CCC Internet Solutions

2002 Annual Report

Canada's Automotive Information Services Company

CCC Internet Solutions

CCC Internet Solutions Inc.is an Au tomo t i ve

Information Service provider that owns and

operates revenue producing automotive

related web sites.

1 Corporate Profile and Financial Highlights 2 Report to Shareholders

4 Management’s Discussion and Analysis 6 Auditor’s Report

7 Consolidated Balance Sheet 8 Consolidated Statement of Income and Deficit

10 Notes to Consolidated Financial Statements 16 Corporate Information

CCC Internet Solutions Inc. is an AutomotiveInformation Service provider that owns and operates rev-enue producing automotive related web sites.

Through its two B2C (Business to Consumer) websites at www.carcostcanada.com and www.freein-voiceprices.com, "CCC" offers comprehensive up todate new car buyer information, including confiden-tial dealer invoice cost prices, to aid the consumerin making informed choices by providing accurateand timely confidential automobile industry informa-tion. To date over 27,000 people have joined asmembers of our sites, generating very consistentrevenue growth. Membership fees have consistent-ly risen throughout the last three years. Currently theaverage membership revenue is over $37.00 permember. On average over 1,000,000 new vehiclesare sold to the retail public each year in Canada.This year we increased our market share from0.71% to 1.38%, an increase in market penetrationof 94%. We are well on our way to reaching our long-term goal of 10% of all new car retail buyers in Canada.

Through its B2B (Business to Business) website, www.43r.ca, "CCC" exclusively serves theAutomotive Insurance Industry. By providing thevaluable confidential automobile industry informa-tion to the Insurer, 43r.ca dramatically lowers settle-ments on automobile total-loss claims with43r/Waiver of depreciation endorsements. A Waiverof Depreciation endorsement entitles the policyholder, of a vehicle that has been deemed to be a

CORPORATE PROFILE

total-loss, to a settlement price based on the originalsale price or replacement value, whichever is lower.Otherwise, the settlement price would be based onthe then current depreciated value of the automo-bile. This can have the effect of raising the settle-ment claim by thousands of dollars. Due to the min-imal cost of purchasing the 43r/waiver of deprecia-tion endorsement, which is typically available forthe first three years of the vehicle’s life and the valuethat the endorsement brings to the consumer, it hasbecome a very popular choice for new car buyers.Potential savings to the Industry, based on industryestimates of 50,000 annual claims and our provenrecord of savings of over $ 1,000 per claim, theInsurance industry could save in excess of $50 mil-lion annually. 43r.ca charges the InsuranceCompany a flat fee of $200.00 per claims transac-tion based on a guaranteed savings to theInsurance Company of at least $1,000 per claim. Itshould be noted that there is no net cost to theInsurance Company only a savings. Since its launchin January 2002, we have handled over $12,000,000worth of claims with an average savings of over$1,200 per claim. Due to the overwhelming accept-ance by many of Canada’s largest Insurance com-panies we are currently increasing our capacity tomeet demand.

The annual meeting of CCC Internet Solutions Inc.will be held on November 26, 2002 at 4:30 p.m. inThe Canadian Room at The Ontario Club located atCommerce Court South, Toronto, Ontario, on the 5th floor.

FINANCIAL HIGHLIGHTS 2002 2001 % ChangeFourth quarter revenue $186,020 $83,284 +124%

Total revenue for the year $535,675 $283,879 + 89%

Total expenses $647,039 $422,995 +53%

Total loss before amortization $111,364 $139,116 -25%

Amortization $63,327 $51,137 +24%

Total loss after amortization $174,691 $190,253 -9%

One time gain on foreignness of debt NIL $130,774 N/A

Total loss for the year $174,691 $59,479 +294%

Loss per share fully diluted for the year $0.016 $0.006 +167%

Outstanding common shares 11,061,233 10,501,952 +5%

CCC Internet Solutions 2002 Annual Report 1

9-11 will forever change the way public companies do busi-

ness in North America. Terrorism reached new heights; a

recession spread throughout the world; a meltdown that dec-

imated the technology industry; a dramatic decrease in the

major North American stock markets for the second year in a

row; and corporate scandals of unprecedented magnitude,

which rocked the corporate world. These events reinforced

the management of CCC’s belief that focus, discipline, sound

business management and solid corporate governance had

become mandatory if CCC, as a Public Company, was to gain

a reputation for conducting its’ affairs with integrity.

