U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required] For the fiscal year ended December 31,
2001 Commission file Number 33-6859-D

                                ZEON Corporation
             (Exact name of registrant as specified in its charter)

         Colorado                                     84-0827610
-----------------------------                   ------------------
(State or otherjurisdiction                     (I.R.S. Employer
of incorporation or organization)               Identification No.)


 1500 Cherry Street, Louisville, Colorado                         80027
---------------------------------------------------------------------------
   (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:  (303) 666-9400
                                                     --------------
Securities registered pursuant to Section 12(b) of the Act:   None.
                                                              -----
Securities registered pursuant to Section 12(g) of the Act:   None.
                                                              -----
Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 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. [x ] Yes []No

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this form 10-KSB.[x]

The issuer's revenues for its most recent fiscal year ended December 31, 2001
were $6,669,700.

The aggregate market value of the voting stock held by non-affiliates of the
registrant (based on the average of bid and ask price on March 15, 2002) was
approximately $688,210.

As of March 15, 2002, the number of shares outstanding of the registrant's
common stock, no par value, $.10 stated value was 344,105.

Transitional Small Business Disclosure Format:
                                                     [] Yes  [x] No

                       Documents Incorporated By Reference
                                      None.


                                       1
<PAGE>


                                     PART I
Item 1.  Business

Introduction:  The statements  contained in this Form 10-KSB that are not purely
historical  are  forward  looking  statements  within  the  meaning  of  federal
securities  laws,  including  statements  regarding the Company's  expectations,
hopes,  intentions  or  strategies  regarding  the future.  All forward  looking
statements  included in this document are based on information  available to the
Company on the date hereof,  and the Company assumes no obligation to update any
such forward  looking  statements.  It is  important to note that the  Company's
actual  results  could  differ  materially  from those in such  forward  looking
statements.

ZEON Corporation  (formerly Data Display Corporation) was incorporated under the
laws of the State of Colorado on September 19, 1980.

The Company operates in a single industry segment: sign manufacturing.

The  Company  is  engaged  entirely  in the  manufacture  and  sale of neon  and
fluorescent  backlit  illuminated signs and related  products.  In May 1995, the
Company sold its Electronic  Display  Division to Colorado Time System,  Inc., a
Colorado Company in the electronic  display business.  The Company recognized an
one-time gain on the sale of this Division's assets of approximately  $44,000 in
1995.

The Company  entered  into the neon glass  tubebending  business in July 1988 by
acquiring  the assets of a local  neon  business.  The  Company  converted  this
business from a wholesale operation (primarily forming neon tubes for local sign
companies) to a volume production shop,  manufacturing  finished neon window and
interior signs for national accounts.

At the June 1994  stockholders'  meeting,  a 1-for-100  reverse  stock split was
approved.  The reverse  stock split  changed the  outstanding  stock shares from
35,334,711 to 353,384.

As of December 31, 2001, the Company had 27 full-time employees.

The following sets forth sales revenue from unaffiliated customers:

                                               Sales

                           2001             $6,669,700
                           2000             $6,149,600
                           1999             $3,014,900






                                       2
<PAGE>


Manufacturing.  The Company manufactures its neon window signs at its facilities
in Louisville,  Colorado.  The Company began importing neon signs  components in
1999, and began  subcontracting  completed sign products to offshore  suppliers.
The  Company  expects  to  increase  the use of these  offshore  resources  as a
compliment to its internal production capacity.

The neon signs are  composed  of  phosphor-coated  hollow  glass  tubes that are
heated to a molten  state and formed into  letters or designs.  The formed tubes
are then filled with neon or argon gas to achieve the desired colors.  The glass
is then mounted onto a  thermal-formed  plastic  backpanel and  illuminated by a
high-voltage transformer that is attached to the back of the sign. The materials
and components are all readily available from multiple sources.

Markets.  The Company markets primarily to the national  chain/franchise  market
for point-of-purchase  products and logo signs. The custom signs are used by our
customers as product/service promotion and customer name/brand recognition. ZEON
Corporation  also  markets  "generic"  signs,  such as OPEN  signs,  in  various
markets.  ZEON Corporation expanded its marketing in 1999 to attract high volume
neon sign customers, primarily in the beverage industry

Distribution.  The neon  products are marketed by the Company's  in-house  staff
through direct contact and presence at selected trade shows.  Independent  sales
representatives are also used as a selling channel.  Dealers are being used as a
distribution channel for the Zeon(R) Neo-grid(R) product line.

Competition.  The industry in which the Company  competes is highly  fragmented,
very competitive and primarily  characterized in all market segments with small,
privately held companies,  of a comparable  size and financial  strength as ZEON
Corporation.  The competition is primarily based on product quality, service and
price.

Developments.  In 2001, the Company continued development on a unique neon power
supply  design,  for  which  a  patent  was  granted  in  2000.  The  commercial
introduction  of the power  supply is expected  to be in early to mid 2002.  The
Company  spent  $225,000  and  $236,600  for 2001 and  2000,  respectively,  for
research and design development for this product.

Product Warranty.  The components of the Company's products are warranted by the
Company as to material  and  workmanship  for a period of up to two years.  This
warranty  is similar in  duration  to the  warranty  provided  by the  Company's
competitors.  To date,  the Company has had no material  costs  associated  with
warranty claims.




                                       3
<PAGE>





Item 2. Properties.

The  Company  leases its primary  manufacturing  and office  facilities  from an
entity in which the Company's president is a 50% partner. During April 2000, the
Company  expanded into an additional  facility  located adjacent to the existing
facilities.  This  additional  facility is also owned by the entity in which the
Company's  president is a 50% partner.  The lease agreement  covering all of the
above facilities requires monthly payments of approximately  $18,130 and expires
March 2010 with a  five-year  option  period.  The  Company is  responsible  for
maintenance and operating costs.

Item 3. Legal Proceedings.

There are no legal proceedings pending against the Company.

Item 4. Submission of Matters to a Vote of Security Holders.

There were no items submitted to a vote of security holders during the last
quarter of the Company's fiscal year ended December 31, 2001.




