FORM 6K

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

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of: ~~November~~January, ~~2004~~2005

Commission File Number: 0-30456

CHARTWELL TECHNOLOGY INC.

(Translation of registrant’s name into English)

Suite ~~700~~400, ~~407~~750 ~~2nd~~– 11th Street SW Calgary, Alberta Canada T2P ~~2Y3~~3N7 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) 82 —

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~December~~February 212, ~~2004~~2005 signed "Don Gleason" Don Gleason, CFO

EXHIBIT INDEX

1 Press Release dated ~~November~~January 1610, ~~2004~~2005

2 Press Release ~~November~~January 1824, ~~2004~~2005

3 ~~Revised~~ Consolidated Financial Statements of Chartwell Technology Inc. ~~as at October 31, 2003 and 2002 and~~ for ~~each of~~ the years ~~in the three-year period~~ ended October 31, 2004, 2003 and 2002

CHARTWELL TECHNOLOGY INC.

PRESS RELEASE

Chartwell Technology Inc.

TSX: CWH

~~Calgary, Canada, November 16,~~ ~~2004,~~CHARTWELL ~~Chartwell~~ANNOUNCES ~~Technology~~FISCAL ~~Inc.~~YEAR ~~(TSX:CWH)~~2004 aFOURTH ~~leading~~QUARTER ~~provider of gaming software~~AND ~~systems~~ ~~and~~YEAR ~~entertainment~~END ~~content~~RESULTS ~~to the online and remote gaming industry has filed its~~ ~~revised~~— ~~audited~~Annual ~~financial~~Revenue ~~statements~~Growth ~~for~~of ~~the three years ended October 31~~66%, ~~2003, 2002 and~~Net ~~2001.~~Income ~~The filing~~ of ~~the statements follows the adoption of a change in revenue recognition policy as previously announced in the Company’s September 29th press release~~$4. ~~As anticipated at that time~~0M, ~~the~~EPS ~~change is not adversely material to the financial statements. The statements can be viewed on SEDAR. The unaudited interim financial statements for the third quarter~~ of ~~2004 reflected the change in policy~~$0.24 —

~~The Company~~Calgary, ~~after consultation with its independent auditors~~Canada, ~~KPMG~~January ~~LLP~~10, ~~concluded that it was appropriate to revise its~~2005, ~~accounting~~Chartwell ~~policy~~Technology ~~for~~Inc. ~~set-up fee revenue and related direct and incremental costs to the method described in note 1~~(eTSX:CWH) ~~to the audited financial statements. This accounting policy change~~, ~~which~~a ~~has~~leading ~~been~~provider ~~adopted retroactively, affects the timing~~ of ~~recognition~~gaming ofsoftware ~~set-up fee~~systems ~~revenue and the allocation of that revenue and associated costs~~ to ~~reporting periods~~ ~~but does not affect~~ the ~~cumulative~~online ~~revenue~~and orremote ~~gross~~gaming ~~margin that the Company will realize from its software licensing contracts. In addition~~industry, ~~the~~is ~~policy~~pleased ~~change~~to ~~does~~announce ~~not~~audited ~~impact~~financial ~~the~~results ~~Company’s~~for ~~past or present cash flow, future business plans or prospects or~~ the ~~Company’s~~ ~~recurring~~fourth ~~revenue~~quarter ~~from~~and ~~ongoing~~year ~~license fees. These ongoing license fees represented 92% of revenue for the nine months~~ ended ~~July~~October 31, 2004.

~~The~~Highlights ~~changes~~of ~~to audited amounts previously reported for Canadian generally accepted accounting principles purposes for~~ the ~~years~~ ~~ended~~year ~~October 31, 2003, 2002 and 2001 are as follows~~included:

2003	As previously reported		As revised		Change
Software set-up fees revenue	$ 943,395		$ 919,892		$ (23,503	)
Software development expenses	3,272,353		3,288,164		15,811
Income tax recovery	520,000		630,000		110,000
Net income	1,610,852		1,681,538		70,686
Net income per share - basic	0.11		0.12		0.01
Future income taxes	520,000		630,000		110,000
Deferred set-up expense	--		209,842		209,842
Deferred revenue	343,311		1,687,935		1,344,624
Deficit	(6,480,170	)	(7,504,952	)	(1,024,782	)

•

Revenue of $12.2M compared to $7.3M in 2003;

2002
Software set-up fees revenue	$ 789,197		$ 896,560		$ 107,363
Software development expenses	2,651,335		2,648,223		(3,112	)
Net loss	(1,431,282	)	(1,320,807	)	110,475
Net loss per share - basic	(0.11	)	(0.10	)	0.01
Deferred set-up expense	91,629		317,283		225,654
Deferred revenue	--		1,321,122		1,321,122
Deficit	(8,091,022	)	(9,186,490	)	(1,095,468	)

•

Operating income of $3.6M and net income of $4.0M compared to operating income of $1.1M and net income of $1.7M in 2003;

2001
Software set-up fees revenue	$ 1,928,696		$ 803,990		$(1,124,706	)
Software development expenses	2,013,601		1,857,580		(156,021	)
Net loss	(835,967	)	(1,804,652	)	(968,685	)
Net loss per share - basic	(0.06	)	(0.14	)	(0.08	)
Deferred set-up expense	--		222,542		222,542
Deferred revenue	--		1,428,485		1,428,485
Deficit	(6,659,740	)	(7,865,683	)	(1,205,943	)

•

Earnings per diluted share of $0.24 compared to $0.12 in 2003;

•

Recurring software license fees $11.3M compared to $6.3M in 2003;

•

Cash flow from operations of $4.2M compared to $1.4M in 2003;

•

Remained debt-free with working capital of $10.5M compared to $6.5M in 2003;

•

Two consecutive years of profitability.

Highlights of the fourth quarter included:

•

Revenue of $3.5M compared to $2.1M in the comparative quarter of 2003;

•

Operating income of $831K and net income of $1.5 million compared to operating income of $744K and net income of $1.4 million in the comparative quarter of 2003;

•

Earnings per diluted share of $0.08 compared to $0.06 in the comparative quarter of 2003(prior to restatement) and $0.10 following restatement;

•

Recurring software license fees of $3.2 million compared to $1.8 million in the comparative quarter of 2003;

•

Cash flow from operations of $1.8M compared to $919K in the comparative quarter of 2003;

•

Eighth consecutive quarter of profitability.

“We are very pleased with our fourth quarter and fiscal year 2004 results”, states Don Gleason, CFO. “We ended the year with significant revenue growth, increased our profitability by 139%, doubled our earnings per share and generated in excess of $4.0M in cash flow from operations. Our investment in product development, sales, marketing and business development gives us confidence in our ability to drive continued growth in the expanding market for our products. We are extremely proud of the hard work and accomplishments of the entire Chartwell team and we look forward to 2005 and carrying this momentum throughout the year.”

Twelve Months Ended October 31, 2004
Compared to the same twelve-month period of 2003, total revenue increased 66%, net income increased 139% and earnings per diluted share increased 100%.

Total revenue increased to $12.2 million compared to $7.3M in fiscal 2003. Recurring software license fees increased 79% to $11.3 compared to $6.3 million in fiscal 2003. Recurring revenue represented 92% of total revenue in fiscal 2004 compared to 86% in fiscal 2003.

Total operating expenses, including foreign exchange, increased 37% to $8.6 million compared to $6.3 million in fiscal 2003. As a percentage of total revenue, operating expenses have decreased to 70% from 86% in fiscal 2003. Compared to the same twelve-month period of 2003, software development and support expenses increased 34% to $4.4 million compared to $3.2 million; sales, general and administrative expenses increased 80% to $3.5 million compared to $1.9 million and foreign exchange losses decreased 71% to $233K from $795K. In fiscal 2004, the Company opened a sales office in the United Kingdom, moved to a larger facility in Calgary to accommodate additional personnel and upgraded its listing to the TSX Exchange from the TSX Venture Exchange. All of these factors contributed to the increase in expenses as noted above.

Income from operations increased 243% to $3.6 million compared to $1.1 million in fiscal 2003.

Net income after tax increased 139% to $4.0 million compared to $1.7 million in fiscal 2003. Basic and diluted earnings per share increased to $0.28 and $0.24 compared to $0.12 and $0.12 in fiscal 2003.

Three Months Ended October 31, 2004
Compared to the same period of 2003, total revenue increased 65%, net income increased 6% and earnings per diluted share decreased 20%. The decrease in diluted EPS is attributable to the significant increase in the weighted average share count resulting from the addition of in the money options.

Total revenue increased to $3.5 million compared to $2.1 million in the comparative period of 2003. Recurring software license fees increased 75% to $3.2 million compared to $1.8 million.

Total operating expenses, including foreign exchange, increased 94% to $2.7 million compared to $1.4 million in the comparative period of 2003. Overall, operating expenses as a percentage of total revenue increased to 76% from 65% in the comparative period of 2003. Compared to the same period in 2003, software development and support expenses increased 206% to $1.2 million compared to $405K; sales, general and administrative expenses increased 45% to $960K compared to $661K and foreign exchange losses increased 17% to $247K compared to $211K. The percentage increase in total expenses in the comparative quarters is primarily due to $103K of stock based compensation expense recorded in the current quarter and the deferral of $531K of software development expense recorded in the fourth quarter of fiscal 2003. Without the stock based compensation expense in the 4^th quarter 2004 and software development deferral expense in the 4^th quarter 2003, the increase in operating expenses would have been limited to 34%.

Income from operations increased 12% to $831K compared to $744K in the comparative period of 2003.

Net income after tax increased 6% to $1.5 million compared to $1.4 million in the same period of 2003. Net income is net of the future tax recovery of $631K in fiscal 2004 compared to $630K in the comparative period of 2003. Basic and diluted earnings per share were $0.10 and $0.08 compared to $0.10 and $0.10 in the comparative quarter of 2003. The decrease in diluted earning per share is solely attributable to the increase in the number of shares resulting from options that are in the money.

The fourth quarter of 2004 represents Chartwell’s eighth consecutive quarter of profitability.

Balance Sheet
Chartwell continues to maintain a solid financial base from which to execute its growth strategy. In fiscal 2004, the Company realized $4.2 million in cash flow from operations compared to $1.4 million in fiscal 2003. Cash at October 31, 2004, including short term investments, increased to $9.3 million from $5.2 million and working capital increased to $10.5 million compared to $6.5 million at October 31, 2003. The Company’s balance sheet has been further strengthened by its recent private placement of $11.0 million completed in the first quarter of fiscal 2005.

Audited Consolidated Financial Statements

Audited 2004 consolidated financial statements may be accessed through www.sedar.com or on the Chartwell website at www.chartwelltechnology.com. In addition, copies of the filed statements will be available upon request by contacting Chartwell Investor Relations by e-mail at investor@chartwelltechnology.com. The audited 2004 consolidated statements will also be published in the Company’s 2004 Annual Report that will be mailed to shareholders along with meeting materials for the 2005 Annual General Meeting.

Forward Looking Statements

This news release and the documents referred to herein may contain forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. Such statements reflect the Company’s current views with respect to future events and are subject to risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made including, but not limited to, certain delays in testing and evaluation of products, regulation of the online gaming industry, and other factors and risks detailed from time to time in filings made by the Company with Canadian and U.S. Securities Regulators. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. The Company does not intend and does not assume any obligation to update these forward-looking statements. We do not assume any responsibility for the accuracy or completeness of these forward-looking statements.

About Chartwell

Chartwell Technology Inc. ~~specializes~~ specializes in the development of ~~leading edge~~ gaming applications and entertainment content for the Internet and wireless platforms and other remote access devices. Chartwell’s ~~Java~~JAVA and Flash based software products and games are designed for deployment in gaming, entertainment, advertising and promotional applications. Chartwell does not participate in the online gaming business of its clients. Chartwell’s team of highly trained professionals is committed to delivering the highest quality software and maintaining its leading edge through continuous development and unparalleled customer support.

