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<DESCRIPTION>ALT VER FORM 10-K
<TEXT>

<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-K
                                ---------------

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                             ---------------------

For the Fiscal Year May 31, 2000                  Commission File Number 0-25104

                        CONTINENTAL INFORMATION SYSTEMS
                                  CORPORATION

                           (Exact name of registrant)

            45 Broadway Atrium, Suite 1105, New York, New York 10006
             (Address of principal executive offices and zip code)

                                 (212) 771-1000
                        (Registrant's telephone number)

       Securities registered pursuant to Section 12(b) of the Act:  NONE

          Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share

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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes /X/  No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

The number of the registrant's shares of Common Stock outstanding on June 30,
2000 was 6,576,244.

As of June 30, 2000, the aggregate market value of the shares of Common Stock
held by non-affiliates of the registrant was approximately $4,259,708.*

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of Continental Information Systems Corporation's Notice of Annual
Meeting of Stockholders and Proxy Statement, to be filed within 120 days after
the end of the registrant's fiscal year, are incorporated into Part III of this
Annual Report.

------------------------

*   Excludes 2,789,837 shares deemed to be held by officers and directors, and
    stockholders whose ownership exceeds ten percent of the shares outstanding
    at June 30, 2000. Exclusion of shares held by any person should not be
    construed to indicate that such person possesses the power, direct or
    indirect, to direct or cause the direction of the management or policies of
    the registrant, or that such person is controlled by or under common control
    with the registrant.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
    All statements contained herein that are not historical facts, including but
not limited to, statements regarding anticipated future capital requirements,
the Company's future development plans, the Company's ability to obtain
additional debt, equity or other financing, and the Company's ability to
generate cash from operations and further savings from existing operations, are
based on current expectations. These statements are forward looking in nature
and involve a number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to differ
materially are the following: the availability of sufficient capital to finance
the Company's business plan on terms satisfactory to the Company; competitive
factors, such as the introduction of new technologies and competitors that may
compete with the Company's T1Xpert.com subsidiary; risks generally associated
with development technology projects, including design, concept and
implementation; risks of the Company in exiting the aviation business including
risks attendant to realizing acceptable value in liquidating assets; risks
attendant to collecting on the Company's notes receivable arising out of various
settlements in the aviation business, risks attendant to the Company's finance
activities generally, including the risks of leverage, risks of borrower
default, general economic and real estate market conditions, and competition for
attractive real estate finance investments and pricing pressures which could
affect the value of the Company's assets; changes in labor, equipment and
capital costs; future acquisitions; general business, economic and regulatory
conditions; and the other risk factors described from time to time in the
Company's reports filed with the Securities and Exchange Commission ("SEC"). The
Company wishes to caution readers not to place undue reliance on any such
forward looking statements, which statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the date
made. The Company undertakes no obligation to update such forward-looking
statements.

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION AND HISTORY

    The Company is a New York Corporation that was organized in 1968. In
January 1989, the Company and nine of its affiliated subsidiaries filed for
protection under chapter 11 of the United States Bankruptcy Code. The Company
emerged from chapter 11 pursuant to a Plan of Reorganization in November 1994.
In 1997, the Board of Directors undertook a restructuring of senior management.
The new management included the appointment of a representative of the Company's
largest shareholder as Chief Executive Officer. New management conducted a
review of the Company's business and decided to focus on three areas of
operations, and to dispose of unrelated lines of business, including
telecommunications-related business units and its laser printing business. The
three areas of business it focused on were leasing of certain capital equipment,
buying and selling commercial aircraft and engines, and specialized financing
services.

    In August 1999, the Company announced that its subsidiary, CIS Corporation,
would no longer enter into new equipment leases and had sold a substantial
portion of its remaining lease portfolio. Since then, the Company has been
disposing of the balance of its remaining lease portfolio. The Company also
announced that it would focus on developing and commercializing specialized
software for the securities industry. In July 2000, the Company, citing market
conditions, among other reasons, announced it was exiting the aviation business
to focus its resources on the continued development and commercializing of an
Internet-enabled electronic securities processing software platform which would
use proprietary technology and which would be adapted to changes in the
securities industry including operational changes related to increased volume,
the ability to effect trades through the Internet, Electronic Crossing Networks,
decimalization, expanded trading hours, various rule changes and the shift from
settling trades in three days to settling trades in one day.

                                       2
<PAGE>
SECURITIES PROCESSING SOFTWARE BUSINESS

    As noted above the Company is continuing its focus on developing and
commercializing software for the securities industry. Originally the product was
designed to provide a trading portal to allow institutional traders to automate
essentially all steps of the trading process across various trading platforms,
and to find optimal price executions. After further research, design and
development the product was redesigned and adapted to focus on the securities
processing business of clearing firms generally, especially in connection with
proposed shortening of trading cycles from settlement occurring three days after
the trade date to one day after the trade date. This change is commonly referred
to as "T+1". The newly created subsidiary that was formed to engage in this line
of business, CIS Portal Corporation, changed its name to T1Xpert.com Corp.
("T1Xpert.com") to more properly reflect its business focus.

    The Company believes that there is a substantial window of opportunity
surrounding the planned transition to T+1 for a new entrant who is able to offer
a complete real-time processing and settlement system that includes operational
risk management tools. T1Xpert.com is in the early stages of developing what
management believes will be a complete real-time processing and settlement
solution encompassing straight through processing, process control, and
operational risk management, and plans to release an early test system by the
end of the 2000 calendar year. There can be no assurance, however, that the
Company's product goals will be met or, if they are, that the resulting products
will meet current expectations. In addition, there is currently no established
market for these services and there can be no assurance that the Company will be
able to create a market for its products.

CUSTOMERS AND MARKETING

    As part of the marketing plans of T1Xpert.com, the Company may seek to
engage in strategic market relationships with vendors, brokers, dealers or other
market participants. There can be no assurance, however, that the Company will
be able to establish the necessary strategic market relationships, or, if such
relationships are established, that they will be successful.

    The current marketing strategy for T1Xpert.com is focused on being an early
entrant with a new product that management believes will solve the straight
through processing and T+1 problems. Establishing early product and firm
credibility will be essential to the success of the business. The Company will
be unable to establish such credibility if testing of the product does not meet
expectations or the Company is unable to meet current product timing and
development goals. Furthermore, technological changes may make the Company's
product obsolete, requiring a complete technological overhaul of the product or
allowing another entrant with more up-to-date technology to take the lead in the
industry.

    The Company currently intends to rely on developing business through the
existing contacts and industry relationships of its senior management and other
key personnel. It is hoped that the development partners will become early
customers. There is a risk that, if the Company is unable to develop necessary
relationships, or if members of senior management and other key personnel leave
the Company, the Company will be unable to successfully develop its T1Xpert.com
business.

    The Company intends that, in order to induce potential clients to test the
product, T1Xpert.com may provide incentives to such clients by offering them
equity interests, special investment opportunities and product discounts. There
can be no assurance, however, that potential clients will be willing to take
such incentives in exchange for allowing T1Xpert.com to test its products at
their businesses.

    T1Xpert.com currently has no clients, though it has been engaged in
discussions with potential clients. There can be no assurance that such
discussions will lead to successful client relationships.

    As the Company is in the initial stages of developing its T1Xpert.com
business, the product has not yet been released or tested for functionality.
There is currently no demonstrated market for this product and the Company does
not have any contracted clients.

                                       3
<PAGE>
    The financial statements contained herein do not include any adjustments
that might result from the outcome of this uncertainty.

COMPETITION

    T1Xpert.com may face competition from systems developed by other, much
larger companies and its success may depend on the ability of the Company to
position itself as the preferred trading facilitation service provider for
institutional users. This, in turn, will depend on the speed with which the
Company can develop and commercialize its products to its target users.
Potential competitors may have access to greater resources or better technology.

    The Company's continued ability to compete effectively is also materially
affected by its ability to attract and retain well-qualified personnel and by
the availability of financing on competitive terms and conditions. Many of the
Company's potential competitors may have substantially greater financial
resources, economies of scale and lower capital costs than the Company and, as a
result, no assurance can be given that the Company will be successful in
operating profitably or in obtaining access to competitive capital sources or
other means of financing its product development.

    The Company believes it will compete primarily on its use of the most
current technology platforms, its understanding of the securities industry, its
capability to meet customer needs, its flexibility in structuring transaction
terms, its reliability in meeting commitments and the degree of knowledge and
competence of key employees and advisors.

PROPRIETARY RIGHTS

    The Company currently has no patents. It has applied for registration of
T1Xpert.com as a registered trademark. The Company's ability to succeed will
depend on the development of related proprietary technologies and specialized
processes either alone or in conjunction with others. These proprietary
technologies and processes will require the Company to secure patents and
trademarks to protect its systems and services. The Company may use licenses
from other relevant technology that may be important to the Company's business.

FEDERAL REGULATION

    T1Xpert.com is not a broker dealer, nor does it engage in activities that
management believes require it to register as such. At present there is no known
regulation governing T1Xpert.com's activities, other than those that affect all
businesses generally. It does intend, however, to provide services to registered
broker dealers, and assist them with complying with various laws and
regulations. Its product offering is intended to assist broker dealers in
meeting a variety of such regulations. Failure to properly develop products in
compliance with such regulation could have a negative impact on the Company's
business.

EMPLOYEES

    T1Xpert.com currently has nine employees, including seven full time
programmers. It also retains two consultants as programmers. The other employees
are its president and its chief operating officer each of whom works full time
on the T1Xpert.com business. In addition, employees of the Company provide
services to T1Xpert.com including executive, accounting, clerical, and legal
services.

DISCONTINUED OPERATIONS

    Through its wholly owned subsidiary, CIS Air Corporation, a Delaware
corporation ("CIS Air"), the Company participated in the worldwide market for
the sale and leasing of used, commercial aircraft and aircraft engines. In
recent periods, CIS Air's activities have consisted primarily of acquiring
aircraft engines

                                       4
<PAGE>
and then selling, leasing or selling them subject to lease. CIS Air financed its
portfolio acquisitions with cash flows from operations or through borrowings
under CIS Air's revolving credit facility.

    Engines, which were acquired from brokers, airlines and dealers, were used
and frequently in need of substantial repair or refurbishing. The Company, when
necessary, contracted with outside vendors to complete this upgrade process
before reselling or leasing the equipment to its customers. Aircraft acquired by
the Company were in various stages of airworthiness. Repairs and upgrades to the
aircraft were sometimes required prior to leasing the aircraft. CIS Air's leases
required the lessee to maintain the aircraft in accordance with FAA-approved
maintenance programs and contained specific return conditions.

    In July 2000, the Company announced that it had sold a portion of its engine
portfolio and had placed the balance out for competitive bid. Proceeds of any
sales will be used to pay down CIS Air's existing credit facility with its
lender. Any proceeds remaining after repayment of debt will be retained by the
Company for general business purposes. As of August 23, 2000 the balance on the
credit facility was $1,424,165 and the Company plans to continue to dispose of
assets in order to pay down the remaining balance. The Company announced that
completion of the sale of its engine portfolio will conclude its exit from the
aviation business. The Company is treating the aviation business as a
discontinued operation with appropriate disclosure and valuation under
accounting principles generally accepted in the United States.

    In addition to CIS Air's sales and leasing activities, a subsidiary of CIS
Air, CIS Aircraft Partners, Inc., had managed a portfolio of commercial aircraft
on behalf of two publicly held limited partnerships, JetStream, L.P. and
JetStream II, L.P. since their inception in 1987 and 1988 respectively. As
managing general partner, CIS Aircraft Partners, Inc. acquired the portfolio on
behalf of the partnerships, arranged leases of the aircraft and engaged in
ongoing management activities including remarketing to preserve and protect the
value of the portfolio. The payment of management fees to CIS Aircraft
Partners, Inc. from Jet Stream, L.P. was suspended in December 1997, and the
payment of management fees from JetStream II, L.P. was suspended in
September 1998, as under the terms of the respective limited partnership
agreements, these fees are subordinate in right of payment to a preferred rate
of return to the limited partners.

    The general partners of the JetStream Partnerships solicited and received
unitholders' approval for the liquidation of the JetStream Partnerships and for
the payment of a marketing fee upon the sale of each of the Partnerships'
assets. The marketing of the assets began in January 2000 and all the assets of
the portfolios except one aircraft held by JetStream L.P. were sold by the
Partnerships. JetStream L.P. is suing the lessee to regain possession of the
remaining aircraft and aircraft records and intends to sell the aircraft upon
repossession.

OTHER FINANCE ACTIVITIES

    On July 3, 1997, the Company announced that it had entered into a Joint
Investment Agreement with Emmes Investment Management Co. LLC to provide up to
$8 million in high-yield, short-term financing for commercial real estate
transactions. At May 31, 2000, the Company's investment in such transactions was
approximately $703,224.

    From time to time the Company makes loans or loan guarantees to borrowers
with profiles that do not meet the requirements of traditional lending
institutions. The Company's determination whether to make the loan will depend
on a number of factors, some of which include: an evaluation of the borrower,
the purpose of the loan, collateral held by the Company, if any, the nature of
the Company's security interest and the time expected to repayment. Based on the
unique nature of the loan the Company may receive fees, equity interests or
other forms of remuneration in addition to interest. The Company has made
several such loans and loan guarantees, which the Company is in the process of
managing, collecting and liquidating. In exchange for a loan guarantee made by
the Company, the Company received warrants in a high technology company, which
the Company currently carries at zero valuation. The amount of warrants, their
valuation and pricing will be determined upon successful completion of the next
round of financing to

                                       5
<PAGE>
be conducted by the technology company. The Company has valued these warrants at
zero as there are no reasonable means to estimate current value.

