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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-KSB

      (Mark One)

     [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934 (NO FEE REQUIRED).

          For the fiscal year ended June 30, 1997

                                       OR

     [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934 (NO FEE REQUIRED).

          For the transition period from ___________ to ___________

                        Commission file number: 33-80935

                           NETWORK EVENT THEATER, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                Delaware                                 13-3864111
     (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
     Incorporation or Organization)

            529 Fifth Avenue
           New York, New York                              10017
(Address of Principal Executive Offices)                 (Zip Code)

                                 (212) 622-7300
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.01 per share
                                (Title of Class)

              Warrants, each to purchase one share of Common Stock
                                (Title of Class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act 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.

                               Yes _X_     No ___

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  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]

     State issuer's revenues for its most recent fiscal year. $6,439,000

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
September 25, 1997: $41,726,536

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity,  as of September  25, 1997:  9,861,323  shares of Common  Stock,
2,645,000 Warrants

     Transitional Small Business Disclosure Format (check one):

                               Yes ___     No _X_

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the  registrant's  definitive  proxy statement under Regulation
14A, which  statement will be filed not later than 120 days after the end of the
fiscal year covered by this report,  are  incorporated  by reference in Part III
hereof.

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                           NETWORK EVENT THEATER, INC.
                          ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS

  Item No.                                                                  Page
  --------                                                                  ----

Part I

    1.     Business.........................................................   1

    2.     Properties.......................................................   7

    3.     Legal Proceedings................................................   7

    4.     Submission of Matters to a Vote of Security Holders..............   7

Part II

    5.     Market For Common Equity and Related Stockholder Matters.........   8

    6.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations.....................................   8

    7.     Financial Statements.............................................  10

    8.     Changes in and Disagreements With Accountants on
              Accounting and Financial Disclosure...........................  10

Part III

    9.     Directors, Executive Officers, Promoters and Control Persons;
              Compliance With Section 16(a) of the Exchange Act.............  11

   10.     Executive Compensation...........................................  11

   11.     Security Ownership of Certain Beneficial Owners and Management...  11
 
   12.     Certain Relationships and Related Transactions...................  11

   13.     Exhibits, List and Reports on Form 8-K...........................  11

Index to Consolidated Financial Statements.................................. F-1

Signatures .................................................................  14

Exhibit Index ..............................................................  15


<PAGE>

                                     PART I

ITEM 1. BUSINESS

     Network Event Theater,  Inc.  (together with its  subsidiaries,  unless the
context otherwise  requires,  the "Company") was incorporated  under the laws of
the State of Delaware in December  1995 to be the  successor  to the business of
Universal Access Network, LP (the "Partnership"), a Delaware limited partnership
organized  in  August  1993.  In  April  1996,   the   Partnership   effected  a
reorganization pursuant to which it assigned all of its assets to the Company in
exchange for 6,354,440  shares of the Company's  common stock,  and  distributed
those shares to its partners.  On April 9, 1996, the Company issued and sold 2.3
million shares of its common stock and 2,645,000  warrants to purchase shares of
its common stock in an initial public offering (the "Initial  Public  Offering")
in which the Company  received  approximately  $9.7 million of net proceeds,  of
which $500,000 was used to repay Company debt.

     The  Company  was  organized  to  develop,  own and  operate a  proprietary
national network of theaters on college  campuses (the  "Network").  The Network
delivers  entertainment and educational events via satellite for display through
high  resolution  video  projectors on movie theater sized  screens,  reaching a
geographically dispersed audience of college students,  faculty,  administrators
and community residents in each college community.  Additionally, the Company is
engaged in developing and acquiring media and marketing services businesses that
focus on the young adult and college markets to complement and enhance the reach
of its Network.

