                                                                        ============   ============   ============ 

SUPPLEMENTAL CASH FLOW INFORMATION                                                                                 
     Value of share capital issued for acquisitions of subsidiaries     $         --   $    675,000   $         -- 
     Value of share capital issued for services                         $         --   $    200,000   $         -- 
     Value of share capital recorded for compensation expense (Note 6)  $    136,560   $     56,940   $         -- 
     Acquisition of capital assets with debt                            $  1,212,681   $  2,686,533   $         -- 
     Interest paid                                                      $    466,048   $    166,393   $    104,365 
     Income taxes paid                                                  $      7,632   $         --   $      9,019 


                                                                   Page 16 of 40

EX-99.2
18th Page of 41
TOC
1st
Previous
Next
Bottom
Just 18th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

1.     DESCRIPTION OF BUSINESS                                                  

Belzberg Technologies Inc. and its wholly-owned subsidiaries (the 
    "Corporation" or "Belzberg") is a leading provider of trade execution,
   order management and routing software for the financial industry. The
Corporation's customers, who include both broker-dealers and their
   customers, use Belzberg trading software to buy and sell equities and
     stock options on a variety of stock exchanges, electronic markets known
    as ECNs, and NASDAQ market makers. Belzberg products enable traders to
  execute and manage large volumes of transactions at high speed, with
reliability and security.                                         

The Corporation also operates a floor brokerage that provides the 
  execution of exchange-traded equity and index options on the Chicago
Board Options Exchange.                                           

       The Corporation's name was changed from Belzberg Financial Markets & News
International Inc. to Belzberg Technologies Inc. in July 2000.    

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                               

      These consolidated financial statements have been prepared in accordance
 with Canadian generally accepted accounting principles ("GAAP") and
     include the following significant accounting policies. A reconciliation
       of the differences between Canadian GAAP and GAAP in the United States of
America ("U.S. GAAP") is presented in Note 18.                    

Consolidation                                                     

  The consolidated financial statements of the Corporation include the
       accounts of Belzberg Technologies Inc. and its wholly-owned subsidiaries,
       Belzberg Financial Markets & News Inc., Belzberg Technologies (USA) Inc.,
eContracts, Inc., Electronic Brokerage Systems, Inc., Belzberg    
      Technologies (Philadelphia) Inc., Belzberg Technologies (UK) Limited and
    Robert C. Sheehan & Associates, Inc. All intercompany transactions and
balances have been eliminated upon consolidation.                 

Cash and cash equivalents                                         

      Cash and cash equivalents includes short-term, highly liquid investments
 that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.             

Capital assets                                                    

Capital assets are recorded at cost and are amortized over their  
estimated useful lives at the following rates:                    

                                                                [Download Table]
                                                                            
Furniture and equipment                 -  10 year straight-line            
Computer equipment                      -  3 year straight-line             
Computer equipment under capital lease  -  3 year straight-line             
Leasehold improvements                  -  lesser of straight-line over term
                                              of lease and useful life      

  The gain on sale and lease-back of computer equipment is recorded as
      deferred revenue and is amortized on a straight-line basis over the term
of the lease.                                                     

                                                                   Page 17 of 40

EX-99.2
19th Page of 41
TOC
1st
Previous
Next
Bottom
Just 19th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                   

Goodwill                                                          

      Goodwill represents the excess of the purchase price over the fair value
of the identifiable net assets acquired in business combinations  
     accounted for as purchases. Amortization is recorded on a straight-line
basis over seven years.                                           

  The Corporation reviews the carrying value of goodwill for potential
       impairment on an ongoing basis. In order to determine if such a permanent
      impairment exists, management considers projected future earnings before
income taxes, cash flows and market-related values of the acquired
    businesses. A permanent impairment in the value of goodwill is written
off against earnings in the year such impairment occurs.          

      In 2001, The Canadian Institute of Chartered Accountants (CICA) approved
 a new Handbook Section 3062 - Goodwill and Other Intangible Assets.
      Intangible assets other than goodwill acquired in a business combination
       or other transaction after June 30, 2001 are to be amortized based on the
useful life to an enterprise, unless the life is determined to be 
  indefinite in which case the intangible asset will not be amortized.
    Goodwill acquired in a business combination after June 30, 2001 should
  not be amortized. Existing goodwill at June 30, 2001 continued to be
       amortized until December 31, 2001. Effective January 1, 2002 all goodwill
  will no longer be required to be amortized but will be subject to an
       annual impairment test in accordance with the provisions of this Section.

Revenue recognition and deferred revenue                          

The Corporation's revenues are derived primarily from:            

  (i)   Subscription fees - the provision of the Corporation's routing
        software and services, on a flat fee per terminal or per month
basis, used for equity and option trading ;           

 (ii)  Transaction fees - the provision of the Corporation's routing
         software and services, on a per share/option or per trade basis
used for equity and option trading;                   

 (iii) Commission income - fees for the execution of exchange traded
     equity and index options from the floor brokerage business;

   (iv)  Software development and installation revenue - the development
     and installation of software for equity and options trading
execution; and                                        

 (v)   Other revenue - the distribution of financial information and
other services.                                       

The Company recognizes revenue from subscription fees and from    
 transaction fees in accordance with American Institute of Certified
Public Accountants Statement of Position 97-2, Software Revenue   
      Recognition as amended. Revenue is recognized from subscription fees and
     transaction fees on a monthly basis as the services are provided once a
     contract has been signed, the software has been delivered and accepted,
and collectibility is assured.                                    

     Commission income from the floor brokerage operation is recognized once
the trades have been executed and collectibility is assured.      

                                                                   Page 18 of 40

EX-99.2
20th Page of 41
TOC
1st
Previous
Next
Bottom
Just 20th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                   

Revenue recognition and deferred revenue (continued)              

   Revenue derived from the development and installation of software for
   equity and options trading execution is recognized on a percentage of
completion basis.                                                 

       Revenue from the distribution of financial information and other services
  is recognized on a monthly basis as the services are provided once a
contract has been signed and collectibility is assured.           

 Deferred revenue represents billings in advance of the provision of
services.                                                         

Research and development and government assistance                

 The Corporation expenses research and development costs as incurred
unless they meet the criteria under Canadian generally accepted   
accounting principles for deferral and amortization. Government   
   assistance for research and development is recognized when earned and
   when the amount and timing of realization is reasonably determinable.

       At December 31, 2000, the Government of Canada completed their assessment
of the Corporation's claims for assistance comprised of scientific
    research and experimental development tax credits and agreed to refund
      $1,149,779 related to the taxation years 1996 to 1999. Accordingly, this
   recoverable amount was recorded in fiscal 2000 and received in fiscal
2001.                                                             

    Since the Corporation is now a public company as defined in the Income
      Tax Act of Canada, future tax credits will reduce income taxes otherwise
payable rather than result in refunds.                            