ForChartwell furtherinvites information,you please contactto Chartwellpreview Technologyand Inc.play our games at www.chartwelltechnology.com

~~Don~~For ~~Gleason,~~further ~~Chief Financial Officer (877) 261-6619 or (403) 261-6619 dgleason@chartwelltechnology.com David Bajwa~~information, ~~Investor~~please contact ~~Relations~~Chartwell ~~(877)~~Technology ~~669-4180 or (604) 669-4180 info@chartwelltechnology~~Inc.~~com~~

~~The Toronto~~Don ~~Stock~~Gleason, ~~Exchange~~CFO ~~does~~(877) ~~not~~261-6619 ~~accept~~(403) ~~responsibility~~261-6619 ~~for~~dgleason@chartwelltechnology.com ~~the~~David ~~adequacy~~Bajwa, orInvestor ~~accuracy~~Relations of(877) ~~this press~~669-4180 ~~release.~~(604) 669-4180 info@chartwelltechnology.com

~~Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:~~ The ~~statements contained herein which~~ ~~are~~TSX ~~not~~does historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not ~~limited~~accept to, certain delays in testing and evaluation of products, regulation of the online gaming industry, and other risks detailed from time to time in Chartwell’s filings with the Securities & Exchange Commission. We assume no responsibility for the ~~accuracy~~adequacy ~~and completeness of these statements to actual results. This is not an offer to sell~~ or aaccuracy ~~solicitation~~ of anthis ~~offer to purchase any securities~~release.

~~NOT~~Safe ~~FOR~~Harbor Statement under the ~~DISSEMINATION~~Private INSecurities ~~THE~~Litigation ~~UNITED~~Reform ~~STATES~~Act of 1995: The statements contained herein which ORare TOnot Uhistorical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products, regulation of the online gaming industry, and other risks detailed from time to time in Chartwell’s filings with the Securities & Exchange Commission.S We assume no responsibility for the accuracy and completeness of these statements and are under no duty to update any of the forward-looking statements contained herein to conform these statements to actual results. This ~~NEWSWIRE~~is ~~SERVICES~~not an offer to sell or a solicitation of an offer to purchase any securities.

CHARTWELL TECHNOLOGY INC. Consolidated Balance Sheets As at October 31 (stated in Canadian dollars)

FOR IMMEDIATE RELEASE

	2004			2003


Assets
Current assets:
Cash	$	5,995,863		$	3,465,120
Short term investments		3,318,286			1,712,890
Accounts receivable		1,916,309			1,991,725
Deferred set-up expense		58,585			47,452
Prepaid expenses and deposits		230,632			148,699
Notes receivable		117,873			--
Future income tax asset		115,000			110,000

Total current assets		11,752,548			7,475,886

Due from related parties		178,961			190,512
Property and equipment		431,824			338,969
Goodwill		811,666			--
Deferred software development costs		607,900			530,948
Deferred set-up expense		68,186			162,390
Notes receivable		180,573			--
Future income tax asset		929,964			520,000

	$	14,961,622		$	9,218,705

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	708,900		$	217,012
Current portion of obligations under capital lease		15,640			5,956
Deferred revenue		478,952			707,433

Total Current liabilities		1,203,492			930,401

Deferred revenue		615,748			980,502
Obligations under capital lease		20,793			3,031

Shareholders' equity:
Share capital		16,502,188			14,809,723
Contributed surplus		102,572			--
Deficit		(3,483,171	)		(7,504,952	)
Total Shareholders equity		13,121,589			7,304,771

	$	14,961,622		$	9,218,705

~~Calgary, Alberta, Canada, November~~ ~~18,~~CHARTWELL ~~2004,~~TECHNOLOGY ~~Chartwell Technology Inc~~INC. ~~(TSX:CWH) (the “Company”), a~~ ~~leading~~Audited ~~provider~~Consolidated Statements of ~~gaming~~Operations ~~software systems~~ and ~~entertainment~~Deficit ~~content to the online and~~ ~~remote gaming industry, is pleased to announce that it has entered into an agreement with~~ ~~a syndicate of underwriters, led by Clarus Securities Inc. (collectively, the~~ ~~“Underwriters”)~~Years ~~pursuant~~ended toOctober ~~which~~31 ~~the Company has agreed to issue and~~ ~~sell~~(stated and the Underwriters have agreed to purchase on a “bought deal” basis, by way of private placement, an aggregate of 2,150,538 Common Shares of the Company at a price of $4.65 per Common Share, resulting in ~~gross~~Canadian proceeds of $10,000,000. In addition, the Company has granted the Underwriters an option to increase the size of the offering by up to $1,000,000 at the same price per share which option is exercisable at any time prior to the closing. dollars)

This private placement financing is subject to normal regulatory approvals, including the approval of the Toronto Stock Exchange. The Common Shares will be offered in certain provinces of Canada by way of private placement pursuant to applicable prospectus exemptions. Closing of the offering is expected to occur on or about December 7, 2004.

	2004			2003			2004


Revenue:
Software license fees	$	11,268,494		$	6,300,335		$	2,646,766
Software set-up fees		798,343			919,892			896,560
Interest and other		134,640			109,411			302,031

		12,201,477			7,329,638			3,845,357

Expenses
Software development and support		4,417,981			3,288,164			2,648,223
Sales, general and administrative		3,498,607			1,947,372			2,385,652
Amortization of deferred software
development costs		98,048			110,068			110,076
Stock-based compensation		102,572			--			--
Depreciation and amortization		244,251			137,310			108,008
Foreign currency loss (gain)		233,201			795,186			(85,795	)

		8,594,660			6,278,100			5,166,164

Net income (loss) before income taxes		3,606,817			1,051,538			(1,320,807	)

Income taxes:
Future income tax recovery		(414,964	)		(630,000	)		--

Net income (loss)		4,021,781			1,681,538			(1,320,807	)

Deficit, beginning of year		(7,504,952	)		(9,186,490	)		(7,865,683	)

Deficit, end of year	$	(3,483,171	)	$	(7,504,952	)	$	(9,186,490	)

Net income (loss) per share:
Basic	$	0.28		$	0.12		$	(0.10	)
Diluted		0.24			0.12			(0.10	)

~~Net~~ CHARTWELL ~~proceeds~~TECHNOLOGY ofINC. ~~the~~ Consolidated ~~offering~~Statements ~~will~~of ~~be used~~Cash byFlows ~~the~~ Years ~~Company~~ended ~~for~~October ~~general~~31 ~~corporate~~ (stated ~~purposes.~~in Canadian dollars)

	2004			2003			2002


Cash provided by (used in):

Operations:
Net income (loss)	$	4,021,781		$	1,681,538		$	(1,320,807	)
Depreciation and amortization		244,251			137,310			108,008
Unrealized foreign exchange losses		268,327			550,234			--
Amortization of deferred software
development costs		98,048			110,068			110,076
Stock-based compensation		102,572			--			--
Interest income capitalized		(11,413	)		(27,947	)		(11,570	)
Issue of shares as finders fee		--			25,000			--
Future income tax recovery		(414,964	)		(630,000	)		--
Write-down of long-term securities		--			--			42,882
Gain on disposal of Property and Equipment		(9,213	)		--			24,258
Contracts acquired on acquisition		25,000			--			--

		4,324,389			1,846,203			(1,047,153	)

Change in non-cash working capital:
Accounts receivable		(34,819	)		(863,086	)		(79,598	)
Due from related parties		20,000			--			--
Deferred set-up expense		83,071			107,441			(94,741	)
Prepaid expenses		(100,904	)		(69,552	)		720
Accounts payable and accrued liabilities		491,888			47,858			109,257
Deferred revenue		(593,235	)		366,813			(107,363	)

		(133,999	)		(410,526	)		(171,725	)

		4,190,390			1,435,677			(1,218,878	)

Financing:
Issue of shares for cash		855,799			152,500			121,088
Repayment of lease obligations		27,446			(6,841	)		(10,286	)

		883,245			145,659			110,802

Investing:
Sale (purchase) of short term investments		(1,605,396	)		1,468,604			168,513
Purchase of property and equipment		(604,404	)		(207,905	)		(97,248	)
Deferred software development costs		(175,000	)		(530,948	)		--

		(2,384,800	)		729,751			71,265
Effect of foreign exchange rate changes on cash		(158,092	)		(550,234	)		--

Increase (decrease) in cash		2,530,743			1,760,853			(1,036,811	)
Cash, beginning of year		3,465,120			1,704,267			2,741,078

Cash, end of year	$	5,995,863		$	3,465,120		$	1,704,267


Supplemental cash flow information:
Cash interest received	$	123,228		$	101,464		$	290,462
Cash interest paid		(2,048	)		(1,955	)		(2,201	)

CHARTWELL TECHNOLOGY INC.
Consolidated Statements of Operations and Deficit

Three months ended October 31
(stated in Canadian dollars)
(Unaudited)

	2004			2003


Revenue:
Software license fees	$	3,237,277		$	1,847,097
Software set-up fees		208,732			246,297
Interest and other		44,407			22,553

		3,490,416			2,115,947

Expenses
Software development and support		1,238,094			404,720
Sales, general and administrative		959,818			660,965
Amortization of deferred software
development costs		58,829			27,517
Stock-based compensation		102,572			-
Depreciation and amortization		52,794			67,511
Foreign currency loss (gain)		247,490			211,267

		2,659,597			1,371,980

Net income (loss) before income taxes		830,819			743,967

Income taxes:
Future income tax recovery (note 7)		(630,749	)		(630,000	)

Net income (loss)		1,461,568			1,373,967
Deficit, beginning of year		(4,944,739	)		(8,878,919	)


Deficit, end of year	$	(3,483,171	)	$	(7,504,952	)


Net income (loss) per share:
Basic	$	0.10		$	0.10
Diluted		0.08			0.10

CHARTWELL TECHNOLOGY INC.
Consolidated Statements of Cash Flows

Three months ended October 31
(stated in Canadian dollars)
(Unaudited)

	2004			2003


Cash provided by (used in):

Operations:
Net income (loss)	$	1,461,568		$	1,373,967
Depreciation and amortization		52,794			67,511
Unrealized foreign exchange losses		282,616			151,614
Amortization of deferred software
development costs		58,829			27,517
Stock-based compensation		102,572			–
Interest income capitalized		(5,145	)		(22,052	)
Issue of shares as finders fee		–			25,000
Future income tax recovery		(630,749	)		(630,000	)
Write-down of long-term securities		–			–
Gain on disposal of Property and Equipment		(9,213	)		–
Contracts acquired on acquisition25,000		–			–

		1,313,272			993,557

Change in non-cash working capital:
Accounts receivable		151,814			(2,161	)
Due from related parties-		–			–
Deferred set-up expense		17,438			(34,609	)
Prepaid expenses		(42,350	)		(35,355	)
Accounts payable and accrued liabilities		553,133			1,964
Deferred revenue		(233,256	)		(4,605	)

		446,779			(74,766	)

		1,760,051			918,791

Financing:
Issue of shares for cash		129,374			127,500
Repayment of lease obligations		(3,779	)		(1,822	)

		125,595			125,678

Investing:
Sale (purchase) of short term investments		(38,705	)		(7,604	)
Purchase of property and equipment		(18,332	)		(14,700	)
Deferred software development costs		--			(530,948	)

		(57,037	)		(553,252	)

Effect of foreign exchange rate changes on cash		(172,381	)		(151,614	)

Increase (decrease) in cash		1,656,228			389,603
Cash, beginning of period		4,339,635			3,125,517

Cash, end of year	$	5,995,863		$	3,465,120

Supplemental cash flow information:
Cash interest received	$	39,264		$	20,502
Cash interest paid		538			(377	)

C h a r t w e l l T e c h n o l o g y I n c .

Chartwell’s Latest Software Offering Provides Exciting New Games, New Features and Added Functionality

Calgary, Canada, January 24, 2005, Chartwell Technology Inc. (TSX:CWH), a leading provider of gaming software systems to the online and remote gaming industry, announces the launch of its latest software, Version 6.3.