     The Company  provides a  comprehensive  marketing  service to  advertisers,
sponsors  and  entertainment  companies  by helping  them target young adult and
college  audiences  through a variety of media, some of which are proprietary to
the Company,  including the sponsorship of events presented on the Network,  the
placement of advertisements in college  newspapers,  the placement of posters on
general and  proprietary  bulletin and wallboards on college  campuses,  and the
distribution of free postcards at selected venues, both on an off campuses.  For
example,  a motion  picture  studio  which  desires to  premiere a major  motion
picture  through the  Network  could  launch a  simultaneous  and  comprehensive
marketing program,  including  advertisements or inserts in college  newspapers,
wallboard  advertisements,  on-campus  postering and free postcard  distribution
both on and off campus,  extending  beyond the  Company's  installed  Network of
campus theaters. The Company believes that its broad array of targeted media and
marketing   services   will  enable  it  to  build  more   lucrative   long-term
relationships  with sponsors,  advertisers  and  entertainment  companies in the
future.

                             The Young Adult Market

     The  Company  defines  the  young  adult  market as 18-24  year-olds.  This
demographic  group  is one of  the  fastest  growing  segments  of the  American
population.  According to  projections  based on 1990 U.S.  Census  Bureau data,
there are  approximately  25 million  young adults in the United  States  today,
representing  9.2% of the total national  population.  According to the Resident
Population  Projections (Middle Series) prepared by the U.S. Census Bureau, this
number will rise to over 30 million by the year 2010 and represent over 10.1% of
the population.

     The Company believes that advertisers  consider the most important  segment
of the  young  adult  market  to be  college  students  because  they are  still
developing  brand  loyalties and their future incomes  generally are higher than
those of young adults who do not attend college. According to the 1995 Digest of
Education  Statistics prepared by the United States Department of Education (the
latest  available),  the college market consists of more than 3,600 colleges and
universities in the United States with  enrollments of  approximately 14 million
students, including part-time and full-time undergraduate and graduate students.
The American Council on Education  estimates that in 1997 over 8.4 million young
adults or 34% of the young adult population are full-time  undergraduate college
students in the United  States.  This  represents  a target  market  which,  the
Company believes,  has significant group spending power. In addition,  growth in
enrollment  at colleges and  universities  is expected to continue into the next
century  because (i) the children of baby  boomers are reaching  college age and
beginning  to attend  college,  (ii) a higher  percentage  of young  adults  are
attending  college  after  completing  high  school  and (iii)  more  adults are
returning to college for advanced degrees.

     The Company  believes the young adult  market,  both on and off campus,  is
particularly  attractive  to  a  significant  segment  of  advertisers  such  as
entertainment  companies,  telecommunications  companies,  computer and software
companies,  automobile  manufacturers,  drug  companies,  fashion  and  athletic
equipment  companies  and  financial  services  companies  because  young adults
generally are receptive to new ideas and products, are in a formative stage with
respect to building brand loyalties and, as a whole, have significant disposable
income.


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<PAGE>

                              Network Event Theater

     The  Company  has built and  intends to expand its  Network  into  selected
colleges and universities throughout the United States and to create and develop
a steady stream of programming and events for the Network.

Network Installations and School Contracts

     The Company is expanding the Network from its present size of 36 schools by
focusing its marketing efforts on schools located in key Designated Market Areas
(television market areas defined by A. C. Nielsen,  Co.), which it believes will
enhance the  Network's  appeal to  programmers,  sponsors and  advertisers.  The
Company markets its Network  principally by contacting and making  presentations
to school administrators and student organizations responsible for promoting and
coordinating campus events and by attending key college conferences.

     The  Company  believes  that  installing  a  Network  theater  on campus is
attractive to school administrators  because, in addition to providing a vehicle
for  entertainment,  it provides  the college  with a  state-of-the-art  digital
satellite signal receiving system and a high resolution  audio/video  projection
system which it can use at no charge for  educational  and other  non-commercial
and  non-competitive  purposes.  This can be a cost-effective way to enhance the
quality of campus life. The Company's  marketing efforts relating to its Network
are currently made through a full-time  marketing  coordinator and the Company's
executive officers. The Company intends to continue expanding its Network.