Management has undertaken a program to implement all

changes necessary to achieve that reputation amongst the

investing public.

REPORT TO SHAREHOLDERS

2


During the past fiscal year, the company has grown in many areas. An important new Insurance Solutions divi-sion called 43r.ca, was launched and has been successful and lucrative. In order to capitalize on the signif-icant opportunity presented by the 43r.ca initiative, CCC has appointed a very experienced President, BrianRadigan to aggressively persue the opportunity. (A discussion of the 43r.ca initiative can be seen in theCorporate Profile section.)

CCC’s’ flagship Car Cost Canada.com is the core automobile information services division of our company.The B2C website at www.carcostcanada.com , has been totally enhanced and updated to add much more value for the potential customer. These ongoing changes are helping the Company focus on itsstrengths, while strengthening its brand. Any new car purchaser can benefit financially from this service. Theinformation available on our site provides the customer with confidential new car dealer invoice cost prices,factory incentives and rebate information. This coupled with our ability to negotiate very low acquisition priceson new cars, makes our service an invaluable necessity for the shrewd new car buyer.

"Lowest new car prices in Canada….Guaranteed!"

In addition and in response to market opportunities, CCC has launched a complementary site to Car CostCanada.com called freeinvoiceprices.com at www.freeinvoiceprices.com which provides CCC with anothervaluable revenue producing stream. Here is how it works. For the first time ever, Canadian new car buyersnow have access to confidential new car dealer invoice prices effectively for free; based upon CCC’s exclusive redeemable coupon program. Up until now, Car Cost Canada.com was the exclusive online source for this valuable information for a fee ranging from $25 to $45. Free Invoice Prices.com, in addition toproviding our "Subscribers" dealer invoice prices, will also provide access to confidential factory rebates and incentive programs. For the service, CCC will charge the consumer a fee of $50.00, which is fully refundableto the consumer by the New Car Dealer of the consumer’s choice, upon conclusion of the purchase of his orher new car.

Finally, two new Independent directors were elected to the Company’s board and an Independent auditcommittee was established to ensure a high standard of corporate governance.

Operationally, and with these new initiatives in place, Management came very close to achieving its goal ofmaking a profit in the 4th quarter. Looking ahead, Management is confident that it can attain its goal for 2003.To turn a profit and to grow both top line revenues and profits on a quarter over quarter basis is our main priority.

It is Managements’ view that in today’s economic climate investors will only be interested in those internet-based companies that are profitable, demonstrate significant potential and are built on solid and traditionalbusiness fundamentals. Discipline and commitment to these guiding principals will ensure "CCC’s" stable andlong range potential for capital appreciation

Management feels that all of the initiatives put in place over this past year will set a platform from which CCCshould be able to deliver superior returns to our stakeholders.

September 30, 2002

R. James Matthews Paul Timoteo

Chief Executive Officer President

OverviewDuring the year Management clearly announced its

corporate goals to the shareholders:

Throughout 2002 "CCC" will focus on the continued

and aggressive expansion of its multiple revenue

streams while enhancing its web sites in order to

move toward sustained profitability.

Management was unwavering in its determination to

achieve these corporate goals.

During this time and subsequent to year-end the

company has reached many important milestones.

CCC expanded its revenue streams with the launch

of 43r.ca, (our Insurance Solutions business),

increased its margins and revised its membership

plans to better reflect market demand at Car Cost

Canada.com and it successfully launched Free

Invoice Prices.com. These changes included a total

redesign of the Car Cost Canada.com website and

several other enhancements to ensure easier navi-

gation and higher profit margins. Lastly and most

importantly, the fourth quarter was CCC’s best ever,

with sales increasing to $186,020, 48% better than

our third quarter of 2001-2002 and 124% better than

our fourth quarter of 2000-2001. The bulk of the

increase in the fourth quarter was a direct result of

the commencement of revenue generation from the

43r.ca initiative.

The following is a summary of the achievement’s

and milestones that have been recently reached for

and subsequent to the period:

• Our Insurance Solutions business 43r.ca was

launched, has received overwhelming accept-

ance and is rapidly growing.

According to Mr. Don Lough, President, Property and Casualty

Insurance for ING Canada, “the pilot program was an over-

whelming success and its results handily exceeded our expecta-

tions”. "43r.ca clearly demonstrated the tremendous value that

they can bring to our business", said Mr. Lough. "We are very

excited about the program and are looking forward to a solid

long-term relationship with CCC Internet Solutions Inc."