                                       4
<PAGE>




                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

The common stock of the Company is traded in the  over-the-counter  market.  SEC
regulations  regulate the  solicitation  procedures  for "penny stocks" and have
severely  curtailed the trading and  liquidity of ZEON  Corporation  shares.  In
addition,   the  National   Association  of  Security   Dealers   increased  the
requirements  for a NASDAQ  listing  which would  require  ZEON  Corporation  to
roughly quadruple in size before qualifying.  The following over-the-counter bid
quotations reflect inter-dealer prices,  without retail mark-up,  mark-down,  or
commission,  and may not necessarily  represent actual transactions.  Due to the
lack of trading activity in ZEON Corporation  stock, the quotes listed below may
not reflect accurate market values.  The following table sets forth the high and
low bid prices for the  periods  indicated  based on a sampling  of quotes  from
various market makers:


                                                 High        Low
                                                 -----      ------
Fourth quarter ended December 31, 2001          $ 2.00         $2.00
Third quarter ended September 30, 2001            2.30          2.30
Second quarter ended June 30, 2001                5.75          4.50
First quarter ended March 31, 2001                1.00         0.375

Fourth quarter ended December 31, 2000            2.25          0.78
Third quarter ended September 30, 2000           2.375         2.375
Second quarter ended June 30, 2000                  NQ            NQ
First quarter ended March 31, 2000                  NQ            NQ

                                                 NQ= no quote available

On March 15, 2002, the closing bid and ask prices of common stock of the Company
were $2.00 and $2.00, respectively.

At March 15, 2002, there are approximately 717 recordholders of the Company's
common stock.

On March 15, 2002,  the Board of Directors of the Company  approved of a reverse
stock split  transaction,  whereby each 500 shares of Common  Stock  outstanding
prior to the split will be  converted  into one full share of Common Stock after
the split.  Any fractional  shares resulting from the split will be purchase for
cash based on a price of $2,000 for a full share (which is  equivalent  to $4.00
per share prior to the  split).  The purpose of the split is to take the Company
private by reducing the number of  shareholders  from  approximately  717 to 49.
Concurrent  with filing this Form 10-KSB,  the Company is filing  Schedule 13e-3
for the reverse  split/going  private  transaction,  which describes the reverse
split and its effect in detail.  A  shareholders  meeting to approve the reverse
split has been  scheduled  for April 30, 2002.  If approved at the  shareholders
meeting,  the  reverse  split  will be  effective  on May 3, 2002.  For  further
information on this proposed reverse split/going private transaction, please see
the Schedule 13e-3.

                                       5
<PAGE>

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Factors That May Affect Operating Results

The statements  contained in this Form 10-KSB that are not purely historical are
forward  looking  statements  within the  meaning of  federal  securities  laws,
including statements regarding the Company's expectations,  hopes, intentions or
strategies regarding the future. All forward looking statements included in this
document are based on  information  available to the Company on the date hereof,
and the  Company  assumes  no  obligation  to update  any such  forward  looking
statements.  It is important to note that the  Company's  actual  results  could
differ materially from those in such forward looking statements.

Financial Condition

The  liquidity  of ZEON  Corporation  continues  to remain  adequate to meet the
Company's  obligations  with a current ratio of 2.0 to 1.0 at December 31, 2001,
compared to a 1.8 to 1 at December 31, 2000.  The 2001 current  ratio  increased
due to a  decrease  in  amounts  outstanding  under its line of credit and trade
payables as of December 31, 2001.

During 2001 and 2000,  the Company's line of credit and long-term debt financing
provided sufficient cash to cover operational and capital  expenditures.  During
2001, the Company borrowed and repaid  $2,788,895 and $2,832,008,  respectively,
on its line of credit and long-term debt. Cash provided in operating  activities
totaled $258,720 in 2001. Cash used in investing  activities totaled $166,530 in
2001 and was primarily for the website development, which will add an additional
marketing avenue to Company customers.

During  2000,  the  Company  borrowed  and  repaid  $2,439,605  and  $2,255,429,
respectively,  on its line of credit and long-term debt,  which provided most of
the cash flow from financing  activities,  netting  $183,594.  During 2000, cash
used in operating  activities  totaled  $140,295,  which was primarily caused by
increases in receivables and inventory to accommodate  increased sales activity.
Cash used in investing activity totaling $54,342 was for the purchase of factory
equipment in 2000.

In  2000,  the  Company  experienced  significant  funding  requirements  as new
business  expansion,   related  inventory  demands  and  additional   facilities
occupancy costs were met. In 2001, the Company made significant  improvements in
inventory  and  receivable   management,   thus  experiencing  a  positive  cash
contribution  from  operations  ($258,720).  The  proposed  reverse  split/going
private  transaction  will  cost the  Company  approximately  $205,000  (for the
purchase of fractional  shares resulting from the split),  to be funded from the
Company's line of credit. Other capital expenditures for 2002 are anticipated to
be approximately $70,000 for production equipment and tooling. Cash generated by
operating  activities,  cash and cash  equivalents and the Company's  $2,000,000
bank line of credit  commitment will be sufficient for its near term capital and
operating needs.


                                       6
<PAGE>


Results of Operations:

Results of Operations 2001 Compared to 2000

                                                2001            2000
                                                ----            ----
Sales                                     $6,669,700       $6,149,600
Gross Profit Margin                               26%              28%
Net Income                                 $ 140,625        $ 122,400

The 2001 sales rose 8% over 2000 with  additional  beverage  sales (19%  growth)
offset by non-beverage  sales drop (9% decline).  The gross profit decline of 2%
was  primarily  product mix  favoring  the more higher  volume,  lower  margined
beverage business.  With economic slowdown, the Company is cautiously monitoring
fixed costs to address incoming order levels.

Operating Expenses decreased from 2000's $1,549,700 to 2001's $1,486,100, or 4%.
General and Administrative expenses decreased by $40,700 from 2001's $673,400 to
2000's $714,100.  The decreased expenses were lower building occupancy costs and
non-recurrence of 2000's outside consulting

Selling Expenses decreased by $12,000 with increased convention expenses offset
by lower commissions and contract labor.

