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, 1999

Commission file Number 33-6859-D
                       ---------


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

         Colorado                                         84-0827610
-------------------------------                    -------------------------
(State or other jurisdiction of                        (I.R.S. Employer
 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, 1999
were $3,014,900.

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,  2000) was
approximately $517,100.

As of March 15,  2000,  the  number of shares  outstanding  of the  registrant's
common stock, no par value, $.10 stated value was 344,717.

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, 1999, the Company had 30 full-time employees.

The following sets forth sales revenue from unaffiliated customers:

                                               Sales
                                            ----------
                           1999             $3,014,900
                           1998             $2,865,800
                           1997             $2,674,300

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.

                                       2
<PAGE>

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. The Company was successful in its
efforts  securing a contract  in the  fourth  quarter to provide  neon signs for
Heineken  USA.  The sales of this  contract  are  expected to exceed one million
dollars over the year 2000.

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,  described below
under "Developments".

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. A compliment to the Zeon Corporation's neon products was developed
in 1995,  using  fluorescent  tubes instead of neon tubes.  A unique  process of
combining  the  fluorescent  tubes with  specular  reflectors  enables  this new
illuminated  sign to successfully  emulate the brightness of neon while offering
the cost advantages and visual flexibility of a traditional lightbox.

In 1999, the Company continued development on a unique neon power supply design,
for which a patent was applied for in 1998. The commercial  introduction  of the
power  supply is expected to be in late 2000.  The Company  spent  $154,500  and
$137,700  for 1999 and 1998,  respectively,  for  research  and  product  design
development.

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.

Effective  December 1992, the Company leased 17,500 square feet, located at 1500
Cherry Street in Louisville, Colorado, for its combined manufacturing and office
operations.  In April 2000,  the Company will expand its  facilities  to include
9,600 square feet of additional  space  adjacent to existing  manufacturing  and
office facility.  A new ten (10) year lease with a five (5) year option has been
executed for a total monthly rent of $15,995 for the entire space.  The rent for
each term is increased by 3.5%  annually.  The total 22,100 square feet facility
is leased from a partnership in which T.Bryan Alu,  President,  Chief  Executive
Officer and a principal shareholder of the Company, is a 50% partner.

Effective March 1992, the Company leased  approximately  17,000 square feet as a
production  facility in Boulder,  Colorado  at a monthly  rate of  approximately
$6,200 from an  unrelated  party.  The  original  term of this lease  expired in
February 1996, with the option for five one-year  renewals.  To date, all of the
renewal  options  have been  exercised.  The Company  vacated  this  facility in
December 1992, and subleased the entire space for a monthly rate of $10,700. The
sublease  expires  on  December  31,  2000.  A real  estate  commission  for the
long-term  sublease  amounted to $52,000 that was  partially  financed by a note
held by the real estate company. This note was paid off in 1996.

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, 1999.












                                       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.  During 1998,  the Company had as
many as five market  makers,  each  quoting  different  bid and ask prices.  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, 1999          $ NQ           $ NQ
Third quarter ended September 30, 1999            NQ             NQ
Second quarter ended June 30, 1999                NQ             NQ
First quarter ended March 31, 1999               2.75           2.75

Fourth quarter ended December 31, 1998           2.00           2.00
Third quarter ended September 30, 1998           2.00           2.00
Second quarter ended June 30, 1998               2.00           2.00
First quarter ended March 31, 1998               2.50           2.00

                                                 NQ= no qoute available


On March 15, 2000,  the closing bid and ask price of common stock of the Company
was $ 1.50.

At March 15, 2000, there are  approximately  500  recordholders of the Company's
common stock.

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.

                                       5
<PAGE>

Financial Condition

The  liquidity  of ZEON  Corporation  continues  to remain  adequate to meet the
Company's  obligations  with a current  ratio of 2.5 to 1 at December  31, 1999,
compared to a 5.0 to 1 at December 31, 1998. The 1999 current ratio declined due
to the line of credit balance ($ 220,811) existing at December 31, 1999.

