U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 31, 2001 COMMISSION FILE NO. 1-13830 TELESOFT CORP. (Name of Registrant as specified in its charter) ARIZONA 86-0431009 (State of Incorporation) (IRS Employer Identification No.) 3443 NORTH CENTRAL AVENUE #1800 PHOENIX, ARIZONA 85012 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (602) 308-2100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) At June 8, 2001, the Registrant had outstanding 1,415,833 shares of common stock, no par value.

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. Consolidated Balance Sheets as of ~~February~~May 2831, 2001 and November 30, 2000 ~~. . . . . . . . . . . . . . . . . . .~~ 3 Consolidated Statements of Operations and Consolidated Operations for the three and six month periods ended ~~February~~May 2831, 2001 and ~~February 29,~~ 2000 4 Consolidated Statements of Cash Flows for the ~~three~~six month periods ended ~~February~~May 2831, 2001 and ~~February 29,~~ 2000 5 - 6 Notes to the Consolidated Financial Statements. ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .~~ 7 - 8 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.. ~~. . . . . . . .~~ 9 - 1214 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.. .14 ~~. . . . . . . . . . . . . . . . . . . . 12~~ PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. .15 ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13~~ ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. .15 ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13~~ ITEM 3. DEFAULTS ON SENIOR SECURITIES. .15 ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13~~ ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. .15 ~~. . . . . . . . . . . . . . . . . . . . . . . . 13~~ ITEM 5. OTHER INFORMATION. .16 ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13~~ ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.. ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14~~17

TELESOFT CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE ~~SHEETS~~SHEET ~~February~~November 2830, ~~2001~~May ~~November 30~~31, 2001 2000 (unaudited) ASSETS Cash and cash equivalents. ~~. . . . . . . . . . . . . . . . . . . . .~~ $ 6762,~~370~~334 $ 41,434 Accounts receivable, net of allowance for uncollectibles of $~~532~~602,~~211~~809 and $423,437 at ~~February~~May 2831, 2001 and November 30, 2000, respectively ~~. . . . . . . . . . . . . . . . . . . . . . . . . . 6~~5,~~627~~599,~~558~~643 7,737,213 Inventory. ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165~~142,~~017~~599 208,325 Income taxes receivable. ~~. . . . . . . . . . . . . . . . . . . . . . 236~~9,~~781~~926 349,364 Deferred taxes ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . 223~~253,~~500~~200 188,400 Other. ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97~~103,~~485~~585 94,010 ------------- -------------- Total current assets ~~. . . . . . . . . . . . . . . . . . . . . . . . 7~~6,~~356~~871,~~711~~287 8,618,746 Property and equipment, net. ~~. . . . . . . . . . . . . . . . . . . .~~ 1,~~290~~196,~~113~~491 1,407,118 Computer software costs, net ~~. . . . . . . . . . . . . . . . . . . . 37~~25,~~548~~032 54,484 Other. ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177~~123,~~532~~067 141,709 ------------- -------------- Total assets ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . .~~ $ 8,~~861~~215,~~904~~877 $ 10,222,057 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY Related party debt ~~. . . . . . . . . . . . . . . . . . . . . . . . .~~ $ ~~600~~300,000 $ 1,375,000 Accounts payable and accrued liabilities ~~. . . . . . . . . . . . . .~~ 4,~~491~~111,~~739~~907 5,199,187 Income taxes payable ~~. . . . . . . . . . . . . . . . . . . . . . . . 361~~364,~~912~~760 203,900 Deferred revenue ~~. . . . . . . . . . . . . . . . . . . . . . . . . . 782~~608,~~696~~990 1,130,375 ------------- -------------- Total current liabilities. ~~. . . . . . . . . . . . . . . . . . . . . 6~~5,~~236~~385,~~347~~657 7,908,462 Deferred taxes ~~. . . . . . . . . . . . . . . . . . . . . . . . . . . 125~~121,~~900~~600 121,900 Other 29,507 - ------------- -------------- Total liabilities. ~~. . . . . . . . . . . . . . . . . . . . . . . . . 6~~5,~~362~~536,~~247~~764 8,030,362 -------------- -------------- Commitments - - Stockholders' Equity: Preferred ~~Stock~~stock, no par value, 10,000,000 shares authorized; ~~. . . . - -~~ none issued and outstanding - - Common stock, no par value, 50,000,000 shares authorized; 1,684,934 issued and 1,415,833 and 1,376,828 outstanding, respectively ~~. . . . . . . . . . . . . . . . . . . . . . . .~~ 956,731 665,125 Retained earnings. ~~. . . . . . . . . . . . . . . . . . . . . . . . .~~ 2,~~354~~534,~~626~~082 2,191,695 -------------- -------------- 3,~~311~~490,~~357~~813 2,856,820 Less: Treasury stock, 269,101 and 178,106 shares, at cost. ~~. . . .~~ (811,700) (665,125) -------------- -------------- Total stockholders' equity 2,~~499~~679,~~657~~113 2,191,695 -------------- -------------- Total liabilities and stockholders' equity ~~. . . . . . . . . . . . .~~ $ 8,~~861~~215,~~904~~877 $ 10,222,057 ============= ==============

The Accompanying Notes are an Integral Part of The Consolidated Financial Statements. 3