Research and Development Expense decreased by $12,100 over prior year levels.
Lower space costs and absence of 2000 contracted labor contributed to the
decrease.

Other income/(expense) increased from 2000's $2,944 expense to 2001's $39,699
expense. Net interest expenses were $39,400 and $43,600 for years 2001 and 2000,
respectively. However, in 2000, interest incurred from line of credit advances
was offset by the sublease income.

Income tax expense increased from 2000's $77,000 to 2001's $93,700.Along with
the income taxes on current income, income tax expense was impacted by
accelerated tax treatment of website development costs resulting in a deferred
tax expense.


New Accounting Pronouncements

In  June  2001,  the  Financial   Accounting  Standards  Board  ("FASB")  issued
Statements of Financial  Accounting  Standards  No. 141 "Business  Combinations"
("SFAS 141") and No. 142 "Goodwill and Other  Intangible  Assets"  ("SFAS 142").
SFAS 141 requires all business combinations  initiated after June 30, 2001 to be
accounted for under the purchase method. For all business combinations for which
the date of  acquisition  is  after  June 30,  2001,  SFAS 141 also  establishes
specific  criteria for the  recognition  of intangible  assets  separately  from
goodwill  and  requires   unallocated   negative  goodwill  to  be  written  off
immediately as an extraordinary  gain, rather than deferred and amortized.  SFAS
142 changes the  accounting  for goodwill and other  intangible  assets after an
acquisition.

                                       7
<PAGE>

The most  significant  changes made by SFAS 142 are: 1) goodwill and  intangible
assets  with  indefinite  lives will no longer be  amortized;  2)  goodwill  and
intangible  assets with indefinite  lives must be tested for impairment at least
annually; and 3) the amortization period for intangible assets with finite lives
will no longer be limited to forty years.  The Company does not believe that the
adoption  of these  statements  will have a  material  effect  on its  financial
position, results of operations, or cash flows.

In June 2001,  the FASB also  approved for issuance  SFAS 143 "Asset  Retirement
Obligations."  SFAS  143  establishes  accounting  requirements  for  retirement
obligations associated with tangible long-lived assets, including (1) the timing
of the liability  recognition,  (2) initial  measurement of the  liability,  (3)
allocation of asset  retirement cost to expense,  (4) subsequent  measurement of
the liability and (5) financial statement disclosures. SFAS 143 requires that an
asset  retirement  cost should be capitalized as part of the cost of the related
long-lived  asset and  subsequently  allocated to expense using a systematic and
rational  method.  The Company will adopt the statement  effective no later than
January 1, 2003,  as required.  The  transition  adjustment  resulting  from the
adoption  of SFAS 143 will be  reported  as a  cumulative  effect of a change in
accounting  principle.  At this time, the Company cannot reasonably estimate the
effect of the adoption of this statement on its financial  position,  results of
operations, or cash flows.

In October 2001, the FASB also approved SFAS 144,  Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
new accounting model for long-lived  assets to be disposed of by sale applies to
all  long-lived  assets,  including  discontinued  operations,  and replaces the
provisions of APB Opinion No. 30, Reporting Results of Operations-Reporting  the
Effects of Disposal of a Segment of a Business,  for the disposal of segments of
a business.  Statement 144 requires that those long-lived  assets be measured at
the lower of carrying amount or fair value less cost to sell,  whether  reported
in continuing operations or in discontinued operations.  Therefore, discontinued
operations will no longer be measured at net realizable value or include amounts
for operating losses that have not yet occurred. Statement 144 also broadens the
reporting of discontinued operations to include all components of an entity with
operations that can be  distinguished  from the rest of the entity and that will
be  eliminated  from  the  ongoing  operations  of  the  entity  in  a  disposal
transaction.  The  provisions  of  Statement  144 are  effective  for  financial
statements  issued for fiscal  years  beginning  after  December  15,  2001 and,
generally, are to be applied prospectively.



                                       8
<PAGE>





ITEM 7. Financial Statements.

See the Financial Statements of ZEON Corporation included herein and referenced
on the Index to Financial Statements set forth in Item 13 of this Form 10-KSB.

ITEM  8.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosures.

None.






                                       9
<PAGE>



                                    PART III

Item 9. Directors and Executive  Officers;  Compliance with Section 16(a) of the
Exchange Act.

<TABLE>
<CAPTION>

Name                        Age     Position (Director Since)
----                        ---     -------------------------

<S>                         <C>                                              <C>
T. Bryan Alu                51      President, CEO and Chairman of the Board (1980)

Alan M. Bloom               51      Executive VP, VP of Marketing, Secretary/Treasurer and Director (1980)

Ruel G. Routt               52      Corporate Controller

Jay R. Beyer                40      Director (1996)
</TABLE>


T. Bryan Alu has been President, Chief Executive Officer and Chairman of the
Board of Directors of the Company since its organization in 1980. He is
responsible for the general management of the Company, as well as devoting time
to handling sales and marketing, as related to specific key accounts.

Alan M. Bloom has been Vice President of Marketing, Executive Vice President and
a Director on the Board since the Company's organization in 1980. Mr. Bloom has
been Secretary of the Company since February 28, 1985 and Treasurer since April
22, 1986.

Ruel G. (Jerry) Routt joined ZEON Corporation in December 1992. Prior to joining
the Company, Mr. Routt held various controller  positions with Honeywell,  Inc.,
Square D  Company  and  Fibrotek,  Inc.  Mr.  Routt is also a  certified  public
accountant having worked with Coopers and Lybrand.  Mr. Routt is responsible for
the financial and administrative controls and providing financial counsel to the
Company and its management.

Mr. Jay R. Beyer is an independent patent agent in Boulder, Colorado practicing
in the areas of patent preparation and prosecution in the mechanical, electrical
and software fields of technology. From 1992 to 1994, he operated a company he
founded which introduced and marketed a patented portable trade show showcase of
his own invention. From 1984 to 1988, Mr. Beyer also held various managerial
positions with ZEON Corporation (formerly Data Display Corporation).