The cash decrease for 1999 was $24,370; however,  operations funding and line of
credit  financing  provided  sufficient  cash to cover  operational  and capital
expenditures. Capital expenditures for 1999 were $ 36,200 for factory equipment,
which will add capacity and better quality.

The Company  believes that during the next twelve months,  new business  demands
will require  significant  funding to address new market  expansion needs and to
purchase related  inventories.  Capital expenditures for 2000 are anticipated to
be  approximately  $75,000  for  facility   improvements/expansion,   production
equipment and tooling.  Cash  generated by operating  activities,  cash and cash
equivalents  and the Company's  $500,000 bank line of credit  commitment will be
sufficient for its immediate capital and operating needs.  However,  the Company
has  requested  and has been  approved  for an  increased  line of  credit  from
$500,000 to $750,000.

Results of Operations:

Results of Operations 1999 Compared to 1998

                                                1999            1998
                                                ----            ----
Sales                                         $3,014,900     $2,865,800
Gross Profit Margin                                   32%            34%
Net Income                                    $   82,800     $  115,500


The 1999  sales  rose 5% over  1998,  due  mainly to  additional  sales from new
customers in the newly added  beverage  markets.  The gross profit decline of 2%
was primarily product mix (1%) and added production management (1%). With future
sales being  anticipated  from our new beverage  customers,  inhouse  production
complimented by foreign  suppliers are being  increased to meet the demand.  The
higher volume incremental sales are expected to modestly lower our overall gross
profit margin.

Operating  Expenses  increased from 1998's $900,800 to 1999's  $927,600,  or 3%.
General and Administrative  expenses declined by $13,500 from 1998's $465,500 to
1999's  $452,000.  Overall  expenses,  i.e.  bad debt,  insurance  and  supplies
decrease was partially offset by modest salaries increases.

Selling Expenses  increased by $23,500 due to conventions and related travel and
commissions. Marketing efforts were expanded to serve the beverage industry.

                                       6
<PAGE>

Research and Development Expense increased by $16,800 over prior year levels due
mainly to the  development  of power supply  accessory  and  overseas  travel to
qualify a key supplier.  Development  costs include  outside design services and
related  travel  expense.

Other income decreased from $1998's 41,000 to 1999's $33,100.  Interest incurred
from line of credit  advances  and the  absence  of prior  year  equipment  sale
contributed to the decrease.  The Company  recognized a total income tax benefit
in 1999 of $27,900.  Prior to 1999, the Company  provided for a total  valuation
allowance on its deferred tax assets, as management was unable to determine that
it was more  likely  than not  that the  deferred  tax  asset  would  have  been
realized.  Management  believes that consistent income performance and projected
future  income  has  warranted  recognition  of a  deferred  tax  asset  with no
valuation allowance as of December 31, 1999. Accordingly, the Company recognized
a tax benefit of $37,000 in 1999.

Recent Accounting Pronouncements

The  FASB  has  recently  issued  SFAS  No.  133,   "Accounting  for  Derivative
Instruments  and Hedging  Activities".  SFAS No. 133  established  standards for
recognizing all derivative instruments including those for hedging activities as
either  assets  or  liabilities  in the  statement  of  financial  position  and
measuring those  instruments at fair value. SFAS No. 133 is effective for fiscal
years  beginning after June 30, 1999.  Management  believes the adoption of this
statement  will  have  no  impact  on  the  Company's   consolidated   financial
statements.

Year 2000 Effects

The Company did not experience any material  adverse  effects from the Year 2000
computer  problem.  The Company  purchased  replacement  software during 1999 to
address the Year 2000 issue for a total cost of $10,000.

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.














                                       7
<PAGE>


                                    PART III

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


Name                 Age     Position (Director Since)
----                 ---     -------------------------
T. Bryan Alu         49      President, CEO and Chairman of the Board (1980)

Alan M. Bloom        49      Executive VP, VP of Marketing, Secretary/Treasurer
                             and Director (1980)

Ruel G. Routt        50      Corporate Controller

Jay R. Beyer         38      Director (1996)


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.