     As of September  29, 1997,  the Company had completed  installations  at 36
colleges and universities with a total enrollment of approximately  800,000. The
average Network  theater has a seating  capacity of  approximately  550 persons.
Installations are as follows:

     Arizona State University                          
     California State University - Long Beach Central
     Michigan University
     Clemson University
     College of William and Mary
     Connecticut College
     Eastern Michigan University
     Emory University Georgia
     Southern University
     Georgia Institute of Technology
     Kansas State University
     Louisiana State University
     Mankato State University
     Michigan State University
     New Mexico State University
     New York University
     Ohio State University
     Oklahoma State University
     Rutgers State University - Cook College
     Southeast Missouri State University
     SUNY College of Oneonta
     University of Alabama-Birmingham
     University of California-Los Angeles
     University of Cincinnati
     University of Colorado-Boulder
     University of Houston
     University of Idaho
     University of Kansas
     University of Minnesota
     University of North Carolina-Charlotte
     University of North Texas
     University of Rhode Island
     University of Rochester
     University of Southern Mississippi
     Washington State University
     Western Kentucky University
  
     The Company  currently  has signed  contracts  with Iowa State  University,
University  of  California  at Davis,  University  of Central  Florida,  Western
Illinois  University and University of California at Berkeley.  Installations at
these  schools are  scheduled to be  completed  before  December  31, 1997.  The
Company decided not to upgrade the  installations at the State University of New
York at Albany and at Old Dominion University because of a cost benefit analysis
performed by the Company considering the cost of upgrading the Network equipment
and the Company's presence in the designated market area. As a result, these two
schools  will no longer  participate  in  Network  broadcasts.  Students  at Old
Dominion, however, can attend Network performances at the College of William and
Mary, which is also located in Norfolk, Virginia.

     The typical Network  installation  package consists of a satellite dish and
attendant  satellite signal receiving  equipment,  a high resolution  projection
system with commercial  quality movie theater sized screen and  state-of-the-art
digital  audio  system.  The cost of the  equipment,  exclusive of  installation
costs, for a typical installation is approximately $62,500, which is paid for by
the Company.  This cost has  declined  over $30,000 in the past two years due to
technological  advances.  In addition,  the Company  installs and maintains this
equipment  at its own  expense.  This  equipment  enables  the  Company to offer
Network  events  to most  areas of the  contiguous  United  States  and  Alaska.
Presently,  the Company owns all of the equipment at its installations,  but may
seek to lease all or a portion of its  presently  installed  and newly  acquired
equipment to reduce its up-front capital costs.


                                       2
<PAGE>

     The Company believes that satellite  technology is the most  cost-effective
technology  for achieving  rapid and complete  market  coverage in that a single
up-link  signal  can  be  broadcast  simultaneously  at  a  fixed  cost  to  all
installations.  Satellite  transmission  also  provides  the  Company  with  the
flexibility  to  deliver  programming  to a single  school  or group of  schools
depending upon the time, day or program offered.  In September 1998, the Company
upgraded,  at its own  expense,  all Network  theater  installations  to receive
digital rather than analog satellite transmission signals, which has resulted in
improved  performance at basically the same transmission cost. The total cost of
this upgrade of the entire Network did not exceed  $50,000  because this upgrade
was anticipated in the original equipment design.

     The schools  listed above have granted the Company the  exclusive  right to
exhibit,  promote and sell commercial  programming  and promotional  merchandise
through its Network, as well as the exclusive use of school venues for a minimum
number of dates per  month.  Under the  terms of such  agreements,  schools  are
generally  responsible for public access and security  staffing and are required
to use their best  efforts to provide  the  Company  with  reasonable  access to
on-campus  media  and key  campus  locations  for  promotional  purposes  and to
otherwise  assist in the promotion,  coordination and staffing of Network events
(including printing and selling tickets, disseminating promotional materials and
providing technical support).

     The Company's  school contracts enable the Company to present a schedule of
events prior to each school semester or quarter to be agreed upon by the school.
Schools are  required to use their best efforts to reserve  campus  theaters for
additional dates to accommodate special events or replays. Schools are permitted
to use the Company's  high-resolution  projection  equipment for non-commercial,
educational and academic  purposes at no cost.  School contracts  generally have
terms ranging from two to five years and provide for automatic renewals,  unless
terminated  by either  party by notice  prior to the end of the initial  renewal
term. Most contracts provide exclusivity to the Network and further provide that
in the event of termination  for any reason other than a material  breach by the
Company,  the school may not enter into an agreement  with a  competitor  of the
Company for a period of two years after termination.