FINANCING

    The Company's financing strategy had been primarily to use its own capital,
except in the aviation subsidiary where the Company also has a collateralized,
revolving loan agreement with an institution to provide lease and inventory
financing for aircraft engines for CIS Air in the amount of $10,000,000. The
facility bears interest at prime plus 1/4% and expires in December 2000. In
connection with the Company's decision to exit the aviation business it has been
paying down the debt associated with the engines. The Company believes that
proceeds from sale of these engines will be sufficient to pay off the debt.

    The Company's expansion into a new line of business will place significant
demands on its current financial resources. The Company will need to arrange for
additional financing to aid in the development and commercialization of the
securities processing software. The Company anticipates that it will seek to
raise funds from outside sources in exchange for an interest in T1Xpert.com.

CONCENTRATION OF CREDIT RISK

    As T1Xpert.com is in the development stage it has no customers. Initially
the Company anticipates that it may have only a few customers. The Company
believes that it competes in an industry in which many of its potential
customers are under regulatory guidelines which require that such entity
maintains a prescribed level of capital in the operations of its business.

    Of the Company's notes receivable balance $2,083,000 is owed by one customer
in the aviation business. Thus, the Company is directly affected by the well
being of this one company and the airline industry in general. The credit risk
associated with this customer is mitigated by the note being collateralized;
however a substantial portion of such collateral is outside the United States,
thereby creating potential difficulties in the recovery of collateral in case of
default.

EMPLOYEES

    As of June 30, 2000, the Company had 23 full-time employees, none of whom
were employed under a collective bargaining agreement. Ten of these employees
work in administration. It is anticipated that with the exiting of the Company
from the aviation business a substantial number of these employees will no
longer be necessary. Estimated termination costs have been taken into account in
discontinued operations. In connection with T1Xpert.com, the Company's plan is
to add employees, but it may be hampered if there are limitations in the pool of
eligible available personnel in the technology job market in which the Company
operates.

ITEM 2.  PROPERTIES

    The Company's executive offices are located in New York, New York. The
Company maintains branch offices located in Syracuse, New York and in Los
Angeles, California. The Company anticipates relinquishing the leases on the
Syracuse and Los Angeles branch offices within the current fiscal year in
connection with its exiting from the aviation business. These leases occupy in
the aggregate approximately 7,000 square feet, (6,000 in New York City) for an
aggregate monthly rental of approximately $15,000, $14,000 of which is related
to the New York City office.

ITEM 3.  LEGAL PROCEEDINGS

    CIS Air Corporation ("CIS Air") has three actions pending against Eastwind
Airlines, a lessee of aircraft and engines.

                                       6
<PAGE>
    1.  On Sept 24, 1999 CIS Air, along with two other creditors, filed a
       petition for involuntary bankruptcy against Eastwind in the Bankruptcy
       Court in Delaware asserting a claim of $4,623,383 consisting primarily of
       non payment of aircraft lease payments and reserves, violations of the
       return provisions, non payment for engine leases and non return of a
       damaged engine. Subsequently three other creditors executed Joinders to
       the Petition. On March 31, 2000 the Court ruled that the numerosity
       requirements of the Bankruptcy Code supporting the filing of the
       Creditor's petition were met. Trial as to whether Eastwind was paying
       their debts as they become due was held and proposed findings of fact and
       conclusions of law are due to be filed with the Court by the end of
       September 2000.

    2.  CIS Air previously sued Eastwind in State Court, New York County. That
       action is stayed pending resolution of the bankruptcy action.

    3.  CIS Air commenced an action in the United States District Court for the
       Southern District of New York against UM Holdings, the sole shareholder
       of Eastwind, seeking damages in the amount of $4,623,383 based on the
       assumption of liability by UM of Eastwind's obligations. The matter is in
       the early stages of litigation. The Company is currently in settlement
       negotiations concerning all of the actions against Eastwind and UM
       Holdings.

    On July 24, 2000 CIS Air settled its previously reported lawsuit against
Cigna Insurance in exchange for the payment by Cigna to CIS Air's institutional
lender as loss payee, the full value of the policy less the policy's deductible.

    CIS Air filed suit in November 1999 against AeroTurbine Inc., a
Florida-based corporation, in State Court in North Carolina. The suit alleges
that AeroTurbine, in removing hushkits that it had purchased which were annexed
to two CIS owned engines, negligently damaged the CIS engines, thereby causing
CIS to incur expenses in repairing them. AeroTurbine has filed a counterclaim
seeking unspecified damages. The matter is in the discovery phase of litigation.

    On March 3, 2000, Dallas AeroSpace, Inc. ("Dallas") of Texas filed suit in
the United States District Court for the Southern District of New York against
CIS Air for breach of contract and other causes of action in connection with the
sale of an engine to Dallas in August 1997. Dallas is seeking damages for the
purchase price of the engine in the amount of $1,150,000. CIS Air has denied any
liability to Dallas on any of the causes of action, and has asserted its
defenses. The litigation is in its initial stages.

    On April 24, 2000 CIS Air filed suit in the United States District Court for
the Northern District of New York against American Air Ventures, Inc. ("American
Air"), a Florida corporation. The suit seeks reimbursement in connection with
losses incurred in joint venture agreements between the parties for the purchase
and sale of engines. The suit further seeks indemnification from American Air
should CIS Air be found liable to Dallas AeroSpace, because CIS Air purchased
the engine sold to Dallas AeroSpace from American Air. The suit is in the
initial phase of litigation.

    On March 7, 2000 CIS Air filed suit against Express One International, Inc.
a Delaware Corporation in The Supreme Court, State of New York, County of New
York. The suits seek damages in an amount no less than $47,500 for engine rent
and maintenance reserve payments and $70,639 for engine repairs. The suit is in
the discovery phase of litigation.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matters were submitted to a vote of the Company's shareholders during the
fourth quarter of its fiscal year.

                                       7
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The Company's Common Stock trades on the Nasdaq Small-Cap Market under the
symbol CISC. The high and low bid information for the last two fiscal years is
as follows:

<TABLE>
<CAPTION>
                                                 AUGUST 31            NOVEMBER 30           FEBRUARY 28             MAY 31
                                            -------------------   -------------------   -------------------   -------------------
                                               FIRST QUARTER        SECOND QUARTER         THIRD QUARTER        FOURTH QUARTER
                                            -------------------   -------------------   -------------------   -------------------
                                              LOW        HIGH       LOW        HIGH       LOW        HIGH       LOW        HIGH
                                            --------   --------   --------   --------   --------   --------   --------   --------
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Fiscal Year ended May 31, 2000............   $1.16      $1.25      $1.16      $ 1.38     $ 1.19     $2.75      $1.25      $2.81
Fiscal Year ended May 31, 1999............   $1.53       2.19      $1.25      $1.875     $1.125     $1.75      $1.22      $1.47
</TABLE>

    As of June 30, 2000, there were 1,228 record holders of the Company's Common
Stock. No cash dividends have been paid on the Common Stock to date and the
Company does not anticipate paying a dividend in the foreseeable future, as the
Board of Directors intends to retain earnings for use in the business. Any
future determination of dividends will depend upon any dividend restrictions
applicable to the Company, the Company's financial condition, the Company's
results of operations and such other factors as the Board of Directors deems
relevant.

ITEM 6.  SELECTED FINANCIAL DATA:

    The following table sets forth a summary of selected consolidated financial
data for the Company and its Subsidiaries as of the dates and for each of the
years stated.

    This information should be read in conjunction with the Company's historical
consolidated financial statements, the related notes, and the other information
contained herein, including the information set forth in "ITEM 7.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

                (Dollars in thousands except per share amounts)

<TABLE>
<CAPTION>
                                                    2000       1999       1998       1997       1996
                                                  --------   --------   --------   --------   --------
<S>                                               <C>        <C>        <C>        <C>        <C>
PERIOD DATA:
Total Revenues..................................  $ 8,465    $ 8,797    $ 6,347    $16,055    $14,475
Costs and expenses..............................   10,854     11,720      7,243     15,764     15,716
                                                  -------    -------    -------    -------    -------
(Loss) income from continuing operations before
  provision (benefit) for income taxes..........   (2,389)    (2,923)      (896)       291     (1,241)
Provision (benefit) for income taxes............       --      5,448       (341)       111       (472)
                                                  -------    -------    -------    -------    -------
(Loss) income from continuing operations........   (2,389)    (8,371)      (555)       180       (769)
(Loss) income from discontinued operations, net
  of taxes......................................   (5,703)     1,544     (4,818)       906        835
                                                  -------    -------    -------    -------    -------
Net (loss) income...............................  $(8,092)   $(6,827)   $(5,373)   $ 1,086    $    66
                                                  =======    =======    =======    =======    =======
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON
  SHARE:
(Loss) income from continuing operations........  $ (0.36)   $ (1.21)   $ (0.08)   $  0.03    $ (0.11)
(Loss) income from discontinued operations......    (0.85)      0.22      (0.69)      0.12       0.12
                                                  -------    -------    -------    -------    -------
Net (loss) income...............................  $ (1.21)   $ (0.99)   $ (0.77)   $  0.15    $  0.01
                                                  =======    =======    =======    =======    =======
</TABLE>

                                       8
<PAGE>
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                 MAY 31,    MAY 31,    MAY 31,    MAY 31,    MAY 31,
                                                   2000       1999       1998       1997       1996
                                                 --------   --------   --------   --------   --------
<S>                                              <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA
  (AT YEAR ENDED):
Total assets...................................  $14,253    $25,218    $39,861    $42,204    $52,734
Liabilities....................................      672      3,142     10,901      7,603     19,281
Shareholders' equity...........................   13,581     22,076     28,960     34,601     33,453
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
       AND RESULTS OF OPERATIONS

                                  INTRODUCTION

    The following discussion and analysis of the financial condition and results
of operations of the Company should be read in conjunction with the consolidated
financial statements and the notes thereto which appear elsewhere in this
Form 10-K. Please note that all statements contained herein that are not
historical facts, including but not limited to, statements regarding anticipated
future capital requirements, the Company's future development plans, the
Company's ability to obtain additional debt, equity or other financing, and the
Company's ability to generate cash from operations and further savings from
existing operations, are based on current expectations. These statements are
forward looking in nature and involve a number of risks and uncertainties.
Actual results may differ materially. Among the factors that could cause actual
results to differ materially are the following: the availability of sufficient
capital to finance the Company's business plan on terms satisfactory to the
Company; competitive factors, such as the introduction of new technologies and
competitors that may compete with the Company's T1Xpert.com subsidiary; risks
generally associated with development technology projects, including design,
concept and implementation; risks of the Company in exiting the aviation
business including risks attendant to realizing acceptable value in liquidating
assets; risks attendant to collecting on the Company's notes receivable arising
out of various settlements in the aviation business, risks attendant to the
Company's finance business generally, including the risks of leverage, risks of
borrower default, general economic and real estate market conditions, and
competition for attractive real estate finance investments and pricing pressures
which could affect the value of the Company's assets; changes in labor,
equipment and capital costs; future acquisitions; general business, economic and
regulatory conditions; and the other risk factors described from time to time in
the Company's reports filed with the SEC. The Company wishes to caution readers
not to place undue reliance on any such forward looking statements, which
statements are made pursuant to the Private Securities Litigation Reform Act of
1995 and, as such, speak only as of the date made. The Company undertakes no
obligation to update such forward-looking statements.

                             RESULTS OF OPERATIONS

CONTINUING OPERATIONS

REVENUES

    For the three fiscal years ended May 31, 2000, total revenues decreased to
$8.5 million in fiscal 2000 from $8.8 million in fiscal 1999, while increasing
from $6.3 million in fiscal 1998. Equipment sales increased to $4.7 million in
fiscal 2000 from $2.6 million in fiscal 1999, and increased from $1.7 million in
fiscal 1998. With the discontinuation of lease originations in August 1999 and
sale of a substantial portion of the portfolio in fiscal 2000, equipment sales
are expected to be minimal in fiscal 2001. The significant increase (78.3%) in
sales during the fiscal year 2000 is due to the sale of the majority of computer
equipment leases for $2.6 million to one lessee at the end of their lease term
during the third and fourth quarters. The Company recorded a gain of $608,000,
net of remarketing fees in the amount of $155,000 in

                                       9
<PAGE>
fiscal 2000 for sales of previously leased computers. In August 1999, a
substantial portion of the general equipment lease portfolio was sold for
$1.7 million.

    Equipment rentals and income from direct financing leases decreased to
$3.0 million in fiscal 2000 from $5.4 million in fiscal 1999 and from
$3.6 million in fiscal 1998. The decrease in fiscal 2000 is chiefly attributable
to the sale of the lease portfolio during the fiscal year 2000. The increase in
fiscal 1999 is mainly due to the increased investment in direct finance leases
made in fiscal 1998 as only 3 months' income was recorded in fiscal 1998 as
compared to 12 months in fiscal 1999 for those leases.

    Interest, fees and other income decreased to $750,000 in fiscal 2000 from
$764,000 in fiscal 1999, and decreased from $955,000 in fiscal 1998. Interest on
bank and short term investments, amounted to $309,000 in fiscal 2000 compared to
$162,000 in fiscal year 1999 and $274,000 in fiscal 1998. Interest on notes
receivable decreased to $192,000 in fiscal 2000 from $343,000 in fiscal 1999 and
decreased from $353,000 in fiscal 1998. This decrease is the result of the note
receivable on spare parts inventory being paid down to $78,000 in fiscal 2000
from $675,000 in fiscal 1999.