                                       8
<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.
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,                     1999    $112,800    $   -0-
  President, C.E.O.               1998     111,500      3,600
                                  1997      99,500     18,000





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 2000, 18,000 options terminated without being exercised,  leaving 9,000
outstanding under the plan's terms.

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, 1999,  no
shares have been issued under this plan.



                                       9
<PAGE>



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

The following  tables set forth certain  information as of March 15, 1999,  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)            51.0%
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                57.4%
Executive Officers
as a Group (2)

(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.

Effective  December 1992, the Company leased 17,500 square feet, located at 1500
Cherry Street in Louisville, Colorado, for its combined manufacturing and office
operations.  In April 2000,  the Company will expand its  facilities  to include
9,600 square feet of additional  space  adjacent to existing  manufacturing  and
office facility.  A new ten (10) year lease with a five (5) year option has been
executed for a total monthly rent of $15,995 for the entire space.  The rent for
each term is increased by 3.5%  annually.  The total 22,100 square feet facility
is leased from a partnership in which T.Bryan Alu,  President,  Chief  Executive
Officer and a principal shareholder of the Company, is a 50% partner.

                                       10
<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,
1999.

(c) Financial data schedule 27.













                                       11
<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, 2000
         --------------

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, 2000
         --------------


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

DATE:    March 29, 1999
         --------------


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

DATE:    March 29, 1999
         --------------







                                       12
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

                                                                         PAGE

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

Balance Sheet - December 31, 1999.........................................F-3

Statements of Income - For the Years Ended
December 31, 1999 and 1998................................................F-4

Statements of Shareholders' Equity -
For the Years Ended December 31, 1999 and 1998............................F-5

Statements of Cash Flows - For the Years Ended
December 31, 1999 and 1998 ...............................................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, 1999, and the related statements of income,  shareholders'  equity,
and cash flows for the years ended December 31, 1999 and 1998.  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  generally   accepted  auditing
standards.  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,  1999,  and the results of its  operations  and its cash flows for the years
ended  December  31,  1999 and  1998,  in  conformity  with  generally  accepted
accounting principles.

HEIN + ASSOCIATES LLP

Denver, Colorado
March 17, 2000

                                       F-2

<PAGE>



                                ZEON CORPORATION

                                  BALANCE SHEET

                                DECEMBER 31, 1999

                                     ASSETS
<TABLE>
<CAPTION>

<S>                                                                                  <C>
CURRENT ASSETS:
    Cash and cash equivalents                                                        $  145,521
    Trade receivables, less allowance of $25,645 for possible losses                    467,320
    Inventories                                                                         429,848
    Prepaid inventory                                                                   110,590
    Prepaid expenses and other                                                           59,666
                                                                                     ----------
         Total current assets                                                         1,212,945

PROPERTY AND EQUIPMENT:
    Machinery and equipment                                                             294,309
    Leasehold improvements                                                               59,280
    Vehicles                                                                             45,668
    Furniture and fixtures                                                                8,408
                                                                                     ----------
                                                                                        407,665

    Less accumulated depreciation and amortization                                     (251,471)
                                                                                     ----------
         Net property and equipment                                                     156,194

OTHER ASSETS                                                                             28,360
                                                                                     ----------
TOTAL ASSETS                                                                         $1,397,499
                                                                                     ==========


                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                 $  160,708
    Accrued expenses                                                                     69,683
    Customer deposits                                                                    20,694
    Revolving line-of-credit                                                            220,811
    Current maturities of long-term debt                                                  6,528
                                                                                     ----------
         Total current liabilities                                                      478,424

LONG-TERM DEBT, less current maturities                                                  18,069
                                                                                     ----------
TOTAL LIABILITIES                                                                       496,493

COMMITMENTS (Note 4)

SHAREHOLDERS' EQUITY:
    Common stock, no par value; ($.10 stated value) 100,000,000 shares
         authorized; 344,717 outstanding                                                 34,471
    Additional paid-in capital                                                          926,310
    Accumulated deficit                                                                 (59,775)
                                                                                     ----------
         Total shareholders' equity                                                     901,006
                                                                                     ----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                           $1,397,499
                                                                                     ==========
</TABLE>



              See accompanying notes to these financial statements.