Foreign currency translation                                      

   The Corporation's foreign operating subsidiaries are considered to be
  integrated operations and are translated into Canadian dollars using
       current rates of exchange for monetary assets and liabilities, historical
    rates of exchange for non-monetary assets and liabilities, and average
      rates for revenues and expenses, except amortization which is translated
 at the rates of exchange applicable to the related assets. Gains or
 losses resulting from these translation adjustments are included in
income.                                                           

 Current monetary assets and liabilities of the Corporation that are
       denominated in foreign currencies are translated into Canadian dollars at
exchange rates in effect at the balance sheet dates. Revenues and 
expenses are translated at rates of exchange prevailing on the    
    transaction dates. Any resulting foreign currency translation gains or
   losses are included in the consolidated statements of earnings in the
current period.                                                   

Income taxes                                                      

   The Corporation uses the asset and liability method of accounting for
       income taxes. Under this method, future income tax assets and liabilities
     are determined based on differences between the financial reporting and
      tax bases of assets and liabilities and measured using the substantively
    enacted tax rates and laws that will be in effect when the differences
are expected to reverse.                                          

                                                                   Page 19 of 40

EX-99.2
21st Page of 41
TOC
1st
Previous
Next
Bottom
Just 21st

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                   

Income taxes (continued)                                          

  Valuation allowances are established when necessary to reduce future
  income tax assets to the amounts expected to be realized. Income tax
 expense consists of the income taxes payable for the period and the
   change during the period in future income tax assets and liabilities.

Stock-based compensation                                          

       The Corporation has a stock-based compensation plan, as described in Note
      10. No compensation expense is recognized when stock options are issued.
     Any consideration paid by employees on the exercise of stock options is
credited to share capital.                                        

       Fair value, as represented by the most recent stock price at which shares
   are exchanged in the market place, is used as the basis for recording
stock issued as compensation.                                     

 Warrants are valued at fair value on the date of issuance using the
Black-Scholes pricing model.                                      

  The CICA also recently issued new Handbook Section 3870, Stock-based
   Compensation and Other Stock-based Payments. This Section establishes
      standards for the recognition, measurement and disclosure of stock-based
    compensation and other stock-based payments made in exchange for goods
and services and applies to transactions, including non-reciprocal
       transactions, in which an enterprise grants shares of common stock, stock
      options, or other equity instruments, or incurs liabilities based on the
      price of common stock or other equity instruments. This Section sets out
 a fair value based method of accounting and is required for certain
       stock-based transactions, effective January 1, 2002 and applied to awards
granted on or after that date.                                    

Earnings per share                                                

     Effective January 1, 2001 the Corporation adopted the CICA standard for
     calculating earnings per share. This standard adopts the treasury stock
  method of calculating the dilutive effect of options on earnings per
 share instead of the imputed earnings approach. The Corporation has
adopted this method on a retroactive basis. There was no effect on
previous periods reported.                                        

Accounting estimates                                              

 The preparation of financial statements in conformity with Canadian
  generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets and
    liabilities and disclosure of contingent 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 such estimates.                                              

3.     ACCOUNTS RECEIVABLE                                                      

  Accounts receivable are net of an allowance for doubtful accounts of
$260,679 at December 31, 2001 (2000 - $52,708).                   

                                                                   Page 20 of 40

EX-99.2
22nd Page of 41
TOC
1st
Previous
Next
Bottom
Just 22nd

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

4.     RESTRICTED CASH                                                          

     The Corporation was required to maintain a term deposit of $81,000 with
     its bank in order to secure any balance which may have been outstanding
 from time to time on credit cards issued to employees. The security
  interest was released and discharged by the bank effective August 8,
2001.                                                             

5.     CAPITAL ASSETS                                                           

                                                        [Enlarge/Download Table]

                                                                     2001                              
                                        ---------------------------------------------------------------
                                                                 Accumulated             Net Book      
                                              Cost               Amortization              Value       
                                        ------------------  -----------------------  ------------------
                                                                                                       
Furniture and equipment                         $ 534,739             $ 123,562              $ 411,177 
Computer equipment                              1,203,129               732,762                470,367 
Computer equipment under capital lease          4,280,810             1,715,211              2,565,599 
Leasehold improvements                          1,255,505                54,686              1,200,819 
                                        ------------------  -----------------------  ------------------
                                              $ 7,274,183           $ 2,626,221            $ 4,647,962 
                                        ------------------  -----------------------  ------------------

                                                        [Enlarge/Download Table]


                                                                     2000                              
                                        ---------------------------------------------------------------
                                                                 Accumulated             Net Book      
                                              Cost               Amortization              Value       
                                        ------------------  -----------------------  ------------------
                                                                                                       
Furniture and equipment                         $ 343,894              $ 77,671              $ 266,223 
Computer equipment                                968,520               393,056                575,464 
Computer equipment under capital lease          3,160,393               510,935              2,649,458 
Leasehold improvements                            294,493                34,456                260,037 
                                        ------------------  -----------------------  ------------------
                                              $ 4,767,300           $ 1,016,118            $ 3,751,182 
                                        ------------------  -----------------------  ------------------

       In 2000, the Corporation sold and leased-back certain computer equipment.
 The gain on sale of approximately $259,000 was recorded as deferred
     revenue and is amortized on a straight-line basis over the thirty-month
     period of the lease. The Corporation recognized $104,684 of the gain in
2001 (2000 - $28,370).                                            

Amortization of computer equipment under capital lease amounted to
      $1,204,276 for the year ended December 31, 2001 (2000 - $428,536; 1999 -
$59,356).                                                         

6.     ACQUISITIONS                                                             

2001 Acquisition                                                  

     On April 1, 2001 the Corporation acquired all of the outstanding common
 shares of Robert C. Sheehan & Associates, Inc. for consideration of
$1,687,631 cash. As of December 31, 2001, $362,674 of the cash    
       consideration remained payable to the vendor, which was subsequently paid
   in January 2002. In addition, 153,000 options were granted to certain
    employees at the fair market value on the date of grant. These options
are included in Note 10(e).                                       

                                                                   Page 21 of 40

EX-99.2
23rd Page of 41
TOC
1st
Previous
Next
Bottom
Just 23rd

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

6.     ACQUISITIONS (continued)                                                 

The acquisition was recorded as follows:                          

    Accounts receivable                                          $ 786,300
    Cash                                                           670,063
    Office furniture and equipment                                  18,558
    Other assets                                                    11,585
     Accounts payable and accrued liabilities                      (188,302)
    Goodwill                                                       417,973
                                                                 -----------
     Cost of acquisition                                          $1,716,177
                                                                 -----------