TELESOFT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS For the three and six months ended ~~February~~May 2831, 2001 and ~~February 29,~~ 2000 (unaudited) Three Months Ended May 31, Six Months Ended May 31, 2001 2000 2001 2000 ------------ ------------ ~~Sales, net . . . . . . . . . . . . . . . . . . $6,119,019 $7,022,543 Cost of sales. . . . . . . . . . . . . . . . . 2,837,878 3,626,409~~ ------------ ------------ ~~Gross~~Sales, ~~profit~~net .$ .6,399,724 .$ .6,484,553 .$12,518,743 .$13,507,096 .Cost .of .sales ~~. . . . . . . .~~ 3,~~281~~329,~~141~~007 3,~~396~~807,~~134~~791 ~~General and administrative expenses. . . . . . 2~~6,~~733~~166,~~682~~885 37,~~172~~434,~~828~~200 ----------- --------------- ~~Operating income . . . . . . . . . . . . . . . 547,459 223,306~~ ----------- --------------- ~~Other~~Gross ~~income~~profit ~~(expense):~~3,070,717 ~~Interest~~2,676,762 ~~income.~~6,351,858 .6,072,896 .General .and .administrative .expenses ~~. . . . . . . . . . 11~~2,~~614 224~~760,~~767~~760 ~~Interest expense . . . . . . . . . . . . . . . (18~~3,~~025)~~098,914 ~~- Other (expense) income . . . . . . . . . . . . (1~~5,~~042)~~494,442 ~~145~~6,~~189~~271,742 ----------- --------------- ~~(7,453) 369,956~~ ----------- --------------- ~~Income~~Operating ~~before provision for~~ income ~~taxes~~(loss) ~~. . . 540~~309,~~006~~957 ~~593~~(422,~~262~~152) ~~Provision for income taxes . . . . . . . . . . 230~~857,~~500~~416 ~~215~~(198,~~600~~846) ----------- ----------- ~~Net income . . . . . . . . . . . . . . . . . . 309,506 377,662 Other comprehensive (loss) income, net of tax Reclass of holding gains realized during period and included in income statement~~ ---- ~~(66,120)~~ ----------- --------------- ~~Comprehensive~~Other income .(expense): .Interest .income .9,997 .106,424 ~~. . . . . . . . $ 309~~21,~~506~~611 ~~$ 311~~331,~~542~~191 ~~===========~~Interest ~~===========~~expense ~~Earnings per share Basic. . . . . . . . . . . . . . . . . . . . . $ 0.23 $ 0.~~(10 ~~Diluted. . . . . . . . . . . . . . . . . . . . $ 0.23 $ 0.10 =========== =========== Weighted average number of shares outstanding Basic. . . . . . . . . . . . . . . . . . . . . 1~~,~~345,584~~725) 3(37,~~711,500~~470) ~~Diluted. . . . . . . . . . . . . . . . . . . . 1~~(28,~~349,307~~750) 3(37,~~829,204~~470) ~~===========~~Other ~~===========~~income ~~The~~2,227 ~~Accompanying~~233 ~~Notes are an Integral Part of the Consolidated Financial Statements. TELESOFT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended February 28~~1,185 ~~2001 and February 29~~145,422 ~~2000 (unaudited) 2001 2000~~ ------------ -------------- Increase (decrease) in cash and cash equivalents: Cash flows from operating activities: Cash received from customers. . . . . . . . . . . . . . $ 7,093,569 $ 9,180,539 Cash paid to suppliers and employees. . . . . . . . . . (6,225,625) (7,715,316) Interest paid . . . . . . . . . . . . . . . . . . . . . (18,025) -------------------------- ~~Interest received . . . . . . . . . . . . . . . . . . . 11~~1,~~614~~499 ~~386~~69,~~137~~187 ~~Income taxes paid . . . . . . . . . . . . . . . . . . . -~~ (65,~~261~~954) ~~Income taxes received . . . . . . . . . . . . . . . . . 8~~439,~~995~~143 - ------------ ------------- ~~Net cash provided by operating activities 870,528 1,845,099~~ ------------ -------------- ~~Cash~~Income ~~flows~~(loss) ~~from~~before ~~investing~~provision ~~activities:~~for ~~Purchase~~income oftaxes ~~property~~311,456 ~~and equipment. . . . . . . . . . .~~ (14352,~~215~~965) ~~(231~~851,~~444)~~462 ~~Cash received from sale of fixed assets . . . . . . . . 30~~240,~~198~~297 -Provision ~~Disbursements~~ for ~~notes~~income ~~receivable~~taxes ~~from related parties -~~ (~~450~~132,000) ~~Collection of notes receivable from related parties . . - 150~~130,~~000~~100 ~~Cash received from sale of investment securities. . . . - 13~~(362,~~846,439~~500) ~~Purchase of investment securities . . . . . . . . . . . -~~ (185,500~~,000~~) ------------ -------------- ~~Net cash provided by investing activities . . . . . . . 15,983 11,814,995~~ ------------ -------------- ~~Cash~~Net ~~flows~~income ~~from~~(loss) ~~financing~~179,456 ~~activities:~~(222,865) ~~Purchases~~488,962 of154,797 ~~treasury~~Other ~~stock~~comprehensive ~~. . . . . . . . . . . . . .~~ (~~146,575~~loss) -income, ~~Proceeds~~net ~~from~~of ~~debt~~tax -Reclass ~~related~~of ~~parties.~~holding .gains .realized .during .period .and .included .in .income .statement ~~300,000~~- - ~~Repayment of debt~~ - ~~related parties . . . . . . . . . .~~ (166,~~075,000~~120) - ------------ ------------ ~~Net cash used in financing activities . . . . . . . . . (921,575)~~ - ------------ -------------- ~~Net~~Comprehensive income (~~decrease~~loss) ~~increase~~$ in179,456 ~~cash~~$ ~~and cash equivalents. .~~ (35222,~~064~~865) 13$ 488,~~660~~962 $ 88,~~094~~677 ~~Cash~~========================== ~~and~~========================== ~~cash~~Earnings ~~equivalents~~(loss) atper ~~beginning~~share ofBasic ~~period~~$ 0.13 $ (0.11) $ 0.35 $ 0.05 ~~41,434~~Diluted ~~2,157,701~~$ ~~------------~~0.13 ~~------------~~$ ~~Cash~~(0.11) ~~and~~$ ~~cash~~0.35 ~~equivalents~~$ at0.05 ~~end~~Weighted average number of ~~period.~~shares .outstanding .Basic .1,415,833 .2,030,721 .1,381,095 .2,866,518 $Diluted 61,~~370~~425,512 ~~$15~~2,~~817~~030,~~795~~721 ~~============~~1,387,796 ~~============~~2,932,685