                                       F-3

<PAGE>



                                ZEON CORPORATION

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                     FOR THE YEARS ENDED
                                                                        DECEMBER 31,
                                                            --------------------------------
                                                                1999                1998
                                                            -------------      -------------

<S>                                                         <C>                <C>
NET SALES                                                   $   3,014,879      $   2,865,754

    Cost of sales                                               2,065,531          1,884,313
                                                            -------------      ---------

GROSS PROFIT ON SALES                                             949,348            981,441

OPERATING EXPENSES:
    General and administrative                                    451,965            465,513
    Selling                                                       321,135            297,523
    Research and development                                      154,480            137,739
                                                            -------------      -------------
         Total operating expenses                                 927,580            900,775
                                                            -------------      -------------

INCOME FROM OPERATIONS                                             21,768             80,666

OTHER INCOME:
    Interest, net                                                  (2,524)               685
    Other income, net                                              35,632             40,325
                                                            -------------      -------------
         Total other income                                        33,108             41,010
                                                            -------------      -------------

INCOME BEFORE INCOME TAXES                                         54,876            121,676

INCOME TAX BENEFIT (EXPENSE)

    Current                                                        (9,100)            (6,200)
    Deferred                                                       37,000                  -
                                                            -------------      -------------
         Total income tax benefit (expense)                        27,900             (6,200)
                                                            -------------      -------------

NET INCOME                                                  $      82,776      $     115,476
                                                            =============      =============

NET INCOME PER SHARE OF COMMON STOCK:
    (Basic and diluted)                                     $         .24      $         .33
                                                            =============      =============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

    (Basic and Diluted)                                           348,125            349,171
                                                            =============      =============

</TABLE>



              See accompanying notes to these financial statements.

                                       F-4

<PAGE>





                                ZEON CORPORATION

                       STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>

                                                             COMMON STOCK            Additional                            Total
                                                     --------------------------       Paid-in        Accumulated       Shareholders'
                                                     Shares          Amount           Capital          Deficit            Equity
                                                     ----------   -------------    ------------    ---------------        ------

<S>                                                  <C>            <C>              <C>              <C>                <C>
 BALANCES, January 1, 1998                           349,205        $34,920          $938,426         $(258,027)         $715,319

     Acquisition and retirement of common stock          (68)            (7)             (129)                -              (136)
     Net income                                            -              -                 -           115,476           115,476
                                                     -------        -------          --------          --------          --------

 BALANCES, December 31, 1998                         349,137         34,913           938,297          (142,551)          830,659

     Acquisition and retirement of common stock       (4,420)          (442)          (11,987)                -           (12,429)
     Net income                                            -              -                 -            82,776            82,776
                                                     -------        -------          --------          --------          --------

 BALANCES, December 31, 1999                         344,717        $34,471          $926,310          $(59,775)         $901,006
                                                     =======        =======          ========          ========          ========
</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,
                                                                --------------------------------
                                                                     1999               1998
                                                                 -------------     -------------

<S>                                                                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                     $   82,776       $   115,476
    Adjustments to reconcile net income to
        net cash (used in) provided by
        operating activities:
            Depreciation and amortization                              53,426            47,985
            Provisions for losses on trade receivables                  9,000            23,500
            Deferred tax asset                                        (37,000)                -
            Changes in operating assets and liabilities:
                  Trade receivables                                  (112,712)          (66,208)
                  Inventories                                        (205,521)           64,287
                  Prepaid expenses and other                          (73,330)          (25,816)
                  Accounts payable                                     64,798          (107,420)
                  Accrued expenses                                     33,496           (26,062)
                  Customer deposits                                    (4,927)           20,565
                                                                     --------          --------
        Net cash (used in) provided by operating activities          (189,994)           46,307
                                                                     --------          --------