Consideration paid                                                
         Cash                                                   $1,324,957
         Due to vendor                                             362,674
         Acquisition costs                                          28,546
                                                                 -----------
                                                                $1,716,177
                                                                 -----------

2000 Acquisitions                                                 

     On July 7, 2000, the Corporation acquired all of the outstanding common
     shares of eContracts, Inc. ("eContracts") for consideration of $150,000
      cash plus the issuance of up to 46,500 common shares at $9 per share. Of
      the share consideration, 25,000 shares were issued to December 31, 2000,
      and the issuance of the remaining shares were contingent upon the vendor
remaining employed by the Corporation as follows:                 

                                           Common Shares
                                             -----------------------

December 31, 2001                                             12,500            
July 31, 2002                                                  9,000            
                                                  --------
Total                                                         21,500            
                                                  --------

      The Corporation was recording the compensation expense relating to these
       shares over the period of the employment agreement. On September 30, 2001
       the Corporation ceased the operations of eContracts and issued the 21,500
      shares to the vendor resulting in compensation expense of $136,560 being
     recorded in the current fiscal year (December 31, 2000 - $56,940). This
       compensation expense is included in the loss from discontinued operations
(Note 7) and in share capital (Note 10).                          

                                                                   Page 22 of 40

EX-99.2
24th Page of 41
TOC
1st
Previous
Next
Bottom
Just 24th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

6.     ACQUISITIONS (continued)                                                 

The acquisition was recorded as follows:                          

Office furniture and equipment                             $ 9,989
Goodwill                                                   367,957
                                                          ----------
 Cost of acquisition                                       $ 377,946
                                                          ----------

Consideration paid                                                
     Cash                                                $ 150,000
     25,000 common shares                                  225,000
     Acquisition costs                                       2,946
                                                          ----------
                                                         $ 377,946
                                                          ----------

   On July 17, 2000, the Corporation acquired the remaining 25% minority
    interest in Electronic Brokerage Systems, Inc. from an individual, who
     holds options in Belzberg Technologies Inc., in return for the issuance
of 50,000 common shares having a market value of $9 per share. The
       exchange amount represents the value agreed to by the Corporation and the
       shareholder. Allocation of the purchase price based on the fair values of
       the net assets acquired resulted in the recording of goodwill of $480,104
including acquisition costs of $30,104.                           

7.     DISCONTINUED OPERATIONS                                                  

On September 30, 2001 the Corporation ceased operations of its    
    wholly-owned subsidiary, eContracts, Inc., a developer and supplier of
      on-line procurement and supply chain integration solutions. Accordingly,
 the Corporation's consolidated financial statements for all periods
      presented have been reclassified to reflect eContracts as a discontinued
business segment in accordance with CICA Section 3475.            

   Summarized financial information for the discontinued operation is as
follows:                                                                        

                              Years ended December 31,
                              ------------------------------
                                 2001         2000      1999
                              ----------   ----------   ----

Revenues                                $   30,668   $       --   $ --          
                              ----------   ----------   ----

Loss before the following                  746,451      141,288     --          
Stock compensation expense (Note 6)        136,560       56,940                 
Impairment charge for goodwill             310,290           --     --          
                              ----------   ----------   ----
Net loss from discontinued operations   $1,193,301   $  198,228   $ --          
                              ----------   ----------   ----

Assets and liabilities                                                          
Current assets                     $   26,450   $   28,555   $ --     
Capital assets                     $       --   $    8,589   $ --     
Goodwill, net of accumulated                                          
amortization of $18,247         $       --   $  349,710   $ --  
Current liabilities                $   14,418   $    8,459   $ --     
                              ----------   ----------   ----

                                                                   Page 23 of 40

EX-99.2
25th Page of 41
TOC
1st
Previous
Next
Bottom
Just 25th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

8.     BANK LOAN                                                                

    The Corporation has a demand operating facility of $1 million Canadian
  that may be used to finance corporate requirements and an additional
       $625,000 U.S. that may be used to finance leasehold improvements. In 2001
  the Corporation used $744,442 of the Canadian facility, repayable in
 blended monthly payments of principal and interest of approximately
    $31,000. The loan bears interest at the bank's prime rate plus 1.125%.
      The loan is secured by a general security agreement on the Corporation's
    assets. The agreement requires that the Corporation maintain a minimum
tangible net worth of $10 million.                                

9.     OBLIGATIONS UNDER CAPITAL LEASE                                          

  The Corporation is committed to the following minimum payments under
capital lease obligations:                                        

                                          2001            2000
                                         -------------   -------------

 2001                                     $        -     $ 1,210,542
 2002                                      1,710,448       1,065,510
 2003                                      1,215,244         577,479
 2004                                        391,588               -
                                         -------------   -------------
                                           3,317,280       2,853,531

Less interest portion at average                                  
    annual rates of approximately 11%        424,846         573,154
                                         -------------   -------------
                                           2,892,434       2,280,377

 Less current portion                      1,390,296         862,286
                                         -------------   -------------
                                          $1,502,138     $ 1,418,091
                                         -------------   -------------

    Interest expense on capital lease obligations amounted to $451,573 for
 the year ended December 31, 2001 (2000 - $166,393; 1999 - $25,123).

                                                                   Page 24 of 40

EX-99.2
26th Page of 41
TOC
1st
Previous
Next
Bottom
Just 26th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

10.    CAPITAL STOCK AND STOCK OPTIONS                                          

All references to common shares reflect a five for one split which
   occurred in July 2000. The following summarizes authorized and issued
capital stock:                                                    

Authorized                                                        
Unlimited number of common shares                       

Issued                                                            

                                                                [Download Table]

                                                                Common Shares       
                                                       ---------------------------- 
                                                          Number          Amount    
                                                       ------------    ------------ 
                                                                                    
Balance, January 1, 2000                                  7,703,590    $  6,227,000 
Issue of common shares for cash                           2,013,800       7,974,241 
Share issuance costs                                             --        (386,000)
Issue of common shares in connection with                                           
     acquisition of eContracts, Inc. (Note 6)                25,000         225,000 
Compensation expense (Note 6)                                    --          56,940 
Issue of common shares in connection with acquisition                               
     of Electronic Brokerage Systems, Inc. (Note 6)          50,000         450,000 
Exercise of options for cash                                899,000       3,210,000 
Issue of common shares for services rendered                 40,000         200,000 
                                                       ------------    ------------ 
Balance, December 31, 2000                               10,731,390      17,957,181 
Issue of common shares for cash                             333,334       5,000,000 
Share issuance costs                                             --        (301,009)
Exercise of options for cash                                 66,600         205,000 
Compensation expense (Note 6)                                21,500         136,560 
Repurchase of common shares for cancellation                (91,900)       (184,479)
                                                       ------------    ------------ 
Balance, December 31, 2001                               11,060,924    $ 22,813,253 
                                                       ------------    ------------ 

(a)          On January 26, 2001, the Corporation received a private placement  
      of $5 million for the issuance of 333,334 common shares from
            treasury and issued 30,000 options at the fair market value on the
     date of grant. During the year ended December 31, 2001, the
          Corporation, pursuant to a Normal Course Issuer Bid, repurchased
           and cancelled 91,900 common shares for a total cash consideration
           of $816,011. The excess of the purchase cost of these shares over
       their historical carrying value ($631,532) was charged to the
deficit.                                              

(b)          In February 2002, The Toronto Stock Exchange approved a Normal     
           Course Issuer Bid for the Corporation to repurchase up to 553,000
of its common shares over the ensuing year.           