COSTS AND EXPENSES

    Costs and expenses decreased to $10.9 million in fiscal 2000 from
$11.7 million in fiscal 1999 and increased from $7.2 million in fiscal 1998.
Cost of sales increased to $3.7 million in fiscal 2000 from $2.1 million in
fiscal 1999 and from $1.2 million in fiscal 1998. The increase is a direct
result of the 78.3% increase in sales. Cost of sales as a percentage of sales
for the fiscal years ended May 31, 2000, 1999 and 1998 was 79.6%, 81.7% and
71.4%, respectively.

    Depreciation of rental equipment decreased to $2.4 million in fiscal 2000
from $4.2 million in fiscal 1999 and from $2.1 million in fiscal 1998. This
decrease is directly related to the sale of $3.7 million of rental equipment
during the fiscal year 2000. The increase in depreciation expense in fiscal 1999
is directly related to the addition of $14.6 million in rental equipment in
March 1998 resulting in an increase in depreciation of $2.2 million in fiscal
1999.

    Interest expense decreased to $16,000 in fiscal 2000 from $127,000 in fiscal
1999 and decreased from $272,000 in fiscal 1998. These variances reflect the
changes in the average debt outstanding during the respective periods. In fiscal
1999 $1.6 million of debt was paid off in conjunction with an equipment sale.

    Other operating expenses decreased to $612,000 in fiscal 2000 from
$1,324,000 in fiscal 1999 and increased from $403,000 in fiscal 1998. The
Company anticipates that these expenses which are principally related to leased
equipment will decrease as the Company liquidates its lease portfolio. In fiscal
2000, re-marketing fees of $155,000 were recorded as a result of sale of
computer equipment. A bad debt expense of $46,000 and an inventory write off of
$63,000 were recorded in fiscal 2000. In fiscal 1999, an inventory write-off of
$719,000 and a bad debt expense of $200,000 were recorded due to the bankruptcy
of a large lessee of the Company. There were no corresponding expenses in fiscal
2000. With the discontinuation of lease originations in August 1999, operating
expenses associated with leased equipment are expected to be minimal in fiscal
2001.

    Selling, general and administrative expenses increased to $4,063,000 in
fiscal 2000 from $3,940,000 in fiscal 1999 and from $3,256,000 in fiscal 1998.
In fiscal 2000 the increase in selling, general and administrative expenses was
mainly attributable to the startup Company T1Xpert.com's expenses which amounted
to $1,611,000 during the fiscal year. This increase was offset by a decrease in
general and administrative expenses in the amount of $1,470,000. These decreases
were principally due to cost containment efforts and staff reduction between the
periods. The increase in fiscal 1999 was due to payments made for state
franchise taxes in the amount of $675,000.

                                       10
<PAGE>
INCOME TAXES

    For the fiscal years ended May 31, 1999 and 1998, a provision for deferred
income tax expense on income from continuing operations, was recorded in the
amounts of $5,414,000 and $371,000, respectively. The value of the deferred tax
assets is dependent on the Company generating future operating earnings, the
income taxes on which would be offsettable by the Company's NOL carryforwards.
The Company provided a full valuation allowance for these deferred tax assets as
of May 31, 1999, since, in management's opinion, the future realizability of the
deferred tax assets is uncertain in light of its actual operating results since
reorganization. This action does not impair the availability of the NOL
carryforwards to offset any future taxable earnings. The pre-reorganization NOL
carryforwards expire during the years 2004 to 2010. Utilization of the
pre-reorganization NOL carryforwards is limited to approximately $2 million per
year. The Company periodically reviews the adequacy of the valuation allowance
for NOL carryforwards and will recognize benefits only if a reassessment
indicates that it is more likely than not that the benefits will be realized.

DISCONTINUED OPERATIONS

    On July 14, 2000, the Company announced that it has placed its commercial
aircraft engine portfolio up for competitive bid, that upon completion of the
sale it will be exiting the aviation business, and that it would account for and
report the Air Group Business as a discontinued operation. The Company recorded
a provision of $4,071,000 in the quarter ended May 31, 2000, relative to the
disposal of CIS Air assets, including $2,679,000 representing estimated losses
on sale of equipment and other revenues and charges related to the
discontinuance of the business unit.

    A summary of the results of operations of the discontinued CIS Air business
unit follows (in thousands):

<TABLE>
<CAPTION>
                                                          YEAR ENDED MAY 31,
                                                    ------------------------------
                                                      2000       1999       1998
                                                    --------   --------   --------
<S>                                                 <C>        <C>        <C>
Revenues..........................................  $ 4,135     $8,630    $12,092
Costs and expenses................................    5,767      8,172     10,218
                                                    -------     ------    -------
Income from discontinued operations...............   (1,632)       458      1,874
Loss on disposal of discontinued operations.......   (4,071)        --         --
                                                    -------     ------    -------
(Loss) income before provision for income taxes...   (5,703)       458      1,874
Provision for income taxes........................       --         --        712
                                                    -------     ------    -------
Net (loss) income from discontinued operations....  $(5,703)    $  458    $ 1,162
                                                    =======     ======    =======
</TABLE>

    On May 29, 1998, the Company announced its decision to discontinue and
liquidate its LaserAcess laser printing business. The Company recorded a
provision of $4,955,000 in the quarter ended May 31, 1998, relative to the
disposal of LaserAccess' assets, including the write-off of goodwill in the
amount of $3,258,000, and other charges related to the discontinuance of the
business unit.

                                       11
<PAGE>
    A summary of the results of operations of the discontinued Laser Access
Business Unit follows (in thousands):

<TABLE>
<CAPTION>
                                                           YEAR ENDED MAY 31,
                                                           -------------------
                                                             1999       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Revenues.................................................   $   --    $ 4,281
Costs and expenses.......................................       --      5,677
                                                            ------    -------
Loss from discontinued operations........................       --     (1,396)
Gain (Loss) on disposal of discontinued operations.......    1,086     (4,955)
                                                            ------    -------
Income (loss) before benefit for income taxes............    1,086     (6,351)
Benefit for income taxes.................................       --       (371)
                                                            ------    -------
Net income (loss) from discontinued operations...........   $1,086    $(5,980)
                                                            ======    =======
</TABLE>

EQUIPMENT LEASING BUSINESS

    In August 1999, the Company announced that its subsidiary had sold a
substantial portion of its remaining lease portfolio and would no longer enter
into new equipment leases. The Company has outsourced the administration of its
remaining lease portfolio, the termination dates of which exceed one year.

                        LIQUIDITY AND CAPITAL RESOURCES

FINANCING ACTIVITIES AND OTHER MATTERS

    Proceeds from lease, bank and institution financings for the fiscal years
ended May 31, 2000, 1999 and 1998, were $205,000, $0 and $1,445,000,
respectively, while payments on lease, bank and institution financings for the
fiscal years ended May 31, 2000, 1999 and 1998, were $249,000, $2,387,000 and
$4,484,000 respectively. In August 1999 a substantial portion of the general
equipment lease portfolio was sold resulting in paying down a majority of the
debt balance.

    On May 27, 1997, the Company announced that its Board of Directors had
authorized the expenditure of up to $500,000 for the repurchase of its common
stock. The Company commenced a voluntary odd lot repurchase program through
June 30, 1997, which was extended through July 31, 1997. Shareholders owning
less than 100 shares of the Company's common stock were offered the opportunity
to sell all their shares at the closing price of the common stock on the Nasdaq
Small-Cap Market on May 23, 1997, which was $2.25 per share. Approximately
20,000 shares were repurchased by the Company at an aggregate cost of
approximately $45,000. Subsequent to the odd lot repurchase program, the Company
repurchased from time to time additional shares of its common stock up to the
balance of $500,000 remaining after the odd lot program. In February 1999, the
Company announced that its Board of Directors had authorized the expenditure of
an additional $500,000 for the repurchase of its common stock. The Company will
hold all repurchased shares of common stock in its treasury. Subject to approval
from the Board of Directors, the Company may repurchase the additional shares at
prevailing prices in the open market or in negotiated or other transactions. As
of May 31, 2000, approximately 525,000 shares had been repurchased by the
Company in this manner at an aggregate cost of approximately $866,000.

    T1Xpert.com had expended $1,611,000 as of May 31, 2000. The Company believes
it has sufficient cash on hand to meet current operating needs until the
projected development of an alpha product.

    The Company anticipates that in developing past the alpha stage it will need
substantial additional funds. In connection therewith, the Company will be
seeking investments from strategic client/investors and/or venture capital
investors. The form of investment will depend upon terms and conditions to be
negotiated. The Company may co-invest with such investors, or failing to find
such investors the Company

                                       12
<PAGE>
may decide to fund such expenditures from its own resources, as then available.
There can be no assurance that the Company will be able to meet its financial
needs after it passes the alpha stage of development.

NEW ACCOUNTING PRONOUNCEMENT, ISSUED BUT NOT YET EFFECTIVE

    On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (FAS 133). FAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000 (June 1, 2001
for the Company). FAS 133 requires that all derivative instruments be recorded
on the balance sheet at their fair market value. Changes in the value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. The Company does not
presently have derivative instruments and does not believe that the adoption of
FAS 133 will have a significant impact on its earnings or statement of financial
position.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK DISCLOSURES

    The Company is exposed to risks associated with interest rate changes. The
Company does not foresee any significant changes in its exposure to fluctuations
in interest rates in the near future. At May 31, 2000, the Company's total
outstanding debt consisted of a secured, revolving loan facility in the amount
of $6,919,000. The facility has a floating interest rate of prime plus 1/4% and
expires in December 2000. If interest rates were to rise dramatically, the cost
of servicing this loan would also increase. Based on weighted average borrowings
outstanding under the credit facility during fiscal year 2000, a 1/8 percentage
point change in the weighted average interest rate would have caused the
interest expense to increase or decrease by approximately $9,000.

                                       13
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                      --------
<S>                     <C>                                                           <C>
Financial Statements

(1         )            Financial Statements
                                                                                          15
                        Report of Independent Accountants...........................

                                                                                          16
                        Consolidated Balance Sheets
                            May 31, 2000 and 1999...................................

                                                                                          17
                        Consolidated Statements of Operations
                            Years ended May 31, 2000, 1999 and 1998.................

                                                                                          18
                        Consolidated Statements of Shareholders' Equity
                            Years ended May 31, 2000, 1999 and 1998.................

                                                                                          19
                        Consolidated Statements of Cash Flows
                            Years ended May 31, 2000, 1999 and 1998.................

                                                                                       20-35
                        Notes to the Consolidated Financial Statements..............

(2         )            Financial Statement Schedules
                                                                                          36
                        Valuation and Qualifying Accounts (Schedule II).............
</TABLE>

    All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.

                                       14
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
  of Continental Information Systems Corporation:

    In our opinion, the consolidated financial statements listed in the
accompanying index on page 15 present fairly, in all material respects, the
financial position of Continental Information Systems Corporation and its
subsidiaries (the "Company") at May 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
May 31, 2000, in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial statement
schedule listed in the accompanying index presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedule are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

    As described in Note 2, the Company believes it has sufficient funds to meet
current operating needs until the projected development of an alpha product and
through the end of fiscal 2001. The Company anticipates that in developing past
the alpha stage it will need substantial additional funds and will be seeking
additional investments from third parties. The Company may co-invest with such
investors, or, failing to find such investors, the Company may decide to fund
such expenditures from its own resources, as then available. There can be no
assurance that the Company will be able to meet its financial needs after it
passes the alpha stage of development.