The Accompanying Notes are an Integral Part of The Consolidated Financial Statements. 4

TELESOFT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ~~(CONTINUED)~~ For the ~~three~~six months ended ~~February~~May 2831, 2001 and ~~February 29,~~ 2000 (unaudited) 2001 2000 ------------- ------------- ~~Reconciliation~~Increase of(decrease) ~~net~~in ~~income~~cash toand ~~net~~ cash ~~provided~~equivalents: byCash flows from operating activities: ~~Net~~Cash ~~income~~received .from .customers .$ .13,936,497 .$ .16,328,075 .Cash .paid .to .suppliers .and .employees .(12,070,055) .(15,106,207) .Interest .paid $(28,750) ~~309~~(24,~~506~~970) $Interest ~~377~~received 21,~~662~~611 492,561 Income tax refund 216,391 592,496 Income taxes paid (143,693) (148,447) ------------- ------------- ~~Adjustments~~Net ~~to reconcile net income to net~~ cash provided by operating activities: ~~Depreciation~~1,932,001 ~~and~~2,133,508 ~~amortization.~~------------- .------------- .Cash .flows .from .investing .activities: ~~116,916~~Purchase ~~166,886 Gain on sale~~ of ~~investment~~property ~~securities.~~and .equipment .(34,768) - (~~145~~424,~~189~~188) ~~Loss~~Disbursements onfor ~~sale~~notes ofreceivable ~~fixed~~from ~~assets~~related .parties .- ~~. . . . . 1~~(450,~~042~~000) -Collection ~~Stock~~of ~~compensation~~notes .receivable .from .related .parties .- .500,000 .Cash .received .from .sale .of .fixed ~~145,031 - Changes in~~ assets ~~and liabilities: Accounts receivable~~45,242 ~~net~~- .Cash .received .from .sale .of .investment .securities .- ~~. 1~~13,~~109~~846,~~655~~439 ~~2,164,080~~Purchase ~~Inventory.~~of .investment .securities .- ~~. . . . . . . . . . . . . 43~~(1,~~308 46~~500,~~590~~000) ~~Other~~------------- ~~current~~------------- ~~assets~~Net .cash .provided .by .investing .activities ~~. . . . . . (3~~10,~~475)~~474 ~~112~~11,~~613 Deferred taxes~~972,251 ~~net.~~------------- .------------- .Cash .flows .from .financing .activities: .Purchases .of .treasury .stock . (31146,~~100~~575) (7275,~~400~~295) ~~Other~~Proceeds ~~assets~~from .debt .- .related .parties ~~. . . . . . . . . . . (35~~300,~~823)~~000 41,~~057~~500,000 ~~Accounts~~Stock ~~payable~~redemption ~~and accrued liabilities .~~ (~~707~~1,~~448~~375,000) (117,~~153~~384,~~388~~768) ~~Deferred~~------------- ~~revenue~~------------- .Net .cash .used .in .financing .activities ~~. . . . . . .~~ (~~347~~1,~~679~~221,575) 62(16,~~449 Income taxes payable . . . . . . . . . . . 158~~160,~~012~~063) - ~~Income taxes receivable. . . . . . . . . . 112,583 216,739~~ ------------ ------------- ~~561~~Net increase (decrease) in cash and cash equivalents 720,~~022~~900 1(2,~~467~~054,~~437~~304) Cash and cash equivalents at beginning of period 41,434 2,157,701 ------------- ------------- ~~Net~~Cash and cash ~~provided~~equivalents byat ~~operating~~end ~~activities.~~of period $ ~~870~~762,~~528~~334 $ 1103,~~845,099~~397 ============= =============