Since the Company Stock is not registered under section 12 of the Exchange Act,
the Company is not subject to section 16a. of such Exchange Act.



                                       10
<PAGE>


ITEM 10. Executive Compensation

The  following  table sets forth a summary of all  compensation  for each of the
last three calendar years with respect to the Company's Chief Executive  Officer
and the Company's Secretary-Treasurer.  All such compensation was in the form of
cash. No other officer of the Company has earned an annual compensation  greater
than  $100,000  annually  for any of the  periods  depicted.  The Company has no
long-term compensation plans.

                        Summary Compensation Table

Name and Principal Position       Year      Salary    Bonus

T. Bryan Alu,                     2001    $109,100   $134,350
  President, C.E.O.               2000     111,900    104,000
                                  1999     112,800       -0-

Alan M. Bloom,                    2001    $103,200   $ 35,000
  Secretary-treasurer, VP Sales   2000     114,800     28,800
  & Marketing                     1999      93,700        -0-

On April 29,  1995,  the board of  directors  of the  Company  adopted  the ZEON
Corporation  Stock  Option  Plan  (the  "Plan").  The Plan was  approved  by the
stockholders  at the  Company's  annual  shareholder's  meeting held on June 21,
1995.  The Plan  allows  the board of  directors  of the  Company  to grant both
incentive  stock  options and options  which do not qualify as  incentive  stock
options to employees and directors of the Company. Thirty-five thousand (35,000)
shares of the  Company's  common  stock are  available  for the grant of options
pursuant to the Plan. The exercise price for each incentive stock option granted
shall be no less than 100% of the fair  market  value  (110% of the fair  market
value for employees  owning more than 10% of the Company's  common stock) of the
common  stock on the day the  option is  granted.  The  exercise  price for each
non-qualified  stock option granted under the Plan will be the price established
by the board of directors  which normally is expected to be no less than 100% of
the fair  market  value on the date the  option  is  granted.  As of the date of
filing this 10-KSB,  a total of 27,000  non-qualified  options have been granted
under the plan for officers and  employees  of the Company.  These  options were
granted on February 27, 1998, at an exercise price of $2.00 per share.  The fair
market of the 27,000  options  at the date of grant is valued at  $7,560.  As of
February 2001, all 27,000 options terminated without being exercised.

Effective July 1991 the Company adopted a directors' compensation plan whereby
directors can be compensated with restricted common stock of the Company in
exchange for services provided. Shares issued are valued based upon the market
value of the stock as determined by the Company. As of December 31, 2001, no
shares have been issued under this plan.


                                       11
<PAGE>




ITEM 11. Security Ownership of Certain Beneficial Owners and Management.

The  following  tables set forth certain  information  as of March 15, 2002 with
respect to the beneficial ownership of the Company's common stock by each person
known by the  Company to be the  beneficial  owner of more than 5 percent of its
outstanding  common stock,  by each  director and  executive  officer and by the
directors and  executive  officers of the Company as a group.  Unless  otherwise
indicated,  all shareholders  have sole voting and investment power with respect
to the shares beneficially owned.

                             No. Of Shares
                            Beneficially         Percentage
Name and Address               Owned              Of Class
----------------           -------------         ----------

T. Bryan Alu                175,894 (1)             51.1%
727 8th Street
Boulder, CO  80302

Alan M. Bloom                22,033 (2)              6.4%
6028 Flagstaff Road
Boulder, CO  80302

All Directors and           197,927                 57.5%
Executive Officers
as a Group

(1) The amounts and percentages of shares held by T. Bryan Alu excludes 500
shares held by Dana and Tom Kennedy, his sister and brother-in-law, as separate
property over which T. Bryan Alu exercises no control and has no beneficial
ownership.

(2) The amounts and percentages of shares held by Alan M. Bloom excludes 399
shares held by Hildred Bloom, his mother, and 80 shares held by Andrew Bloom,
his brother, as separate property over which Alan M. Bloom exercises no control
and has no beneficial ownership.

Item 12. Certain Relationships and Related Transactions.

The  Company  leases its primary  manufacturing  and office  facilities  from an
entity in which the Company's president is a 50% partner. During April 2000, the
Company  expanded into an additional  facility  located adjacent to the existing
facilities.  This  additional  facility is also owned by the entity in which the
Company's  president is a 50% partner.  The lease agreement  covering all of the
above facilities requires monthly payments of approximately  $18,130 and expires
March 2010 with a  five-year  option  period.  The  Company is  responsible  for
maintenance and operating costs.


                                       12
<PAGE>



Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) (1) or (2) Index to Financial Statements

         The financial statements included in this Item are indexed on page F-1,
         "Index to Financial Statements".

(a) (3) [Numbered in accordance with Item 601 of Regulation S-B]

(3) Articles of incorporation and by-laws (Incorporated by reference to Exhibit
3.1 and 3.2 to Form S-18 Registration which became effective September 10, 1986:
file #33-6859-D).


 - Amendments to articles of incorporation (Incorporated by reference to Exhibit
A to June 30, 1988 form 10-Q).

 - Amendments to articles of incorporation (Incorporated by reference to Exhibit
A to December 31, 1994 form 10-KSB).

(99) Stock Option Plan (Incorporated by reference to Exhibit B to December 31,
1994 form 10-KSB).

(b) Reports on form 8-K.

    There were no reports on Form 8-K filed for the quarter ended December 31,
2001.

(c) Financial data schedule 27.








                                       13
<PAGE>





                                   Signatures

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


  ZEON CORPORATION

BY:  /s/ T. Bryan Alu
    ---------------------------------
    T. Bryan Alu
    Chairman of the Board, Director, Chief Executive Officer and President

DATE:    March 29, 2002
     ---------------------------------



In accordance with 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 on the dates indicated.