Chartwell’s Version 6.3 incorporates a variety of new games and back office functionality needed to complement the continued growth of Chartwell’s customers, which include some of Europe’s most successful gaming companies. The new software provides a greatly expanded back office management system (CyberBoss) that offers new bonus structure capabilities, enhanced security and auditing functionality and marketing features. New look and feel, bonus levels and progressive features have been added to popular games and the addition of Common Wallet functionality allows players to access funds in different environments such as poker, bingo and casino, without having to manually transfer funds between accounts.

“From our client’s perspective, Version 6.3 offers the most flexible platform to grow their businesses through significant enhancements to Cyberboss – our back office toolset,” said Lee Richardson, Chief Executive of Chartwell Games Corp. “And our latest offering, which includes a variety of new 3 and 5 reel slots, with multi-level bonus and progressive play, plus hi/lo-based soft games, lottery-style games and new language support throughout, responds to our client’s demands for fresh, highly-appealing games that Chartwell is renowned for.”

New games in Version 6.3 include:


Slots	•	Oktoberfest 5-reel multi-line payout slot with wild card symbol and bonus feature.
	•	New Space Invasion 3-reel slot with wild card symbol for multiplied payouts.
	•	New Pot O' Gold 3-reel slot with wild card symbol, progressive jackpots and bonus feature.
	•	Cash Grab 3-reel slot with wild card symbol.
Soft Games	•	Card Sharks, combination hi/lo poker hand game with optional progressive.
	•	Mad Matterhorn, hi/lo game with exciting let-it-ride style progressive game levels.

90 Ball Bingo	•	The traditional European Bingo with all of the fun and features of our original 75 Ball Bingo
		with the flexibility to be deployed in a community environment or as a stand-alone product.

Horse Race Lotto	•	An exciting lottery based game with a horse race theme and multiple betting strategies.
Common Draw Roulette	•	Single zero roulette with the added fun and excitement of multiple players betting on a common
		spin at pre-set spin intervals.

Chartwell’s product lines, including multi-player poker, mobile and kiosk-based gaming systems, also benefit from the deployment of Version 6.3. Enhanced back-end functionality allows for smoother integration and ease

of play, allowing

Chartwell’s clients the ability to introduce the latest gaming platforms to their player bases, ensuring that Chartwell’s clients maintain the most up-to-date and innovative gaming systems available.

Chartwell invites you to preview and play our games at www.chartwelltechnology.com

About Chartwell

Chartwell Technology Inc. specializes in the development of leading edge gaming applications and entertainment content for the Internet and wireless platforms and other remote access devices. Chartwell’s Java and Flash based software products and games are designed for deployment in gaming, entertainment, advertising and promotional applications. Chartwell does not participate in the online gaming business of its clients. Chartwell’s team of highly trained professionals is committed to delivering the highest quality software and maintaining its leading edge through continuous development and unparalleled customer support.

For further information, please contact: ~~Chartwell Technology Inc.~~

Don Gleason, ~~Chief~~CFO ~~Financial Officer~~ (877) 261-6619 or (403) 261-6619 dgleason@chartwelltechnology.com David Bajwa, Investor Relations (877) 669-4180 or (604) 669-4180 info@chartwelltechnology.com

The ~~Toronto~~TSX ~~Stock Exchange~~ does not accept responsibility for the adequacy or accuracy of this ~~press~~ release.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products, regulation of the online gaming industry, and other risks detailed from time to time in Chartwell’s filings with ~~the~~ the Securities & Exchange Commission. We assume no responsibility for the accuracy and completeness of these statements and are under no duty to update any of the forward-looking statements contained herein to conform these statements to actual results. This is not an offer to sell or a solicitation of an offer to purchase any securities.

kpmg

~~Revised~~ Consolidated Financial Statements of ~~CHARTWELL TECHNOLOGY INC. As at October 31, 2003 and 2002 and for each of the years in the three-year period ended October 31, 2003~~

CHARTWELL TECHNOLOGY INC.

Years ended October 31, 2004, 2003 and 2002.

AUDITORS’ REPORT TO THE SHAREHOLDERS

We have audited the ~~revised~~ consolidated balance sheets of Chartwell Technology Inc. as at October 31, ~~2003~~2004 and ~~2002~~ 2003 and the ~~revised~~ consolidated statements of operations and deficit and cash flows for each of the years in the three-year period ended October 31, ~~2003~~2004. 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. 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.

In our opinion, these ~~revised~~ consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at October 31, ~~2003~~2004 and ~~2002~~2003 and the results of its operations and its cash flows for each of the years in the three year period ended October 31, ~~2003~~2004 in accordance with Canadian generally accepted accounting principles.

~~Our previous report dated December 5,~~(Signed) ~~2003~~ KPMG ~~has~~LLP ~~been withdrawn and the financial statements have been revised as explained in note 2.~~

Chartered Accountants

Calgary, Canada December 521, ~~2003, except for notes 2, and 5, which are as at October 29,~~ 2004

CHARTWELL TECHNOLOGY INC. Consolidated Balance Sheets As at October 31 (stated in Canadian dollars) ~~(Revised, Note 2)~~

	2003		2002
		2004			2003
Assets
Current assets:
Cash	~~$ 3,465,120~~	$	~~$ 1~~5,~~704~~995,~~267~~863		$	3,465,120
Short term investments (note 9)	1,712,890		3,181,494
Short term investments			3,318,286			1,712,890
Accounts receivable	~~1,991,725~~		1,~~128~~916,~~639~~309			1,991,725
Deferred set-up expense	~~47,452~~		~~162~~58,~~290~~585			47,452
Prepaid expenses	148,699		79,147
Prepaid expenses and deposits			230,632			148,699
Future income tax asset (note 8)	110,000		--
Notes receivable			117,873			--
	7,475,886		6,255,837
Future income tax asset (note 7)			115,000			110,000
Due from related parties (note 7)	190,512		162,565
Total current assets			11,752,548			7,475,886
Capital assets (note 3)	338,969		268,374
Due from related parties (note 6)			178,961			190,512
Deferred software development costs (note 4)	530,948		110,068
Property and equipment (note 2)			431,824			338,969
Deferred set-up expense	162,390		154,993
Goodwill (note 4(c))			811,666			--
Future income tax asset (note 8)	520,000		--
Deferred software development costs (note 3)			607,900			530,948
	$ 9,218,705		$ 6,951,837
Deferred set-up expense			68,186			162,390
Liabilities and Shareholders' Equity
Notes receivable			180,573			--
Current liabilities:
Future income tax asset (note 7)			929,964			520,000
Accounts payable and accrued liabilities	$ 217,012		$ 169,154
		$	14,961,622		$	9,218,705
Current portion of obligations under capital lease	5,956		6,841
Liabilities and Shareholders' Equity
Deferred revenue	707,433		595,878
Current liabilities:
	930,401		771,873
Accounts payable and accrued liabilities		$	708,900		$	217,012
Long-term deferred revenue	980,502		725,244
Current portion of obligations under capital lease			15,640			5,956
Obligations under capital lease	3,031		8,987
Deferred revenue			478,952			707,433
Shareholders' equity:
Total Current liabilities			1,203,492			930,401
Share capital (note 5)	14,809,723		14,632,223
Deferred revenue			615,748			980,502
Deficit	(7,504,952	)	(9,186,490	)
Obligations under capital lease			20,793			3,031
	7,304,771		5,445,733
Shareholders' equity:
Commitments (note 10)
Share capital (note 4)			16,502,188			14,809,723
Subsequent events (notes 2 and 5)
Contributed surplus			102,572			--
	$ 9,218,705		$(9,186,490	)
Deficit			(3,483,171	)		(7,504,952	)
Total Shareholders equity			13,121,589			7,304,771
Commitments (note 9)
Subsequent event (note 12)
		$	14,961,622		$	9,218,705

See accompanying notes to consolidated financial statements.

On behalf of the Board:

Signed "Darold H. Parken" , Director

Signed "Rod A. Ferguson" , Director

CHARTWELL TECHNOLOGY INC. Consolidated Statements of Operations and Deficit Years ended October 31 (stated in Canadian dollars) ~~(Revised, Note 2)~~

	2003		2002		2001
		2004			2003			2002
Revenue:
Software license fees	~~$ 6,300,335~~	$	~~$ 2~~11,~~646~~268,~~766~~494		$ ~~908,876~~	6,300,335		$	2,646,766
Software set-up fees	~~919,892~~		~~896~~798,~~560~~343		~~803,990~~	919,892			896,560
Interest and other	~~109,411~~		~~302~~134,~~031~~640		~~394,782~~	109,411			302,031
	7,329,638		3,845,357		2,107,648
			12,201,477			7,329,638			3,845,357
Expenses:
Expenses
Software development	3,288,164		2,648,223		1,857,580
Software development and support			4,417,981			3,288,164			2,648,223
General and administrative	1,947,372		2,385,652		2,059,697
Sales, general and administrative			3,498,607			1,947,372			2,385,652
Gain from extinguishment of debt (note 7)	--		--		(242,512	)
Amortization of deferred software
Amortization of deferred software
development costs			98,048			110,068			110,076
development costs	110,068		110,076		110,076
Stock-based compensation			102,572			--			--
Depreciation and amortization	~~137,310~~		~~108~~244,~~008~~251		~~121,446~~	137,310			108,008
Foreign currency loss (gain)	~~795,186~~		~~(85~~233,~~795~~201	)	~~6,013~~	795,186			(85,795	)
	6,278,100		5,166,164		3,912,300
			8,594,660			6,278,100			5,166,164
Net income (loss) before income taxes	~~1,051,538~~		(13,~~320~~606,~~807~~817	)	~~(1,804,652~~	)1,051,538			(1,320,807	)
Income taxes:
Future income tax recovery (note 8)	(630,000	)	--		--
Future income tax reduction (note 7)			(414,964	)		(630,000	)		--
Net income (loss)	~~1,681,538~~		(14,~~320~~021,~~807~~781	)	~~(1,804,652~~	)1,681,538			(1,320,807	)
Deficit, beginning of year, as previously
Deficit, beginning of year			(7,504,952	)		(9,186,490	)		(7,865,683	)
reported	(8,091,022	)	(6,659,740	)	(5,823,773	)
Deficit, end of year		$	(3,483,171	)	$	(7,504,952	)	$	(9,186,490	)
Cumulative effect of accounting change (note 2)	(1,095,468	)	(1,205,943	)	(237,258	)
Net income (loss) per share:
Deficit, as revised	(9,186,490	)	(7,865,683	)	(6,061,031	)
Basic		$	0.28		$	0.12		$	(0.10	)
Deficit, end of year	$(7,504,952	)	$(9,186,490	)	$(7,865,683	)
Diluted			0.24			0.12			(0.10	)
Net income (loss) per share:
Basic	$ 0.12		$ (0.10	)	$ (0.14	)
Diluted	0.11		(0.10	)	(0.14	)

See accompanying notes to consolidated financial statements.