Supplemental disclosure of non-cash investing and financing activities: During the six months ended May 31, 2001, the Company issued 130,000 shares of its common stock to Telesoft Recovery Corp. executives. This stock issuance was made in connection with their employment agreements in lieu of cash compensation in the amount of $145,031. The Accompanying Notes are an Integral Part of the Consolidated Financial Statements. 5 TELESOFT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the six months ended May 31, 2001 and 2000 (unaudited) 2001 2000 ------------ ------------ Reconciliation of net income to net cash provided by operating activities: Net income $ 488,962 $ 154,797 ------------ ------------ Adjustments to reconcile net income to net cash provided (used) by operating activities from continuing operations: Depreciation and amortization 231,832 334,231 Gain on sale of investment securities - (145,189) Gain on sale of fixed assets (2,227) - Interest expense included with note payable - 12,500 Stock compensation 145,031 - Changes in assets and liabilities: Accounts receivable, net 2,137,570 2,875,023 Inventory 65,726 (44,937) Other current assets (9,575) 133,293 Deferred taxes, net (65,100) (39,700) Other assets 18,642 19,247 Accounts payable and accrued liabilities (1,057,773) (1,820,596) Deferred revenue (521,385) 85,590 Income taxes payable 160,860 149,840 Income taxes receivable 339,438 419,409 ------------ ------------ 1,443,039 1,978,711 ------------ ------------ Net cash provided by operating activities $ 1,932,001 $ 2,133,508 ============ ============ The Accompanying Notes are an Integral Part of the Consolidated Financial Statements. 6 TELESOFT CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the six month periods ended May 31, 2001 and 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for audited year-end financial statements. In the opinion of management, all adjustments consisting of recurring accruals considered necessary for a fair presentation have been included. Operating results for the three and six months ended May 31, 2001 are not necessarily indicative of the results that may be expected for the year ending November 30, 2001. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended November 30, 2000. Principles of Consolidation The consolidated financial statements include the accounts of Telesoft Corp., together with its wholly owned subsidiaries, Telesoft Acquisition Corp and Telesoft Recovery Corp. All significant intercompany accounts and transactions have been eliminated. 2. INVESTMENT SECURITIES Amdocs Ltd. ("DOX") The Company accounted for its investment in DOX, which traded on the NYSE under the symbol DOX, as an available-for-sale equity security, which accordingly was carried at market value. During the six months ended May 31, 2000, the Company sold all 7,434 DOX shares that it had held for $296,439. These shares were previously held as 20,000 shares of International Telecommunication Data Systems Inc. (ITDS). 3. STOCKHOLDERS' EQUITY Self-Tender Offer On February 3, 2000, the Company commenced an offer to repurchase up to 2.3 million shares of its common stock pursuant to a "Dutch auction" self-tender offer. On March 24, 2000, the tender expired. Pursuant to the tender offer the Company repurchased a total of 2.3 million shares of its common stock. The purchase price for the shares of common stock was $7.25 per share and the proration factor was 60.22 percent. The Company redeemed 1,938,816 common shares for $14,056,416 and 351,352 common stock options for $1,112,674. Included in the common shares redeemed were 1,031,663 shares of the Company's common stock redeemed from affiliates of the Company for an aggregate of approximately $7,480,000. Additionally, the Company repurchased all 293,750 shares of common stock owned by Joseph Zerbib for $2,129,688. As of February 28, 2001, affiliates of the Company owned 695,837 shares or 54.1% of the outstanding common stock of the Company. Expenses incurred related to the tender offer were $85,991. 7 TELESOFT CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the six month periods ended May 31, 2001 and 2000 3. STOCKHOLDERS' EQUITY (CONTINUED) Treasury Stock During the six months ended May 31, 2001, the Company repurchased 90,995 shares of its common stock for $146,575. Common Stock During the six months ended May 31, 2001, the Company issued 130,000 shares of its common stock to TRC executives. This stock issuance was made in connection with their employment agreements in lieu of cash compensation in the amount of $145,031. The Company has expensed the total amount of the stock issuance. Common Stock Options In February 2001, the Company granted 27,200 options to employees at an exercise price of $1.3125 per share, the fair market value of the underlying shares at the date of grant. 4. RELATED PARTY DEBT: In April 2000, three of the Company's executive officers entered into an agreement with the Company, pursuant to which each of them agreed to make available to the Company up to $1,000,000 on the Company's request. In May 2000, each of their agreements was amended to increase the amount to $1,350,000. Draw downs are payable on May 31, 2001 and have an annual interest rate of 10%. Each loan is secured by the Company's assets. As of February 28, 2001, the outstanding balance on the loans aggregated $600,000. This financing was completed in order to satisfy the terms of the Company's self-tender offer of its common stock completed in fiscal 2000. Pursuant to a second amendment to their respective agreements in April 2001, each of the officers has agreed to extend $350,000 of their respective loans until August 31, 2001. During the six months ended May 31, 2001 and May 31, 2000, interest expense in connection with these notes was $28,750 and $25,000, respectively. As of May 31, 2001, borrowings outstanding on the line of credit were $300,000. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS BY PRODUCT LINE FOR THE ~~THREE~~SIX MONTHS ENDED ~~FEBRUARY~~MAY 2831, 2001 AND ~~FEBRUARY 29,~~ 2000 (in thousands except per share items) ~~Three~~Six months ended ~~February~~May 2831, 2001 ~~Three~~Six months ended ~~February~~May 2931, 2000 ----------------------------------------------- ------------------------------------------------ System Custom Recovery System Custom Recovery STS Sales Billing Services Total STS Sales Billing Services Total ------------------------------------------------------------------------------------------------- Sales, net. ~~. . . . . . . .~~ $ 37,~~882~~702 $ 13,~~405~~203 $ ~~263~~447 $ ~~569~~1,167 $ 612,~~119~~519 $ 49,~~792~~729 $1 2,~~818~~862 $ ~~253~~484 $ ~~159~~432 $713,~~022~~507 Cost of sales ~~. . . . . . . 2~~5,~~469~~337 ~~367~~828 2 - 26,~~838~~167 36,~~287~~939 ~~333~~485 610 - 37,~~626~~434 -------- -------- --------- --------- -------- ------~~---~~ -------- -------- ---------- -------- Gross profit. .2,365 .2,375 .445 ~~. . . .~~ 1,~~413~~167 16,~~038~~352 ~~261 569 3~~2,~~281~~790 12,~~505~~377 ~~1,485~~474 ~~247~~432 ~~159 3~~6,~~396~~073 -------- -------- --------- --------- -------- ------~~---~~ -------- -------- ---------- -------- General & administrative expenses: General .1,408 .2,429 .244 .816 .4,897 ~~. . . . . 693~~ 1,~~264~~841 ~~118 384~~ 2,~~459~~958 ~~950~~416 ~~1,472~~456 ~~224 233 2~~5,~~879~~671 Depreciation. .56 .20 .6 .2 .84 .91 .79 2810 ~~12 3~~ 1 44181 ~~47 39 5 - 91~~ Bad debt. .197 ~~. . . . . . . . 77~~ - - - 77197 69140 9- - - 78140 Corporate allocations: General .79 .84 .3 ~~. . . . . . . 38 40~~ 2 1168 8170 3241 1912 63 1126 58 Depreciation. .45 .88 .11 .4 .148 .69 .68 2216 ~~44 5 2 73 31 29 6~~ - 66153 -------- -------- --------- --------- -------- ------~~---~~ -------- -------- ---------- -------- ~~858~~ 1,~~360~~785 ~~128~~2,621 ~~388~~264 2824 5,~~734~~494 12,~~129~~211 13,~~568~~146 ~~241~~454 ~~234~~460 36,~~172~~271 -------- -------- --------- --------- -------- ------~~---~~ -------- -------- ---------- -------- (28) Operating income (loss) .580 ~~. 555~~ (~~322~~246) ~~133~~ 181 ~~547~~343 ~~376~~858 579 (83769) 620 (75198) ~~224~~ Other (expense) income. ~~. .~~ (76) ~~370~~439 -------- -------- Pretax income .852 .241 ~~. . . . . 540 594~~ Income tax provision. ~~. . .~~ (~~230~~363) (~~216~~86) -------- -------- Net income. ~~. . . . . . . .~~ $ ~~310~~489 $ ~~378~~155 ======== ======== Diluted earnings per share. $ 0.2335 $ 0.1005 ======== ========