PRICEWATERHOUSECOOPERS LLP
New York, New York
August 27, 2000

                                       15
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                    MAY 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Assets:
Cash and cash equivalents...................................  $  3,382   $  5,616
Accounts receivable, net of allowance for doubtful accounts
  of $108 and $325 at May 31, 2000 and 1999 (Note 4)........     1,095         93
Notes receivable............................................     2,567      3,204
Investment in mortgage participation notes (Note 5).........     1,108        862
Inventory...................................................        --         52
Restricted cash.............................................       900         --
Net investment in direct financing leases (Note 6)..........     1,092      2,951
Rental equipment, net (Note 7)..............................        96      4,781
Property, plant and equipment, net (Note 8).................       260        372
Other assets................................................       229        470
Net assets of discontinued operations (Note 3)..............     3,524      6,817
                                                              --------   --------
    Total assets............................................  $ 14,253   $ 25,218
                                                              ========   ========
Liabilities and Shareholders' Equity:
Liabilities:
  Accounts payable and other liabilities....................  $    509   $    557
  Discounted lease rental borrowings (Note 9)...............       163        207
  Deferred lease revenue....................................        --      2,378
                                                              --------   --------
    Total liabilities.......................................       672      3,142
                                                              --------   --------
Commitments and contingencies (Notes 3 and 14)

Shareholders' Equity:
Common stock, $.01 par value; authorized 20,000,000 shares
  at May 31, 2000 and 1999; issued and outstanding 7,101,668
  shares at May 31, 2000 and 1999 (Notes 10 and 11).........        71         71
Additional paid-in capital..................................    35,129     35,129
Accumulated deficit.........................................   (20,753)   (12,661)
                                                              --------   --------
                                                                14,447     22,539
Treasury stock, at cost: 525,424 shares at May 31, 2000,
  216,824 shares at May 31, 1999 (Note 10)..................      (866)      (463)
                                                              --------   --------
    Total shareholders' equity..............................    13,581     22,076
                                                              --------   --------
    Total liabilities and shareholders' equity..............  $ 14,253   $ 25,218
                                                              ========   ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       16
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

                      IN THOUSANDS (EXCEPT PER SHARE DATA)

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                    YEAR ENDED MAY 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Revenues:
Equipment sales.............................................  $ 4,671    $ 2,620    $ 1,740
Equipment rentals...........................................    2,747      4,804      3,137
Income from direct financing leases.........................      297        609        515
Interest, fees and other income.............................      750        764        955
                                                              -------    -------    -------
                                                                8,465      8,797      6,347
                                                              -------    -------    -------
Costs and Expenses:
Cost of sales...............................................    3,718      2,140      1,244
Depreciation of rental equipment............................    2,445      4,189      2,068
Interest expense............................................       16        127        272
Other operating expenses....................................      612      1,324        403
Selling, general and administrative expense.................    4,063      3,940      3,256
                                                              -------    -------    -------
                                                               10,854     11,720      7,243
                                                              -------    -------    -------
Loss from continuing operations before provision (benefit)
  for income taxes..........................................   (2,389)    (2,923)      (896)
Provision (benefit) for income taxes........................       --      5,448       (341)
                                                              -------    -------    -------
Loss from continuing operations.............................   (2,389)    (8,371)      (555)
                                                              -------    -------    -------
Discontinued Operations (Note 3):
  Income from discontinued operations, net of provision for
    income taxes of $341 in 1998............................   (1,632)       458        137
  (Loss) gain on disposal of discontinued operations net of
    (benefit) provision for income taxes....................   (4,071)     1,086     (4,955)
                                                              -------    -------    -------
  Total for discontinued operations.........................   (5,703)     1,544     (4,818)
                                                              -------    -------    -------
Net loss....................................................  $(8,092)   $(6,827)   $(5,373)
                                                              =======    =======    =======
Basic and diluted net (loss) income per share (Note 1):
  Loss from continuing operations...........................  $ (0.36)   $ (1.21)   $ (0.08)
  (Loss) income from discontinued operations................    (0.85)      0.22      (0.69)
                                                              -------    -------    -------
    Net loss per share......................................  $ (1.21)   $ (0.99)   $ (0.77)
                                                              =======    =======    =======
Weighted average number of shares of common stock
  outstanding...............................................    6,696      6,922      6,984
                                                              =======    =======    =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       17
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

                     IN THOUSANDS (EXCEPT NUMBER OF SHARES)

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                            COMMON                ADDITIONAL                            TREASURY
                                            SHARES      COMMON     PAID-IN     ACCUMULATED   TREASURY    COMMON
                                            ISSUED      STOCK      CAPITAL       DEFICIT      STOCK      SHARES
                                           ---------   --------   ----------   -----------   --------   --------
<S>                                        <C>         <C>        <C>          <C>           <C>        <C>
Balance--May 31, 1997....................  7,031,667     $70        $34,992      $   (461)       --         (960)
  Net loss...............................         --      --             --        (5,373)       --           --
  Acquisition of treasury shares.........         --      --             --            --      $406     (161,648)
  Stock options exercised................     70,001       1            137            --        --           --
                                           ---------     ---        -------      --------      ----     --------
Balance--May 31, 1998....................  7,101,668     $71        $35,129      $ (5,834)     $406     (162,608)
  Net loss...............................         --      --             --        (6,827)       --           --
  Acquisition of treasury shares.........         --      --             --            --        57      (54,216)
                                           ---------     ---        -------      --------      ----     --------
Balance--May 31, 1999....................  7,101,668     $71        $35,129      $(12,661)     $463     (216,824)
  Net loss...............................         --      --             --        (8,092)       --
  Acquisition of treasury shares.........         --      --             --            --       403     (308,600)
                                           ---------     ---        -------      --------      ----     --------
Balance--May 31, 2000....................  7,101,668     $71        $35,129      $(20,753)     $866     (525,424)
                                           =========     ===        =======      ========      ====     ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       18
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

                     IN THOUSANDS (EXCEPT NUMBER OF SHARES)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                    YEAR ENDED MAY 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash flows from operating activities:
Net loss....................................................  $(8,092)   $(6,827)   $(5,373)
Less: (Loss) income from discontinued operations............   (5,703)     1,544     (4,818)
                                                              -------    -------    -------
    Loss from continuing operations.........................   (2,389)    (8,371)      (555)
                                                              -------    -------    -------

Adjustments to reconcile loss from continuing operations to
  net cash provided by (used in) operating activities:
  Gain on sale of equipment.................................     (953)      (480)      (496)
  Write off of equipment....................................       --        719
  Depreciation and amortization expense.....................    2,850      4,288      2,274
  Effect on cash flows of changes in:
    Accounts receivable, net................................   (1,002)       243        983
    Notes receivable........................................      638      3,665     (1,775)
    Inventory...............................................       --         15        227
    Other assets............................................     (241)     3,369        136
    Accounts payable and other liabilities..................      (48)       (61)       202
    Deferred lease revenue..................................   (2,378)    (3,126)     5,485
    Deferred tax assets.....................................       --      5,414         --
    Other...................................................      123        (28)       148
                                                              -------    -------    -------
                                                               (1,011)    14,018      7,184
                                                              -------    -------    -------
    Net cash (used in) provided by continuing operations....   (3,400)     5,647      6,629
    Net cash provided by (used in) discontinued
     operations.............................................   (2,220)    (4,123)       615
                                                              -------    -------    -------
      Net cash (used in) provided by operating activities...   (5,620)     1,524      7,244
                                                              -------    -------    -------

Cash flows from investing activities:
Proceeds from sale of equipment.............................    4,671      3,042      5,612
Purchase of rental equipment................................     (158)      (494)   (14,602)
Purchase of property and equipment..........................      (10)       (76)      (399)
Collections of rentals on direct financing leases net of
  amortization of unearned income...........................      566      1,087        754
Proceeds of (investment in) mortgage participation notes....     (336)       850     (1,299)
Restricted cash.............................................     (900)        --         --
                                                              -------    -------    -------
      Net cash provided by (used in) investing activities...    3,833      4,409     (9,934)
                                                              -------    -------    -------

Cash flows from financing activities:
Proceeds from lease, bank and institution financings........      205         --      1,445
Payments on lease, bank and institution financings..........     (249)    (2,387)    (4,484)
Purchase of treasury stock..................................     (403)       (57)      (406)
Proceeds from exercise of stock options.....................       --         --        137
                                                              -------    -------    -------
      Net cash (used in) provided by financing activities...     (447)    (2,444)    (3,308)
                                                              -------    -------    -------

      Net increase (decrease) in cash and cash
       equivalents..........................................   (2,234)     3,489     (5,998)
Cash and cash equivalents at beginning of period............    5,616      2,127      8,125
                                                              -------    -------    -------
Cash and cash equivalents at end of period..................  $ 3,382    $ 5,616    $ 2,127
                                                              =======    =======    =======
Interest paid...............................................  $    16    $   127    $   272
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       19
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Continental Information Systems Corporation and its Subsidiaries (the
"Company") was a specialized financial services company that engaged in the
leasing, sales and management of commercial aircraft and engines and other
financing activities, including commercial real estate financing.

    The Company has changed its focus and is in the early stages of developing
software for the securities industry to deal with the processing of securities
transactions in a real time environment. Management intends that the system will
make use of the state of the art software using proprietary work process control
methods.

    CONSOLIDATION

    The accompanying consolidated financial statements include the accounts of
Continental Information Systems Corporation and its wholly owned subsidiaries.
All intercompany accounts have been eliminated in consolidation.

    CASH AND CASH EQUIVALENTS

    Cash and cash equivalents include checking and money market accounts and
short term commercial paper with financial institutions having original
maturities of 90 days or less.

    RESTRICTED CASH

    Restricted cash comprises funds on deposit for two letters of credit
hypothecated to one US bank and one Israeli bank which guarantee a loan made to
an unrelated high technology company. In connection with this loan guarantee,
the Company received warrants to purchase the stock in the high technology
company. The amount of stock to be purchased, their valuation and pricing will
be determined upon the successful completion of the next round of financing to
be conducted by the technology company. The Company has valued these warrants at
zero as there are no reasonable means to estimate value.

    CONCENTRATION OF CREDIT RISK

    T1Xpert.com is in the development stage and has no customers. Initially the
Company anticipates that it may have only a few customers in the broker-dealer
industry.

    Of the Company's notes receivable balance $2,083,000 is owed by one customer
in the aviation business. Thus, the Company is directly affected by the well
being of this company and the airline industry in general. The credit risk
associated with this customer is mitigated by the note being collateralized;
however, a substantial portion of such collateral is outside the United States,
thereby creating potential difficulties of recovery of collateral in case of
default. The note bears interest at 6% and will mature in 2005.

    INVESTMENT IN MORTGAGE PARTICIPATION NOTES

    Investment in mortgage participation notes represents investments in
high-yield, short-term commercial real estate transactions and are carried at
the lower of cost or market. Interest income on the notes is recorded monthly
using the weighted average estimated yields on these investments.

                                       20
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    LEASE ACCOUNTING POLICIES

    Statement of Financial Accounting Standards No. 13 requires that a lessor
account for each lease by the direct financing method, sales-type method or
operating method. Presently, the Company has primarily direct financing and
operating leases; the dollar value and number of sales-type leases are
considered immaterial. Net investment in direct financing leases consists of the
future minimum lease payments plus unguaranteed residual less unearned income
net of unamortized initial direct costs. At the end of the lease term, the
recorded residual value of equipment under direct financing leases is
reclassified to rental equipment and is depreciated over its estimated remaining
useful life, if the related asset is released.

    Unearned income is amortizated to lease income by the interest method using
a constant periodic rate over the lease term.

    Rental equipment consists of equipment under operating leases. Rental
equipment are depreciated on a straight-line basis to their estimated residual
values over the remaining useful lives of such equipment. Operating lease
revenues consist of the contractual lease payments which are recognized on a
straight-line basis over the lease term. Costs associated with operating leases
principally consist of depreciation of the equipment.

    The Company makes adjustments to the carrying value of leased assets, if
necessary, when market conditions have resulted in values that are below net
book value. At the time assets are disposed of, cost and accumulated
depreciation as to each investment are removed from the accounts and the
difference, net of proceeds, is recognized as a gain or loss.

    DEFERRED COMMISSIONS AND INITIAL DIRECT COSTS

    Commissions and other initial direct costs related to lease transactions are
capitalized as a component of the corresponding investment in direct financing
leases or rental equipment and amortized over the estimated average lease term
as an adjustment of yield. Costs relating to direct financing leases are
amortized using the interest method and costs relating to operating lease
equipment are amortized using the straight-line method. In accounting for the
air subsidiary as a discontinued operation all deferred commissions and indirect
costs were accelerated and recorded as a current expense.

    PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment are recorded at cost and are being depreciated
using the straight-line method over the estimated useful lives of such assets.
Leasehold improvements are depreciated over three to seven years. Computer
equipment and software is depreciated over three to five years and furniture,
fixtures and office equipment over seven years and aircraft engines over seven
years from the date of purchase.

    INCOME TAXES

    The Company accounts for income taxes under the asset and liability method
required by Financial Accounting Standard No. 109 (SFAS 109), ACCOUNTING FOR
INCOME TAXES. SFAS 109 requires the recording of deferred tax assets and
liabilities for the future tax effects of temporary differences between the
bases of all assets and liabilities for financial reporting purposes and tax
purposes. Valuation

                                       21
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. The Company periodically reviews the adequacy of
the valuation allowance and will recognize benefits only if reassessment
indicates that it is more likely than not that the benefits will be realized. A
valuation allowance for the full amount of deferred tax assets was provided for
in income tax expense in 1999.

    NET INCOME (LOSS) PER SHARE

    EARNINGS PER SHARE, is calculated in accordance with Financial Accounting
Standard No. 128 (SFAS 128), EARNINGS PER SHARE, which specifies standards for
computing and disclosing net income (loss) per share. Basic and diluted net
income (loss) per share for the fiscal years ended May 31, 2000, 1999 and 1998,
was computed based on the weighted average number of shares of common stock
outstanding during the periods. As of May 31, 2000, the Company had issued and
outstanding options to purchase 315,283 shares of common stock (see Note 10).
The effect of these options is antidilutive and was not included in the
computation of diluted net income (loss) per share.

    ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ materially from those estimates. The most
significant estimates relate to the carrying value of discontinued operations
and notes receivable.

    RECLASSIFICATIONS

    Certain prior period balances in the financial statements have been
reclassified to conform to the current period presentation.

2.  T1XPERT.COM

    The Company shifted its focus to development and commercializing of an
Internet-enabled electronic securities processing software platform which would
use proprietary technology and which would be adapted to changes in the
securities industry including operational changes related to increased volume,
the ability to effect trades through the Internet, Electronic Crossing Networks,
decimalization, expanded trading hours, various rule changes and the shift from
settling trades in three days to settling trades in one day. This latter shift
is commonly referred to as "T+1". The newly created subsidiary that was formed
to engage in this line of business, CIS Portal Corporation, changed its name to
T1Xpert.com Corp. ("T1Xpert.com") to more properly reflect its business focus.

    As part of the marketing plans of T1Xpert.com the Company may seek to engage
in strategic market relationships with vendors, brokers, dealers or other market
participants. There can be no assurance, however, that the Company will be able
to establish the necessary strategic market relationships, or, if such
relationships are established, that they will be successful.