BY:   /s/ T. Bryan Alu
     ---------------------------------
     T. Bryan Alu
     Chairman of the Board, Director, Chief Executive Officer and President

DATE:    March 29, 2002
     ---------------------------------




BY:    /s/ Alan M. Bloom
     ---------------------------------
     Alan M. Bloom
     Treasurer and Director

DATE:    March 29, 2002
     ---------------------------------




BY:    /s/ Ruel G. Routt
     ---------------------------------
     Ruel G. Routt
     Corporate Controller

DATE:    March 29, 2002
     --------------------------------


                                       14
<PAGE>






                          INDEX TO FINANCIAL STATEMENTS



                                                                            PAGE

Independent Auditor's Report................................................F-2

Balance Sheet - December 31, 2001...........................................F-3

Statements of Income - For the Years Ended December 31, 2001 and 2000.......F-4

Statements of Shareholders' Equity - For the Years Ended
December 31, 2001 and 2000..................................................F-5

Statements of Cash Flows - For the Years Ended December 31, 2001 and 2000...F-6

Notes to Financial Statements...............................................F-7









                                      F-1
<PAGE>




                          INDEPENDENT AUDITOR'S REPORT




To the Shareholders and Board of Directors
ZEON Corporation
Louisville, Colorado

We have  audited  the  accompanying  balance  sheet  of ZEON  Corporation  as of
December 31, 2001, and the related statements of income,  shareholders'  equity,
and cash flows for the years ended December 31, 2001 and 2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  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.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of ZEON Corporation as of December
31,  2001,  and the results of its  operations  and its cash flows for the years
ended  December 31, 2001 and 2000,  in  conformity  with  accounting  principles
generally accepted in the United States of America.



HEIN + ASSOCIATES LLP

Denver, Colorado
February 21, 2002



                                      F-2
<PAGE>

                                ZEON CORPORATION

                                  BALANCE SHEET
                                DECEMBER 31, 2001
<TABLE>
<CAPTION>

                                                      ASSETS
CURRENT ASSETS:
<S>                                                                                              <C>
    Cash and cash equivalents                                                                    $       150,262
    Trade receivables, less allowance of $27,359 for possible losses                                     864,882
    Inventories                                                                                          634,284
    Prepaid inventory                                                                                     61,486
    Prepaid expenses and other                                                                           183,452
                                                                                                 ---------------
         Total current assets                                                                          1,894,366

PROPERTY AND EQUIPMENT:
    Machinery and equipment                                                                              262,539
    Leasehold improvements                                                                                27,042
    Vehicles                                                                                              41,169
    Furniture and fixtures                                                                                83,775
                                                                                                 ---------------
                                                                                                         414,525
    Less accumulated depreciation and amortization                                                      (273,840)
                                                                                                 ---------------

         Net property and equipment                                                                      140,685

WEBSITE DEVELOPMENT COSTS                                                                                116,000
OTHER ASSETS                                                                                              41,115
                                                                                                 ---------------
TOTAL ASSETS                                                                                     $     2,192,166
                                                                                                 ===============


                                       LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable                                                                             $       368,485
    Accrued expenses                                                                                     139,442
    Customer deposits                                                                                     98,896
    Revolving line-of-credit                                                                             301,098
    Current maturities of long-term debt                                                                  14,682
                                                                                                 ---------------
         Total current liabilities                                                                       922,603

LONG-TERM DEBT, less current maturities                                                                   38,781
DEFERRED TAX LIABILITY, long-term                                                                         68,740
                                                                                                 ---------------
TOTAL LIABILITIES                                                                                      1,030,124
COMMITMENTS (Note 4)
SHAREHOLDERS' EQUITY:
    Common stock, no par value; ($.10 stated value) 100,000,000
         shares authorized; 344,105 outstanding                                                           34,410
    Additional paid-in capital                                                                           924,406
    Retained earnings                                                                                    203,226
                                                                                                 ---------------
         Total shareholders' equity                                                                    1,162,042
                                                                                                 ---------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                       $     2,192,166
                                                                                                 ===============
</TABLE>

              See accompanying notes to these financial statements

                                      F-3
<PAGE>



                                ZEON CORPORATION

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>


                                                                                           FOR THE YEARS ENDED
                                                                                              DECEMBER 31,
                                                                                   -----------------------------------
                                                                                        2001               2000
                                                                                   ----------------  ------------------

<S>                                                                                <C>               <C>
NET SALES                                                                          $    6,669,668    $     6,149,646

    Cost of sales                                                                       4,909,519          4,397,614
                                                                                   --------------    ---------------

GROSS PROFIT ON SALES                                                                   1,760,149          1,752,032

OPERATING EXPENSES:
    General and administrative                                                            673,449            714,123
    Selling                                                                               587,656            599,007
    Research and development                                                              224,984            236,599
                                                                                   --------------    ---------------
         Total operating expenses                                                       1,486,089          1,549,729
                                                                                   --------------    ---------------

INCOME FROM OPERATIONS                                                                    274,060            202,303

OTHER INCOME (EXPENSE):
    Interest, net                                                                         (39,392)           (43,587)
    Other (expense) income, net                                                              (307)            40,643
                                                                                   --------------    ---------------
         Total other income (expense)                                                     (39,699)            (2,944)
                                                                                   --------------    ---------------

INCOME BEFORE INCOME TAXES                                                                234,361            199,359

INCOME TAX BENEFIT (EXPENSE)
    Current                                                                               (59,156)           (80,983)
    Deferred                                                                              (34,580)             4,000
                                                                                   --------------    ---------------
         Total income tax benefit (expense)                                               (93,736)           (76,983)
                                                                                   --------------    ---------------

NET INCOME                                                                         $      140,625    $       122,376
                                                                                   ==============    ===============

NET INCOME PER SHARE OF COMMON STOCK:
    (Basic and diluted)                                                            $          .41    $           .36
                                                                                   ==============    ===============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
    (Basic and Diluted)                                                                   344,350            344,592
                                                                                   ==============    ===============

</TABLE>


              See accompanying notes to these financial statements

                                      F-4

<PAGE>


                                ZEON CORPORATION

                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>




                                                                   COMMON STOCK                           RETAINED
                                                           ------------------------------    ADDITIONAL   EARNINGS       TOTAL
                                                                                              PAID-IN    (ACCUMULATED SHAREHOLDERS'
                                                              SHARES          AMOUNT          CAPITAL      DEFICIT)     EQUITY
                                                           --------------  --------------   ------------- -------------- -----------