CHARTWELL TECHNOLOGY INC. Consolidated Statements of Cash Flows Years ended October 31 (stated in Canadian dollars) ~~(Revised, Note 2)~~

	2003		2002		2001
		2004			2003			2002
Cash provided by (used in):
Operations:
Net income (loss)	~~$ 1,681,538~~	$	~~$(1~~4,~~320~~021,~~807~~781	)	$~~(1,804,652~~	)1,681,538		$	(1,320,807	)
Depreciation and amortization	~~137,310~~		~~108~~244,~~008~~251		~~121,446~~	137,310			108,008
Unrealized foreign exchange losses550,234	--		--
Unrealized foreign exchange losses268,327			550,234			--
Amortization of deferred software
development costs	~~110,068~~		~~110~~98,~~076~~048		~~110,076~~	110,068			110,076
Interest income capitalized	(27,947	)	(11,570	)	--
Stock-based compensation			102,572			--			--
Issue of shares as finders fee	25,000		--		--
Interest income capitalized			(11,413	)		(27,947	)		(11,570	)
Future income tax recovery	(630,000	)	--		--
Issue of shares as finders fee			--			25,000			--
Write-down of long-term securities	--		42,882		--
Future income tax reduction			(414,964	)		(630,000	)		--
Loss on disposal of capital assets-	24,258		--
Write-down of long-term securities			--			--			42,882
Gain from extinguishment of debt	--		--		242,512
Gain on disposal of Property and Equipment			(9,213	)		--			24,258
Change in non-cash working capital:
Contracts acquired on acquisition25,000			--			--
Accounts receivable	(863,086	)	(79,598	)	(1,056,283	)
			4,324,389			1,846,203			(1,047,153	)
Deferred set-up expense	107,440		(94,741	)	(106,021	)
Change in non-cash working capital:
Prepaid expenses	(69,552	)	720		(7,899	)
Accounts receivable			(34,819	)		(863,086	)		(79,598	)
Accounts payable and accrued liabilities	47,858		109,257		(968,157	)
Due from related parties			20,000			--			--
Deferred revenue	366,813		(107,363	)	774,917
Deferred set-up expense			83,071			107,441			(94,741	)
	(410,526	)	(171,725	)	(1,363,443	)
Prepaid expenses			(100,904	)		(69,552	)		720
	1,435,677		(1,218,878	)	(2,694,061	)
Accounts payable and accrued liabilities			491,888			47,858			109,257
Financing:
Deferred revenue			(593,235	)		366,813			(107,363	)
Issue of shares	152,500		121,088		92,500
			(133,999	)		(410,526	)		(171,725	)
Repayment of lease obligations	(6,841	)	(10,286	)	(3,735	)
			4,190,390			1,435,677			(1,218,878	)
	145,659		110,802		88,765
Financing:
Investing:
Issue of shares for cash			855,799			152,500			121,088
Sale (purchase) of short term investments	1,468,604		168,513		(3,350,007	)
Repayment of lease obligations			27,446			(6,841	)		(10,286	)
Purchase of capital assets	(207,905	)	(97,248	)	(97,093	)
			883,245			145,659			110,802
Deferred software development costs	(530,948	)	--		--
Investing:
	729,751		71,265		(3,447,100	)
Sale (purchase) of short term investments			(1,605,396	)		1,468,604			168,513
Effect of foreign exchange rate changes on cash	(550,234	)	--		--
Purchase of property and equipment(604,404)			(207,905	)		(97,248	)
Increase (decrease) in cash	1,760,853		(1,036,811	)	(6,052,396	)
Deferred software development costs			(175,000	)		(530,948	)		--
Cash, beginning of year	1,704,267		2,741,078		8,793,474
			(2,384,800	)		729,751			71,265
Cash, end of year	$ 3,465,120		$ 1,704,267		$ 2,741,078
Effect of foreign exchange rate changes on cash			(158,092	)		(550,234	)		--
Supplemental cash flow information:
Increase (decrease) in cash			2,530,743			1,760,853			(1,036,811	)
Cash interest received	$ 101,464		$ 290,462		$ 393,709
Cash, beginning of year			3,465,120			1,704,267			2,741,078
Cash interest paid	(1,955	)	(2,201	)	(3,409	)
Cash, end of year		$	5,995,863		$	3,465,120		$	1,704,267
Supplemental cash flow information:
Interest received		$	123,228		$	101,464		$	290,462
Interest paid			(2,048	)		(1,955	)		(2,201	)

See accompanying notes to consolidated financial statements.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

Chartwell Technology Inc. (the “Company”) is incorporated under the Business Corporations Act (Alberta). The Company specializes in the development of ~~leading edge~~ games and entertainment content for Internet and Intranet deployment. The Company’s software products and games are designed for use in gaming, entertainment, advertising and promotional applications.

Significant accounting policies:

(a)

Basis of presentation:

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Gateway Technology Inc. (“GTI”), a United States company, and Chartwell Games Corp. (“CGC”) (formerly Gaming Tech Corporation), a Belize company. GTI is a US incorporated company, which was acquired on November 1, 1998, and CGC was incorporated in Belize and commenced operations November 1, 1999. The accounting policies of the Company are in accordance with generally accepted accounting principles in Canada and Canadian dollars is the functional currency. Except for the information disclosed in note 11 there are no material differences between Canadian and United States generally accepted accounting principles in these consolidated financial statements.

(b) ~~Capital~~Property ~~assets~~and equipment:

~~Capital~~Property ~~assets~~and equipment are recorded at cost and amortization is provided for on a declining balance basis using the following rates:



Capital assets under lease	30	%
Computer equipment	30	%
Furniture and equipment	20	%

(c)

Deferred software development costs:

Research costs are expensed as incurred. Costs related to the development of software are expensed as incurred unless such costs meet the criteria for deferral and amortization under Canadian generally accepted accounting principles. The criteria include identifiable costs attributable to a clearly defined product, the establishment of technical feasibility, identification of a market for the software, the Company’s intent to market the software, and the existence of adequate resources to complete the project. In the year ended October 31, ~~2003~~2004, the Company ~~has~~ deferred $~~530~~175,~~948~~000 of software development costs which will be amortized over an estimated useful life of three years, commencing in the year when commercial sales of the products commence. ~~In addition, the deferred purchase cost of previously acquired software has been fully amortized over its expected useful life of five years.~~ Capitalized software development is evaluated in each reporting period to determine whether it continues to meet the criteria for continued deferral and amortization.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 2~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

Significant accounting policies (continued):

(d)

Foreign currency translation:

Accounts of foreign operations, all of which are considered financially and operationally integrated, are translated to Canadian dollars using average exchange rates for the year for revenue and expenses. Monetary assets and liabilities are translated at the year-end current exchange rate and non-monetary assets and liabilities are translated using historical rates of exchange. Gains or losses resulting from these translation adjustments are included in net income.

Transactions in foreign currencies are translated at rates in effect at the time of the transaction. Monetary assets and liabilities are translated at current rates. Gains and losses are included in income.

(e)

Revenue recognition:

The Company enters into contractual agreements with licensees that provide for the provision of graphics, web design and software implementation services, the licensing of software, and the provision of unspecified software upgrades over the fixed term of the contract. Revenue under such contractual arrangements is not recognized before there exists persuasive evidence that an arrangement exists, delivery has occurred, the fee is fixed and determinable, and the collectibility of outstanding amounts is considered probable. The Company considers persuasive evidence to exist when a formal contract or purchase order is ~~finalized~~signed. Delivery occurs over the term of the arrangement as described further below. The Company considers a fee to be fixed and determinable when it is for a measurable amount and receivable over a period not to exceed twelve months. Finally, the Company assesses collectibility relative to customer payment histories, credit checks, the nature of the customer and other relevant information. As the Company’s contractual arrangements provide for the delivery of multiple elements, the Company evaluates whether vendor–specific objective evidence (“VSOE”) exists to allow for the allocation of the arrangement fee between the undelivered elements and the delivered elements for revenue recognition purposes. To date, as the period provided for in contractual arrangements for the provision of unspecified upgrades is consistent with the license period, the Company has not been able to identify VSOE and allocate revenue between delivered and undelivered elements. Accordingly, set-up fees are recognized ratably over the term of the contract, commencing upon completed delivery of the implementation and integration services. License fees, which are contingent upon customer usage, are recognized on an accrual basis as earned over the life of the contract.

Direct and incremental costs incurred ~~during~~with respect to the set-up contractual arrangements, have been deferred as deferred set-up expense and are recognized ratably over the term of the contract consistent with that for the related revenue recognition.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 3~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

Significant accounting policies (continued):

(f)

Per share amounts:

Basic per share amounts are calculated using the weighted average number of shares outstanding during the year. Diluted per share amounts are calculated based on the treasury stock method, which assumes that any proceeds obtained on exercise of options would be used to purchase common shares at the average market price during the period. The weighted average number of shares outstanding is then adjusted by the net change.

(g)

Income taxes:

The Company follows the liability method of accounting for income taxes, whereby future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using substantively enacted tax rates expected to apply when the asset is realized or the liability settled. A valuation allowance is recorded against future income tax assets if it is more likely than not that all or a portion of the assets will not be realized.

(h) Stock-based compensation ~~plan~~:

Effective November 1, 2002, the Company adopted the Canadian standards for accounting for stock-based compensation and other stock-based payments. The new recommendations require equity instruments awarded to employees and non-employees and the cost of the service received as consideration to be measured and recognized based on the fair value of the equity instruments issued. Compensation expense is recognized over the period of related employee service, usually the vesting period of the equity instrument awarded. In addition, the new standards require that equity instruments issued to non-employees be recorded at their fair value at the date ofthey ~~issue~~are earned. The new recommendations permit the measurement of compensation expense for stock options granted to employees and directors that are not direct awards of stock, stock appreciation rights or otherwise call for settlement in cash or other assets by an alternative method and to provide pro forma disclosure of the financial results using the fair value method.

The Company has elected to follow an alternative method of accounting for stock options awarded to employees and recognize no compensation expense when stock options are granted. On November 1, 2004, as a result of a change in accounting standards, the Company is no longer able to follow this alternate method and must recognize the fair value of options issued to employees as an expense over the period of the related employee service. The Company has elected to adopt this new policy retroactively without restatement of prior periods. As a result, $430,563, representing the estimated value of stock options issued to employees in 2003 and 2004, will be charged to deficit and credited to contributed surplus on November 1, 2004.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 4~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

Significant accounting policies (continued):

(i)

Use of estimates:

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Areas of significant estimate include the recoverability of deferred software development costs, amortization periods for ~~capital~~property ~~assets~~and equipment, provision for doubtful accounts, ~~and~~the realization of future tax assets, deferred set-up fee ~~expense~~expenses, and stock-based compensation. Actual results could differ from management’s best estimates and underlying assumptions as additional information becomes available in the future.

(j) ~~Comparative figures~~Goodwill:

Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the assets acquired, less liabilities assumed, based on their fair values. Goodwill is allocated as of the date of the business combination to the Company’s reporting units that are expected to benefit from the synergies of the business combination. Goodwill is not amortized and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is carried out when the carrying value amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. The implied fair value is determined in the same manner as the value of goodwill is determined in a business combination described in the preceding paragraph, using the fair value of the reporting unit as if it was the purchase price. When the carrying amount of reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the statement of operations before extraordinary items and discontinued operations.

(k)

Comparative figures:

Certain comparative figures have been reclassified to conform with the current year financial statement presentation.