                                       22
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  T1XPERT.COM (CONTINUED)
    As the Company is in the initial stages of developing its T1Xpert.com
business, the product has not yet been released or tested for functionality.
There is currently no demonstrated market for this product and the Company does
not have any contracted clients. The financial statements contained herein do
not include any adjustments that might result from the outcome of this
uncertainty.

    RISKS AND UNCERTAINTIES

    T1Xpert.com has expended $1,611,000 as of May 31, 2000. The Company believes
it has sufficient funds to meet current operating needs until the projected
development of an alpha product and to the end of fiscal 2001.

    The Company anticipates that in developing past the alpha stage it will need
substantial additional funds. In connection therewith, the Company will be
seeking investments from strategic client/investors and/or venture capital
investors. The form of investment will depend upon the terms and conditions to
be negotiated. The Company may co-invest with such investors, or, failing to
find such investors, the Company may decide to fund such expenditures from its
own resources, as then available. There can be no assurance that the Company
will be able to meet its financial needs after it passes the alpha stage of
development.

3.  DISCONTINUED OPERATIONS

    On July 14, 2000, the Company announced that it was offering for sale its
commercial aircraft engine portfolio by competitive bid, that upon completion of
the sale it will be exiting the aviation business, and that it would account for
and report the Air Group Business as a discontinued operation.

    The Company has a revolving loan agreement (the "CIS Air Loan facility")
with an institution to provide lease and inventory financing for aircraft
engines for CIS Air, in the amount of $10,000,000. The facility has a three-year
term and permits borrowings equal to a percentage of the appraised value of the
aircraft engines financed. Substantially all of the assets of CIS Air are
pledged as collateral for the Loan. At May 31, 2000, $6,862,000 of this facility
was being utilized. The CIS Air Loan facility bears interest at prime plus 1/4%
(9.75%, 8.0% and 8.75% at May 31, 2000, 1999, and 1998 respectively) and expires
in December 2000. The Company paid interest related to this facility of
$619,000, $513,000 and $438,000 in fiscal 2000, 1999, 1998, respectively.
Proceeds of sale are used to permanently pay down the loan. The Company's lender
had been notified, and the CIS Air Loan facility will not be renewed. Upon pay
down of the CIS Air Loan facility, and in connection with CIS Air's exiting from
the aviation business, proceeds from the disposition of Air assets will be
available for general corporate purposes. As of August 23, 2000, $1,424,165 of
the facility was unpaid.

    The Consolidated Balance Sheet and Statements of Operations for all periods
presented have been reclassified to report the results of discontinued
operations separately from those of continuing operations.

                                       23
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  DISCONTINUED OPERATIONS (CONTINUED)
The (loss) income from and net assets of discontinued operations reflected on
the accompanying Consolidated Financial Statement consist of the following (in
thousands):

<TABLE>
<CAPTION>
                                                                    YEAR ENDED MAY 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $ 4,135     $8,630    $12,092
Costs and expenses..........................................    5,767      8,172     10,218
                                                              -------     ------    -------
Income from discontinued operations.........................   (1,632)       458      1,874
Loss on disposal of discontinued operations*................   (4,071)        --         --
                                                              -------     ------    -------
(Loss) income before provision for income taxes.............   (5,703)       458      1,874
Provision for income taxes..................................       --         --        712
                                                              -------     ------    -------
Net (loss) income from discontinued operations..............  $(5,703)    $  458    $ 1,162
                                                              =======     ======    =======
</TABLE>

*   The principal components of this balance are $2,679 representing estimated
    losses on sale of remaining equipment and $1,257 representing expenses
    during the winddown.

<TABLE>
<CAPTION>
                                                                    MAY 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
ASSETS:
Cash and cash equivalents...................................   $  336     $  184
Accounts receivable.........................................      991        212
Inventory...................................................    5,254      6,909
Net investment in direct financing leases...................      907      1,868
Rental equipment............................................    5,663      7,050
Other assets................................................        4        722
                                                               ------     ------
    Total assets............................................   13,155     16,945
                                                               ------     ------
LIABILITIES:
Accounts payable and cost of discontinuance.................    2,229      1,295
Other Liabilities...........................................      483        334
Note payable to institution.................................    6,919      7,515
                                                               ------     ------
    Total liabilities.......................................    9,631      9,144
                                                               ------     ------
    Net assets of discontinued operations...................   $3,524     $7,801
                                                               ======     ======
</TABLE>

    In June 2000 a portion of the Company's engine portfolio was sold. As of
August 23, 2000, the Company has paid down approximately $5.5 million of the
outstanding $6.9 million debt balance at May 31, 2000.

    The Company separately announced that CIS Aircraft Partners, Inc. had
completed the sale of all but one of the aircraft under its managed portfolio.
The general partners of the JetStream Partnerships solicited and received
unitholders' approval for the liquidation of the JetStream Partnerships and for
the payment of a marketing fee upon the sale of the Partnerships' assets. The
marketing of the assets began in January 2000 and all the assets of the
portfolios except one aircraft held by JetStream L.P. were sold by the

                                       24
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  DISCONTINUED OPERATIONS (CONTINUED)
Partnerships. JetStream L.P. is suing the lessee to regain possession of the
remaining aircraft and aircraft records and intends to sell the aircraft upon
repossession.

    On May 29, 1998, the Company announced its decision to discontinue and
liquidate its LaserAcess laser printing business. The Company recorded a
provision of $4,955,000 in the quarter ended May 31, 1998, relative to the
disposal of LaserAccess' assets, including the write-off of goodwill in the
amount of $3,258,000, and other charges related to the discontinuance of the
business unit.

    The Consolidated Balance Sheet and Statements of Operations for all periods
presented have been reclassified to report the results of discontinued
operations separately from those of continuing operations.

    Details of the net loss from discontinued operations of LaserAccess are as
follows (in thousands):

<TABLE>
<CAPTION>
                                                              YEAR ENDED MAY 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Revenues....................................................       --    $ 4,281
Costs and expenses..........................................       --      5,677
                                                               ------    -------
Loss from discontinued operations...........................              (1,396)
Gain (loss) on disposal of discontinued operations..........    1,086     (4,955)
                                                               ------    -------
Income (loss) before benefit for income taxes...............    1,086     (6,351)
Benefit for income taxes....................................       --       (371)
                                                               ------    -------
Net income (loss) from discontinued operations..............   $1,086    $(5,980)
                                                               ======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                              MAY 31, 1999
                                                              ------------
<S>                                                           <C>
ASSETS:
Cash and cash equivalents and total assets..................      $   6
                                                                  -----
LIABILITIES:
Accounts payable and accruals
Other Liabilities...........................................        990
                                                                  -----
    Total liabilities.......................................        990
                                                                  -----
Net assets of discontinued operations.......................      $(984)
                                                                  -----
</TABLE>

4.  ACCOUNTS RECEIVABLE

    Accounts receivable include $983,000 due from a lessee pursuant to the sale
of computer leases in the fourth quarter. As of July 31, 2000, $530,000 of the
$983,000 has been received.

                                       25
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.  INVESTMENT IN MORTGAGE PARTICIPATION NOTES

    On July 3, 1997, the Company announced that it had entered into a Joint
Investment Agreement with Emmes Investment Management Co. LLC to provide up to
$8 million in high-yield, short-term financing for commercial real estate
transactions. At May 31, 2000, the Company's investment in such transactions was
approximately $703,224.

6.  NET INVESTMENT IN DIRECT FINANCING LEASES (SEE ALSO NOTE 9)

    The components of the net investment in direct financing leases as of
May 31 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Minimum lease payments receivable...........................   $1,259     $3,559
Initial direct costs........................................       22         35
Estimated unguaranteed residual values......................       93        190
Less: Unearned income.......................................     (227)      (833)
Less: Write off.............................................      (55)        --
                                                               ======     ======
  Net investment in direct financing leases.................   $1,092     $2,951
                                                               ======     ======
</TABLE>

    Future minimum lease payments to be received under direct financing leases
for fiscal years ending May 31 are as follows (in thousands):

<TABLE>
<S>                                                           <C>
2001........................................................   $  593
2002........................................................      448
2003........................................................      213
2004........................................................        5
                                                               ------
                                                               $1,259
                                                               ======
</TABLE>

7.  RENTAL EQUIPMENT (SEE ALSO NOTE 9)

    Rental equipment consists of the following as of May 31 (in thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Computer equipment..........................................   $ 196     $ 9,594
Capital equipment...........................................      --       2,600
Telecommunication equipment.................................     122         218
Printing equipment..........................................     275         760
Other.......................................................      --          86
                                                               -----     -------
                                                                 593      13,258
Less: accumulated depreciation..............................    (497)     (8,477)
                                                               -----     -------
                                                               $  96     $ 4,781
                                                               =====     =======
</TABLE>

                                       26
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.  RENTAL EQUIPMENT (SEE ALSO NOTE 9) (CONTINUED)
    Rental equipment in 1999 included $4.1 million of computer equipment under
two-year, prepaid leases. The leases expired in April 2000. The underlying
equipment was sold to the lessee for $2.2 million as of May 31, 2000. The
Company recognized a gain thereunder of approximately $608,000.

    Future minimum lease payments to be received under operating leases for the
fiscal years ended May 31 are as follows (in thousands):

<TABLE>
<S>                                                           <C>
2001........................................................    $121
2002........................................................      77
2003........................................................      27
2004........................................................      --
                                                                ----
                                                                $225
                                                                ====
</TABLE>

8.  PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment consist of the following as of May 31 (in
thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Leasehold improvements......................................   $ 129      $ 184
Computer equipment and software.............................     344        761
Furniture, fixtures and office equipment....................      15         15
                                                               -----      -----
                                                                 488        960
Less: Accumulated depreciation..............................    (228)      (588)
                                                               -----      -----
                                                               $ 260      $ 372
                                                               =====      =====
</TABLE>

9.  DISCOUNTED LEASE RENTAL BORROWINGS

    The Company financed certain leases by assigning the rentals to various
lending institutions at fixed rates on a recourse and non-recourse basis.
Discounted lease rental borrowings represent the present value of the lease
payments discounted at the rate charged by the lending institution and are
reduced on a monthly basis as the corresponding lease rental stream is collected
(generally by the lending institutions). Amounts due under recourse borrowings
are obligations of the Company, and are also collateralized by the leased
equipment and assignments of lease receivables. Amounts due under non-recourse
borrowings are collateralized by the leased equipment and assignments of lease
receivables with no recourse to the general assets of the Company.

    Discounted lease rental borrowings as of May 31 are as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Non-recourse borrowings.....................................    $163       $ 64
Recourse borrowings.........................................      --        143
                                                                ----       ----
                                                                $163       $207
                                                                ====       ====
</TABLE>

                                       27
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  DISCOUNTED LEASE RENTAL BORROWINGS (CONTINUED)
    The Company paid interest related to discounted lease borrowings of $14,000,
$126,000 and $272,000 for the fiscal years ended May 31, 2000, 1999 and 1998,
respectively.

    Discounted lease rental borrowings for the fiscal years ending May 31 are
payable as follows (in thousands):

<TABLE>
<S>                                                           <C>
2001........................................................    $ 67
2002........................................................      74
2003........................................................      22
                                                                ----
                                                                $163
                                                                ====
</TABLE>

10.  COMMON STOCK

    Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of shareholders. The Company does not anticipate the payment
of dividends on the common stock for the foreseeable future.

    Pursuant to an odd lot repurchase program established by the Company in
prior years, the Company repurchased from time to time additional shares of its
common stock up to a balance of $500,000 remaining after the odd lot program. In
February 1999, the Company announced that its Board of Directors had authorized
the expenditure of an additional $500,000 for the repurchase of its common
stock. As of May 31, 2000, approximately 525,424 shares had been repurchased by
the Company in this manner at an aggregate cost of approximately $866,000.
Subject to approval from the Board of Directors, the Company may repurchase the
additional shares at prevailing prices in the open market or in negotiated or
other transactions. The Company will hold all repurchased shares of common stock
in its treasury.

11.  STOCK OPTION PLAN

    In 1995, the Board of Directors adopted and the stockholders approved the
Continental Information Systems Corporation 1995 Stock Compensation Plan (the
"1995 Plan"). The 1995 Plan provides for the issuance of options covering up to
1,000,000 shares of common stock and stock grants of up to 500,000 shares of
common stock to non-employee directors of the Company and, at the discretion of
the Compensation Committee or the Board of Directors, employees of and
independent contractors and consultants to the Company. Options granted to
non-employee directors of the Company in any year become exercisable at the next
annual stockholders' meeting while those granted to employees of and independent
contractors and consultants to the Company are subject to vesting periods
determined by the Compensation Committee or the Board of Directors. Options
granted to employees in fiscal 1999 become exercisable in installments of 33 1/3
percent at the grant date and at each subsequent fiscal year end except for
options granted to two executive officers which become fully exercisable one
year from the grant date. The Company applies APB Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
the 1995 Plan. Accordingly, no compensation cost has been charged against income
for the stock option plan. Had compensation cost for the 1995 Plan been
determined based on the fair value at the grant dates for awards under the Plan,
consistent with the requirements of FASB

                                       28
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  STOCK OPTION PLAN (CONTINUED)
Statement No. 123, "Accounting for Stock-Based Compensation," the Company's net
income (loss) and net income (loss) per share would have reflected the pro forma
amounts indicated below:

                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                      2000       1999       1998
                                                    --------   --------   --------
<S>                       <C>                       <C>        <C>        <C>
Net (Loss) income         -As reported............  $(8,092)   $(6,827)   $(5,373)
                          -Pro forma..............  $(8,174)   $(6,965)   $(5,613)
Basic and diluted net
  (Loss) income per       -As reported............
  share                                             $ (1.21)   $  (.99)   $  (.77)
                          -Pro forma..............  $ (1.22)   $ (1.01)   $  (.80)
</TABLE>

    The fair value of each stock option grant has been estimated on the date of
each grant using the Black-Scholes option-pricing model with the following
weighted average assumptions:

<TABLE>
<CAPTION>
                                                               2000       1999       1998
                                                             --------   --------   --------
<S>                                                          <C>        <C>        <C>
Risk-free interest rate....................................    5.4%       4.3%       6.3%
Expected life (months).....................................     60         50         46
Expected volatility........................................     58%        44%        42%
Expected dividend yield....................................     --         --         --
</TABLE>

    The weighted-average grant date fair values of options granted during fiscal
2000, 1999 and 1998 were $.61, $.67 and $.92 per share, respectively.