MANAGEMENT’S DISSCUSSION AND ANALYSIS

• Mr. Br ian Radigan, LLB. , was appointed

President of the Company’s 43r.ca division.

"I am both enthusiastic and energized by my appointment as

President of 43r.ca and look forward to the challenges and

opportunities my role will bring" said Radigan. "In a very short

time, 43r.ca has clearly demonstrated its big-sky potential. The

opportunity for me now will be to make a major contribution

to the development of 43r.ca’s great potential; and that I am

very excited about!"

• Car Cost Canada was successfully redesigned.

"Total membership sales totalled 13,809, an increase of 94%

over last year."

• Free Invoice Prices was successfully launched.

• Two Independent directors, Richard Buzbuzian

and Greg Harris, were appointed to the

Company’s Board.

• An Independent Audit Committee and Audit

Committee Mandate have been established for

the Company to ensure quality of corporate

governance and provide shareholders the confi-

dence they deserve.

OperationsAs a result of CCC’s progressive activities for the fis-

cal period, total revenue rose to a record $535,675,

an 89% increase over fiscal 2000-2001. Total oper-

ating expenses before amortization were $647,039,

an increase of 53% over fiscal 2000-2001. Total

losses for the year were $174,691, 9% lower than

4

fiscal 2000-2001 before a one time gain for forgive-

ness of debt.

On June 5, 2002 we announced that an agreement

of debt conversion with Paul Timoteo, James

Matthews, Eli Oszlak and Lease Busters Inc. to con-

vert two-thirds of the $197,676.85 debt owing by

CCC Internet Solutions Inc. to such persons into

common shares of the company, had been com-

pleted. The shares have been issued and the debt

has been extinguished.

CCC’s balance sheet is now 100% debt-free.

"As we begin our new fiscal year, which commenced June 01,

2002, we are better than ever positioned, to realize the true

potential of our company. We are now totally debt free, cash

flow positive and looking forward to reporting profitable and

sustainable bottom-line results,"

Our flagship site Car Cost Canada.com continued

to deliver solid growth. This year we sold 13,809

memberships, compared to 7,122 last year, an

increase of 94%. This brings our membership

base to a grand total of 22,585, an increase of

257% compared with the total of 8,776 as of

May 31, 2001.

The Corporation reported a loss of $174,691 for the

year ended May 31, 2002 that includes a total non-

cash item of $63,327 in amortization expense. Cash

used in operations was $248,521. Based on a year-

end cash position of $186,739, no debt and positive

cash flow going forward, management feels that

they are in a good position to meet all current and

foreseeable financial obligations.

As for our competition, history has demonstrated

that due to the confidentiality of much of our data,

the barrier of entry into our business remains very

high. Currently, to the best of management’s knowl-

edge, there is no other company offering both the

range of products and services and the ability to

deliver these products and services online.

Risk ManagementCCC Internet Solutions Inc. is subject to the risk

generally associated with the operation of income-

producing websites and high-technology invest-

ments. These risks include fluctuations in site traffic,

sales, operating expenses, and the risk of unavail-

ability of further equity financing and/or funding.

Other associated risks may include competition,

technical constraints in further business develop-

ment, and possible service interruptions.

OutlookCCC management for 2002 to 2003 looks to:

Aggressively grow the 43r.ca Insurance

Solutions business and secure Master Vendor

Agreements with Canadian Insurance

Companies where available and as quickly as

possible.

Increase revenues from our flagship website

Car Cost Canada.com (www.carcostcanada.com)

through continued innovative improvements,

effective marketing campaigns and expansion

of strategic partnership agreements with

Yahoo! Autobytel.ca and other large national

organizations.

Increase our market share through effective

sales and marketing of both our B2C and B2B

businesses.

Achieve and sustain profitability with

sequential earnings growth for the year ahead.

Achieve more cost efficiencies in all of

the operations.

It is Management’s belief that CCC Internet

Solutions Inc., with its financial and human

resources, is poised for significant growth as it cap-

italizes and grows it’s niche markets in all aspects of

it’s Internet and traditionally based businesses.

It is expected that Management can meet these

objectives regardless of economic conditions.

Although a robust economy can lead to a greater

number of cars sold and thus a potentially larger

market opportunity for all of CCC’s’ divisions, a

down economy can have an equally positive impact

as both individuals and Insurance Companies

become more cost conscious.