(kl) Cash and ~~cash~~short ~~equivalents~~term investments:

Cash ~~and~~consists ~~cash equivalents consist~~ of bank deposits. ~~and short~~Short-term investments ~~with~~consist of maturities of three months or less. ~~Short-term~~and ~~investments~~ are recorded at cost which does not differ materially from fair value.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 5~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

2. ~~Amendment~~Property toand ~~accounting policy~~equipment:

Subsequent to completion and issuance by the Company of its October 31, 2003 consolidated financial statements, the Company, after consultation with its auditors, concluded that it was appropriate to revise its accounting policy for set-up fee revenue and related direct and incremental costs, to the method described in note 1(e). Previously, such fees were recognized when the implementation services were completed and customer acceptance occurred. The revised accounting policy, as described in note 1(e), is consistent with SOP 97-2, “Software Revenue Recognition”, applied under U.S. generally accepted accounting principles (note 12). This accounting change has been adopted retroactively, resulting in the following changes to amounts previously reported for Canadian generally accepted accounting principles purposes for the years ended October 31, 2003, 2002 and 2001:

2004	Cost		Accumulated amortization		Net book value


Property and equipment under lease	$	90,152	$	52,279	$	37,873
Computer equipment		732,740		514,523		218,217
Furniture and equipment		264,627		88,893		175,734

	$	1,087,519	$	655,695	$	431,824

2003	~~As previously reported~~	Cost	~~As revised~~		~~Change~~Accumulated amortization		Net book value
Software set-up fees revenue	$ 943,395		$ 919,892		$ (23,503	)
Property and equipment under		$	47,005		$	36,047	$	10,958
Software development expenses	3,272,353		3,288,164		15,811
Computer equipment			730,773			447,361		283,412
Income tax recovery	520,000		630,000		110,000
Furniture and equipment			89,558			44,959		44,599
Net income	1,610,852		1,681,538		70,686
		$	867,336		$	528,367	$	338,969
Net income per share - basic	0.11		0.12		0.01
Future income taxes	520,000		630,000		110,000
Deferred set-up expense	--		209,842		209,842
Deferred revenue	343,311		1,687,935		1,344,624
Deficit	(6,480,170	)	(7,504,952	)	(1,024,782	)

2002
Software set-up fees revenue	$ 789,197		$ 896,560		$ 107,363
Software development expenses	2,651,335		2,648,223		(3,112	)
Net loss	(1,431,282	)	(1,320,807	)	110,475
Net loss per share - basic	(0.11	)	(0.10	)	0.01
Deferred set-up expense	91,629		317,283		225,654
Deferred revenue	--		1,321,122		1,321,122
Deficit	(8,091,022	)	(9,186,490	)	(1,095,468	)

Deferred software development costs:

2001
		2004			2003
Software set-up fees revenue	$ 1,928,696		$ 803,990		$(1,124,706	)
Software development costs		$	1,230,097		$	1,055,097
Software development expenses	2,013,601		1,857,580		(156,021	)
Less: accumulated amortization			(622,197	)		(524,149	)
Net loss	(835,967	)	(1,804,652	)	(968,685	)
Net book value		$	607,900		$	530,948
Net loss per share - basic	(0.06	)	(0.14	)	(0.08	)
Deferred set-up expense	--		222,542		222,542
Deferred revenue	--		1,428,485		1,428,485
Deficit	(6,659,740	)	(7,865,683	)	(1,205,943	)

~~Other~~ CHARTWELL ~~impacted~~TECHNOLOGY ~~amounts~~INC. Notes ~~presented~~to ~~throughout~~Consolidated Financial ~~these~~Statements Years ~~revised~~ended ~~consolidated~~October ~~financial~~31, ~~statements~~2004, ~~have~~2003 ~~been~~and ~~amended~~2002 (stated asin ~~appropriate.~~Canadian dollars)

~~CHARTWELL TECHNOLOGY INC~~4. ~~Notes~~ toShare ~~Consolidated Financial Statements, Page 6 Years ended October 31, 2003, 2002 and 2001 (stated in Canadian dollars) (Revised, Note 2)~~ capital:

3.(a) ~~Capital assets~~Authorized:

2003	Cost	Accumulated amortization	Net book value
Capital assets under lease	$ 47,005	$ 36,047	$ 10,958
Computer equipment	730,773	447,361	283,412
Furniture and equipment	89,558	44,959	44,599
	$867,336	$528,367	$338,969

100,000,000 common shares without par value

2002
Capital assets under lease	$ 47,005	$ 31,350	$ 15,655
Computer equipment	535,356	325,898	209,458
Furniture and equipment	77,070	33,809	43,261
	$659,431	$391,057	$268,374

(b)

Issued:

4. Deferred software development costs:

			Amount


Balance, October 31, 2001	15,628,501		$	14,511,135
Issued for cash on exercise of stock options	189,200			121,088

Balance, October 31, 2002	15,817,701			14,632,223
Issued for cash on exercise of stock options	145,000			152,500
Issued as finders fee	25,000			25,000

Balance, October 31, 2003	15,987,701			14,809,723
Issued for cash on exercise of stock options	701,932			855,799
Release of shares from escrow	--			836,666
Shares cancelled from escrow and returned to treasury	(666,667	)		--

Balance, October 31, 2004	16,022,966		$	16,502,188

	2003		2002
Software development costs	$ 1,055,097		$ 524,149
Less: accumulated amortization	(524,149	)	(414,081	)
Net book value	$ 530,948		$ 110,068

CHARTWELL TECHNOLOGY INC.
Notes to Consolidated Financial Statements

Years ended October 31, 2004, 2003 and 2002
(stated in Canadian dollars)

~~CHARTWELL TECHNOLOGY INC~~4. ~~Notes~~ toShare ~~Consolidated~~capital ~~Financial Statements, Page 7 Years ended October 31, 2003, 2002 and 2001~~ (~~stated in Canadian dollars~~continued) ~~(Revised, Note 2)~~ :

5.(c) ~~Share~~Release ~~capital~~of escrowed shares and goodwill:

On November 1, 1998, the Company acquired all of the issued and outstanding shares of Gateway Technology Inc. (a“GTI”) ~~Authorized:~~for consideration of 1,000,000 common shares. Under the terms of the Purchase Agreement, the shares were placed in escrow and were releasable from time to time as one escrowed share for each $1.00 of cash flow generated by GTI subsequent to its acquisition by the Company. Shares remaining in escrow at October 31, 2003 were to be returned to the Company and cancelled. The escrowed shares were considered contingent consideration and valued at $nil in the financial statements at November 1, 1998.

~~100~~At October 31,~~000~~ 2003 application was made to the TSX Venture Exchange for the release of 333,~~000~~333 ~~common~~shares in accordance with the terms of the escrow agreement. On February 12, 2004 the Exchange provided approval for the release of the shares ~~without~~and ~~par~~on April 27, 2004 the shares were released from escrow. The release of the shares have been accounted for as an additional cost of the purchase of GTI, equal to the fair value of the shares on February 12, 2004 of $836,666. The remaining 666,667 shares were cancelled and returned to treasury.

~~(b)~~The ~~Issued:~~additional consideration of $836,666 has been assigned to license contracts acquired, in the amount of $25,000 and the remaining $811,666 to goodwill. The contracts expired in 2001 and the assigned consideration of $25,000 was written off as a current period expense.

	Number of shares	Amount
Balance, October 31, 2000	15,550,501	$14,418,635
Issued for cash on exercise of stock options	20,000	20,000
Issued for cash on exercise of Warrants	58,000	72,500
Balance, October 31, 2001	15,628,501	14,511,135
Issued for cash on exercise of stock options	189,200	121,088
Balance, October 31, 2002	15,817,701	14,632,223
Issued for cash on exercise of stock options	145,000	152,500
Issued as finders fee	25,000	25,000
Balance, October 31, 2003	15,987,701	$14,809,723

On August 18, 2004 application was made to the Alberta Securities Commission for the release of 955,400 shares held in escrow on behalf of the principles of the Company and others, subject to the direction and determination of the regulatory authorities in the Province of Alberta. On October 5, 2004 consent was given by the Alberta Securities Commission to the release of all shares held pursuant to that agreement

375,000 shares ~~are~~remain ~~held~~ in escrow on behalf of the principals of the Company and are subject to the direction and determination of the securities regulatory authorities in the Province of British Columbia.

~~955,400~~(d) ~~shares~~Stock ~~are~~option ~~held in escrow on behalf of the principals of the Company and others, and subject to the direction and determination of the regulatory authorities in the Province of Alberta.~~plan:

~~Pursuant~~The ~~to the~~ Company’s ~~acquisition~~has ofa ~~all~~stock ofoption ~~the~~plan ~~issued~~for ~~shares~~its ~~of GTI~~directors, 1officers,~~000,000~~ ~~shares~~employees ~~were held in escrow~~ and ~~were~~key ~~realizable~~consultants ~~from~~whereby ~~time~~an toamount ~~time as one escrowed share for each $1.00~~ of ~~cash~~options ~~flow generated by GTI subsequent~~ to ~~its~~acquire ~~acquisition~~a bymaximum ~~the~~of ~~Company. Shares remaining in escrow at November 1~~3,264,000 ~~2003~~shares ~~were~~may to be ~~returned~~granted subject to ~~the~~certain ~~Company~~terms and ~~cancelled~~conditions. OnStock ~~October~~option ~~31,~~vesting ~~2003,~~privileges anare ~~application~~at ~~was made to~~ the ~~TSX~~discretion ~~Venture Exchange for release~~ of ~~333,333 shares, in accordance with~~ the ~~terms of the escrow agreement~~Board. OnThe ~~April~~exercise ~~27,~~price ~~2004~~for ~~those~~stock ~~shares~~options ~~were~~granted ~~released~~is ~~from~~no ~~escrow.~~less ~~The~~than ~~remaining~~the ~~666,667~~quoted ~~shares~~market ~~were~~price ~~returned to the Company~~ on ~~May~~grant ~~6, 2004 and cancelled~~date.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 8~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

54. Share capital (continued):

(ce) ~~Stock~~Continuity of options issued under the plan:

~~The~~A ~~Company~~summary ~~has~~of athe ~~stock~~status ~~option~~of the plan ~~for~~as ~~its~~of ~~directors~~October 31, ~~officers~~2004, ~~employees~~2003 and ~~key~~2002 ~~consultants whereby an amount of options to a maximum of 3,110,100 shares may be granted subject to certain terms~~ and ~~conditions. Stock option vesting privileges are at~~ the ~~discretion~~changes ofduring the ~~Board.~~years ~~The exercise price for stock options granted~~ is nopresented ~~less than the quoted market price on grant date. Changes in the number of options, with their weighted average exercise prices, are summarized~~ below:

	October 31, 2003				October 31, 2002				October 31, 2001
		October 31, 2004						October 31, 2003					October 31, 2002
	~~Shares~~	Shares	~~Weighted average exercise price~~		~~Shares~~Weighted average exercise price		~~Weighted average exercise price~~	Shares	~~Shares~~		Weighted average exercise price		Shares			Weighted average exercise price
Outstanding, beginning
of year	~~2,388,866~~		~~$1.21~~2,616,100		~~2,011,566~~$	1.19	~~$1.15~~		12,~~777~~388,~~532~~866		$~~1.02~~	1.21		2,011,566		$	1.15
Granted	~~503,900~~		~~1.08~~600,000		~~426,400~~$	2.45	~~1.54~~		~~579~~503,~~100~~900		~~1.35~~	1.08		426,400			1.54
Exercised	~~(145,000~~	)	~~1.05~~(701,932	)	—$	1.22	—		(~~209~~145,~~200~~000	)	~~0.67~~	1.05		--			--
Forfeited	~~(131,666~~	)	~~1.38~~(158,334	)	~~(49,100~~$	)1.31	~~1.80~~		(~~135~~131,~~866~~666	)	~~1,03~~	1.38		(49,100	)		1.80
Outstanding, end of
year	~~2,616,100~~		~~$1.19~~2,355,834		~~2,388,866~~$	1.49	~~$1.21~~		2,~~011~~616,~~566~~100		$~~1.15~~	1.19		2,388,866		$	1.21

On(f) ~~June~~Summary 5,of ~~2001,~~ the ~~Company~~balances ~~re-priced~~of ~~certain employee stock~~ options ~~with~~issued ~~original~~under ~~exercise~~the ~~prices ranging from $1.77 to $4.20, to new exercise prices ranging from $1.06 to $1.17.~~plan:

The following table summarizes information about the stock options outstanding at October 31, 2003:

	Options Outstanding						Options Exercisable


Range of exercise prices	Number		Weighted average reamining contractual life (years)		Weighted average exercise price		Number		Weighted average exercise price

$ 1.00-1.50		1,530,067		1.7	$	1.06		1,230,975	$	1.07
1.51-2.00		250,767		2.2		1.72		173,596		1.77
2.01-2.50		175,000		3.6		2.35		50,000		2.09
2.51-3.00		400,000		4.3		2.63		37,500		2.58

$ 1.00-3.00		2,355,834		2.3	$	1.49		1,492,071	$	1.22

	Options Outstanding			Options Exercisable
Range of exercise prices	Number	Weighted average reamining contractual life (years)	Weighted average exercise price	Number	Weighted average exercise price
$ 1.00-1.50	2,123,600	2.3	$1.07	2,073,163	$1.08
1.51-2.00	442,500	2.9	1.67	181,597	1.65
2.01-2.09	50,000	2.8	2.09	50,000	2.09
$ 1.00-2.09	2,616,100	2.4	$1.19	2,304,760	$1.15

The weighted average grant date fair value of stock options granted during 2004 was $1.55.