(c)          The Corporation has a stock option plan under which the board of   
   directors may grant to employees, officers, directors and
             consultants stock options to purchase from treasury up to 6,000,000
             common shares of the Corporation of which 5,993,750 at December 31,
         2001 (2000 - 4,788,500) have been granted net of cancellations.

                                                                   Page 25 of 40

EX-99.2
27th Page of 41
TOC
1st
Previous
Next
Bottom
Just 27th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

10.    CAPITAL STOCK AND STOCK OPTIONS (continued)                              

     (d)    There was a total of 1,800,000 share purchase warrants issued in
      2000 for proceeds of $1,782,900 in relation to the private
placements as follows:                              

Price of                      
Common Share                      
Number of        to be Purchased                                        
Warrants            Per Warrant                             Expiry Date 
------------------   -------------------                   -------------------  

     650,000             $4.00                         February 10, 2005
     600,000             10.00                         February 14, 2003
     500,000              5.00                         February 14, 2005
   50,000              7.76                         March 31, 2002
------------------------------------------------------------------------------  
1,800,000             $6.38 (weighted average)                    
------------------------------------------------------------------------------  

   (e) Summarized information relative to the Corporation's stock option
plan is as follows:                                                             

                                    Weighted                Weighted
                                    Average                  Average
                             2001     Exercise Price     2000   Exercise Price
                       ------------- --------------  --------- -------------

Options outstanding,                                                            
beginning of year     3,889,500       $ 6.83      3,397,500   $ 4.38  
Options granted            1,582,050         6.05      1,391,000    10.58       
Options exercised            (66,600)        3.08       (899,000)    3.57       
Options cancelled           (376,800)        9.98             --       --       
                    ---------       ------      ---------   ------
Options outstanding,                                                            
end of year           5,028,150       $ 6.44      3,889,500   $ 6.83  
                    ---------       ------      ---------   ------

Options exercisable,                                                            
end of year           3,597,067       $ 6.17      3,130,500   $ 6.11  
                    ---------       ------      ---------   ------

                                                                   Page 26 of 40

EX-99.2
28th Page of 41
TOC
1st
Previous
Next
Bottom
Just 28th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

10.    CAPITAL STOCK AND STOCK OPTIONS (continued)                              

(f) The following table summarizes information about stock options
outstanding at December 31, 2001:                                               

                                                        [Enlarge/Download Table]

                            Outstanding                                           Exercisable          
----------------------------------------------------------------------  -------------------------------
                                           Weighted        Weighted                         Weighted   
     Range of                              Average         Average                           Average   
     Exercise              Number         Remaining        Exercise          Number         Exercise   
      Prices            Outstanding        Life (*)         Price         Exercisable         Price    
--------------------  ----------------   ------------   --------------  ----------------  -------------
                                                                                                       
   $3.00 - $5.00           3,338,650           5.29          $ 4.64           2,504,400        $ 4.71  
   $5.50 - $9.00           1,127,500           4.00            7.83             762,000          7.86  
  $10.00 - $18.00            562,000           4.31           14.32             330,667         13.38  
--------------------  ----------------   ------------   --------------  ----------------  -------------
                           5,028,150           4.89          $ 6.44           3,597,067        $ 6.17  
--------------------  ----------------   ------------   --------------  ----------------  -------------

(*) Weighted average contractual remaining life in years.                       

11.    INCOME TAXES                                                             

      The provision for income taxes reported differs from the amount computed
    by applying the Canadian statutory rate to income before taxes for the
following reasons:                                                

                                                        [Enlarge/Download Table]

                                                       2001          2000            1999   
                                                   -------------  ----------  --------------
                                                                                            
Loss before income taxes                           $ (4,068,759)  $(340,999)   $ (2,650,049)
                                                   -------------  ----------  --------------
Combined basic federal and provincial rates              41.75%      43.90%          44.62% 
                                                   -------------  ----------  --------------
Benefit based on statutory income tax rate           (1,698,707)   (149,700)     (1,182,450)
Decrease in tax benefit resulting from:                                                     
     Losses and temporary differences incurred in                                           
        the year not tax affected                     1,668,900     124,900       1,182,450 
     Permanent differences                               29,807      24,800               - 
     U.S. corporate and minimum tax                      15,685       5,063           9,019 
                                                   -------------  ----------  --------------
                                                       $ 15,685     $ 5,063         $ 9,019 
                                                   -------------  ----------  --------------

                                                                   Page 27 of 40

EX-99.2
29th Page of 41
TOC
1st
Previous
Next
Bottom
Just 29th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

11.    INCOME TAXES (continued)                                                 

The Corporation has accumulated income tax losses of approximately
   $12,059,000 as at December 31, 2001 that may be used to reduce future
   taxable income. The benefit of these losses has not been reflected in
   these financial statements. The loss carryforwards expire as follows:

                      Canada          United States                Total
                     -----------        --------------           -------------

      2004           $    91,000           $         -            $     91,000
      2006             1,935,000                     -               1,935,000
      2007               667,000                     -                 667,000
      2008               872,000                                       872,000
      2011                     -               287,000                 287,000
      2012                     -             2,147,000               2,147,000
      2018                     -               242,000                 242,000
      2019                     -               519,000                 519,000
      2020                     -             2,405,000               2,405,000
      2021                                   2,894,000               2,894,000
                     -----------        --------------           -------------
                     $ 3,565,000           $ 8,494,000            $ 12,059,000
                     -----------        --------------           -------------

       The Corporation adopted January 1, 2000 the asset and liability method to
 recognize future tax assets and liabilities. The tax effect of loss
     carryforwards and significant temporary differences representing future
tax assets at December 31, 2001 and 2000 are as follows:          

                                           2001           2000
                                          -------------  -------------