<S>                                                           <C>        <C>              <C>         <C>             <C>
BALANCES, January 1, 2000                                344,717    $     34,471     $     926,310    $    (59,775)   $    901,006

        Acquisition and retirement of common stock          (194)            (19)             (563)              -            (582)
        Net income                                             -               -                 -         122,376         122,376
                                                    ------------    ------------     -------------    ------------    ------------

BALANCES, December 31, 2000                              344,523          34,452           925,747          62,601       1,022,800

        Acquisition and retirement of common stock          (418)            (42)           (1,341)              -          (1,383)
        Net income                                             -               -                 -         140,625         140,625
                                                    ------------    ------------     -------------    ------------    ------------

BALANCES, December 31, 2001                              344,105    $     34,410     $     924,406    $    203,226    $  1,162,042
                                                    ============    ============     =============    ============    ============

</TABLE>


       See accompanying notes to these financial statements


                                      F-5
<PAGE>



                                ZEON CORPORATION

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                             FOR THE YEARS ENDED
                                                                                                DECEMBER 31,
                                                                                      ----------------------------------
                                                                                           2001               2000
                                                                                      ----------------   ---------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>                <C>
    Net income                                                                        $     140,625      $    122,376
    Adjustments to reconcile net income to net cash provided by (used in)
         operating activities:
             Depreciation and amortization                                                   44,637            61,279
             Provisions for losses on trade receivables                                      20,000            15,500
             Provision for deferred income taxes                                             34,580            (4,000)
             Changes in operating assets and liabilities:
                 Trade receivables                                                         (167,721)         (265,341)
                 Inventories                                                                388,679          (593,115)
                 Prepaid expenses and other                                                  40,243           (78,055)
                 Accounts payable                                                          (279,696)          487,474
                 Accrued expenses                                                           (46,073)          118,831
                 Customer deposits                                                           83,446            (5,244)
                                                                                      -------------      ------------
         Net cash provided by (used in) operating activities                                258,720          (140,295)
                                                                                      -------------      ------------

CASH FLOWS FROM INVESTING ACTIVITY:
    Purchase of property and equipment                                                     (166,530)          (54,342)
                                                                                      -------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from line-of-credit (LOC)                                                    2,788,895         2,362,815
    Payments on LOC                                                                      (2,832,008)       (2,239,415)
    Proceeds from long-term debt                                                                  -            76,790
    Principal payments on long-term debt                                                    (31,910)          (16,014)
    Acquisition and retirement of common stock                                               (1,383)             (582)
                                                                                      -------------      ------------
         Net cash provided by (used in) financing activities                                (76,406)          183,594
                                                                                      -------------      ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                    15,784           (11,043)

CASH AND CASH EQUIVALENTS, beginning of year                                                134,478           145,521
                                                                                      -------------      ------------

CASH AND CASH EQUIVALENTS, end of year                                                $     150,262      $    134,478
                                                                                      =============      ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid for interest                                                            $      42,495      $     51,545
                                                                                      =============      ============
    Cash paid for income taxes                                                        $     157,077      $      8,700
                                                                                      =============      ============

</TABLE>



                                      F-6
<PAGE>



                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------------

Organization - ZEON  Corporation  (the  "Company") is engaged in the business of
developing,   manufacturing  and  marketing  neon  signs  to  customers  located
throughout the United States and Europe.

Use of 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  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Financial  Instruments  and Credit Risk  Concentration  - Financial  instruments
which  potentially  subject the Company to concentrations of credit risk consist
primarily of cash, temporary cash investments and trade receivables. The Company
invests  temporary  cash in demand  deposits and interest  bearing  money market
accounts with  financial  institutions.  Such deposit  accounts,  at times,  may
exceed Federal  insured  limits.  The Company has not  experienced any losses in
such accounts.  Concentrations  of credit risk with respect to trade receivables
are limited due to the large number of customers, generally short payment terms,
and their  dispersion  across  geographic  areas. As of December 31, 2001, three
customers made up 78% of accounts  receivable.  Revenue  concentrations  for the
years ended December 31, 2001 and 2000 was as follows:

                   Customer               2001            2000
                ----------------      --------------  -------------

                        A                    27%             30%
                        B                    11%              5%
                        C                     7%             15%


In 1999, the Company began  purchasing  parts from an overseas  supplier.  These
parts were used to fill orders obtained from new customers. Of the total revenue
for the years  ended  December  31,  2001 and 2000,  approximately  64% and 57%,
respectively,  were from customers for which  overseas parts were supplied.  Any
disruption in the Company's relationship with the supplier could have an adverse
impact  on the  Company's  future  operating  results.  Management  believes  an
alternative  supplier of the  Company's  products  could be procured,  but there
could be significant delays in procuring products to fulfill sales commitments.

Cash and Cash  Equivalents  - The Company  considers  cash and all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents.

Inventories  -  Inventories  are valued at the lower of cost or market.  Cost is
determined at a standard cost,  which  approximates the same value as determined
under the first-in, first-out method.

                                      F-7
<PAGE>



Property and Equipment - Property and equipment is stated at cost.  Depreciation
is  computed  over  the   estimated   useful  lives  of  the  assets  using  the
straight-line method generally over a 5-year period.  Leasehold improvements are
amortized on the  straight-line  method over the lesser of the lease term or the
useful life.  Expenditures  for ordinary  maintenance and repairs are charged to
expense as  incurred.  Upon  retirement  or  disposal  of  assets,  the cost and
accumulated depreciation are eliminated from the account and any gain or loss is
reflected in the statement of operations. For income tax purposes,  depreciation
is calculated using accelerated methods.

Website  Development Cost - The Company is currently  developing its Website and
related costs have been capitalized. During fiscal 2001, the Company capitalized
$116,000 of website costs paid to a third party.  Capitalized  development costs
have not  begun  amortization,  as the  website  has not been put into use as of
December 31, 2001. The Company intends to amortize these costs over 5 years.