CASH FLOWS FROM INVESTING ACTIVITY:
    Purchase of property and equipment                                (36,231)          (88,937)
                                                                     --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from line-of-credit (LOC)                                313,311                 -
    Payments on LOC                                                   (92,500)                -
    Proceeds from long-term debt                                            -            36,169
    Principal payments on long-term debt                               (6,527)           (5,045)
    Acquisition and retirement of common stock                        (12,429)             (136)
                                                                     --------          --------
        Net cash provided by financing activities                     201,855            30,988
                                                                     --------          --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                             (24,370)          (11,642)

CASH AND CASH EQUIVALENTS, beginning of year                          169,891           181,533
                                                                     --------          --------

CASH AND CASH EQUIVALENTS, end of year                               $145,521          $169,891
                                                                     ========          ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid for interest                                           $  5,431          $  2,403
                                                                     ========          ========
    Cash paid for income taxes                                       $  5,786          $      -
                                                                     ========          ========
</TABLE>


                See accompanying notes to these financial statements.

                                        F-6

<PAGE>


                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

1. 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, 1999, six customers made up 63% of accounts  receivable.  Revenue derived
   from  franchisees  for the  years  ended  December  31,  1999 and 1998 was as
   follows:

                  Customer                     1999        1998
                  --------                     ----        ----

                     A                           9%         14%
                     B                          14%          4%
                     C                           6%         11%
                     D                           6%          5%
                     E                          20%         16%
                                                ---         ---

                                                55%         50%
                                                ===         ===


   Sales to customer A is made directly to an  independently  owned and operated
   franchise while sales to customers B through E are made to franchisors.

   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 year ended  December  31,  1999,  approximately  10% was from
   customers for which overseas parts were  supplied.  The Company  expects this
   percentage to increase substantially in 2000. 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.

                                       F-7

<PAGE>


                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

   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.


   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.


   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,  1999 and 1998,  18,000 and 27,000
   outstanding options were not included in diluted income per share because the
   exercise contingency had not been met. See Note 5 for further discussion.

                                       F-8

<PAGE>


                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


   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.


   Accounting  Pronouncements - The SFAS Board has recently issued SFAS No. 133,
   Accounting for Derivative  Instruments and Hedging  Activities.  SFAS No. 133
   established  standards for recognizing all derivative  instruments  including
   those for hedging activities as either assets or liabilities in the statement
   of financial position and measuring those instruments at fair value. SFAS No.
   133 is effective for fiscal years beginning  after June 30, 1999.  Management
   believes the adoption of this  statement will have no impact on the Company's
   consolidated financial statements.

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

   Inventories are summarized as follows:


                                                   December 31,
                                                       1999
                                                   ------------
                  Finished goods                     $204,411
                  Work-in-process                      40,925
                  Raw materials                       184,512
                                                     --------
                                                     $429,848
                                                     ========

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

   Long-term debt consisted of the following:

                                                                 December 31,
                                                                     1999
                                                                 ------------
      8.25% note payable to a bank, monthly payments of $741,
      including interest through February 2003, secured by a
      vehicle.                                                      $24,597

      Less current maturities                                        (6,528)
                                                                    -------
                                                                    $18,069
                                                                    =======


                                       F-9

<PAGE>


                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

   Future maturities of long-term debt are: 2000 - $6,528; 2001 - $7,697; 2002 -
   $8,354; and 2003 - $2,018.

   The  Company  has a  line-of-credit  from its bank  for  borrowings  of up to
   $500,000,  with  interest on any  borrowing  at 1% above the banks  reference
   rate, to be paid  monthly.  The  line-of-credit  is  collateralized  by trade
   receivables,  inventories,  property and  equipment and  intangibles  and the
   Company is subject to certain  restrictions which include among other things,
   restrictions on borrowings and dividend payments. The balance on this line as
   of December 31, 1999 was $220,811. The line-of-credit expires on November 18,
   2000.  Management  has  received  tentative  verbal  approval to increase the
   line-of-credit to $750,000.