MAY 31, 2002

To the Shareholders of CCC Internet Solutions Inc.

I have audited the consolidated balance sheet of

CCC Internet Solutions Inc. as at May 31, 2002 and

the consolidated statement of income and deficit

and consolidated statement of cash flows for the

year then ended. These consolidated financial

statements are the responsibility of the company’s

management. My responsibility is to express an

opinion on these consolidated financial statements

based on my audit.

I conducted my audit in accordance with Canadian

generally accepted auditing standards. Those stan-

dards require that I plan and perform an audit

to obtain reasonable assurance whether the

consolidated financial statements are free of mis-

statement. An audit includes examining, on a test

basis, evidence supporting the amounts and

disclosures in the consolidated financial statements.

An audit also includes assessing the accounting

principles used and significant estimates made by

management, as well as evaluating the overall con-

solidated financial statement presentation.

CONSOLIDATED FINANCIAL STATEMENTS

AUDITOR'S REPORT

6

In my opinion, these consolidated financial

statements present fairly, in all material respects, the

consolidated financial position of CCC Internet

Solutions Inc. as at May 31, 2002 and the results

of its operations and its cash flows for the year then

ended in accordance with Canadian generally

accepted accounting principles.

Toronto, Ontario

July 31, 2002

Philip Gigan

CHARTERED ACCOUNTANT


CURRENT

GIC (note 4) $240,452 $375,000

Accounts receivable 74,706 25,749Prepaid expenses and sundry assets 9,770 28,566Bank - 60,260GST receivable - 3,004

324,928 492,579

CAPITAL ASSETS – NET (notes 3 and 5) 57,779 58,195

OTHER ASSETS

Intangible assets-net(notes 3,7(a) and 8(f)) 227,997 257,997Deferred acquisition costs-net(notes 3 and 7(b)) 56,064 72,083

284,061 330,080$ 666,768 $ 880,854

LIABILITIES

CURRENT

Bank overdraft $ 53,713 $ - Accounts payable and accrued liabilities (note 8(g)) 73,043 40,531Advances from directors (note 8(g)) 14,852 7,652Note payable (note 8(c)) - 125,000Deferred revenue - 12,500Loan payable – Lease Busters Inc.(note 8(b)) - 151,105

141,608 336,788

SHAREHOLDERS’ EQUITY

CAPITAL STOCK (note 9) 733,628 577,843

DEFICIT (208,468) (33,777)525,160 544,066

$ 666,768 $ 880,854

APPROVED ON BEHALF OF THE BOARD:

R. James MatthewsChief Executive Officer

Paul TimoteoPresident

CONSOLIDATED BALANCE SHEET

AS AT MAY 31, 2002 2002 2001

8

REVENUE (note 3) $ 535,675 $ 283,879

EXPENSES 112,702 43,109Advertising (note 8(g)) 112,702 43,109Office salaries 110,979 47,067Management salaries and fees (note 8(e)) 102,000 101,000Computer consulting and supplies (note 8(g)) 71,903 31,250Investor relations 54,739 57,601Professional fees 32,285 19,923Selling fees 31,187 5,222Automobile and travel (note 8(g)) 26,947 24,241Bookkeeping (note 8(g)) 24,000 14,050Bank charges and interest 16,284 8,679Rent and common area costs (note 8(d)) 14,827 14,220Transfer and exchange fees 11,353 6,088Employee benefits 11,269 6,165Interest on long term debt (note 8(b)) 10,054 6,269Office and general (note 8(g)) 10,633 8,160Telephone 6,926 3,679Temporary services 3,900 8,438Selling salaries 2,501 26,667Insurance 2,010 - Bad debts 1000 - Less:Interest income (10,460) (8,833)

647,039 422,995

(LOSS) BEFORE AMORTIZATION (111,364) (139,116)

LESS: AMORTIZATIONIntangible assets (notes 3,7(a) and 8(f)) 30,000 30,000Capital assets (notes 3 and 4) 17,308 13,545Deferred acquisition costs (notes 3 and 7(b)) 16,019 7,592

63,327 51,137

NET (LOSS) BEFORE UNDERNOTED ITEM (174,691) (190,253)

ADD: GAIN ON FOREGIVENESS OF DEBT - 130,774

NET (LOSS) (Basic and fully diluted loss per share-$0.01) (174,691) (59,479)