                                       29
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  STOCK OPTION PLAN (CONTINUED)
    A summary of the status of the 1995 Plan as of May 31, 1998, 1999 and 2000,
and changes during the years ending on those dates is presented below:

<TABLE>
<CAPTION>
                                                                          WEIGHTED AVERAGE
                                                              NUMBER OF    EXERCISE PRICE
                                                               OPTIONS       PER OPTION
                                                              ---------   ----------------
<S>                                                           <C>         <C>
Outstanding at
  May 31, 1997 (188,337 exercisable)........................   284,000         $2.02
Granted.....................................................   190,674         $2.38
Exercised...................................................   (70,001)        $1.97
Forfeited/expired...........................................   (38,331)        $1.97
                                                              --------
Outstanding at
  May 31, 1998 (234,002 exercisable)........................   366,342         $2.22
Granted.....................................................    72,000         $1.92
Exercised...................................................        --            --
Forfeited/expired...........................................   (16,668)        $1.97
                                                              --------
Outstanding at
  May 31, 1999 (298,008 exercisable)........................   421,674         $2.18
Granted.....................................................    13,280         $1.40
Exercised...................................................        --            --
Forfeited/expired...........................................  (119,671)        $2.10
                                                              --------
Outstanding at
  May 31, 2000 (302,003 exercisable)........................   315,283         $2.18
                                                              ========
</TABLE>

    The following table summarizes information about stock options outstanding
at May 31, 2000:

<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING
                                  ---------------------------------------------       OPTIONS EXERCISABLE
                                              WEIGHTED-AVERAGE                    ---------------------------
           EXERCISE               NUMBER OF      REMAINING                        NUMBER OF
           PRICES                  OPTIONS    CONTRACTUAL LIFE   EXERCISE PRICE    OPTIONS    EXERCISE PRICES
           --------               ---------   ----------------   --------------   ---------   ---------------
           <S>                    <C>         <C>                <C>              <C>         <C>               <C>
           $3.00................     9,337            2.4             3.00           9,337           3.00
            2.50................     6,000            0.3             2.50           6,000           2.50
            2.38................   100,000            1.2             2.38         100,000           2.38
            2.25................    75,000            1.1             2.25          75,000           2.25
            2.00................    50,000            2.9             2.00          50,000           2.00
            1.97................    36,666            1.0             1.97          36,666           1.97
            1.95................    10,000            2.1             1.95          10,000           1.95
            1.84................     6,000            1.4             1.84           6,000           1.84
            1.59................     9,000            2.9             1.59           9,000           1.59
            1.56................     4,280            4.8             1.56              --           1.56
            1.32................     9,000            4.4             1.32              --           1.32
                                   -------
           Total................   315,283                                         302,003
                                   =======
</TABLE>

                                       30
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  STOCK OPTION PLAN (CONTINUED)
    In 2000, the Board of Directors of T1Xpert.com adopted the T1Xpert.com Corp.
Stock Compensation Plan ("the T1X 2000 Plan"). The T1X 2000 Plan provides for
the issuance of stock options covering up to 2,000,000 shares of common stock to
employees of T1Xpert.com. Options granted typically do not become exercisable
until at least one year from the date of commencement of employment and vest
ratably over periods of time as provided at the discretion of the Board of
T1Xpert.com. Option grants expire ten years from date of grant, or upon
termination of the employee's employment with the T1Xpert.com.

    As of May 31, 2000 stock option grants representing 1,610,000 shares had
been issued to employees at an option price of $.0675 per share under the
T1Xpert.com 2000 Plan.

12.  INCOME TAXES

    The components of the provision (benefit) for income taxes from continuing
and discontinuing operations are as follows (in thousands):

<TABLE>
<CAPTION>
                                                           YEAR ENDED MAY 31,
                                                     ------------------------------
                                                       2000       1999       1998
                                                     --------   --------   --------
<S>                                                  <C>        <C>        <C>
Current
  Federal..........................................  $    --     $   --     $   --
  State............................................       --         34         77
                                                     -------     ------     ------
                                                                     34         77
Deferred...........................................   (2,176)      (491)       264
Valuation allowance................................    2,176      5,905
                                                     -------     ------     ------
                                                     $    --     $5,448     $  341
                                                     =======     ======     ======
</TABLE>

    The difference between the effective income tax rate and the provision
resulting from the application of the federal statutory income tax rate is
primarily due to utilization of net operating losses, state and local taxes and
the change in the valuation allowance in 1999.

    A reconciliation of income tax expense (benefit) at the statutory rate to
reported income tax expense (benefit) for continuing operations follows (in
thousands):

<TABLE>
<CAPTION>
                                                            YEAR ENDED MAY 31,
                                                      ------------------------------
                                                        2000       1999       1998
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
U.S. Federal statutory rate applied to pretax
  (Loss) income from continuing operations..........  $  (836)   $(1,023)     $314
State income taxes, net of federal benefit..........       --        (99)       27
Other, principally temporary differences............   (1,340)       665        --
  Change in the valuation allowance.................    2,176      5,905        --
                                                      -------    -------      ----
                                                      $    --    $ 5,448      $341
                                                      =======    =======      ====
</TABLE>

                                       31
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12.  INCOME TAXES (CONTINUED)

    The income tax effect of the significant temporary differences and
carryforwards which give rise to deferred tax assets and (liabilities) are as
follows as of May 31 (in thousands):

<TABLE>
<CAPTION>
                                                              2000       1999
                                                            --------   --------
<S>                                                         <C>        <C>
ASSETS
  Net operating losses....................................  $17,525    $16,429
  Prepaid lease revenue...................................      184      1,030
  Discontinued operations.................................    1,178         29
  Other...................................................      331        168
  Leased assets...........................................    2,898      1,135
  Valuation allowance.....................................  (22,116)   (18,791)
                                                            -------    -------
                                                            $     0    $     0
                                                            =======    =======
</TABLE>

    A full valuation allowance was provided for such deferred tax assets since,
in management's opinion, the realizability of such assets was uncertain in light
of the Company's actual operating results since reorganization. The Company
periodically reviews the adequacy of the valuation allowance and will recognize
benefits only if a reassessment indicates that it is more likely than not that
the benefits will be realized. As of May 31, 2000, the Company had a net
operating loss carry-forwards for future tax, taxable income in the amount of
approximately $46 million which will expire from 2005 through 2020.

13.  EMPLOYEE BENEFIT PLANS

    The Company maintains a defined contribution 401(k) plan covering
substantially all of its employees under which it is obligated to make matching
contributions at the rate of 50% of the first 6% of participant earnings
contributed to the plan and which provides for an annual discretionary
contribution based on participants' eligible compensation. Employees generally
became eligible to participate in the plan after the completion of one full year
of employment. Matching and discretionary contributions made by the Company vest
over a five-year period. Matching company contributions to the plan for the
fiscal years ended May 31, 2000, 1999 and 1998, were $26,000, $21,000 and
$38,000, respectively. The Company made no discretionary contribution.

14.  COMMITMENTS AND CONTINGENCIES

    RENTAL COMMITMENTS

    The Company has various operating lease agreements for offices and office
equipment. These leases generally have provisions for renewal at varying terms.
The Company recorded rental expense of $243,000, $279,000 and $243,000 in the
fiscal years ended May 31, 2000, 1999 and 1998, respectively.

                                       32
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
    The future minimum lease payments required under operating leases for the
fiscal years ended May 31 are as follows (in thousands):

<TABLE>
<S>                                                           <C>
2001........................................................    $153
2002........................................................     163
2003........................................................     163
2004........................................................     163
Beyond 2004.................................................     136
                                                                ----
                                                                $778
                                                                ====
</TABLE>

    CONTINGENCIES

    ITEM 3.  LEGAL PROCEEDINGS

    CIS Air Corporation ("CIS Air") has three actions pending against Eastwind
Airlines, a lessee of aircraft and engines.

    1.  On Sept 24, 1999 CIS Air, along with two other creditors, filed a
petition for involuntary bankruptcy against Eastwind in the Bankruptcy Court in
Delaware asserting a claim of $4,623,383 consisting primarily of non payment of
aircraft lease payments and reserves, violations of the return provisions, non
payment for engine leases and non return of a damaged engine. Subsequently three
other creditors executed Joinders to the Petition. On March 31, 2000 the Court
ruled that the numerosity requirements of the Bankruptcy Code supporting the
filing of the Creditor's petition were met. Trial as to whether Eastwind was
paying their debts as they become due was held and proposed findings of fact and
conclusions of law are due to be filed with the Court by the end of September
2000.

    2.  CIS Air previously sued Eastwind in State Court, New York County. That
action is stayed pending resolution of the bankruptcy action.

    3.  CIS Air commenced an action in the United States District Court for the
Southern District of New York against UM Holdings, the sole shareholder of
Eastwind, seeking damages in the amount of $4,623,383 based on the assumption of
liability by UM of Eastwind's obligations. The matter is in the early stages of
litigation. The Company is currently in settlement negotiations concerning all
of the actions against Eastwind and UM Holdings.

    On July 24, 2000 CIS Air settled its previously reported lawsuit against
Cigna Insurance in exchange for the payment by Cigna to CIS Air's institutional
lender as loss payee, the full value of the policy less the policy's deductible.

    CIS Air filed suit in November 1999 against AeroTurbine Inc., a
Florida-based corporation, in State Court in North Carolina. The suit alleges
that AeroTurbine, in removing hushkits that it had purchased which were annexed
to two CIS owned engines, negligently damaged the CIS engines, thereby causing
CIS to incur expenses in repairing them. AeroTurbine has filed a counterclaim
seeking unspecified damages. The matter is in the discovery phase of litigation.

    On March 3, 2000, Dallas AeroSpace, Inc. ("Dallas") of Texas filed suit in
the United States District Court for the Southern District of New York against
CIS Air for breach of contract and other causes of

                                       33
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
action in connection with the sale of an engine to Dallas in August 1997. Dallas
is seeking damages for the purchase price of the engine in the amount of
$1,150,000. CIS Air has denied any liability to Dallas on any of the causes of
action, and has asserted its defenses. The litigation is in its initial stages.

    On April 24, 2000 CIS Air filed suit in the United States District Court for
the Northern District of New York against American Air Ventures, Inc. ("American
Air"), a Florida corporation. The suit seeks reimbursement in connection with
losses incurred in joint venture agreements between the parties for the purchase
and sale of engines. The suit further seeks indemnification from American Air
should CIS Air be found liable to Dallas AeroSpace, because CIS Air purchased
the engine sold to Dallas AeroSpace from American Air. The suit is in the
initial phase of litigation.

    On March 7, 2000 CIS Air filed suit against Express One International, Inc.
a Delaware Corporation in The Supreme Court, State of New York, County of New
York. The suits seek damages in an amount no less than $47,500 for engine rent
and maintenance reserve payments and $70,639 for engine repairs. The suit is in
the discovery phase of litigation.

15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

    The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

    CASH AND CASH EQUIVALENTS, NOTES RECEIVABLE AND INVESTMENT IN MORTGAGE
PARTICIPATION NOTES--The carrying value approximates fair value because of the
short maturity of those instruments.

    DISCOUNTED LEASE RENTAL BORROWINGS AND NOTE PAYABLE TO INSTITUTION--The fair
value of discounted lease rental borrowings and note payable to institution are
based on the borrowing rates currently available to the Company for bank loans
with similar terms and average maturities. At May 31, 2000 and 1999, the fair
value of such borrowings approximate their carrying values.

16.  SEGMENT FINANCIAL DATA

    The Company adopted SFAS No. 131, DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE
AND RELATED INFORMATION, as required, in fiscal 2000. The Company's operating
subsidiaries are classified into two principal operating segments on the basis
of the Company's strategic direction and assessment procedures within the
operating subsidiaries, which require different investment and marketing
strategies.

    EQUIPMENT LEASING BUSINESS: The Company's Equipment Leasing Business, which
was conducted through its operating subsidiary CIS Corporation, a New York
Corporation ("CIS"), leased a wide range of equipment, including computers,
printers and telecommunications equipment. The Company participated in the
leasing market principally by originating new leases and financing other
equipment brokers. In August 1999, the Company announced CIS would no longer
enter into new equipment leases.

    SECURITIES PROCESSING SOFTWARE BUSINESS: The product is being designed as an
electronic securities processing software platform which would use proprietary
technology and which would be adapted to changes in the financial market place.