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 2001 AND 2000 Revenues decreased by 7.3% to $12,518,743 for the six months ended May 31, 2001 compared to $13,507,096 for the six months ended May 31, 2000. The Company's revenue is derived from four principal product lines and services: STS Outsourcing Programs (STS), System Sales and Maintenance, Customized Billing Outsourcing Services and Recovery Services. STS Program revenues were $7,702,411 for the six months ended May 31, 2001 compared to $9,728,487 for the six months ended May 31, 2000, a (20.8%) decrease. This decrease was primarily due to market pressure from competing long-distance communications products including pre-paid cards, other calling cards, wireless services and the Internet. During fiscal 2000, the Company adjusted to these market pressures by lowering its retail rates and renegotiating its wholesale rates with its suppliers. The impact of these new rates began during the fourth fiscal quarter (September-November), which represents the first three months of the 2000-2001 academic year. Revenues for the fourth quarter of fiscal 2000 were 23.2% lower than the fourth quarter of fiscal 1999. Historically, the calling patterns during September through November are indicative of calling patterns for the balance of the academic year. Based on this decline in revenue, the Company has reduced selling, general and administrative expenses, including a reduction in staff to adjust to the reduction in subscribers, traffic, and revenues. We expect to have additional pressure on revenue in the 2001-2002 academic year, based on decreased long distance usage, and a decrease in customer base. 9 Revenues from System Sales and Maintenance were $3,202,147 for the six months ended May 31, 2001 compared to $2,862,443 for the six months ended May 31, 2000, an increase of 11.9%. TelMaster sales and maintenance related revenues increased by $1,050,761, or 62.8%, to $2,724,453 for the six months ended May 31, 2001 compared to $1,673,692 for the six months ended May 31, 2000. The increase in TelMaster revenues from the first half of fiscal 2000 to the first half of fiscal 2001 included a $385,700 increase in revenues from the development of a custom convergence billing, reporting and support system for Pacific Bell and MCI customer care services for the State of California's CALNET contract, which was subsequently terminated. The DCS product revenues declined 27.8%, or $170,044, to $441,322, due to a decrease in demand for its text-based software. The Company expects this trend to continue. RATEX revenues declined 93.7%, or $541,013, to $36,372 for the six months ended May 31, 2001 compared to $577,385 for the six months ended May 31, 2000. In December 2000, the Company completed the sale of the RATEX division. For the six months ended May 31, 2001 and 2000, revenues from Customized Billing Services were approximately $447,000 and $484,000, respectively. Revenues from Recovery Services, which are generated through the Company's wholly-owned subsidiary, Telesoft Recovery Corp., increased 170.3%, or $735,097, to $1,166,838 for the six months ended May 31, 2001 from $431,741, for the six months ended May 31, 2000.

Revenue for the ~~three~~ six-month period ended ~~February~~May 2831, 2001 ~~February 29,~~ 2000 ~~February 28,~~ 1999 ~~February 28,~~ 1998 ~~February 28,~~ 1997 -----------~~-------~~ -----------~~-------~~ -----------~~-------~~ -----------~~-------~~ -----------~~-------~~ Telemanagement. . $ 12,~~191~~724,~~300~~453 $ 1,~~108~~673,~~955~~692 $ ~~717~~1,~~672~~311,235 $ ~~444~~854,~~788~~140 $ ~~212~~705,~~236~~326 DCS ~~. . . . . . . 176~~441,~~833~~322 ~~372~~611,~~156~~366 ~~338~~661,~~942~~226 ~~388~~906,~~228~~641 ~~250~~828,~~264~~920 RATEX ~~. . . . . .~~ 36,372 ~~337~~577,~~109~~385 ~~331~~725,~~582~~775 ~~495~~890,~~448~~466 ~~158~~360,~~215~~610 ------------------ ------------------ ------------------ ---------~~---------~~ ~~------------------~~ System Sales 13,~~404~~202,~~505~~147 12,~~818~~862,~~220~~443 12,~~388~~698,~~196~~236 12,~~328~~651,~~464~~247 ~~620~~1,~~715~~894,856 STS ~~. . . . . . . 3~~7,~~882~~702,~~567~~411 49,~~791~~728,~~533~~487 511,~~817~~390,~~928~~479 511,~~455~~011,~~812~~644 48,~~067~~268,~~982~~643 ~~Custom~~Customized Billing. .Services ~~263~~447,~~245~~347 ~~253~~484,~~685~~425 ~~545~~808,~~005~~474 ~~242~~462,~~502~~595 ~~167~~310,~~894~~067 Network Services. - - 51129,~~468~~556 - - Recovery Services ~~568~~1,~~702~~166,838 ~~159~~431,~~105~~741 -241 - - ------------------ ------------------ ------------------ ---------~~---------~~ ~~------------------~~ $ 612,~~119~~518,~~019~~743 $ 713,~~022~~507,~~543~~096 $ 715,~~802~~026,~~597~~986 $ 714,~~026~~125,~~778~~486 $ 410,~~856~~473,~~591~~566 ================== ================== ================== =========~~========= ==================~~