 Tax benefit of losses carryforward       $ 4,471,740    $ 3,189,600
 Capital assets                               187,165         94,900
 Share issue costs                            237,203        268,000
 Other                                        213,865              -
                                          -------------  -------------
 Total future tax asset                     5,109,973      3,552,500

 Valuation allowance                        5,109,973      3,552,500
                                          -------------  -------------
 Future tax asset or liability            $         -    $         -
                                          -------------  -------------

      The Corporation has determined that realization of the future income tax
     asset does not meet the "more likely than not" criteria for recognition
       and therefore a valuation allowance has been recorded against this future
income tax asset.                                                 

                                                                   Page 28 of 40

EX-99.2
30th Page of 41
TOC
1st
Previous
Next
Bottom
Just 30th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

12.    CHANGES IN NON-CASH WORKING CAPITAL ITEMS                                

     The changes in non-cash working capital items consist of the following:

                                                        [Enlarge/Download Table]

                                                2001            2000          1999   
                                           ------------  --------------  ------------
                                                                                     
Accounts receivable                         $ (208,195)   $ (2,309,497)   $ (250,386)
Government assistance receivable             1,149,779      (1,023,706)            - 
Prepaid and other receivables                 (642,388)       (208,810)       79,076 
Accounts payable and accrued liabilities       917,887      (1,293,244)      713,230 
Deferred revenue                              (242,790)       (139,136)      356,464 
Restricted cash (Note 4)                        81,000               -             - 
                                          ------------  --------------  ------------ 
                                           $ 1,055,293    $ (4,974,393)    $ 898,384 
                                          ------------  --------------  ------------ 

13.    RELATED PARTY TRANSACTIONS                                               

       During 1999, the Corporation paid rent to a company controlled by certain
     directors and officers of the Corporation in the amount of $165,996. No
       rent was paid to these companies in the years ended December 31, 2001 and
December 31, 2000.                                                

 Prepaid expenses and other receivables include loans to officers of
 $496,636 (2000 - $18,033) and loans to employees of $42,492 (2000 -
      $3,235) for the purchase of shares in the Corporation. Subsequent to the
    year-end $508,104 has been repaid and the remaining loans are due July
2002.                                                             

14.    COMMITMENTS                                                              

   The Corporation's commitments, primarily for occupancy costs, require
future minimum payments as summarized below at December 31, 2001: 

  2002                                     $ 1,207,274
  2003                                       1,132,234
  2004                                       1,071,326
  2005                                       1,104,510
  2006                                       1,106,820
  Thereafter                                 2,327,624
                                            ------------
                                           $ 7,949,788
                                            ------------

                                                                   Page 29 of 40

EX-99.2
31st Page of 41
TOC
1st
Previous
Next
Bottom
Just 31st

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

15.    SEGMENTED INFORMATION                                                    

     The Corporation operates and manages its business in one industry - the
    financial services sector. The Corporation has two reportable segments
      being the Core business and the Brokerage business. In the Core business
   the Corporation creates and provides to institutional customers trade
      execution software and a network for connecting to various exchanges and
 other markets in North America. The Brokerage business involves the
  execution of exchange-traded equity and index options on the Chicago
Board Options Exchange.                                           

     The accounting policies of the segments are the same as those described
in the summary of significant accounting policies (Note 2). The   
      Corporation evaluates performance of the Core business and the Brokerage
business based on several factors, of which the primary financial 
measures are revenue and operating earnings (loss) from continuing
       operations. The Corporation defines operating earnings (loss) as earnings
      (loss) from continuing operations before amortization, interest expense,
interest income, income taxes and other non-recurring items.      

(a)    Industry segments                                          

                                                                [Download Table]

                                              Year ended December 31, 2001         
                                          Core         Brokerage           Total   
                                      ------------    ------------    ------------ 
                                                                                   
External revenues                                                                  
     Subscription fees                $ 10,595,561    $         --    $ 10,595,561 
     Transaction fees                    8,900,156              --       8,900,156 
     Commissions                                --       3,593,898       3,593,898 
     Software development                                                          
        and installation                   771,996              --         771,996 
     Other                                 519,147          79,313         598,460 
                                      ------------    ------------    ------------ 
Total external revenues               $ 20,786,860    $  3,673,211    $ 24,460,071 
                                      ------------    ------------    ------------ 

Operating earnings (loss)                                                          
     from continuing operations       $   (933,546)   $    164,704    $   (768,842)
Amortization                                                             1,799,338 
Write-down of leasehold improvements                                       153,195 
Interest expense                                                           466,048 
Interest income                                                 --        (311,965)
                                      ------------    ------------    ------------ 
Loss from continuing operations                                                    
     before income taxes                                              $ (2,875,458)
                                      ------------    ------------    ------------ 

Total assets                          $ 14,628,382    $  2,822,133    $ 17,450,515 
Capital asset expenditures               2,670,243           8,862       2,679,105 
Goodwill additions                              --         417,973         417,973 
                                      ------------    ------------    ------------ 

                                                                   Page 30 of 40

EX-99.2
32nd Page of 41
TOC
1st
Previous
Next
Bottom
Just 32nd

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

15.    SEGMENTED INFORMATION (continued)                                        

       For the years ended December 31, 2000 and 1999 the Brokerage business was
      not in existence and thus only information relating to the Core business
is presented in the following table:                              

                                       2000           1999
                                       Core           Core
                                        ------------    ------------
External revenues                                                 
      Subscription fees                 $  6,080,239    $  4,526,458
      Transaction fees                     3,276,096         643,227
Software development                                    
         and installation                  2,059,348         667,150
      Other                                  535,346          67,264
                                        ------------    ------------
 Total external revenues                $ 11,951,029    $  5,904,099
                                        ------------    ------------

Operating earnings (loss)                                         
       from continuing operations        $  1,163,106    $ (2,292,835)
 Amortization                                841,279         219,591
 Write-down of leasehold improvements             --         112,500
 Interest expense                            166,393          25,123
 Stock exchange listing costs                525,198              --
 Interest income                            (226,993)             --
                                        ------------    ------------
Loss from continuing operations                                   
       before income taxes               $   (142,771)   $ (2,650,049)
                                        ------------    ------------

 Total assets                           $ 15,459,525    $  2,869,254
 Capital asset expenditures                3,981,563         582,592
 Goodwill additions                          480,104              --
                                        ------------    ------------

                                                                   Page 31 of 40

EX-99.2
33rd Page of 41
TOC
1st
Previous
Next
Bottom
Just 33rd

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

15.    SEGMENTED INFORMATION (continued)                                        

(b)   Geographic segments                                         

            The Corporation's external revenues by geographic region are based
            on the region in which the revenue is transacted. The total assets
          and capital assets are based on the geographic area in which the
Corporation operates:                                 

                                                                [Download Table]