(DEFICIT) RETAINED EARNINGS, beginning of year (33,777) 25,702

DEFICIT, end of year $ (208,468) $ (33,777)

CONSOLIDATED STATEMENT OF INCOME AND DEFICIT

FOR THE YEAR ENDED MAY 31, 2002 May 31, 2002 May 31, 2001


CASH USED IN OPERATING ACTIVITIESNet loss $ (174,691) $ (59,479)

Add: Amortization of capital assets 17,308 13,545

Amortization of intangible assets 30,000 30,000

Amortization of deferred acquisition costs 16,019 7,592

(111,364) (8,342)

Net changes in non-cash working capital

balances related to operations 55 2,119

(111,309) (6,223)

CASH USED IN INVESTMENT ACTIVITIES

Purchase of capital assets (16,892) (57,430)

Deferred acquisition costs - (79,675)

(16,892) (137,105)

CASH PROVIDED BY FINANCING ACTIVITIES

Decrease in

loan payable – Lease Busters Inc. (151,105) (154,517)

Issuance of capital stock 155,785 50,000

(Decrease) increase in note payable (125,000) 125,000

Fair value of shares issued - 527,842

(120,320) 548,325

(DECREASE) INCREASE IN BANK (OVERDRAFT) AND GIC (248,521) 404,997

BANK AND GIC, beginning of year 435,260 30,263

BANK AND GIC, end of year $ 186,739 $ 435,260

NET CHANGES IN NON-CASH WORKING CAPITAL CONSISTS OF:GST receivable 3,004 $ 19,851

Accounts receivable (48,957) 20,524

Prepaid expenses and sundry assets 18,796 (21,472)

Accounts payable and accrued liabilities 32,512 13,739

Advances from directors 7,200 (13,433)

Deferred revenue (12,500) (17,090)

$ 55 $ 2,119

CONSOLIDATED STATEMENT OF INCOME AND DEFICIT

FOR THE YEAR ENDED MAY 31, 2002 May 31, 2002 May 31, 2001

MAY 31, 2002

1. BASIS OF PRESENTATION

The consolidated balance sheet of CCC Internet Solutions Inc. (Formerly Duke Capital Corp.)

(“CCCBC”) a company incorporated under the laws of the province of British Columbia, gives effect

to the reverse takeover whereby CCCBC, the legal parent, was acquired by CCC Internet Solutions

Inc.(Formerly E-Tom Technologies Inc.) (“CCCONT”) a company incorporated under the laws of the

province of Ontario, the legal subsidiary.

This reverse takeover occurred on October 30, 2000 pursuant to a Share Purchase Agreement

whereby CCCBC acquired all of the outstanding shares of CCCONT in exchange for 6,500,000

CCCBC shares and $150,000 of which $100,000 had been paid. The remaining $50,000 was con-

verted into shares of “CCCBC”as described in note 8(c)and 9(a).

These consolidated financial statements include the accounts of CCCBC and CCCONT. All material

inter-company balances, transactions and profits have been eliminated.

The prior year’s comparative figures have been reclassified, where necessary, to conform with the

current year’s presentation.

2. BUSINESS COMBINATION

a- The business combination occurred on October 30, 2000 and is accounted for by the purchase

method, with CCCONT being deemed the acquirer, because this exchange of shares leaves the

former shareholders of CCCONT with the majority of the issued shares of CCCBC.

As a result, the balance sheet of CCCONT is recorded at book value and the balance sheet of

CCCBC is recorded at fair market value at October 30, 2000.

b- Current Assets Of CCCBC @ October 30, 2000 $ 677,842

Liabilities Assumed Of CCCBC @ October 30, 2000 -

Cost Of Purchase $ 677,842

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with Canadian generally accepted

accounting principles. The following is a summary of significant policies;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10

CAPITAL ASSETS

Capital assets are recorded at historical cost. Amortization is charged to earnings over the estimat-

ed useful life of the assets on the following basis:

Leasehold improvements - straight line over 5 years

Furniture and fixtures - 20% declining balance

Computer hardware - 30% declining balance

Computer software - 100% declining balance

Capital assets purchased during the year are amortized at one-half the above stated rates.

REVENUE RECOGNITION AND DEFERRED REVENUE

Customer membership fees are recognized on a monthly prorata basis. The unearned portion is

reflected as deferred revenue on the balance sheet.

INTANGIBLE ASSETS

Intangible assets are recorded at acquisition cost. Amortization is provided on a straight line basis

over 10 years with half rates taken in the year of acquisition.