10 Total gross profit increased 4.6% or $278,962, to $6,351,858 for the six months ended May 31, 2001 compared to $6,072,896 for the six months ended May 31, 2000. Cost of goods sold was approximately 69.3% of STS revenues for the six months ended May 31, 2001, compared with 71.3% for the six months ended May 31, 2000. This decrease was primarily due to more favorable billing fee structures with the Company's university customers. The emphasis on more fixed fee structures positively contributed to the more moderate decrease in gross profits of 15.2% compared to the 21% decrease in revenues from this division. Cost of goods sold as a percentage of System Sales and Maintenance revenues were approximately 26% and 17% for the six months ended May 31, 2001 and 2000, respectively. This increase was due to a higher proportion of professional services-related revenue. General and administrative expenses decreased by 12.4%, or $777,300, for the six months ended May 31, 2001 to $5,494,442 from $6,271,742 for the six months ended May 31, 2000. This decrease was primarily due to a human resources cost-cutting effort implemented by the Company during the last two fiscal quarters of 2000 and the first fiscal quarter of 2001. Also contributing to the decrease was the decrease in human resource costs resulting from the sale of the RATEX division. The gain on the sale of RATEX was largely offset by a charge taken for the issuance of common stock to the TRC executives in lieu of cash compensation under their employment agreements. RATEX related expenses for the first half of fiscal 2001 and 2000 were approximately $50,000 and $534,000, respectively. Recovery Services had operating expenses of $824,000 and $460,000 during the first half of fiscal 2001 and 2000, respectively. General and administrative expenses as a percentage of gross profit were 86.5% and 103.3% for the first half of fiscal 2001 and 2000, respectively. The Company expects general and administrative expenses as a percentage of gross profit to decrease over time as revenues for TelMaster systems and Recovery services increase. Other income and expense decreased to an expense of $5,954 for the first half of fiscal 2001 from income of $439,143 in the first half of fiscal 2000. This decrease was attributable to an approximate $310,000 decrease in pre-tax interest income in the first half of fiscal 2001 and a $145,189 pretax gain on the sale of investment securities in the first half of fiscal 2000. Interest expense for the six months ended May 31, 2001 and 2000 was $28,750 and $37,470, respectively. The provision for income taxes was $362,500 and $85,500 for the six months ended May 31, 2001 and 2000, respectively. This represents 42.6% and 35.6% of income before provision for income taxes for 2001 and 2000, respectively. This percentage increase was partially attributable to decreased interest from tax-free investments as well as a lower percentage of tax-free interest included in pretax income. Net income increased to $488,962 for the first half of fiscal 2001 from $154,797 in the first half of fiscal 2000. This increase was attributable to an approximate $523,000 decrease in operating loss from the System Sales division, reflecting the impact of cost cutting measures, and improved results from the Recovery Services division, which had operating income of approximately $343,000 for the first half of fiscal 2001 compared to an approximate $28,000 operating loss in the first half of fiscal 2000. These increases were offset by an approximate $309,000 decrease in pre-tax interest income in the first half of fiscal 2001 and a $145,189 pretax gain on the sale of investment securities in the first half of fiscal 2000. 11

~~During~~RESULTS ~~the~~OF ~~quarter~~OPERATIONS BY PRODUCT LINE FOR THE THREE MONTHS ENDED MAY 31, 2001 AND 2000 (in thousands except per share items) Three months ended ~~February~~May 2831, 2001 Three months ended May 31, ~~the~~2000 ~~Company~~--------------------------------------------- ~~made~~----------------------------------------------- ~~the~~System ~~following~~Custom ~~sales~~Recovery ofSystem ~~unregistered~~Custom ~~securities:~~Recovery ~~Consideration~~STS ~~Received~~Sales IfBilling ~~Option,~~Services ~~and~~Total ~~Description~~STS ofSales ~~Warrant~~Billing orServices ~~Underwriting~~Total or---------------------------------------------------------------------------------------------- ~~Other~~Sales, ~~Exemption~~net ~~Convertible~~$3,820 ~~Discount~~$ to1,798 ~~Market~~$ ~~From~~184 ~~Security~~$ 598 $6,400 ~~Terms~~$4,937 ~~Date~~$ of1,044 ~~Number~~$ ~~Price~~231 ~~Afforded~~$ to273 ~~Registration~~$6,485 Cost of ~~Exercise~~sales or2,868 ~~Sale~~461 ~~Title~~- of- ~~Security~~3,329 ~~Sold~~3,652 ~~Purchasers~~152 ~~Claimed~~4 ~~Conversion~~- 3,808 ------ ------- -------- --------- ------- ------ -------- -------- ---------- ------- Gross profit 952 1,337 184 598 3,071 1,285 892 227 273 2,677 ------ ------- -------- --------- ------- ------ ~~2/13/01~~-------- ~~Options~~-------- to---------- ~~purchase~~------- 27General & administrative expenses: General 715 1,~~200~~165 ~~Options~~126 ~~granted~~432 -2,438 no891 4(1,486 192 223 2),792 ~~Exercisable~~Depreciation ~~for~~28 ~~shares~~8 of3 ~~common~~1 ~~consideration~~40 ~~received~~44 by31 ~~five~~5 ~~years~~1 ~~from~~81 ~~stock~~Bad ~~Company~~debt ~~until~~120 ~~exercise~~- ~~date~~- of- ~~grant~~120 at71 an- ~~exercise~~- ~~price~~- of71 $Corporate allocations: General 41 44 1~~.3125~~ ~~per~~1 ~~share~~87 38 22 6 2 68 Depreciation 23 44 6 2 75 38 39 10 - 87 ------ ------- -------- --------- ------- ------ -------- -------- ---------- ------- 927 1,261 136 436 2,760 1,082 1,578 213 226 3,099 ------ ------- -------- --------- ~~2/13/01~~------- ~~Common~~------ ~~Stock~~-------- -------- ---------- ------- Operating income (loss) 25 76 48 162 311 203 (686) 14 47 (422) Other income 1 69 ------- ------- Pretax income (loss) 312 (353) Income tax provision (133) 130~~,000~~ ~~Issued~~------- to------- ~~TRC~~Net ~~executives~~income 4(2loss) ~~N/A~~$ in179 ~~connection~~($223) ~~with~~======= ~~their~~======= ~~employment~~Diluted ~~agreements~~earnings (loss) per share $ 0.13 ($0.11) ======= =======