                                                     2001                        
                               ------------------------------------------------- 
                                 Canada          United States           Total   
                               -----------       -------------        -----------
                                                                                 
External revenues                                                                
     Subscription fees         $ 6,511,498        $ 4,084,063        $10,595,561 
     Transaction fees            1,336,558          7,563,598          8,900,156 
     Commissions                        --          3,593,898          3,593,898 
     Software development and                                                    
        installation               446,895            325,101            771,996 
     Other                         489,850            108,610            598,460 
                               -----------        -----------        ----------- 
Total external revenues        $ 8,784,801        $15,675,270        $24,460,071 
                               -----------        -----------        ----------- 

Total assets                   $ 8,512,615        $ 8,937,900        $17,450,515 
                               -----------        -----------        ----------- 

Capital assets                 $ 3,745,797        $   902,165        $ 4,647,962 
                               -----------        -----------        ----------- 
                                                                [Download Table]


                                                     2000                        
                               ------------------------------------------------- 
                                 Canada          United States           Total   
                               -----------       -------------        -----------
                                                                                 

External revenues                                                                
     Subscription fees         $ 3,213,497        $ 2,866,742        $ 6,080,239 
     Transaction fees              558,018          2,718,078          3,276,096 
     Software development and                                                    
        installation             1,782,546            276,802          2,059,348 
     Other                         523,371             11,975            535,346 
                               -----------        -----------        ----------- 
Total external revenues        $ 6,077,432        $ 5,873,597        $11,951,029 
                               -----------        -----------        ----------- 

Total assets                   $11,831,898        $ 3,627,627        $15,459,525 
                               -----------        -----------        ----------- 

Capital assets                 $ 3,112,179        $   639,003        $ 3,751,182 
                               -----------        -----------        ----------- 

                                                                [Download Table]


                                                     1999                        
                               ------------------------------------------------- 
                                 Canada          United States           Total   
                               -----------       -------------        -----------
                                                                                 
External revenues                                                                
     Subscription fees         $ 2,012,436        $ 2,514,022        $ 4,526,458 
     Transaction fees              202,527            440,700            643,227 
     Software development and                                                    
        installation               415,400            251,750            667,150 
     Other                          50,011             17,253             67,264 
                               -----------        -----------        ----------- 
Total external revenues        $ 2,680,374        $ 3,223,725        $ 5,904,099 
                               -----------        -----------        ----------- 

Total assets                   $ 2,067,073        $   802,181        $ 2,869,254 
                               -----------        -----------        ----------- 

Capital assets                 $   958,500        $   186,698        $ 1,145,198 
                               -----------        -----------        ----------- 


                                                                   Page 32 of 40

EX-99.2
34th Page of 41
TOC
1st
Previous
Next
Bottom
Just 34th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

16.    FINANCIAL INSTRUMENTS                                                    

Fair value of financial instruments                               

     Accounts receivable, government assistance receivable, accounts payable
     and accrued liabilities and bank loan are all short-term in nature and,
    as such, their carrying values approximate fair value. Other financial
instruments are recorded at amounts which approximate fair value. 

Foreign currency risk                                             

The Corporation operates internationally and as such is exposed to
fluctuations in foreign exchange rates. The Corporation does not  
       currently use financial instruments to limit its exposure to fluctuations
in foreign exchange rates.                                        

Interest rate risk                                                

The Corporation is subject to interest rate risk on its short-term
    investments. Fluctuations in interest rates impact the market value of
      the short-term investments. Any increase or decrease in the market value
     affects short-term investments to the extent they are converted to cash
prior to maturity.                                                

      The Corporation is subject to interest rate price risk on the bank loan.
The Corporation does not use derivative instruments to reduce its 
exposure to interest rate risk.                                   

Credit risk                                                       

       The Corporation is subject to risk of non-payment of accounts receivable.
     The Corporation mitigates this risk by monitoring the credit worthiness
of its clientele monthly as subscription and transaction fees are 
generated. At December 31, 2001, amounts due from five customers  
       accounted for 47.0% of total accounts receivable (December 31, 2000 - two
      customers for 26.8%). For the year ended December 31, 2001, one customer
    accounted for approximately 10% of total revenues (December 31, 2000 -
one customer for approximately 16%).                              

17.    COMPARATIVE FIGURES                                                      

     Certain of the comparative figures have been reclassified to conform to
the presentation adopted in the current year.                     

                                                                   Page 33 of 40

EX-99.2
35th Page of 41
TOC
1st
Previous
Next
Bottom
Just 35th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

18.    UNITED STATES ACCOUNTING PRINCIPLES                                      

       These financial statements have been prepared in accordance with Canadian
GAAP, which conform in all material respects applicable to the    
      Corporation with those in the United States during the periods presented
except with respect to the following:                             

      (a)    On June 29 2001, the Financial Accounting Standard Board ("FASB")
             approved for issuance Statement of Financial Accounting Standards
       ("SFAS") No. 141, "Business Combinations" and SFAS No. 142,
              "Goodwill and Other Intangible Assets". SFAS No. 141 requires that
      the purchase method of accounting be used for all business
   combinations initiated after June 30, 2001 and that the
             pooling-of-interests will be prohibited. SFAS No. 142 changes the
     accounting for goodwill from an amortization method to an
     impairment-only approach. Thus, amortization of goodwill,
           including goodwill recorded in past business combinations, will
    cease upon the adoption of this Statement which, for the
              Corporation will be January 1, 2002; however, for any acquisitions
              completed after June 30, 2001, goodwill and intangible assets with
an indefinite life will not be amortized.           

         The FASB approved for issuance SFAS 143 "Accounting for Asset
    Retirement Obligations" and SFAS 144 "Accounting for the
             Impairment or Disposal of Long-Lived Assets". The Corporation has
            determined that the adoption of these standards will not have an
impact on the Corporation.                          

(b)    Under Canadian GAAP, there is no requirement to record     
              compensation expense on the issue of stock options to employees or
directors.                                          

      Under U.S. GAAP, SFAS No. 123, "Accounting for Stock-based
         Compensation", establishes financial accounting and reporting
            standards for stock-based employee compensation plans as well as
            transactions in which an entity issues its equity instruments to
             acquire goods or services from non-employees. As permitted by the
          Statement, the Corporation has elected to follow the intrinsic
   value method of accounting for stock-based compensation
           arrangements with employees, as provided for in APB Opinion No.
         25. During the year ended December 31, 2001 and 2000, certain
      compensatory stock options were issued to consultants. The
              estimated fair market value of the options is recorded as deferred
       stock compensation expense (recovery) and is amortized into
earnings over the life of the options.              