DEFERRED ACQUISITION COSTS

Deferred acquisition costs are recorded at cost and are amortized on a straight line basis over 5

years with half rates taken in the initial year.

EARNINGS PER SHARE

The computation of earnings per share is based on the weighted average number of common shares

outstanding during the year.

4. GIC

The GIC bears interest at 1.75% and matures on January 28, 2003.

5. CAPITAL ASSETS

Capital assets consist of:

May 31, 2002 May 31, 2002 May 31, 2002 May 31, 2001Accumulated Net Book Net Book

Cost Amortization Value Value

Leasehold improvements $ 43,643 $ 13,093 $ 30,550 $ 39,278

Furniture and fixtures 8,171 2,004 6,167 5,295

Computer hardware 31,089 11,161 19,928 13,316

Computer software 9,894 8,760 1,134 306

$ 92,797 $ 35,018 $ 57,779 $ 58,195


cont..., NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. GST RECEIVABLE

GST receivable represents GST input tax credits in excess of GST collected from customers.

7. OTHER ASSETS

a- Intangible assets consist of the “Autohotline” as described in note 8(f):

May 31, 2002 May 31, 2002

Acquisition cost $ 300,000 $ 300,000

Less: Accumulated amortization (72,003) (42,003)

$ 227,997 $ 257,997

b- Deferred acquisition costs represents the cost of professional fees for the reverse takeover as

described in note 1:

May 31, 2002 May 31, 2002

Acquisition costs $ 79,675 $ 79,675

Less: Accumulated amortization (23,611) (7,592)

$ 56,064 $ 72,083

8. RELATED PARTY TRANSACTIONS

a- Advances from directors are non-interest bearing and due on demand. Two directors of the

company are also directors and controlling shareholders of Lease Busters Inc.

b- The loan payable was due to Lease Busters Inc. Interest at 8% was payable on this loan until

December 31, 1999. Effective January 1, 2000, this loan was non-interest bearing until January 1,

2001. On January 1, 2000 $173,702 of this debt was foregiven and $130,774 was foregiven on July

1, 2000. Effective January 1, 2001, interest accrued at 8% per annum. $69,320 of this loan was

repaid in cash during the current fiscal year. The remaining $81,785 was exchanged for 272,615

common shares of the corporation (as described in note 9(b)).

c- Pursuant to the reverse takeover as described in note 1, there was a $150,000 non-interest bear-

ing note payable due to the shareholders of CCCONT. $100,000 of this note payable was repaid dur-

ing the last two fiscal years. The remaining $50,000 was exchanged for 166,666 common shares of

the corporation (as described in note 9(b)).

d- Included in expenses are the following paid to Lease Busters Inc.:

2002 2001

Rent - at fair market value $ 12,000 $ 12,000


12


e-Management salaries and fees were paid to directors of the company.

f- Intangible assets were acquired from Lease Busters Inc. and represent the purchase of the rights,

systems, data and clientele of Lease Busters Inc.’s “Autohotline”.

g- Included in expenses are the following paid to directors and parties related to directors of the

company:

2002 2001

Advertising $ 2,925 $1,787

Bookkeeping 24,000 14,050

Computer consulting 54,694 18,584

Office and general 800 750

Automobile 21,600 15,600

$ 104,019 $ 50,771

Included in accounts payable is $5,416 (2001-$20,080) due to these related parties.

9. CAPITAL STOCK

a- Authorized

100,000,000 common shares without par value

b- IssuedCCC Internet Solutions Inc. (Formerly E-Tom Technologies Inc.)

Balance as at May 31, 2001 May 31, 2002

100 $ 1

CCC Internet Solutions Inc. (Formerly Duke Capital Corp.)

Balance as at May 31, 2001 10,501,952 $ 1,438,916

Issued in consideration of debt retirement 272,615 81,785

to Lease Busters Inc.