Long-Lived  Assets - The  Company  applies  SFAS  No.  121,  Accounting  for the
Impairment  of  Long-Lived  Assets.  Under SFAS No. 121,  long-lived  assets and
certain  identifiable  intangibles  are  reported  at the lower of the  carrying
amount or their estimated recoverable amounts.

Revenue  Recognition  - Sales are  generally  recorded  in the  periods in which
products are shipped.

Taxes on Income - The Company  follows the  provisions of Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Under SFAS No.
109, the Company's  policy is to provide  deferred  income taxes on  differences
between the financial reporting and tax basis of assets and liabilities.

Stock-Based  Compensation - As permitted under the SFAS No. 123,  Accounting for
Stock-Based Compensation,  the Company accounts for its stock-based compensation
in accordance with the provisions of Accounting  Principles  Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees.  As such, compensation expense
for  issuances  of equity  instruments  to  employees is recorded on the date of
grant only if the current  market  price of the  underlying  stock  exceeded the
exercise  price.  Certain pro forma net income and EPS  disclosures for employee
stock option grants are also  included in the notes to the financial  statements
as if the  fair  value  method  as  defined  in SFAS No.  123 had been  applied.
Transactions in equity  instruments with non-employees for goods or services are
accounted for by the fair value method.  The Company estimates the fair value of
each stock  option of the grant date by using the  Black-Scholes  option-pricing
model.

Income Per Share - The Company  applies SFAS No. 128,  Earnings Per Share.  SFAS
No. 128 provides for the calculation of "Basic" and "Diluted"  income per share.
Basic income per share  includes no dilution and is computed by dividing  income
available to common shareholders by the weighted average number of common shares
outstanding  for the period.  Diluted  income per share  reflects the  potential
dilution  of  securities  that could  share in the  earnings  of an  entity.  At
December  31,  2001,  there  were  no  outstanding  options  or  other  dilutive
securities.  At December  2000, no options were  included in diluted  income per
share because the exercise  contingency had not been met. See Note 5 for further
discussion.


                                      F-8
<PAGE>


Comprehensive  Income -  Comprehensive  income  is  defined  as all  changes  in
stockholders'  equity,  exclusive of transactions  with owners,  such as capital
investments. Comprehensive income includes net income, changes in certain assets
and  liabilities  that are  reported  directly  in  equity  such as  translation
adjustments  on  investments  in foreign  subsidiaries,  and certain  changes in
minimum pension liabilities. The Company's comprehensive income was equal to its
net income for all periods presented in these financial statements.

New Accounting Pronouncements - In June 2001, the Financial Accounting Standards
Board  ("FASB")  issued  Statements  of Financial  Accounting  Standards No. 141
"Business  Combinations" ("SFAS 141") and No. 142 "Goodwill and Other Intangible
Assets"  ("SFAS  142").  SFAS 141 requires all business  combinations  initiated
after June 30,  2001 to be  accounted  for under the  purchase  method.  For all
business  combinations for which the date of acquisition is after June 30, 2001,
SFAS 141 also  establishes  specific  criteria for the recognition of intangible
assets separately from goodwill and requires unallocated negative goodwill to be
written off  immediately  as an  extraordinary  gain,  rather than  deferred and
amortized.  SFAS 142 changes the  accounting  for goodwill and other  intangible
assets after an acquisition.  The most significant changes made by SFAS 142 are:
1)  goodwill  and  intangible  assets  with  indefinite  lives will no longer be
amortized;  2) goodwill  and  intangible  assets with  indefinite  lives must be
tested for  impairment at least  annually;  and 3) the  amortization  period for
intangible  assets with finite  lives will no longer be limited to forty  years.
The Company does not believe that the adoption of these  statements  will have a
material effect on its financial position, results of operations, or cash flows.

In June 2001,  the FASB also  approved for issuance  SFAS 143 "Asset  Retirement
Obligations."  SFAS  143  establishes  accounting  requirements  for  retirement
obligations associated with tangible long-lived assets, including (1) the timing
of the liability  recognition,  (2) initial  measurement of the  liability,  (3)
allocation of asset  retirement cost to expense,  (4) subsequent  measurement of
the liability and (5) financial statement disclosures. SFAS 143 requires that an
asset  retirement  cost should be capitalized as part of the cost of the related
long-lived  asset and  subsequently  allocated to expense using a systematic and
rational  method.  The Company will adopt the statement  effective no later than
January 1, 2003,  as required.  The  transition  adjustment  resulting  from the
adoption  of SFAS 143 will be  reported  as a  cumulative  effect of a change in
accounting  principle.  At this time, the Company cannot reasonably estimate the
effect of the adoption of this statement on its financial  position,  results of
operations, or cash flows.

In October 2001, the FASB also approved SFAS 144,  Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
new accounting model for long-lived  assets to be disposed of by sale applies to
all  long-lived  assets,  including  discontinued  operations,  and replaces the
provisions of APB Opinion No. 30, Reporting Results of Operations-Reporting  the
Effects of Disposal of a Segment of a Business,  for the disposal of segments of
a business.  Statement 144 requires that those long-lived  assets be measured at
the lower of carrying amount or fair value less cost to sell,  whether  reported
in continuing operations or in discontinued operations.  Therefore, discontinued
operations will no longer be measured at net realizable value or include amounts
for operating losses that have not yet occurred. Statement 144 also broadens the
reporting of discontinued operations to include all components of an entity with
operations that can be  distinguished  from the rest of the entity and that will
be  eliminated  from  the  ongoing  operations  of  the  entity  in  a  disposal
transaction.  The  provisions  of  Statement  144 are  effective  for  financial
statements  issued for fiscal  years  beginning  after  December  15,  2001 and,
generally,  are to be applied  prospectively.  At this time,  the Company cannot
estimate the effect of this  statement  on its  financial  position,  results of
operations, or cash flows.