           For purposes of reconciliation to U.S. GAAP, the estimated fair
            market value of $2,207,908 (2000 - $5,398,607) would be recorded
             as additional paid-in capital and deferred stock compensation and
       the related amortization of the deferred stock compensation
             expense of $1,861,237, for the year ended December 31, 2001 (2000
        - $460,841) would be recorded as a recovery (expense) in the
         statement of operations. The fair market value of the options
              issued in connection with the private placement were recorded as a
       reduction of capital stock with a corresponding increase in
         additional paid in capital. The fair value of the options was
   estimated as at the date of the option grants using the
          Black-Scholes option pricing model with the following weighted
             average assumptions for the measurement dates: risk-free interest
              rates of 2.5% to 4.9% (2000 - 5.94%), expected life of the options
           of 1.89 to 5 years (2000 - 5 years); expected volatility of 34%
    (2000 - 35%) and a dividend yield of zero (2000 - zero).

                                                                   Page 34 of 40

EX-99.2
36th Page of 41
TOC
1st
Previous
Next
Bottom
Just 36th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

18.    UNITED STATES ACCOUNTING PRINCIPLES (continued)                          

   (c)   Under U.S. GAAP, government research and development assistance
       would be recorded as a reduction of the income tax provision.
             Canadian GAAP requires the assistance to be recorded as a reduction
of research and development expense.                  

   In 2000, the Corporation recorded government research and
         development assistance of $1,149,779. There was no research and
             development assistance recorded during the years ended December 31,
2001 and 1999.                                        

 (d)   The Corporation has presented the costs incurred in the stock
           exchange listing, amortization, interest expense, interest income
            and the write-down of leasehold improvements as other items in the
             income statement. Under U.S. GAAP, these costs would be included in
administrative expenses within operating expenses.    

  (e)   The following table reconciles the net loss for the year ended
             December 31, 2001 and 2000 with that which would have been reported
             had the financial statements been presented in accordance with U.S.
         GAAP. There were no material adjustments to report for the year
ended December 31, 1999.                              

                                               2001             2000
                                              -----------      -----------

Net loss in conformity with Canadian GAAP        $(4,084,444)     $  (346,062)  
Stock compensation expense, included in                                         
  administrative expenses (Note 18(b))          1,861,237          460,841
                                              -----------      -----------
Net loss in conformity with U.S. GAAP            $(5,945,681)     $  (806,903)  
                                              -----------      -----------

Loss per share from continuing operations                                       
   Basic and diluted  - U.S. GAAP              $     (0.43)     $     (0.06)
                                              -----------      -----------

Loss per share                                                                  
   Basic and diluted  - U.S. GAAP              $     (0.54)     $     (0.08)
                                              -----------      -----------

                                                                   Page 35 of 40

EX-99.2
37th Page of 41
TOC
1st
Previous
Next
Bottom
Just 37th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

18.    UNITED STATES ACCOUNTING PRINCIPLES (continued)                          

(e)   (continued)                                                 

            Had the financial statements been prepared in accordance with U.S.
            GAAP, the amounts on the balance sheet as at December 31, 2001 and
            2000 which differ from those reported under Canadian GAAP would be
as follows:                                           

                                                                [Download Table]

December 31, 2001                 Canadian GAAP   Adjustment     U.S. GAAP   
-------------------               -------------  ------------   ------------ 

Shareholders' equity                                                         
                                                                             
     Capital stock                $ 22,813,253   $   (188,891)  $ 22,624,362 
     Warrants                        1,782,900             --      1,782,900 
     Deferred stock compensation            --     (1,855,575)    (1,855,575)
     Additional paid in capital             --      4,366,544      4,366,544 
     Deficit                       (13,791,444)    (2,322,078)   (16,113,522)
                                  ------------   ------------   ------------ 
                                  $ 10,804,709   $         --   $ 10,804,709 
                                  ------------   ------------   ------------ 

                                                                [Download Table]

December 31, 2000                 Canadian GAAP   Adjustment      U.S. GAAP  
-------------------               -------------  ------------   ------------ 

Shareholders' equity                                                         

                                                                             
     Capital stock                $ 17,957,181   $         --   $ 17,957,181 
     Warrants                        1,782,900             --      1,782,900 
     Deferred stock compensation            --     (4,937,766)    (4,937,766)
     Additional paid in capital             --      5,398,607      5,398,607 
     Deficit                        (9,075,468)      (460,841)    (9,536,309)
                                  ------------   ------------   ------------ 
                                  $ 10,664,613   $         --   $ 10,664,613 
                                  ------------   ------------   ------------ 

                                                                   Page 36 of 40

EX-99.2
38th Page of 41
TOC
1st
Previous
Next
Bottom
Just 38th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

18.    UNITED STATES ACCOUNTING PRINCIPLES (continued)                          

  (f)   Under U.S. GAAP the statement of cash flows for the year ended
          December 31, 2001 and 2000 would report the same amount for cash
         used in operating activities as reported under Canadian GAAP as
follows:                                              

                                                                [Download Table]


                                                      2001          2000    
                                                  -----------   ----------- 
Operating activities                                                        
                                                                            
     Net loss                                     $(5,945,681)  $  (806,903)
     Loss from discontinued operations              1,193,301       198,228 
     Items not affecting cash                                               
        Amortization of capital assets              1,646,540       793,568 
        Amortization of goodwill                      152,798        47,711 
        Amortization of gain on disposal of                                 
           capital assets                            (104,684)      (28,370)
        Services rendered for capital stock                                 
           consideration                                   --       200,000 
        Write-down of leasehold improvements          153,195            -- 
        Amortization of stock based compensation    1,861,237       460,841 
     Change in non-cash working capital items       1,055,293    (4,974,393)
                                                  -----------   ----------- 
                                                  $    11,999   $(4,109,318)
                                                  -----------   ----------- 

                                                                   Page 37 of 40

EX-99.2
39th Page of 41
TOC
1st
Previous
Next
Bottom
Just 39th

BELZBERG TECHNOLOGIES INC.                                                      
Notes to the Consolidated Financial Statements                                  
December 31, 2001 and 2000                                                      
(in Canadian dollars)                                                           
--------------------------------------------------------------------------------

18.    UNITED STATES ACCOUNTING PRINCIPLES (continued)                          

     (g)    Under U.S. GAAP, Consolidated Statements of Shareholders' Equity
are also presented as follows:                      

                                                        [Enlarge/Download Table]


                                 Number of                               Additional    Deferred                                
                                  Common      Number of                   Paid-in       Stock                                  
                                  Shares      Warrants      Amount        Capital     Compensation    Deficit        Total     
                               ------------  ------------ ------------  ------------  ------------  ------------  ------------ 
                                                                                                                               