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2001 AND 2000 Revenues decreased by 1.3% to $6,399,724 for the three months ended May 31, 2001 compared to $6,484,553 for the three months ended May 31, 2000. The Company's revenue is derived from four principal product lines and services: STS Outsourcing Programs (STS), System Sales and Maintenance, Customized Billing Outsourcing Services and Recovery Services. STS Program revenues were $3,819,844 for the three months ended May 31, 2001 compared to $4,936,954 for the three months ended May 31, 2000, a 22.6% decrease. Revenues from System Sales and Maintenance were $1,797,642 for the three months ended May 31, 2001 compared to $1,044,223 for the three months ended May 31, 2000, an increase of 72.2%. TelMaster sales and maintenance related revenues increased by $968,416, or 171.5%, to $1,533,153 for the three months ended May 31, 2001 compared to $564,737 for the three months ended May 31, 2000. The increase in TelMaster revenues from the second quarter of fiscal 2000 to the second quarter of fiscal 2001 included a $233,400 increase in revenues from the development of a custom convergence billing, reporting and support system for Pacific Bell and MCI customer care services for the State of California's CALNET contract, which was subsequently terminated. The DCS product revenues increased 10.6%, or $25,279, to $264,489. For the three months ended May 31, 2000, RATEX revenues were $240,276. In December 2000, the Company completed the sale of the RATEX division. 12 For the three months ended May 31, 2001 and 2000, revenues from Customized Billing Services were approximately $184,000 and $230,000, respectively. Revenues from Recovery Services, which are generated through the Company's wholly-owned subsidiary, Telesoft Recovery Corp., increased 119.4%, or $325,500, to $598,136 for the three months ended May 31, 2001 from $272,636 for the three months ended May 31, 2000.

~~The~~Revenue ~~following~~for ~~table reconciles~~ the ~~numerators~~three-month ~~and~~period ~~denominators~~ended ofMay ~~the basic and diluted earnings per share: THREE MONTHS ENDED FEBRUARY 28~~31, ~~FEBRUARY 29,~~ 2001 2000 ~~---------~~1999 1998 1997 ---------- ~~BASIC EARNINGS PER COMMON SHARE:~~ ---------- ---------- ---------- ----------~~-----~~ ~~NUMERATOR~~Telemanagement ~~Net earnings available to common shareholders 309~~$1,~~506 377~~533,~~662~~153 ~~=========~~$ ~~=========~~564,737 ~~DENOMINATOR~~$ ~~Weighted~~593,563 ~~average~~$ ~~number~~409,352 of$ ~~shares~~493,090 ~~outstanding~~DCS 1264,~~345~~489 239,~~584~~210 3322,~~711~~284 518,~~500~~413 ~~=========~~578,656 ~~=========~~RATEX ~~PER~~- ~~SHARE~~240,276 ~~AMOUNTS~~394,193 ~~Net~~395,018 ~~earnings~~202,395 ~~available to common shareholders 0.23 0.10 ========= ========= DILUTED EARNINGS PER SHARE~~ ---------------------------------------------------------- ~~NUMERATOR~~System ~~Net~~Sales ~~earnings~~1,797,642 ~~available~~1,044,223 ~~to common shareholders 309~~1,~~506~~310,040 ~~377~~1,~~662~~322,783 ~~========= ========= DENOMINATOR Weighted average number of shares outstanding~~ 1,~~345~~274,~~584~~141 STS 3,~~711~~819,~~500~~844 ~~Effect~~4,936,954 of5,572,551 ~~dilutive~~5,555,832 ~~securities:.~~4,200,661 .Customized .Billing .Services .184,102 .230,740 .263,469 .220,093 ~~Options~~142,173 ~~and~~Network ~~warrants.~~Services .- .- .78,088 .- .- .Recovery .Services ~~. . . . . 27~~598,~~200~~136 ~~418~~272,~~100~~636 ~~Stock~~241 ~~acquired~~- ~~with~~- ~~proceeds. . . . . . . . . (23,477) (300,396)~~ --------- ------------------------------------------------- ~~Weighted~~$6,399,724 ~~average~~$6,484,553 ~~common~~$7,224,389 ~~shares and assumed. . 1~~$7,~~349~~098,~~307~~708 3$5,~~829~~616,~~204~~975 ~~conversions outstanding~~ ========= ========= ~~PER SHARE AMOUNTS Net earnings available to common shareholders 0.23 0.10~~ ========= ===============================