                                      F-9
<PAGE>
<TABLE>
<CAPTION>

2.       INVENTORIES:
         -----------

        Inventories are summarized as follows:

                                                                                      December 31,
                                                                                          2001
                                                                                    -----------------

<S>                                                                                 <C>
           Finished goods                                                           $        533,159
           Work-in-process                                                                     2,931
           Raw materials                                                                      98,194
                                                                                    ----------------

                                                                                    $        634,284
                                                                                    ================
</TABLE>


3.       LONG-TERM DEBT AND REVOLVING LINE-OF-CREDIT:
         -------------------------------------------
<TABLE>

        Long-term debt consisted of the following:

                                                                                      December 31,
                                                                                          2001
                                                                                    ------------------

           Note payable to a bank, interest at 1% above the bank's reference
           rate (5.75% at December 31, 2001), monthly principal and interest
           payments through March 2005, collateralized by trade receivables,
<S>                                                                                 <C>
           inventories, property and equipment, and intangibles.                    $         53,463

           Less current maturities                                                           (14,682)
                                                                                    ----------------

                                                                                    $         38,781
                                                                                    ================
</TABLE>

Future maturities of long-term debt are: 2002 - $14,682;  2003 - $16,242; 2004 -
$17,961; and 2005 - $4,578.


                                      F-10
<PAGE>



The  Company  has  a  line-of-credit  from  its  bank  for  borrowings  of up to
$2,000,000, with interest on any borrowing at 1% above the bank's reference rate
(5.75%  at  December  31,  2001),  to be paid  monthly.  The  line-of-credit  is
collateralized  by  trade  receivables,  inventories,  property  and  equipment,
intangibles  and common stock of the Company owned by the  Company's  president.
The Company is subject to certain restrictions which include among other things,
restrictions on borrowings and dividend payments. The balance drawn on this line
as of  December  31,  2001 was  $301,098  plus  $67,828  committed  to an issued
outstanding letter-of-credit. The line-of-credit expires on May 15, 2002.

4.       COMMITMENTS AND RELATED PARTY TRANSACTIONS:
         ------------------------------------------

The  Company  leases its primary  manufacturing  and office  facilities  from an
entity in which the Company's  president is a 50% partner.  The lease  agreement
covering all of the above facilities  requires monthly payments of approximately
$18,134 and expires in March 2010 with a five-year option period. The Company is
responsible for maintenance and operating costs.

The Company had an  operating  lease  agreement  with an  unrelated  party which
required  monthly  payments of  approximately  $6,200 through December 2000. The
Company had entered into a sublease  agreement  for this space with an unrelated
party through December 2000 at an initial monthly rate of approximately $10,700.
The operating lease and sublease agreements expired in December 2000.

        Rent expense for operating leases, less related sublease income, was as
follows:
<TABLE>
<CAPTION>

                                                                                For the Years Ended
                                                                                    December 31,
                                                                          ---------------------------------
                                                                              2001              2000
                                                                          --------------   ----------------

<S>                                                                       <C>              <C>
           Related party lease                                            $    210,250     $     220,662
           Unrelated party lease                                                     -            83,094
           Less sublease rentals                                                     -          (128,338)
                                                                          ------------     -------------

                                                                          $    210,250     $     175,418
                                                                          ============     =============

</TABLE>

Future lease commitments are: 2002 - $217,608; 2003 - $225,224; 2004 - $233,107;
2005 - $241,266, 2006 - $249,710, and thereafter - $874,441.


                                      F-11
<PAGE>



STOCK OPTION AND AWARD PLANS:
----------------------------

Stock Option Plan - The Company has a Stock Option Plan (the  "Plan"),  expiring
June 21, 2004,  reserving for issuance  35,000  shares of the  Company's  common
stock.  The Plan  provides  for  grants  to  either  employees  or  non-employee
directors,  at the  discretion  of a  committee  of the Board of  Directors,  of
incentive or non-statutory stock options to purchase common stock of the Company
at a price not less than fair  market  value on the date of grant.  Any  options
granted  under the Plan must be exercised  within 10 years of the date they were
granted.  The Company  granted  27,000 stock  options in February  1998 to three
employees,  exercisable  at $2.00 a share,  which vest  ratably over three years
based on the Company  achieving  certain  predetermined  financial  targets each
fiscal year end. As of February  2001,  all 27,000 of these  options had expired
because certain predetermined financial targets were not met.

Directors'  Compensation  Plan - The Company has a directors'  compensation plan
whereby directors can be compensated with restricted common stock of the Company
in exchange for services  provided.  Shares issued will be valued based upon the
market value of the stock as determined by the Company. As of December 31, 2001,
no shares have been issued under this plan.

6.       TAXES ON INCOME:
         ---------------

        A reconciliation of income taxes at the Federal statutory rate to the
effective tax rate is as follows:
<TABLE>
<CAPTION>

                                                                                    2001              2000
                                                                               ----------------  --------------

<S>                                                                               <C>               <C>
           Income taxes computed at the Federal statutory rate (34%)           $     (79,682)    $    (67,800)
           State income tax                                                           (8,403)
           Change in valuation allowance                                                   -          (10,150)
           Other                                                                      (5,651)             967
                                                                               -------------     ------------

           Income tax benefit (expense)                                        $     (93,736)    $    (76,983)
                                                                               =============     ============
</TABLE>


                                      F-12
<PAGE>


The  types  of  temporary  differences  between  the tax  basis  of  assets  and
liabilities  that give rise to a significant  portion of the deferred tax assets
(liabilities) and their approximate tax effects are as follows:
<TABLE>
<CAPTION>

                                                                                    2001              2000
                                                                               ----------------  ----------------

           Non-Current:
<S>                                                                            <C>               <C>
                   Property and equipment                                      $     (26,100)    $     (2,800)
                   Website development                                               (42,600)               -

           Current:
                   Deferred revenue                                                   36,700            5,700
                   Allowance for bad debts                                            10,200            6,000
                   Other                                                              22,200           26,100
                                                                               -------------     ------------
                                                                                         400           35,000
           Valuation allowance                                                             -                -
                                                                               -------------     ------------
                                                                               $         400     $     35,000
                                                                               =============     ============

</TABLE>

The net current  deferred  tax asset is  included  as part of other  prepaid and
current assets.


                                      F-13
<PAGE>