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

   The Company leases its primary  manufacturing and office  facilities  through
   January  2003  from an  entity  in which  the  Company's  president  is a 50%
   partner.  The lease requires monthly payments of  approximately  $8,200.  The
   Company is responsible for maintenance and operating costs.

   Approximately April 2000, the Company will expand into an additional facility
   adjacent  to  the  existing   manufacturing  and  office  facilities.   These
   facilities  will  also be  leased  from an  entity  in  which  the  Company's
   president is a 50% partner.  The existing lease has been  superseded by a new
   lease for current and additional  space,  which requires  monthly payments of
   approximately  $16,000  and  expires  February  2010 with an  option  for one
   five-year  period.  The Company is responsible  for maintenance and operating
   costs.

   The Company has an operating  lease  agreement with an unrelated  party which
   requires  monthly  payments of  approximately  $6,200  through  December 2000
   including renewal options.  The Company has entered into a sublease agreement
   for this space with an unrelated  party  through  December 2000 at an initial
   monthly rate of approximately $10,700, increasing at 5% per year.

   Rent expense for  operating  leases,  less related  sublease  income,  was as
   follows:

                                                      For the Years Ended
                                                         December 31,
                                                  -------------------------
                                                     1999            1998
                                                  -----------     ---------

                  Related party lease             $ 100,366      $ 102,295
                  Unrelated party lease              74,662         72,589
                  Less sublease rentals            (122,226)      (116,406)
                                                   --------       --------
                                                  $  52,802      $  58,478
                                                   ========       ========



                                      F-10

<PAGE>


                                ZEON CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


   Future lease commitments, net of approximately $128,000 of sublease income in
   2000 and including the new lease signed subsequent to December 31, 1999, are:
   2000 - $119,722;  2001 - $198,658;  2002 - $205,611;  2003 - $212,807; 2004 -
   $220,256, and thereafter - $1,267,580.

5. 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 2000, 18,000 of these
   options had expired because certain predetermined  financial targets were not
   met.


   SFAS No. 123, requires the Company to provide pro forma information regarding
   net  income  and net  earnings  per  share as if  compensation  costs for the
   Company's  stock option plans and other stock awards had been  determined  in
   accordance  with fair value based  method  prescribed  in SFAS No.  123.  The
   Company   estimated  the  fair  value  of  each  stock  award  by  using  the
   Black-Scholes   option-pricing  model  with  the  following  weighted-average
   assumptions  used for grants in 1998:  no  expected  dividend  yields for all
   years;  expected  volatility of 1.0%;  risk-free  interest rates of 5.0%; and
   expected lives of three years.  The fair value of the options  granted during
   the year ended December 31, 1998 was approximately $.28 per option.


   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, 1999, 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:

                                                 1999           1998
                                               --------      ---------

      Income taxes computed at the
         Federal statutory rate (34%)          $(18,700)     $(41,000)
      Expiration of unused tax credits                -       (45,000)
      Change in valuation allowance              37,000        97,000
      Other                                       9,600       (17,200)
                                               --------      --------

      Income tax benefit (expense)             $ 27,900      $ (6,200)
                                               ========      ========


                                      F-11
<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 and their approximate tax effects are as follows:


                                                     1999          1998
                                                   ----------   ---------

       Property and equipment - non-current        $ 3,300       $ 15,000
       Current:
           Deferred revenue                          7,700         10,000
           Allowance for bad debts                   9,500          -
           Other                                    10,500         12,000
                                                   -------       --------
                                                    31,000         37,000
       Valuation allowance                               -        (37,000)
                                                   -------       --------
                                                   $31,000              -
                                                   =======       ========


   The deferred tax assets are included as part of other  current and  long-term
   assets.

















                                      F-12