~~The~~ CHARTWELL ~~weighted~~TECHNOLOGY ~~average~~INC. Notes ~~grant~~to ~~date~~Consolidated Financial ~~fair~~Statements Years ~~value~~ended ofOctober ~~stock~~31, ~~options~~2004, ~~granted~~2003 ~~during~~and ~~the~~2002 (stated ~~year~~in ~~was~~Canadian ~~$0.78.~~dollars)

~~CHARTWELL TECHNOLOGY INC~~4. ~~Notes~~ toShare ~~Consolidated~~capital ~~Financial Statements, Page 9 Years ended October 31, 2003, 2002 and 2001~~ (~~stated in Canadian dollars~~continued) ~~(Revised, Note 2)~~ :

5.(g) ~~Share~~Per ~~capital~~share ~~(continued)~~amounts:

The weighted average number of shares outstanding for the year was 14,249,151 (d2003 –13,504,890; 2002 – 13,485,109). ~~Per~~Diluted shares of 16,709,931 for 2004 reflect the dilutive effect of the exercise of the options outstanding. Diluted loss per share ~~amounts:~~was not disclosed separately in 2002 as the exercise of options outstanding would have had an anti-dilutive effect on net loss per share. Contingently returnable and issuable shares held in escrow have been excluded from the calculations.

~~The weighted average number of shares outstanding for the year was 13,504,890 (2002 – 13,485,109; 2001 – 13,286,063)~~5. Diluted shares of 13,749,013 for 2003 reflect the dilutive effect of the exercise of the options outstanding. Diluted loss per share was not disclosed separately in 2002 and 2001 as the exercise of options outstanding would have had an antiStock-~~dilutive~~based ~~effect on net loss per share. Contingently returnable and issuable shares held in escrow have been excluded from the calculations.~~compensation:

6.The ~~Stock~~Company has calculated the fair value of stock options granted in 2004 to employees, directors, and officers using the Black Scholes option pricing model, assuming a dividend yield of 0%, a risk-~~based~~free interest rate of 4%, weighted average expected volatility of 67%, and an expected option life of 5 years. Had compensation expense been determined based on the fair value of the 2004 employee stock option awards at the grant dates, the Company’s net income and loss per share for 2004 would have been changed to the following pro forma amounts:

The Company has calculated the fair value of stock options granted in 2003 to employees, directors, and officers using the Black Scholes option pricing model, assuming a dividend yield of 0%, a risk-free interest rate of 4%, volatility of 99%, and an expected option life of 5 years. Had compensation expense been determined based on the fair value of the 2003 employee stock option awards at the grant dates, the Company’s net income and loss per share for 2003 would have been changed to the following pro forma amounts:

2004	As reported		Pro forma


Net income	$	4,021,781	$	3,671,031

Net income per share:
Basic	$	0.28	$	0.26
Diluted	$	0.24	$	0.22

	As reported		Pro forma
2003		As reported		Pro forma
Net income	~~$ 1,571,538~~	$	$ 1,~~495~~681,~~009~~538	$	1,601,725
Net income per share:
Basic	~~$ 0.12~~	$	$ 0.1112	$	0.12
Diluted	~~$ 0.11~~	$	$ 0.1112	$	0.12

7Of the 600,000 stock options granted in 2004, 125,000 were issued to consultants. ~~Related~~The ~~party~~estimated ~~transactions:~~fair value of those options of $102,572 has been charged to operations.

~~For~~ CHARTWELL ~~the~~TECHNOLOGY ~~year~~INC. Notes to Consolidated Financial Statements Years ended October 31, ~~2003~~2004, ~~the~~2003 ~~Company incurred legal fees of $60,000 (2002 — $60,000; 2001 — $60,000)~~ and ~~consulting fees of $165,000 (~~2002 (stated —in ~~$165,000;~~Canadian ~~2001 — $162,000~~dollars) ~~to various directors of the Company in the normal course of business. These transactions were measured at the exchange amount and recorded in general and administrative expenses.~~

~~Amounts due from related parties of $190,512 consist of amounts due from Company officers, directors and employees~~6. OfRelated ~~these~~party amounts, $49,907 is non-interest bearing, unsecured and with no set terms of repayment. The remaining $140,605 bears 6% interest, is secured by 189,200 common shares of the Company and has no set terms of repayment.transactions:

InFor ~~2001~~the year ended October 31, 2004, the Company ~~determined~~incurred ~~that~~legal fees of $~~242~~60,~~512~~000 of(2003 ~~liabilities~~— $60,000; ~~which~~2002 ~~were~~— ~~recognized~~$60,000) ~~upon~~and ~~the~~consulting ~~acquisition~~fees of ~~the~~$165,000 ~~issued~~(2003 ~~and~~— ~~outstanding~~$165,000; ~~shares~~2002 of— ~~GTI~~$162,000) ~~were~~to nocertain ~~longer~~directors ~~payable,~~of ~~and~~the ~~therefore~~Company ~~these~~in ~~amounts~~the ~~have~~normal ~~been~~course ~~recognized~~of asbusiness. ~~income~~These intransactions were measured at the ~~2001~~exchange ~~year~~amount and recorded in general and administrative expenses.

~~CHARTWELL~~Amounts ~~TECHNOLOGY~~due ~~INC. Notes~~from torelated ~~Consolidated~~parties ~~Financial~~of ~~Statements~~$178,961 ~~Page~~(2003 10— ~~Years~~$190,512) ~~ended~~consist ~~October~~of 31amounts due from certain Company officers, ~~2003~~directors and employees. Of these amounts, ~~2002~~$29,907 is non-interest bearing, unsecured and ~~2001~~with ~~(stated~~no inset ~~Canadian~~terms ~~dollars)~~of ~~(Revised~~repayment. The remaining $149,054 ~~Note~~bears 2) 6% interest, is secured by 189,200 common shares of the Company and has no set terms of repayment.

8 CHARTWELL TECHNOLOGY INC. Notes ~~Income~~to ~~taxes:~~Consolidated Financial Statements Years ended October 31, 2004, 2003 and 2002 (stated in Canadian dollars)

~~Income tax recovery differs from the amount that would be computed by applying the basic combined Canadian federal and provincial statutory income tax rate to the net loss for the year~~7. ~~The~~Income ~~reasons for the differences are as follows~~taxes:

	2003		2002		2001
Net income (loss) before income taxes	$ 1,051,538		$(1,320,807	)	$(1,804,652	)
Combined Canadian federal and provincial
statutory rate	37.2	%	39.7	%	42.6	%
Computed provision (recovery)	$ 391,173		$ (524,360	)	$ (768,782	)
Non-tax-based amortization	40,945		43,653		44,605
Difference in foreign tax rates	(2,349,334	)	(998,724	)	(304,990	)
Foreign accrual property income	2,358,077		1,034,320		741,800
(Realization) benefit of future tax assets
not recognized	(451,767	)	436,825		276,813
Non deductible expenses	10,906		8,287		10,554
Reduction of valuation allowance	(630,000	)	--		--
Actual recovery	$ (630,000	)	$ --		$ --

Income tax recovery differs from the amount that would be computed by applying the basic combined Canadian federal and provincial statutory income tax rate to the net income (loss) for the year. The reasons for the differences are as follows:

The adjustment in respect of differences in foreign tax rates includes amounts arising from the differences in taxable income in the various jurisdictions in which the Company operates.

	2004			2003			2002


Net income (loss) before income taxes	$	3,606,817		$	1,051,538		$	(1,320,807	)

Combined Canadian federal and provincial
statutory rate		34.4	%		37.2	%		39.7	%
Computed provision (recovery)	$	1,240,746		$	391,173		$	(524,360	)
Non-tax-based amortization		—			40,945			43,653
Difference in foreign tax rates, net of
foreign property accrual income		(218,301	)		8,743			35,596
(Realization) benefit of future tax assets
not recognized		(444,602	)		(451,767	)		436,825
Stock-based compensation		35,284			—			—
Non deductible expenses		16,873			10,906			8,287
Reduction of valuation allowance		(1,044,964	)		(630,000	)		—

Actual recovery	$	(414,964	)	$	(630,000	)	$	—

The ~~components~~adjustment ofin ~~the~~respect ~~Company’s~~of ~~net~~differences ~~future~~in ~~income~~foreign tax ~~asset~~rates atincludes ~~October~~amounts ~~31,~~arising ~~2003~~from ~~and~~the ~~2002~~differences ~~are~~in astaxable ~~follows:~~income in the various jurisdictions in which the Company operates.

2003	Canada		United States	Total;
Non-capital/net operating losses	$ 64,930		$ 20,995	$ 85,925
Capital assets	81,337		--	81,337
Share issue costs	57,140		--	57,140
Resource deductions	78,039		--	78,039
Deferred development costs	1,284,846		--	1,284,846
Deferred revenue	465,508		--	465,508
Deferred set-up expense	(72,647	)	--	(72,647	)
	1,959,153		20,995	1,980,148
Less: valuation allowance	1,329,153		20,995	1,350,148
	$ 630,000		$ --	$ 630,000

The components of the Company’s net future income tax asset at October 31, 2004 and 2003 are as follows:

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements, Page 11 Years ended October 31, 2003, 2002 and 2001 (stated in Canadian dollars) (Revised, Note 2)

2004	Canada			United States			Total


Non-capital/net operating losses	$	—		$	19,393		$	19,393
Property and equipment		114,097			—			114,097
Share issue costs		297			—			297
Resource deductions		75,785			—			75,785
Deferred development costs		658,860			—			658,860
Deferred revenue		238,545			—			238,545
Deferred set-up expense		(42,620	)		—			(42,620	)

		1,044,964			19,393			1,064,357
Less: valuation allowance		—			(19,393	)		(19,393	)

	$	1,044,964		$	—		$	1,044,964

8 CHARTWELL TECHNOLOGY INC. ~~Income~~ Notes ~~taxes~~to Consolidated Financial Statements Years ended October 31, 2004, 2003 and 2002 (~~continued~~stated in Canadian dollars):

2002	Canada		United States	Total
Non-capital/net operating l	$ 1,200,628		$ 24,823	$ 1,225,451
Capital assets	116,966		--	116,966
Share issue costs	120,340		--	120,340
Resource deductions	87,963		--	87,963
Deferred development costs	449,460		--	449,460
Deferred revenue	463,978		--	463,978
Deferred set-up expense	(111,430	)	--	(111,430	)
	2,327,905		24,823	2,352,728
Less: valuation allowance	2,327,905		24,823	2,352,728

Income taxes (continued):

At October 31, 2003, the Company has non-capital loss carry-forwards for Canadian income tax purposes of approximately $187,550 (2002 – $1,377,491) available for deduction against future years’ taxable income. These losses expire in 2008. The Company also has $3,700,719 of unused deferred development costs which may be carried forward indefinitely.

2003	Canada			United States			Total


Non-capital/net operating losses	$	64,930		$	20,995		$	85,925
Property and equipment		81,337			—			81,337
Share issue costs		57,140			—			57,140
Resource deductions		78,039			—			78,039
Deferred development costs		1,284,846			—			1,284,846
Deferred revenue		465,508			—			465,508
Deferred set-up expense		(72,647	)		—			(72,647	)

		1,959,153			20,995			1,980,148
Less: valuation allowance		(1,329,153	)		(20,995	)		(1,350,148	)

	$	630,000		$	—		$	630,000

At October 31, 2004, the Company has non-capital loss carry-forwards for Canadian income tax purposes of $nil (2003 – $187,550) available for deduction against future years’ taxable income. In addition, the Company has net operating losses carry-forward for United States income tax purposes of approximately $6157,~~750~~038 (~~2002~~2003 – $7361,~~008~~750) available for deduction against future year’s taxable income. These losses expire between 2018 and 2019.