Balance, December 31, 1999        7,703,590            -- $  6,227,000  $         --  $         --  $ (8,729,406) $ (2,502,406)
    Issuance of common shares                                                                                                  
      For cash                    2,912,800            --   10,798,241            --            --            --    10,798,241 
      For acquisition of                                                                                                       
        subsidiaries                 75,000            --      675,000            --            --            --       675,000 
      As compensation                                                                                                          
        expense                      40,000            --      200,000            --            --            --       200,000 
      As compensation                                                                                                          
        expense (Note 6)                 --            --       56,940            --            --            --        56,940 
    Issuance of warrants                                                                                                       
      For cash                           --     1,800,000    1,782,900            --            --            --     1,782,900 
    Issuance of compensatory                                                                                                   
       options                           --            --           --     5,398,607    (5,398,607)           --            -- 
    Amortization of deferred                                                                                                   
      stock compensation                 --            --           --            --       460,841            --       460,841 
    Net loss                             --            --           --            --            --      (806,903)     (806,903)
                               ------------  ------------ ------------  ------------  ------------  ------------  ------------ 
Balance, December 31, 2000       10,731,390     1,800,000   19,740,081     5,398,607    (4,937,766)   (9,536,309)   10,664,613 

    Issuance of common shares                                                                                                  
      For cash                      399,934            --    4,715,100       188,891            --            --     4,903,991 
      As compensation                                                                                                          
        expense (Note 6)             21,500            --      136,560            --            --            --       136,560 
      Repurchase of                                                                                                            
        common shares               (91,900)           --     (184,479)           --            --            --      (184,479)
      Premium on repurchase                                                                                                    
        of common shares                 --            --           --            --            --      (631,532)     (631,532)
    Issuance of compensatory                                                                                                   
       options                           --            --           --     2,207,908    (2,207,908)           --            -- 
    Amortization (recovery) of                                                                                                 
      deferred stock                                                                                                           
      compensation                       --            --           --    (3,428,862)    5,290,099            --     1,861,237 
    Net loss                             --            --           --            --            --    (5,945,681)   (5,945,681)
                               ------------  ------------ ------------  ------------  ------------  ------------  ------------ 
Balance, December 31, 2001       11,060,924     1,800,000 $ 24,407,262  $  4,366,544  $ (1,855,575) $(16,113,522) $ 10,804,709 
                               ------------  ------------ ------------  ------------  ------------  ------------  ------------ 

19.    SUBSEQUENT EVENT                                                         

   On March 1, 2002, the Corporation ended its relationship with its new
 president and closed its Philadelphia office. Lease termination and
employee severance costs are estimated to be $900,000.            

                                                                   Page 38 of 40

EX-99.2
40th Page of 41
TOC
1st
Previous
Next
Bottom
Just 40th

INVESTOR INFORMATION                                                            
Belzberg Technologies Annual Report 2001                                        

Investor Contact  Donald W. Wilson                                              
Telephone:       416-360-2572               
e-mail:          dwilson@belzberg.com       

Corporate Offices                                                               
Canada:            40 King Street West, Suite 3400                              
(Head Office)      Toronto, ON                                                  
M5H 3Y2                                   
Telephone:  416-360-1812                  

360 St. Jacques, Suite 415                
Montreal, PQ                              
H2Y 1P5                                   
Telephone:  514.808.1287                  

United States:     55 Broad Street                                              
28th Floor                                
New York, NY                              
10004                                     
Telephone: 212-943-1400                   
Fax:       212-943-1515                   

141 West Jackson                          
35th Floor, Suite 3510                    
Chicago Board of Trade Building           
Chicago, IL                               
60604                                     
Telephone: 312-663-3655                   
Fax:       312-663-3669                   

United Kingdom:    75 Cannon St.                                                
London EC4N 5BN                           
Telephone:  +44 (0) 20.7556.7177          
Fax         +44 (0) 20.7823.3388          

Transfer Agent     Computershare Trust Company of Canada                        
100 University Ave., 11th Floor           
Toronto, ON                               
M5J 2Y1                                   
Telephone: 416-981-9633 or 800-663-9097   
Fax:       416-981-9507                   
e-mail:  Caregistryinfo@computershare.com 
Web site: www.computershare.com           

Auditors           Deloitte & Touche LLP                                        
Toronto, ON                               

Legal Counsel      Blake, Cassels & Graydon LLP    Sichenzia Ross & Friedman LLP
  Toronto, ON                     New York, NY

Market             Toronto Stock Exchange                                       
Symbol: BLZ                               

                                                                   Page 39 of 40

EX-99.2
Last Page of 41
TOC
1st
Previous
Next
Bottom
Just 41st

BOARD OF DIRECTORS                                                              
Belzberg Technologies Annual Report 2001                                        
Sidney H. Belzberg                                                              
Chairman of the Board, President and Chief Executive Officer of the Corporation 

John Engels                                                                     
Vice Chairman of the Board                                                      

Alicia Belzberg                                                                 
Executive Vice President of the Corporation                                     

Lawrence J. Cyna                                                                
Chief Financial Officer of the Corporation                                      

Dr. William Gnam                                                                
Economist                                                                       

Donald W. Wilson                                                                
Chief Operating Officer                                                         

Stephen Sadler                                                                  
Chairman and CEO of Enghouse Systems Limited, a software developer              

Officers                                                                        
Sidney H. Belzberg                                                              
President and Chief Executive Officer                                           

Alicia Belzberg                                                                 
Executive Vice President                                                        

Lawrence J. Cyna                                                                
Chief Financial Officer                                                         

Donald W. Wilson                                                                
Chief Operating Officer                                                         

Under the rules of the Toronto Stock Exchange (TSX), every listed company must  
disclose its approach to corporate governance with reference to the guidelines  
set out by the TSX. The guidelines address matters such as the constitution and 
independence of the Board of Directors, functions to be performed by each member
of the Board, and effectiveness of the Board. The Board of Directors of Belzberg
Technologies believes that sound corporate governance practices are essential to
the well-being of Belzberg Technologies, and have addressed each of the TSX's   
guidelines in the Information Circular.                                         

                                                                   Page 40 of 40

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 6-K Filing		Date		First		Last			Other Filings
		12/31/99		16		36
		1/1/00		29
		7/7/00		23
		7/17/00		24
		12/31/00		14		39			20-F
		1/1/01		21
		1/26/01		26
		4/1/01		22
		6/30/01		19		35
		8/8/01		22
		9/11/01		5
		9/30/01		23		24			6-K
		12/31/01		4		39			20-F
		1/1/02		10		35
		3/1/02		14		39
		3/31/02		27
For The Period Ended		6/3/02
Filed On / Filed As Of		6/4/02
		2/14/03		27
		2/10/05		27
		2/14/05		27
Top									List All Filings