Issued in consideration of debt retirement 166,666 50,000

to directors

Issuance of capital stock – 120,000 24,000

stock options exercised

Balance at May 31, 2002 11,061,233 1,594,701

Combined balances at May 31, 2002 11,061,333 1,594,70

Eliminate consolidation of subsidiary (100) (861,074)

Consolidated balance sheet at May 31, 2002 11,061,233 $ 733,628


c- Fully Diluted Shares

Balance at May 31, 2002 in note 9(b) 11,061,233 $ 733,628

Common shares issuable pursuant to incentive

stock options held by directors and officers 390,000 214,500

of CCCBC (note 9d(i))

Common shares issuable pursuant to incentive

stock options held by employees and others (note 9d(ii))

155,000 85,250

Common shares issuable under the unexercised

portion of the warrants granted to private

placement financing sources (note 9(f)) 761,952 761,952

Fully diluted share capital 12,368,185 $ 1,795,330

d- Stock Options

i- Directors

The company has granted stock options to its directors to purchase up to 510,000 common shares

of the company. 120,000 options were exercised at $.20 during the current fiscal year. 390,000

options are exercisable at $.55 per share and expire on February 15, 2006.

ii- Employees And Others

The company has granted stock options to its employees and others to purchase up to 155,000

common shares of the company exercisable at $.55 per share. These options expire on February 15,

2006.

e- Warrant – Listing AgentPursuant to an Agency Agreement dated August 26, 1999, the company’s listing agent was granted

non-transferable warrants to purchase up to 180,000 common shares of the company at $0.20 per

share. The listing agent exercised the warrant to purchase 90,000 common shares on November 24,

1999 and the remaining warrant to purchase 90,000 common shares was exercised on May 14,

2001.

f- Warrant – Private PlacementPursuant to a private subscription agreement, CCCBC entered into an agreement with a private

investor. This investor agreed to purchase 761,952 common shares at $0.55 concurrently with the

completion of the reverse takeover on October 30, 2000. This investor was also given a warrant enti-

tling him to acquire 761,952 additional CCCBC shares at a price of $1 per share until October 30,

2002.


14

g- Escrowi- Of the 2,890,000 common shares issued as at August 31, 2000, 666,667 of these issued common

shares are held in escrow in accordance with the terms of the regulation of the Canadian Venture

Exchange.

Escrow (Cont’d)

ii- Pursuant to the share purchase agreement as described in note 1, the 6,500,000 payment shares

are subject to escrow restrictions pursuant to the terms of an escrow agreement which was entered

into between CCCBC, a trustee and the shareholders of CCCONT in the form prescribed by the

exchange. The escrow agreement provides that the payment shares will be released from escrow as

to 5% commencing six months after the date of completion of the transactions (six months from

October 30, 2000) and continuing every six months thereafter until the second anniversary from

October 30, 2000. Thereafter, the remaining payment shares will be released from escrow as to 10%

commencing 30 months after October 30, 2000 and a further 10% every six months thereafter until

all payment shares have been released from escrow. The final tranche of payment shares to be

released from escrow, will be released on the sixth anniversary from October 30, 2000. Therefore,

there are 5,525,000 shares remaining in escrow at May 31, 2002 after 975,000 (15%) have been

released from April 30, 2001 to April 30, 2002.

INCOME TAXES

At May 31, 2002, the company had non-capital losses for income tax purposes of approximately

$561,100 available to offset future taxable income. The potential tax benefits have not been reflected

in these financial statements. These losses will expire as follows:

2007 $ 201,800

2008 $ 199,000

2009 $ 160,300

$ 561,100



CCC Internet Solutions Inc.

1230 Crestlawn Drive

Mississauga, Ontario

L4W 1A6

Telephone: (905) 624-3144

Facsimile: (905) 629-3299

http://cccis.ca

http://carcostcanada.com

http://43r.ca

http://freeinvoiceprices.com

Richard Buzbuzian BA.

Greg Harris BA. LLB.

Eli Oszlak

James Mathews B.Comm

Robert Montemarano BA. "Nominee"

Paul Timoteo

James Matthews

Secretary & Chief Executive Officer

Paul Timoteo

President & Chief Financial Officer

Eli Oszlak

Vice President & Chief Technical Officer

TSX Venture Exchange

CIS

Pacific Corporate Trust, Vancouver, B.C.

Harris & Harris, Toronto, Ontario

Philip Gigan C.A., Toronto, Ontario

Bank of Montreal and HSBC, Mississauga, Ontario

Annual Meeting of Shareholders will be held at:

The Ontario Club, in The Canadian Room

Commerce Court South, 5th Floor

Toronto, Ontario

November 26, 2002, at 4:30 p.m.

Corporate Office

Corporate Web Sites

Directors

Officers

Symbol

Transfer Agent

Legal Counsel

Auditor

Annual Meeting

Bank

CORPORATE INFORMATION

16

Documents

CCC Internet Solutions