98. Financial instruments:

The Company’s financial instruments consist of cash, short term investments, accounts receivable, amounts due from related parties, accounts payable and accrued liabilities and capital lease obligations. The fair value of these financial instruments approximate their carrying values. It is management’s opinion that the Company is not exposed to significant interest and or credit risk. The Company’s credit risk lies in its accounts receivable where the balance is due from a small number of customers. The Company’s short term investments consist of investments in low risk, fixed interest, corporate and government bonds. A substantial portion of the Company’s revenue is exposed to currency fluctuations.

CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements~~, Page 12~~ Years ended October 31, ~~2003~~2004, ~~2002~~2003 and ~~2001~~ 2002 (stated in Canadian dollars) ~~(Revised, Note 2)~~

109. Commitments:

~~Operating leases~~Leases:

Future minimum annual payments under operating and capital leases are as follows:

2004		$338,326
2005		$394,216
2005		385,977
2006		$406,878
2006		282,782
2007		$323,593
2007		283,480
2008		$316,520
2008		283,620
2009		$299,840
Thereafter		25$ 24,~~203~~708

1110. Segmented information:

The Company has aggregated its Canadian and Belize operating segments into one reporting segment as management has determined that the nature of the operations in each segment meets the aggregation criteria specified by ~~the~~Canadian ~~CICA~~accounting standards. The Company’s software set-up and license fees are from domestic and foreign entities and originate from the following countries of operation:

The Company’s software set-up and license fees are from domestic and foreign entities and originate from the following countries of operation:

2004	Canada		Belize		Total


Software set-up fees	$	--	$	798,343	$	798,343
Software license fees	$	204,154	$	11,064,340	$	11,268,494
Total assets	$	7,186,451	$	7,775,171	$	14,961,622

2003	~~Canada~~	Canada	~~Belize~~	~~Total~~Belize		Total
Software set-up fees	~~$ --~~	$	~~$ 919,892~~--	$ ~~919,892~~	919,892	$	919,892
Software license fees	~~$ 227,538~~	$	$6227,~~072,797~~538	$~~6,300,335~~	6,072,797	$	6,300,335
Total assets	~~$7,731,838~~	$	$17,~~486~~731,~~837~~868	$~~9,218,705~~	1,486,837	$	9,218,705

2002		Canada		Belize		Total
Software set-up fees	~~$ 51,832~~	$	~~$ 844~~51,~~728~~832	$ ~~896,560~~	844,728	$	896,560
Software license fees	~~$ 231,071~~	$	$2231,~~415,695~~071	$~~2,646,766~~	2,415,695	$	2,646,766
Total assets	~~$4,660,842~~	$	$24,~~290~~660,~~995~~842	$~~6,951,837~~	2,290,995	$	6,951,837

2001
Software set-up fees		$57,435		$746,555		$803,990
Software license fees		$67,022		$841,854		$908,876

During the year ended October 31, 2004, four licensees (2003 – four; 2002 – three), each of which provided more than 10% of the Company’s total sales revenue, accounted for 79.4% (2003 – 72.6%; 2002 – 68.5%) of the Company’s 2004 total sale revenue.

~~During~~ CHARTWELL ~~the~~TECHNOLOGY ~~year~~INC. Notes to Consolidated Financial Statements Years ended October 31, ~~2003~~2004, ~~four~~2003 ~~licensees~~and (2002 ~~– three; 2001 – five), each of which provided more than 10% of the Company’s total sales revenue, accounted for 72.6%~~ (~~2002~~stated –in ~~68.5%;~~Canadian ~~2001 – 54.9%~~dollars) ~~of the Company’s 2003 total set-up fee and license revenue.~~

~~CHARTWELL TECHNOLOGY INC~~11. ~~Notes~~ toDifferences ~~Consolidated~~in ~~Financial~~generally ~~Statements,~~accepted ~~Page~~accounting 13principles ~~Years~~between ~~ended~~Canada ~~October 31, 2003, 2002~~ and ~~2001~~the ~~(stated~~United ~~in Canadian dollars) (Revised, Note 2)~~ States:

~~12.~~The ~~Differences~~financial statements have been prepared in accordance with Canadian generally accepted accounting principles ~~between~~(“Canadian ~~Canada~~GAAP”). ~~and~~Any ~~the~~differences in United States generally accepted accounting principles (“U.S. GAAP”) as they pertain to the Company’s financial statements are not material except as follows:

~~The~~(a) ~~financial~~Reconciliation ~~statements~~of ~~have been prepared in accordance with~~ Canadian ~~generally accepted accounting principles (“Canadian~~ GAAP~~”).~~ ~~Any~~to ~~differences in United States generally accepted accounting principles (“~~U.S. GAAP”) asnet ~~they~~income ~~pertain to the Company’s financial statements are not material except as follows~~(loss):

The effect on the net income (aloss) ~~Reconciliation~~for each of the years in the three year period ended October 31, 2004 of the differences between Canadian GAAP toand U.S. GAAP ~~net~~is ~~income~~summarized ~~(loss)~~as follows:

The effect on the net income (loss) for each of the years in the three year period ended October 31, 2003 of the differences between Canadian GAAP and U.S. GAAP is summarized as follows:

	Years ended October 31,

	2004			2003			2002

Net income (loss) for the year as reported
in accordance with Canadian GAAP	$	4,021,781		$	1,681,538		$	(1,320,807	)
Compensation (expense) reduction - repricing
of stock options		(2,474,811	)		(228,900	)		95,820
Compensation expense - escrowed shares		(289,862	)		—			—
Software development costs		(175,000	)		(530,948	)		—
Amortization of software development costs		98,049			—			—
Stock based compensation expense:
APB 25		—			—			(7,981	)
FAS 123		—			—			(105,119	)

Net income (loss) - U.S. GAAP		1,180,157			921,690			(1,338,087	)
Deficit, beginning of year - U.S. GAAP		(9,449,247	)		(10,370,937	)		(9,032,850	)

Deficit, end of year - U.S. GAAP	$	(8,269,090	)	$	(9,449,247	)	$	(10,370,937	)

Net income (loss) per share:
Basic	$	0.08		$	0.07		$	(0.10	)
Diluted	$	0.07		$	0.07		$	(0.10	)

	Years ended October 31,
	2003		2002		2001
Net income (loss) from continuing operations
for the year as reported in accordance with
Canadian GAAP, as revised	$ 1,681,538		$(1,320,807	)	$(1,804,652	)
Repricing of stock options	(228,900	)	95,820		(702,660	)
Software development costs	(530,948	)	--		--
Stock based compensation expense:
APB 25	--		(7,981	)	(37,580	)
FAS 123	--		(105,119	)	(94,870	)
Net income (loss) - U.S. GAAP	921,690		(1,338,087	)	(2,639,762	)
Deficit, beginning of year - U.S. GAAP, as
previously reported	(9,275,469	)	(7,826,907	)	(6,155,830	)
Cumulative effect of accounting change
(notes 2 and 12(d))	(1,095,468	)	(1,205,943	)	(237,258	)
As revised	(10,370,937	)	(9,032,850	)	(6,393,088	)
Deficit, end of year - U.S. GAAP	$(9,449,247	)	$(10,370,937	)	$(9,032,850	)
Net income (loss) per share - basic
and diluted	$ 0.06		$ (0.10	)	$ (0.20	)

For U.S. GAAP purposes, the amounts of interest income would not be included in the subtotal of revenue.

~~For~~ ~~U.S.~~CHARTWELL ~~GAAP~~TECHNOLOGY ~~purposes,~~INC. Notes ~~the~~to ~~amounts~~Consolidated Financial ofStatements Years ~~interest~~ended ~~income~~October ~~would~~31, ~~not~~2004, be2003 ~~included~~and 2002 (stated in ~~the~~Canadian ~~subtotal of~~dollars) ~~revenue.~~

~~CHARTWELL TECHNOLOGY INC~~11. ~~Notes~~ toDifferences ~~Consolidated~~in ~~Financial~~generally ~~Statements,~~accepted ~~Page~~accounting 14principles ~~Years~~between ~~ended~~Canada ~~October 31, 2003, 2002~~ and ~~2001~~the ~~(stated~~United inStates ~~Canadian dollars)~~ (~~Revised, Note 2~~continued) :

~~12.~~(a) ~~Differences~~Reconciliation inof ~~generally~~Canadian ~~accepted~~GAAP ~~accounting~~to ~~principles~~U.S. ~~between~~GAAP ~~Canada~~net ~~and~~income ~~the~~(loss) ~~United States~~ (continued):

~~(a)~~The ~~Reconciliation~~components of ~~Canadian~~comprehensive ~~GAAP to U.S. GAAP net~~ income ~~(loss)~~are ~~(continued)~~as follows:

The components of comprehensive income are as follows:

	2004		2003			2002


Net income (loss) - U.S. GAAP	$	1,180,157	$	921,690		$	(1,338,087	)
Other comprehensive (loss) income:
Change in fair value of available
for sale securities		59,166		(1,365	)		(85,426	)

Comprehensive income (loss)	$	1,239,323	$	920,325		$	(1,423,513	)

	2003		2002		2001
Net income (loss) - U.S. GAAP	$ 921,690		$(1,338,087	)	$(2,639,762	)
Other comprehensive (loss) income:
Change in fair value of available
for sale long-term securities	(1,365	)	(85,426	)	27,625
Comprehensive income (loss)	$ 920,325		$(1,423,513	)	$(2,612,137	)

Balance sheet items which vary in conformity with U.S. GAAP and SEC requirements:

	2004			2003


Assets:
Deferred software development costs	$	—		$	—

Shareholders' equity:
Accumulated other comprehensive income	$	—		$	(59,166	)
Deficit		(8,269,090	)		(9,449,247	)

	$	(8,269,090	)	$	(9,508,413	)

	2003		2002
Assets:
Available for sale long-term securities	$ --		$ 1,365
Deferred software development costs	--		--
	$ --		$ 1,365
Shareholders' equity:
Accumulated other comprehensive income	$ (59,166	)	$ (57,801	)
Deficit	(9,449,247	)	(10,370,937	)
	$(9,508,413	)	$(10,428,738	)

There are no variations between the carrying values of liabilities and those amounts measured using U.S. GAAP.

~~There~~ CHARTWELL ~~are~~TECHNOLOGY noINC. Notes ~~variations~~to ~~between~~Consolidated Financial ~~the~~Statements Years ~~amounts~~ended ofOctober ~~liabilities~~31, ~~and~~2004, ~~those~~2003 ~~amounts~~and ~~measured~~2002 (stated ~~using~~in ~~U.S.~~Canadian ~~GAAP.~~dollars)

~~Accumulated~~11. ~~other~~Differences ~~comprehensive~~in ~~income~~generally ataccepted ~~October~~accounting ~~31,~~principles ~~2002~~between ~~has~~Canada ~~been~~and ~~revised~~the toUnited ~~correct~~States ~~an error of $27,625.~~(continued):

~~CHARTWELL TECHNOLOGY INC. Notes to Consolidated Financial Statements, Page 15 Years ended October 31, 2003, 2002 and 2001~~ (~~stated in Canadian dollars~~b) ~~(Revised,~~Stock ~~Note~~based 2) compensation:

12The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board (“APB”) Opinion No. ~~Differences~~25, “Accounting for Stock Issued to Employees”, and related interpretations, in ~~generally~~accounting ~~accepted~~for its stock options issued to employees, directors and officers of the Company for purposes of reconciliation to U.S. GAAP. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. SFAS No. 123, “Accounting for Stock-Based Compensation”, established accounting ~~principles~~and ~~between~~disclosure ~~Canada~~requirements using a fair value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting described above and has adopted the ~~United~~disclosure ~~States~~requirements of SFAS No. 123. Stock options issued to consultants and other third parties are accounted for at their fair values in accordance with SFAS No. 123 which is consistent to the policy applied for Canadian GAAP purposes since November 1, 2002. During 2004, there were 125,000 options granted to consultants or other third parties (~~continued~~2003 – nil; 2001 – 100,000):. There was $102,572 (2003 — $nil; 2002 –$105,119) charged to income for those options in 2004.