Total gross profit increased 14.7%, or $393,955, to $3,070,717 for the three months ended May 31, 2001 compared to $2,676,762 for the three months ended May 31, 2000. Cost of goods sold was approximately 75% of STS revenues for the three months ended May 31, 2001, compared with 74% for the three months ended May 31, 2000. Cost of goods sold as a percentage of System Sales and Maintenance revenues were approximately 26% and 14% for the three months ended May 31, 2001 and 2000, respectively. This increase was due to a higher proportion of professional services-related revenue. General and administrative expenses decreased by 10.9%, or $338,154, for the three months ended May 31, 2001 to $2,760,760 from $3,098,914, for the three months ended May 31, 2000. This decrease was primarily due to a human resources cost cutting effort implemented by the Company during the last two fiscal quarters of 2000 and the first fiscal quarter of 2001. Also contributing to the decrease was the decrease in human resource costs resulting from the sale of the RATEX division. RATEX related expenses for the second quarter of fiscal 2000 were $256,000. Recovery Services had operating expenses of $436,000 and $226,000 during the second quarter of fiscal 2001 and 2000, respectively. General and administrative expenses as a percentage of gross profit were 89.9% and 115.8% for the second quarter of fiscal 2001 and 2000, respectively. The Company expects general and administrative expenses as a percentage of gross profit to decrease over time as revenues for TelMaster systems and Recovery services increase. Other income decreased to $1,499 for the second quarter of fiscal 2001 from $69,187 in the second quarter of fiscal 2000. This decrease was attributable to an approximate $96,000 decrease in pre-tax interest income in the second quarter of fiscal 2001. Interest expense for the three months ended May 31, 2001 and 2000 was $10,725 and $37,470, respectively. The provision for income taxes was an expense of $132,000 and benefit of $130,100 for the three months ended May 31, 2001 and 2000, respectively. This represents 42.4% and 36.9% of income before provision for income taxes for 2001 and 2000, respectively. For the second quarter of fiscal 2001, the Company realized net income of $179,456 compared to a $222,865 net loss in the second quarter of fiscal 2000. 13 MATERIAL CHANGES IN FINANCIAL POSITION Accounts receivable decreased to $6,202,452 as of May 31, 2001 from $8,160,650 as of November 30, 2000 ($5,599,643 and $7,737,213, net of allowance for uncollectibles as of May 31, 2001 and November 30, 2000, respectively). This decrease was primarily due to normal seasonal decline in STS revenues. STS revenues were approximately $3,820,000 and $5,473,000 for the second quarter of 2001 and the fourth quarter of 2000, respectively. Accounts payable and accrued liabilities decreased to $4,111,907 as of May 31, 2001 from $5,199,187 as of November 30, 2000. As of May 31, 2000, there was $4,060,379 in accounts payable and accrued liabilities. This slight decrease from May 31, 2001 to May 31, 2000 was attributable to the decline in STS revenues, offset by increasing gross profit margins. LIQUIDITY AND CAPITAL RESOURCES At May 31, 2001, the Company had cash and cash equivalents of $762,334. In April 2000, three of the Company's executive officers entered into an agreement with the Company, pursuant to which each of them agreed to make available to the Company up to $1,000,000 at the Company's request. In May 2000, each of their agreements was amended to increase the amount to $1,350,000. Draw downs were payable on May 31, 2001 and had an annual interest rate of 10%. Pursuant to a second amendment to their respective agreements in April 2001, each of the officers has agreed to extend $350,000 of their respective loans until August 31, 2001. As of May 31, 2001, the outstanding balance on the loans aggregated $300,000. The Company believes that cash flows from its business will allow it to service the interest payments the Company will incur on these loans. However, there can be no assurance that the Company will not require additional funding within this time frame. The Company may be required to raise additional funds through public or private financing, strategic relationships, or other arrangements. There can be no assurance that such additional funding, if needed, will be available on terms attractive to the Company, or at all. Furthermore, any additional equity financing may be dilutive to existing stockholders. SEASONALITY The Company generally completes the sale of the majority of STS Program system installations in the university market during the spring and early summer months. The implementation and installation of these systems and services typically occurs during the summer months. Revenues derived from STS Programs begin in the fall and weaken during winter holiday and the summer months when students are on vacation. As a result, the Company's revenues have consistently been highest during the second and fourth quarters. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. At November 30, 2000 and May 31, 2001, the Company had no derivative Financial instruments, other financial instruments, or long-term debt obligations. 14 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not involved as a party to any legal proceedings other than various claims and lawsuits arising in the normal course of its business, none of which, in the opinion of the Company's management, are individually or collectively material to the Company's business. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On May 18, 2001, the Company held its annual meeting of shareholders, at which the Company's shareholders considered the election of directors. Shareholders voted to elect Joseph W. Zerbib, Michael F. Zerbib, Thierry E. Zerbib, Brian H. Loeb, Cecile Silverman, Kalvan Swanky and Todd Belfer to serve as directors for the ensuing year and until their successors are elected and qualified. 771,892 shares were voted and 1,057 shares were withheld for each director. 15 ITEM 5. OTHER INFORMATION In April 2000, three of the Company's executive officers entered into an agreement with the Company, pursuant to which each of them agreed to make available to the Company up to $1,000,000 on the Company's request. In May 2000, each of their agreements was amended to increase the amount to $1,350,000. Draw downs were payable on May 31, 2001 and had an annual interest rate of 10%. Each loan is secured by the Company's assets. This financing was completed in order to satisfy the terms of the Company's self-tender offer of its common stock completed in fiscal 2000. Pursuant to a second amendment to their respective agreements in April 2001, each of the officers has agreed to extend $350,000 of their respective loans until August 31, 2001. As of May 31, 2001, the outstanding balance on the loans aggregated $300,000. 16 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) NO. DESCRIPTION REFERENCE --- ----------- --------- 10.12 Form of Promissory Note between the Company and (1) each of Michael Zerbib, Thierry Zerbib and Brian Loeb, dated April 3, 2000 10.13 Form of Amendment to the Promissory Note dated (1) April 3, 2000 between the Company and each of Michael Zerbib, Thierry Zerbib and Brian Loeb, dated May 24, 2000 10.14 Form of Second Amendment to the Promissory Note (1) dated April 3, 2000, as amended on May 24, 2000, between the Company and each Michael Zerbib, Thierry Zerbib and Brian Loeb, dated April 9, 2001 11 Earnings per common and common equivalent shares Filed herewith (1) Filed with Form 10-Q for the quarter ended February 28, 2001 (b) There were no reports on Form 8-K filed during the quarter ended May 31, 2001. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TELESOFT CORP. BY: /s/ Michael F. Zerbib -------------------------------- Michael F. Zerbib Chief Financial Officer DATED: June 8, 2001 17

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