VIRTGAME.COM CORP.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    September 30, 2001 and December 31, 2000

                                     ASSETS




                                               September 30,
                                                   2001         December 31,
                                                (Unaudited)         2000
                                               -------------    ------------
                                                       
Current Assets:
   Cash and cash equivalents                      $    4,782      $  123,053
   Accounts receivable, net                          174,650
   Unbilled revenue                                   54,900          27,925
   Prepaid expenses and other assets                 103,752          20,964
   Net assets of discontinued operations                              11,010
                                                  ----------      ----------
Total current assets                                 338,084         182,952
                                                  ----------      ----------

Noncurrent assets:
   Deposits                                            8,762           8,466
   Property and equipment, net                        93,565         155,330
   Capitalized software, net                       1,002,963         985,495
                                                  ----------      ----------
Total noncurrent assets                            1,105,290       1,149,291
                                                  ----------      ----------
Total assets                                      $1,443,374      $1,332,243
                                                  ==========      ==========






                                    




                                VIRTGAME.COM CORP.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    September 30, 2001 and December 31, 2000

                      LIABILITIES AND SHAREHOLDERS' EQUITY




                                                                      September 30,
                                                                          2001            December 31,
                                                                      (Unaudited)            2000
                                                                     --------------     ---------------
                                                                
 Current Liabilities:
    Accounts payable                                                 $      178,430     $      198,726
    Accrued expenses                                                        221,911            100,840
    Current portion of capital lease obligation                               6,569              5,423
    Notes payable                                                           238,590            201,090
                                                                     --------------     --------------
 Total current liabilities                                                  645,500            506,079

 Long Term Liabilities                                                        4,322              9,643
                                                                     --------------     --------------
 Total liabilities                                                          649,822            515,722
                                                                     --------------     --------------

 Shareholders' Equity

    Preferred stock, $.0001 par value, 10,000,000 shares
       authorized, none issued or outstanding                                     -                -
    Common stock, $.00001 par value; 30,000,000 shares
       authorized; 17,692,928 and 12,832,092 shares issued
       and outstanding 2001 and 2000, respectively; 1,527,552
       and 125,857 issuable in 2001 and 2000, respectively                      177                130
    Additional paid-in capital                                           17,323,132         15,649,831
    Accumulated deficit                                                 (16,529,757)       (14,833,440)
                                                                     --------------     --------------

    Total shareholders' equity                                              793,552            816,521
                                                                     --------------     --------------

    Total liabilities and shareholders' equity                       $    1,443,374     $    1,332,243
                                                                     --------------     --------------

                                     



                               VIRTGAME.COM CORP.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         For the Nine and Three Months Ended September 30, 2001 and 2000



                                                                   Nine Months Ended Sept. 30        Three Months Ended Sept. 30
                                                                   2001             2000               2001             2000
                                                                (Unaudited)      (Unaudited)        (Unaudited)      (Unaudited)
                                                              ---------------   --------------    ---------------  ----------------
                                                       
Revenues:                                                     $       513,635   $      160,538    $       143,350  $       131,538
Operating Expenses:
   Salaries and payroll expenses                                      872,914          755,595            422,149          219,121
   Other operating expenses                                         1,302,422          758,890          1,127,953          233,806
                                                              ---------------   --------------    ---------------  ---------------
   Total expenses from continuing
        operations before income taxes                              2,175,336        1,514,485          1,550,102          452,927
                                                              ---------------   --------------    ---------------  ---------------
        Loss from continuing operations before
            financial expense                                      (1,661,701)      (1,353,947)        (1,406,752)        (321,389)

Financial income (expense):
   Interest income                                                        339            1,595                 10              187
   Interest expense                                                   (30,639)         (19,248)            (9,144)          (6,813)
   Other income                                                             -            4,183                  -            1,405
                                                              ---------------   --------------    ---------------  ---------------
   Total financial expense                                            (30,300)         (13,470)            (9,134)          (5,221)
                                                              ---------------   --------------    ---------------  ---------------
        Loss from continuing operations
            before income taxes                                    (1,692,001)      (1,367,417)        (1,415,886)        (326,610)
Income tax expense                                                     (4,316)          (4,779)              (207)            (535)
                                                              ---------------   --------------    ---------------  ---------------
        Loss from continuing operations                            (1,696,317)      (1,372,196)        (1,416,093)        (327,145)
Discontinued Operations
   Loss from discontinued operations (net
       of tax provision of $0)                                              -         (264,230)                 -           (5,903)
   Net Loss                                                   $    (1,696,317)  $   (1,636,426)   $    (1,416,093) $      (333,048)
                                                              ===============   ==============    ===============  ===============
Basic and diluted net loss per share                          $         (0.13)  $        (0.14)   $         (0.10) $         (0.03)
                                                              ===============   ==============    ===============  ===============
Shares used to compute basic and diluted net loss per share        13,374,903       11,490,683         13,734,850       12,537,467
                                                              ===============   ==============    ===============  ===============


                                  




                               VIRTGAME.COM CORP.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 2001 and 2000




                                                                                    Nine Months Ended
                                                                                       September 30,
                                                                                     2001          2000
                                                                                 (Unaudited)    (Unaudited)
                                                                                 ------------   -----------

Cash flows from operating activities:

        Net loss from continuing operations                                      $(1,696,317)   $(1,372,196)
           Adjustments to reconcile net loss to net
              cash flows used in continuing operating activities:
                  Depreciation and Amortization                                       91,026        202,984
                  Issuance of stock and options to consultants                       669,684           --
                  Issuance of stock options to employees                             213,700           --
                  Bad debts                                                           94,750           --

              Changes in operating assets and liabilities:
                  Decrease (increase) in:
                      Unbilled revenue                                               (26,975)          --
                      Accounts receivable, prepaid expenses and other
                      current assets                                                (352,188)        12,190
                  (Decrease) increase in:
                      Accounts payable and accrued expenses                          100,775         56,559
                                                                                 -----------    -----------
        Net cash flows used in continuing operating activities                      (905,547)    (1,100,463)
                                                                                 -----------    -----------
Cash flows provided by (used in)
         discontinued operating activities                                            11,011        (26,435)
Cash flows from investing activities:
        (Decrease) / Increase in deposits                                               (296)         2,586
        Investment in capitalized software                                           (46,728)          --
        Purchase of equipment                                                           --         (149,310)
                                                                                 -----------    -----------
        Net cash flows used in investing activities                                  (47,024)      (146,724)
                                                                                 -----------    -----------
Cash flows from financing activities:

        Net proceeds from issuance of common stock                                   434,964        839,998
        Proceeds from exercise of options                                            355,000           --
        Increase in notes payable                                                     37,500          2,214
        Principal (payments) borrowings under capital lease                           (4,175)        16,179
                                                                                 -----------    -----------
        Net cash flows provided by financing activities                              823,289        858,391
                                                                                 -----------    -----------
Net (decrease) in cash and cash equivalents                                         (118,271)      (415,231)
Cash and cash equivalents at beginning of period                                     123,053        422,309
                                                                                 -----------    -----------
Cash and cash equivalents at end of period                                       $     4,782    $     7,078
                                                                                 ===========    ===========
        Supplemental Disclosures of Cash Flow Information
        Cash paid during the period for:

        Interest                                                                 $    30,639    $    19,248
                                                                                 ===========    ===========

        Income Taxes                                                             $     4,316    $     4,779
                                                                                 ===========    ===========