                                       34
<PAGE>
                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16.  SEGMENT FINANCIAL DATA (CONTINUED)

OPERATING SEGMENTS

<TABLE>
<CAPTION>
                                                                   YEARS ENDED MAY 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
REVENUES (000'S)
T1Xpert.com Segment.........................................       --         --         --
Equipment Leasing Segment...................................  $ 7,960    $ 8,062     $5,438
Corporate and other.........................................      505        735        909
                                                              -------    -------     ------
Consolidated................................................    8,465      8,797      6,347
                                                              -------    -------     ------

OPERATING INCOME (LOSS) (000'S)
T1Xpert.com Segment.........................................   (1,611)        --         --
Equipment Leasing Segment...................................    1,091        343      1,570
Corporate and other.........................................   (1,853)    (3,139)    (2,194)
                                                              -------    -------     ------
Consolidated................................................   (2,373)    (2,796)      (624)
                                                              -------    -------     ------
INTEREST EXPENSES (000'S)
T1Xpert.com Segment.........................................       --         --         --
Equipment Leasing Segment...................................       16        127        272
Corporate and other.........................................       --         --         --
                                                              -------    -------     ------
Consolidated................................................       16        127        272
                                                              -------    -------     ------

INCOME (LOSS) BEFORE INCOME TAXES (000'S)
T1Xpert.com Segment.........................................   (1,611)        --         --
Equipment Leasing Segment...................................    1,075        216      1,298
Corporate and other.........................................   (1,853)    (3,139)    (2,194)
                                                              -------    -------     ------
Consolidated................................................   (2,389)    (2,923)      (896)
                                                              -------    -------     ------

DEPRECIATION AND AMORTIZATION (000'S)
T1Xpert.com Segment.........................................       --         --         --
Equipment Leasing Segment...................................    2,445      4,189      2,068
                                                              -------    -------     ------
Consolidated................................................    2,445      4,189      2,068
                                                              -------    -------     ------

IDENTIFIABLE ASSETS (000'S)
T1Xpert.com Segment.........................................       --         --
Equipment Leasing Segment...................................    2,283      7,911
Corporate and other.........................................   11,970     17,307
                                                              -------    -------
Consolidated................................................  $14,253    $25,218
                                                              =======    =======
</TABLE>

                                       35
<PAGE>
                                                                     SCHEDULE II

                  CONTINENTAL INFORMATION SYSTEMS CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
                         THREE YEARS ENDED MAY 31, 2000
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           CHARGED       CHARGED
                                             BEGINNING     TO COSTS     TO OTHER     DEDUCTIONS     ENDING
                                              BALANCE    AND EXPENSES   ACCOUNTS    (RECOVERIES)   BALANCE
                                             ---------   ------------   ---------   ------------   --------
<S>                                          <C>         <C>            <C>         <C>            <C>
1998:
Accounts receivable--
Allowance for doubtful Accounts............    $ (50)        $ (10)     $     --        $(16)       $ (76)
                                               -----         -----      ---------       ----        -----

1999:
Accounts receivable--
Allowance for doubtful Accounts............    $ (76)        $(381)     $     --        $132        $(325)
                                               -----         -----      ---------       ----        -----

2000:
Accounts receivable--
Allowance for doubtful Accounts............    $(325)        $(146)     $     --        $363        $(108)
                                               -----         -----      ---------       ----        -----
</TABLE>

                                       36
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

    None

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The Company incorporates herein by reference the information concerning
directors and executive officers contained in its Notice of Annual Meeting of
Stockholders and Proxy Statement to be filed within 120 days after the end of
the Company's fiscal year (the "2000 Proxy Statement").

ITEM 11.  EXECUTIVE COMPENSATION

    The Company incorporates herein by reference the information concerning
executive compensation contained in the 2000 Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The Company incorporates herein by reference the information concerning
security ownership of certain beneficial owners and management contained in the
2000 Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The Company incorporates herein by reference the information concerning
certain relationships and related transactions contained in the 2000 Proxy
Statement.

                                       37
<PAGE>
                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

    (a)  The following documents are filed as part of this Annual Report:

        Financial Statements. See "ITEM 8. FINANCIAL STATEMENTS AND
    SUPPLEMENTARY DATA" for Index to Financial Statements and Schedules included
    in this Form 10-K.

<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<C>                     <S>
        2.1*            Disclosure Statement with respect to Trustee's Joint Plan of
                        Reorganization dated October 4, 1994.

        2.2*            November 29, 1994 Order Confirming Trustee's Joint Plan of
                        Reorganization dated October 4, 1994.

        3.1*            Restated Certificate of Incorporation, as amended (Filed as
                        Exhibit 3.1 to the Company's Form 10-Q for the quarter ended
                        November 30, 1997 and incorporated herein by reference).

        3.2             Restated Bylaws as amended through February 10, 2000

       10.1**           1995 Stock Compensation Plan (Filed as Exhibit 10.1 to the
                        Company's Form 10-Q for the quarter ended August 31, 1995
                        and incorporated herein by reference).

       10.2**           Advisory Agreement for Real Estate Related Investments
                        between Continental Information Systems Corporation and
                        Emmes Investment Management Co. LLC dated June 30, 1997
                        (Filed as Exhibit 10.13 to the Company's Form 10-K for the
                        fiscal year ended May 31, 1997 and incorporated herein by
                        reference).

       10.5**           Loan and Security Agreement between CIS Air Corporation and
                        Heller Financial, Inc. dated December 19, 1997 (Filed as
                        Exhibit 10.1 to the Company's 10-Q for the quarter ended
                        February 28, 1998 and incorporated herein by reference).

       27.1             Financial Data Schedule.
</TABLE>

------------------------

*   Filed as an exhibit to the Company's amended Form 10 Registration Statement
    (Commission File No. 0-25104), originally filed November 10, 1994 and
    incorporated herein by reference.

**  Incorporated by reference.

    (b) Reports on Form 8-K

        One report on Form 8-K was filed by the Company during the fiscal year
    2000. On June 16, 1999 the Company filed an 8K reporting the settlement of
    litigation between the Company and former owners of its LaserAccess printing
    business.

                                       38
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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.

<TABLE>
<S>                                                    <C>  <C>
                                                       CONTINENTAL INFORMATION SYSTEMS CORPORATION

                                                       BY:             /s/ MICHAEL L. ROSEN
                                                            -----------------------------------------
                                                                         Michael L. Rosen
                                                              PRESIDENT, CHIEF EXECUTIVE OFFICER AND
                                                                             DIRECTOR

                                                       BY:              /s/ JONAH M. MEER
                                                            -----------------------------------------
                                                                          Jonah M. Meer
                                                              SENIOR VICE PRESIDENT, CHIEF OPERATING
                                                               OFFICER AND CHIEF FINANCIAL OFFICER
</TABLE>

Dated: September 13, 2000

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and the dates indicated:

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                     DATE
                      ---------                                   -----                     ----
<C>                                                    <S>                          <C>
                /s/ JAMES P. HASSETT                   Director and Chairman of
     -------------------------------------------         the Board                   September 13, 2000
                  James P. Hassett

                  /s/ MICHAEL BRUCK                    Director
     -------------------------------------------                                     September 13, 2000
                    Michael Bruck

                   /s/ MARK JAINDL                     Director
     -------------------------------------------                                     September 13, 2000
                     Mark Jaindl

               /s/ GEORGE H. HEILBORN                  Director
     -------------------------------------------                                     September 13, 2000
                 George H. Heilborn

                 /s/ PAUL M. SOLOMON                   Director
     -------------------------------------------                                     September 13, 2000
                   Paul M. Solomon
</TABLE>

                                       39
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<FILENAME>a2025461zex-3_2.txt
<DESCRIPTION>EXHIBIT 3.2
<TEXT>

<PAGE>

                                                                     Exhibit 3.2

                                    RESTATED

                                     BY-LAWS

                                       OF

                   Continental Information Systems Corporation

                             A New York Corporation


                                    ARTICLE I


                                     OFFICES


         SECTION 1. REGISTERED OFFICE. The registered office of the corporation
in the State of New York shall be located at 4 Central Avenue, Albany, New York,
County of Albany. The name of the corporation's registered agent at such address
shall be Corporation Service Company. The registered office and/or registered
agent of the corporation may be changed from time to time by action of the board
of directors.

         SECTION 2. OTHER OFFICES. The corporation may also have offices at such
other places, both within and without the State of New York, as the board of
directors may from time to time determine or the business of the corporation may
require.


                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS

         SECTION 1. PLACE AND TIME OF MEETINGS. An annual meeting of the
shareholders shall be held each year within one hundred fifty (150) days after
the close of the immediately preceding fiscal year of the corporation for the
purpose of electing directors and conducting such other proper business as may
come before the meeting. The date, time and place of the annual meeting shall be
determined by the president of the corporation; provided, that if the president
does not act, the board of directors shall determine the date, time and place of
such meeting.

         SECTION 2. SPECIAL MEETINGS. Special meetings of shareholders may be
called for any purpose and may be held at such time and place, within or without
the State of New York, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than 50 percent of the votes at the meeting.
<PAGE>

         SECTION 3. PLACE OF MEETINGS. The board of directors may designate any
place, either within or without the State of New York, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal executive office of the
corporation.

         SECTION 4. NOTICE. Whenever shareholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each shareholder entitled to vote at such meeting not
less than 10 nor more than 50 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the shareholder at his, her or its address as the
same appears on the records of the corporation.

         SECTION 5. BOOKS AND RECORDS. The corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and executive committee, if any, and
shall keep at the office of the Corporation in New York or at the office of its
transfer agent or registrar in New York, a record containing the names and
addresses of all shareholders, the number and class of shares held by each and
the dates when they respectively became the owners of record thereof. Any person
who shall have been a shareholder of record of a corporation for at least six
months immediately preceding his demand, or any person holding, or thereunto
authorized in writing by the holders of, at least five percent of any class of
the outstanding shares, upon at least five days written demand shall have the
right to examine in person or by agent or attorney, during usual business hours,
its minutes of the proceedings of shareholders and to make extracts therefrom.

         SECTION 6. FIXING A RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the board of directors may fix, in advance, a date
as the record date for any such determination of shareholders, such date shall
not be more than fifty nor less than ten days before the date of such meeting,
nor more than fifty days prior to any other action. If no record date is fixed
by the board of directors, (i) the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if no notice is given, the day on which the meeting is held, or (ii)
the record date for determining shareholders for any other purpose other than
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders, shall be at the close of business on the day on which the
resolution of the board relating thereto is adopted. A


                                      -2-
<PAGE>

determination of shareholders of record entitled to notice of or to vote at any
meeting of shareholders shall apply to any adjournment thereof, unless the board
of directors fixes a new record date for the adjourned meeting. The officer or
agent of the corporation having charge of the books of the corporation shall
make, not more than fifty but not less than ten days before the date of such
meeting or such action, a complete list of the shareholders of the corporation.

         SECTION 7. QUORUM. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the shareholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or represented by proxy at
the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.

         SECTION 8. ADJOURNED MEETINGS. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If after the adjournment,
the board of directors fixes a new record date for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of record
entitled to such notice.

         SECTION 9. VOTE REQUIRED. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
shareholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question.

         SECTION 10. VOTING RIGHTS. Except as otherwise provided by the Business
Corporation Law of the State of New York or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every shareholder of record shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share of
common stock held by such shareholder.

         SECTION 11. PROXIES. Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after eleven months
from its date, unless the proxy provides for a longer period. A duly executed
proxy shall be irrevocable if it states that it is irrevocable and if, and only
as long as, it is coupled with an interest sufficient in law to support an
irrevocable power. Any proxy is suspended when the person executing the proxy is
present at a meeting of shareholders and elects to vote,


                                      -3-
<PAGE>

except that when such proxy is coupled with an interest and the fact of the
interest appears on the face of the proxy, the agent named in the proxy shall
have all voting and other rights referred to in the proxy, notwithstanding the
presence of the person executing the proxy.

         SECTION 12. ACTION BY WRITTEN CONSENT. Unless otherwise provided in the
certificate of incorporation, whenever shareholders are required or permitted to
take any action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by the holders of all
outstanding shares that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the State of New York, or the corporation's principal place of business, or an
officer or agent of the corporation having custody of the book or books in which
proceedings of meetings of shareholders are recorded or written consents in lieu
of meetings are kept. All consents properly delivered in accordance with this
section shall be deemed to be recorded when delivered. Any action taken pursuant
to such written consent or consents of the shareholders shall have the same
force and effect as if taken by the shareholders at a meeting thereof.

                                   ARTICLE III

                                    DIRECTORS

         SECTION 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.

         SECTION 2. NUMBER, ELECTION AND TERM OF OFFICE. The number of directors
which shall constitute the Board of Directors shall be six (6). The number of
directors shall be established from time to time by resolution of the board of
directors and subject to the limitation by statute. Each director elected shall
hold office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as hereinafter provided. The chief
executive officer of the corporation shall be a member of the board of
directors.

         SECTION 3. REMOVAL AND RESIGNATION. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the holders of any class or series are entitled to elect one or more
directors by the provisions of the corporation's certificate of incorporation,
the provisions of this section shall apply, in respect to the removal without
cause of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole.

         SECTION 4. VACANCIES. Newly created directorships resulting from an
increase in the number of directors and vacancies occurring on the board for any
reason, except the removal of directors without cause,


                                      -4-
<PAGE>

may be filled by a majority of the directors then in office, even if such number
is less than a quorum, or by a sole remaining director. Vacancies created by the
removal of a director or directors without cause shall be filled by a majority
vote of the holders of the Corporation's stock entitled to vote thereon, except
as provided in the Restated Certificate of Incorporation of the corporation,
filed with the Secretary of State on December 21, 1994. Each director so chosen
shall hold office until a successor is duly elected and qualified or until his
or her earlier death, resignation or removal as herein provided.