~~(b)~~All ~~Stock~~options ~~based~~granted ~~compensation~~to date have been fixed and granted to employees, directors and officers of the Company. The Company has calculated the fair value of stock options granted using the Black Scholes option pricing model with the following weighted-average assumptions:

The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations, in accounting for its stock options issued to employees, directors and officers of the Company for purposes of reconciliation to U.S. GAAP. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. SFAS No. 123, “Accounting for Stock-Based Compensation”, established accounting and disclosure requirements using a fair value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting described above and has adopted the disclosure requirements of SFAS No. 123. Stock options issued to consultants and other third parties are accounted for at their fair values in accordance with SFAS No. 123. During 2003, there were no options granted to consultants or other third parties.

	2004		2003		2002


Risk free interest rate	4	%	4	%	5	%
Expected Volatility	67	%	99	%	72	%
Expected option life (in years)	5		5		5
Dividend yield	0	%	0	%	0	%

~~With~~ CHARTWELL ~~the~~TECHNOLOGY ~~exception~~INC. Notes ~~of 100,000 options granted~~ to aConsolidated Financial ~~consultant~~Statements Years ~~in the year~~ ended October 31, ~~2002 and 50~~2004,~~000~~ ~~options~~2003 ~~granted to a consultant in the year ended October 31, 2001, all options granted to date have been fixed~~ and ~~granted to employees, directors and officers of the Company. There was $nil (~~2002 (stated –in ~~$105,119;~~Canadian ~~2001 — $94,870~~dollars) ~~charged to income for those options in 2003.~~

~~The~~11. ~~Company~~Differences ~~has~~in ~~calculated~~generally ~~the~~accepted ~~fair~~accounting ~~value~~principles ofbetween ~~stock~~Canada ~~options granted to employees, directors~~ and ~~officers using~~ the ~~Black~~United ~~Scholes~~States ~~option pricing model with the following weighted-average assumptions~~(continued):

	2003		2002		2001
Risk free interest rate	4	%	5	%	6	%
Volatility	99	%	72	%	100	%
Expected option life (in years)	5		5		5
Dividend yield	0	%	0	%	0	%

(b)

Stock based compensation (continued):

~~CHARTWELL~~Had ~~TECHNOLOGY~~the ~~INC. Notes~~Company todetermined ~~Consolidated~~employee ~~Financial~~compensation ~~Statements,~~costs ~~Page~~based 16on ~~Years~~the ~~ended~~fair ~~October~~value ~~31,~~at ~~2003~~the date of grant for its stock options under SFAS 123, ~~2002~~net ~~and~~earnings ~~2001~~in ~~(stated~~accordance with US GAAP would have been as reported in ~~Canadian~~the ~~dollars)~~following ~~(Revised,~~table. ~~Note~~The 2) Company has not recognized in income any amount under SFAS 123 for stock-based employee compensation expense. These pro forma earnings reflect compensation cost amortized over the vesting periods of the options.

12. Differences in generally accepted accounting principles between Canada and the United States (continued):

	Years ended October 31,

	2004		2003		2002

Net income (loss) - U.S. GAAP:
As reported	$	1,180,157	$	921,690	$	(1,338,087	)
Pro forma		3,181,738		799,014		(1,703,077	)

Net income (loss) per share:
As reported - basic	$	.08	$	0.07	$	(0.10	)
- diluted	$	.07	$	0.07	$	(0.10	)
Pro forma - basic	$	.22	$	0.06	$	(0.13	)
- diluted	$	.19	$	0.06	$	(0.13	)

(bc) ~~Stock~~Escrowed ~~based compensation (continued)~~shares:

~~Had~~In ~~the~~accordance ~~Company~~with ~~determined~~securities ~~compensation~~regulations ~~costs~~1,330,400 ~~based~~common onshares ~~the~~with ~~fair~~respect ~~value~~to atprior ~~the~~public ~~date~~offerings ofwere ~~grant~~placed ~~for its stock options under SFAS 123, net earnings~~ in ~~accordance~~escrow with USan ~~GAAP~~escrow ~~would~~agent ~~have~~pursuant ~~been~~to asescrow ~~reported~~agreements. inUnder the ~~following~~terms ~~table.~~of ~~The~~the ~~Company~~agreements ~~has~~the ~~not~~shares ~~recognized~~were into ~~income~~be ~~any~~released ~~amount~~upon ~~under~~application ~~SFAS~~by ~~123~~the ~~for~~Company ~~stock-based~~and ~~employee~~at ~~compensation expense. These pro forma earnings reflect compensation cost amortized over~~ the ~~vesting~~discretion ~~periods~~ of ~~the~~securities ~~options~~regulators.

	Years ended October 31,
	2003	2002 (revised)		2001 (revised)
Net income (loss) - U.S. GAAP:
As reported	$ 921,690	$ (1,338,087	)	$ (2,639,762	)
Pro forma (revised)	936,339	(1,737,676	)	(2,385,998	)
Net income (loss) per share -
basic and diluted:
As reported	$ 0.06	$ (0.10	)	$ (0.20	)
Pro forma (revised)	$ 0.06	$ (0.13	)	$ (0.18	)

On October 5, 2004, 955,400 common Shares were released from escrow and compensation, of which 252,700 were released to an officer and to a director of the Company. Compensation expense of $289,862 was recorded for the fair value of the shares issued to the officer and director.

~~Previously~~ CHARTWELL ~~reported~~TECHNOLOGY ~~pro~~INC. Notes ~~forma~~to ~~amounts~~Consolidated Financial ofStatements Years ~~$(1,683,131)~~ended ~~for~~October ~~2002 and $(1~~31,~~889,073)~~ ~~for 2001~~2004, ~~and~~2003 ~~pro forma net loss per share of $ (0.12)~~ and $ 2002 (~~0.14)~~stated ~~for those years respectively, have been revised to correct calculation errors~~ in ~~the~~Canadian ~~prior~~dollars) ~~years.~~

~~(c)~~11. ~~Additional~~Differences ~~disclosures~~in ~~under~~generally ~~U.S.~~accepted ~~GAAP~~accounting principles between Canada and the United States (continued):

(id) ~~The~~Additional ~~Company~~disclosures ~~follows~~under ~~SFAS 130 regarding comprehensive income for purposes of reconciliation to~~ U.S. GAAP. Under U.S. GAAP, items defined as, other comprehensive income are separately classified in the financial statements and the accumulated balance of other comprehensive income (loss) is reported separately in shareholders’ equity on the balance sheet. For the three years ended October 31, 2003 there are no items classified as other comprehensive income, with the exception of a change in the fair value of available for sale securities of $(1,365)for the year ended October 31, 2003 (2002 – $(85,426); 2001 — $27,625).:

(iii) The 1Company follows SFAS 130 regarding comprehensive income for purposes of reconciliation to U.S. GAAP. Under U.S. GAAP,~~663~~ items defined as,~~733~~ ~~common~~other ~~shares~~comprehensive ~~held~~income are separately classified in ~~escrow~~the ~~for~~financial statements and the ~~year~~accumulated balance of other comprehensive income (loss) is reported separately in shareholders’ equity on the balance sheet. For the three years ended October 31, ~~2003~~2004 ~~(2002~~there –are ~~2,330,400~~no ~~and~~items ~~2001~~classified –as 2other comprehensive income,~~330,400)~~ ~~have~~with ~~not~~the ~~been~~exception ~~included~~of a change in the ~~calculation~~fair value of ~~basic~~available orfor ~~diluted~~sale ~~earnings~~securities ~~per~~of ~~share~~$59,166for asthe ~~doing~~year soended ~~would~~October be31, ~~anti-dilutive~~2004 (2003 – $(1,365); 2002 — $57,801).

~~CHARTWELL~~(ii) ~~TECHNOLOGY~~The ~~INC. Notes~~375,000 tocommon ~~Consolidated~~shares ~~Financial~~held ~~Statements,~~in ~~Page~~escrow 17for ~~Years~~the year ended October 31, 2004 (2003 – 1,663,733 and 2002 ~~and~~– ~~2001~~2,330,400) ~~(stated~~have not been included in ~~Canadian~~the ~~dollars)~~calculation ~~(Revised,~~of ~~Note~~basic 2) or diluted earnings per share as they are contingently releasable and as doing so would be anti-dilutive. This is the same treatment as under Canadian GAAP.

12(iii) In 2001, 1,330,800 stock options were repriced. ~~Differences~~In accordance with the intrinsic value method of accounting for stock options, an expense of $702,660 was recognized in ~~generally~~the ~~accepted~~year of repricing. In fiscal 2004 and 2003 these stock options have been accounted for using variable price accounting, ~~principles~~resulting ~~between~~in ~~Canada~~an expense of $2,474,811 in 2004 and ~~the~~an ~~United~~expense ~~States~~of $228,900 in 2003. An expense recapture of $95,820 was realized in 2002. At October 31, 2004, 680,600 (~~continued~~2003 – 1,089,000): of those options, with exercise prices ranging between $1.06 and $1.17 per share, remained unexercised, and expire between January, 2005 and November, 2005.

(civ) ~~Additional~~Under ~~disclosures under~~ U.S. GAAP, ~~(continued):~~deferred software development costs are accounted for under SFAS 86, Accounting for Costs of Computer Software to be Sold, Leased or Otherwise Marketed, which requires the expensing of all amounts incurred to the date of technical feasibility. Under Canadian GAAP, these amounts have been capitalized as they meet all of the required criteria.

~~(iii) As disclosed in note 5(c) to the consolidated financial statements, in 2001 certain stock options were repriced~~12. InSubsequent accordance with the intrinsic value method of accounting for stock options, an expense of $702,660 was recognized in the year of repricing. In fiscal 2003 and 2002 these stock options have been accounted for using variable price accounting, resulting in an expense of $228,900 in 2003 and an expense reduction of $95,820 in 2002.event:

~~(iv)~~On ~~Under~~December ~~U.S. GAAP~~7, ~~deferred~~2004 ~~software~~the ~~development~~Company ~~costs~~closed ~~are~~a ~~accounted~~private ~~for~~placement ~~under~~consisting ~~SFAS~~of 862,365,592 ~~Accounting~~common ~~for~~shares ~~Costs~~which were sold at a price of ~~Computer~~$4.65 ~~Software~~per toshare befor ~~Sold~~net proceeds of $10,340,002 ~~Leased~~before orunderwriter ~~Otherwise~~expenses ~~Marketed~~and related Company legal expenses. The underwriters were granted 141,936 ~~which~~compensation ~~requires~~options ~~the~~exercisable ~~expensing~~at an exercise price of ~~all~~$5.10 ~~amounts~~per ~~incurred~~common toshare for a period of 18 months from the date of ~~technical~~the ~~feasibility~~closing of the private placement. ~~Under~~All ~~Canadian~~of ~~GAAP,~~the ~~these~~securities ~~amounts~~sold ~~have~~pursuant ~~been~~to ~~capitalized~~the asprivate ~~they~~placement ~~meet~~are ~~all~~subject to a four month hold period. Net proceeds of ~~the~~financing ~~required~~will ~~criteria~~be used for general corporate purposes.

(d) Revenue recognition accounting policy:

As described in note 2, subsequent to completion and issuance of the October 31, 2003 consolidated financial statements, the Company revised its set-up fees revenue and direct and incremental costs accounting policy to that disclosed in note 1(e). This accounting policy is in accordance with the provisions of SOP 97-2, “Software Revenue Recognition”. Accordingly, this restatement is accounted for retroactively for U.S. purposes, in accordance with APB Opinion No. 20, “Accounting Changes”.

Filing Compare · CHARTWELL TECHNOLOGY INC