         SECTION 5. ANNUAL MEETINGS. The annual meeting of each newly elected
board of directors shall be held without other notice than by this by-law
immediately after, and at the same place as, the annual meeting of shareholders.

         SECTION 6. OTHER MEETINGS AND NOTICE. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board of directors. Special meetings of the board of directors may be called
by or at the request of the president or any director on at least 24 hours
notice to each director, either personally, by telephone, by mail or by
telegraph.

         SECTION 7. QUORUM, REQUIRED VOTE AND ADJOURNMENT. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

         SECTION 8. COMMITTEES. The board of directors, by resolution passed by
a majority of the entire board of directors, may designate from among its
members an executive committee and other committees, which to the extent
provided in such resolution or these by-laws shall have all the authority of the
board of directors except as otherwise limited by law. The board of directors
may designate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member or members at any meeting of the
committee. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of directors.
Each committee shall keep regular minutes of its meetings and report the same to
the board of directors when required.

         SECTION 9. COMMITTEE RULES. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as


                                      -5-
<PAGE>

provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.

         SECTION 10. WAIVER OF NOTICE AND PRESUMPTION OF ASSENT. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting prior to the conclusion
of the meeting to the transaction of any business because the meeting is not
lawfully called or convened. Such member shall be conclusively presumed to have
assented to any action taken unless his or her dissent shall be entered in the
minutes of the meeting or unless his or her written dissent to such action shall
be filed with the person acting as the secretary of the meeting before the
adjournment thereof or shall be forwarded by registered mail to the secretary of
the corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.

         SECTION 11. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by
the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, may be taken without a meeting if all members of the board of
directors or committee, as the case may be, consent thereto in writing to the
adoption of a resolution authorizing the action, and the writing or writings are
filed with the minutes of proceedings of the board or committee.

         SECTION 12. TELEPHONIC PARTICIPATION IN MEETINGS. Any one or more
members of the board of directors or any committee thereof may participate in a
meeting of such board or committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time.

                                   ARTICLE IV

                                    OFFICERS

         SECTION 1. NUMBER. The officers of the corporation shall be elected by
the board of directors and shall consist of a chairman of the board of
directors, a president, one or more vice presidents, a secretary, a treasurer,
and such other officers and assistant officers as may be deemed necessary or
desirable by the board of directors. Any number of offices may be held by the
same person except the offices of president and secretary. In its discretion,
the board of directors may choose not to fill any office for any period as it
may deem advisable.


                                      -6-
<PAGE>

         SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of shareholders or as soon thereafter as is
convenient. The president shall appoint other officers to serve for such terms
as he or she deems desirable. Vacancies may be filled or new offices created and
filled at any meeting of the board of directors. Each officer shall hold office
until a successor is duly elected and qualified or until his or her earlier
death, resignation or removal as hereinafter provided.

         SECTION 3. REMOVAL. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

         SECTION 4. VACANCIES. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.

         SECTION 5. COMPENSATION. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.

         SECTION 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of the
board of directors shall preside at all meetings of the board of directors and
shall have such powers and perform such duties as may be prescribed by the board
of directors or provided in these by-laws. Whenever the president is unable to
serve, by reason of sickness, absence or otherwise, the chairman of the board of
directors shall perform all the duties and responsibilities and exercise all the
powers of the president.

         SECTION 7. THE PRESIDENT. The president shall be the chief executive
officer of the corporation; shall preside at all meetings of the shareholders at
which he or she is present; subject to the powers of the board of directors,
shall be in the general and active charge of the business, affairs and property
of the corporation, and control over its officers, agents and employees; and
shall see that all orders and resolutions of the board of directors are carried
into effect. The president shall preside at all meetings of the board of
directors at which the chairman is not present and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
as may be provided in these by-laws.

         SECTION 8. VICE PRESIDENTS. The vice president, or if there shall be
more than one, the vice presidents in the order determined by the board of
directors, shall, in the absence or disability of the president, act with all of
the powers and be subject to all the restrictions of the president. The vice
presidents shall also perform such other duties and have such other powers as
the board of directors, the president or these by-laws may, from time to time,
prescribe.


                                      -7-
<PAGE>

         SECTION 9. THE SECRETARY AND ASSISTANT SECRETARIES. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the shareholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the president or these
by-laws may, from time to time, prescribe; and shall have custody of the
corporate seal of the corporation. The secretary, or an assistant secretary,
shall have authority to affix the corporate seal to any instrument requiring it
and when so affixed, it may be attested by his or her signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his or her signature. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors, the
president, or secretary may, from time to time, prescribe.

         SECTION 10. THE TREASURER AND ASSISTANT TREASURER. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the
president or these by-laws may, from time to time, prescribe. If required by the
board of directors, the treasurer shall give the corporation a bond (which shall
be rendered every six years) in such sums and with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance of
the duties of the office of treasurer and for the restoration to the
corporation, in case of death, resignation, retirement, or removal from office,
of all books, papers, vouchers, money, and other property of whatever kind in
the possession or under the control of the treasurer belonging to the
corporation. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors, shall in
the absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. The assistant treasurers shall perform such other
duties and have such other powers as the board of directors, the president or
treasurer may, from time to time, prescribe.

         SECTION 11. OTHER OFFICERS, ASSISTANT OFFICERS AND AGENTS. Officers,
assistant officers and agents, if any, other than those whose


                                      -8-
<PAGE>

duties are provided for in these by-laws, shall have such authority and perform
such duties as may from time to time be prescribed by resolution of the board of
directors.

         SECTION 12. ABSENCE OR DISABILITY OF OFFICERS. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.

                                    ARTICLE V

                INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

         SECTION 1. NATURE OF INDEMNITY. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative is or was a director or officer of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent which it is empowered to
do so unless prohibited from doing so by the Business Corporation Law of the
State of New York, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys' fees actually and reasonably incurred
by such person in connection with such proceeding and such indemnification shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in Section 2 hereof, the corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the corporation. The right to indemnification
conferred in this Article V shall be a contract right and, subject to Sections 2
and 5 hereof, shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition.
The corporation may, by action of its board of directors, provide
indemnification to employees and agents of the corporation with the same scope
and effect as the foregoing indemnification of directors and officers.

         SECTION 2. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or


                                      -9-
<PAGE>

officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 30 days, the right to indemnification or advances as granted by
this Article V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the Business Corporation Law of the State of New York for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Business Corporation Law of the State of New York, nor an actual determination
by the corporation (including its board of directors, independent legal counsel,
or its shareholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

         SECTION 3. ARTICLE NOT EXCLUSIVE. The rights to indemnification granted
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article V shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, by-law, agreement, vote of
shareholders or disinterested directors or otherwise.

         SECTION 4. INSURANCE. The corporation may purchase and maintain
insurance on its behalf and on behalf of any person who is or was a director,
officer, employee, fiduciary, or agent of the corporation or was serving at the
request of the corporation as a director, officer, employer or agent of another
corporation, partnership, joint venture trust, or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.

         SECTION 5. EXPENSES. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
corporation in advance of such proceeding's final disposition unless otherwise
determined by the board of directors in the specific case upon receipt of an
undertaking by or on behalf of the director or


                                      -10-
<PAGE>

officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation. Such expenses incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.

         SECTION 6. EMPLOYEES AND AGENTS. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.

         SECTION 7. CONTRACT RIGHTS. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the Business Corporation Law of the State of New York or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.

         SECTION 8. MERGER OR CONSOLIDATION. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.

                                   ARTICLE VI

                              CERTIFICATES OF STOCK

         SECTION 1. FORM. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice president and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by such holder in the
corporation. If such a certificate is countersigned (1) by a transfer agent or
an assistant transfer agent other than the corporation or its employee or (2) by
a registrar, other than the corporation or its employee, the signature of any
such president, vice president, secretary, or assistant secretary may be
facsimiles. In case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such


                                      -11-
<PAGE>

certificate or certificates shall cease to be such officer or officers of the
corporation whether because of death, resignation or otherwise before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the corporation. All certificates for shares shall
be consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. Shares of stock
of the corporation shall only be transferred on the books of the corporation by
the holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the corporation of the certificate or certificates
for such shares endorsed by the appropriate person or persons, with such
evidence of the authenticity of such endorsement, transfer, authorization, and
other matters as the corporation may reasonably require, and accompanied by all
necessary stock transfer stamps. In that event, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under the
laws of the United States or any state thereof to act as its transfer agent or
registrar, or both in connection with the transfer of any class or series of
securities of the corporation.

         SECTION 2. LOST CERTIFICATES. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.

         SECTION 3. FIXING A RECORD DATE FOR DETERMINATION OF SHAREHOLDERS. For
the purpose of determining the shareholders entitled to vote at any meeting a
shareholder or any adjournment thereof, or to express consent or to dissent from
any proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any rights, or
for the purpose of any other action, the board of directors may fix, in advance,
a date as the record date for any such determination of shareholders, such date
shall not be more than fifty nor less than ten days before the date of such
meeting, nor more than fifty days prior to any other action. If no record date
is fixed by the board of directors, (i) the record date for the determination of
shareholders entitled to notice of or to vote at a


                                      -12-
<PAGE>

meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
on which the meeting is held, or (ii) the record date for determining
shareholders for any purpose other than the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, shall be at the
close of business on the day on which the resolution of the board relating
thereto is adopted. A determination of shareholders of record entitled to notice
of or to vote at any meeting of shareholders shall apply to any adjournment
thereof, unless the board of directors fixes a new record date for the adjourned
meeting.

         SECTION 4. REGISTERED SHAREHOLDERS. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.

         SECTION 5. SUBSCRIPTIONS FOR STOCK. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation or the board of
directors may declare a forfeiture.

                                   ARTICLE VII

                               GENERAL PROVISIONS

         SECTION 1. DIVIDENDS. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, including
the shares or bonds of other corporations, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation. Before payment of
any dividend, there may be set aside out of any funds of the corporation
available for dividends such sum or sums as the directors from time to time, in
their absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or any other purpose and the directors may modify
or abolish any such reserve in the manner in which it was created.


                                      -13-
<PAGE>

         SECTION 2. OPTIONS AND WARRANTS. The board of directors cannot, without
shareholder approval, issue options, warrants or any other securities
convertible into more than fifteen percent (15%) of the authorized shares of
capital stock of the corporation.

         SECTION 3. CHECKS, DRAFTS OR ORDERS. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.

         SECTION 4. CONTRACTS. The board of directors may authorize any officer
or officers, or any agent or agents, of the corporation to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the corporation, and such authority may be general or confined to specific
instances.

         SECTION 5. LOANS. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be secured or unsecured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.

         SECTION 6. FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.

         SECTION 7. CORPORATE SEAL. The board of directors may provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, New York".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.

         SECTION 8. VOTING SECURITIES OWNED BY CORPORATION. Voting securities in
any other corporation held by the corporation shall be voted by the president,
unless the board of directors specifically confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.

         SECTION 9. INSPECTION OF BOOKS AND RECORDS. Any person who shall have
been a shareholder of record of the corporation for at least six months
immediately preceding his demand, or any person holding, or thereunto authorized
in writing by the holders of at least five percent of any class of the
outstanding shares, upon at least five days written


                                      -14-
<PAGE>

demand shall have the right to examine in person or by agent or attorney, during
usual business hours, its minutes of the proceedings of its shareholders and
record of shareholders and to make extracts therefrom.

         SECTION 10. SECTION HEADINGS. Section headings in these by-laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.

         SECTION 11. INCONSISTENT PROVISIONS. In the event that any provision of
these by-laws is or becomes inconsistent with any provision of the certificate
of incorporation, the Business Corporation Law of the State of New York or any
other applicable law, the provision of these by-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.

                                  ARTICLE VIII

                                   AMENDMENTS

         These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been conferred
upon the board of directors shall not divest the shareholders of the same
powers.


(As amended through February 10, 2000).


                                      -15-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>3
<FILENAME>a2025461zex-27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
CONTINENTAL INFORMATION SYSTEMS CORPORATION 2000.
</LEGEND>
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          MAY-31-2000
<PERIOD-END>                               MAY-31-2000
<CASH>                                           3,382
<SECURITIES>                                         0
<RECEIVABLES>                                    1,203
<ALLOWANCES>                                     (108)
<INVENTORY>                                          0
<CURRENT-ASSETS>                                 4,477
<PP&E>                                           2,228
<DEPRECIATION>                                   (780)
<TOTAL-ASSETS>                                  14,253
<CURRENT-LIABILITIES>                              672
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                            71
<OTHER-SE>                                      13,581
<TOTAL-LIABILITY-AND-EQUITY>                    14,253
<SALES>                                          4,671
<TOTAL-REVENUES>                                 8,465
<CGS>                                            3,718
<TOTAL-COSTS>                                    6,791
<OTHER-EXPENSES>                                 4,063
<LOSS-PROVISION>                                   109
<INTEREST-EXPENSE>                                  16
<INCOME-PRETAX>                                (2,389)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                            (2,389)
<DISCONTINUED>                                 (5,703)
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (8,092)
<EPS-BASIC>                                     (1.21)
<EPS-DILUTED>                                   (1.22)


</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