Programming

     The  Company  commenced  regular  operations  of the Network in the 1996-97
academic year and anticipates that it will broadcast at least four to six events
per month in the 1997-98  academic  year.  The Network can be used to  broadcast
both live and pre-recorded events, and also offers the ability to perform market
testing  and  analytical   services  to  companies  seeking  to  target  college
audiences.  In addition,  the Network has audio/video  interactive  capabilities
which allow  audiences to interact  with  performers  and  participants  before,
during and after live performances.

     Since January 1996, the Company has entered into a number of agreements for
individual programs with content providers such as Miramax Films, Sony Pictures,
Mandalay  Entertainment,  Dreamworks  SKG,  HBO, Don King  Productions,  Mercury
Records,  Warner  Brothers and ABC and has broadcast both live and  pre-recorded
events,   including   concerts,   motion   pictures   and  sneak   previews   of
yet-to-be-released  motion  pictures,  comedy  shows,  documentaries,   sporting
events,  special  pay-per-view  events  and  educational  seminars.   Typically,
programmers pay a fee for access to the Network's  audiences.  For instance,  in
August 1996,  the Company  entered  into an  agreement  pursuant to which HBO is
paying the Company to preview one HBO program per month during the 1996-1997 and
1997-1998  academic  years on its Network.  During the next twelve  months,  the
Company intends to develop additional relationships with these and other content
providers to premiere a variety of special events.

     The Company  believes that there are  significant  opportunities  for it to
preview  movies  for film  studios  on  campuses  and to show  feature  films of
independent  and foreign  film makers  which  appeal to college  audiences.  The
Company  also  believes  that  recording  artists and record  companies  will be
attracted  to the  Network  and  may  seek  to use it to  establish  an  initial
following among college students,  who are generally  receptive to many forms of
popular music, including rock, country and alternative. Furthermore, the Company
believes  that  promoters  of a  wide  variety  of  sporting  events,  including
football,  basketball,   baseball  and  other  sports,  will  find  the  Network
attractive.  The  Company  believes  that many  televised  sporting  events  are
available  only  in  particular  regions  or in  sports  bars  which  may not be
accessible  to college  students.  In its  effort to make a variety of  sporting
events  available  over its Network,  the Company will seek to capitalize on the
popularity of sporting events among college students.  However,  there can be no
assurance  that the  Company  will  attract  and retain a  sufficient  number of
schools and obtain the programming  necessary to generate meaningful revenues or
achieve profitable operations from its Network.

     In December 1995, the Company  entered into a consulting  agreement with an
entity  owned by Freddie  Fields and Jerome  Hellman,  prominent  figures in the
entertainment  industry,  pursuant to which Messrs. Fields and Hellman 


                                       3
<PAGE>

served as Chairman and  President,  respectively,  of the Company's  Programming
Division.  Messrs.  Fields and Hellman used their contacts in the  entertainment
industry to establish  relationships with programmers and to identify and obtain
quality  programming  on behalf of the  Company.  On May 20,  1997,  the Company
entered into a revised  agreement which relieved  Messrs.  Fields and Hellman of
their  obligation to devote a substantial  portion of their business time to the
Company,  but  provided  that each would  continue  to be  available  to perform
consulting services for the Company and that Mr. Fields, at his election,  would
continue to serve as a director of the Company.  The revised  agreement  further
provided  that the Company will  continue to pay Messrs.  Fields and Hellman the
monthly consulting fees and expense reimbursements  provided for in the original
agreement  (totaling  $413,000 for the period from July 1, 1997 through December
31,  1997),  but  that  the  Company  may at any  time  elect  to pay 50% of the
remaining balance in a single cash payment and 50% by issuing Messrs. Fields and
Hellman  registered  shares  of  the  Company's  common  stock.  However,  as of
September 29, 1997, the Company has not elected to exercise this option.

Marketing and Event Promotion of the Network

     The  Company  has  a  field  force  of  permanent  and   part-time   campus
coordinators  who work with local  college  personnel and students to facilitate
the  promotion  and the  presentation  of Network  events on each campus.  It is
anticipated  that students will  generally be informed of Network events through
advertisements  in  school  newspapers,   and  by  posters,   flyers  and  other
promotional activities.

     The Company  anticipates that the Network's  principal  sources of revenues
will be from fees paid by  content  providers  and from  sponsorship  of Network
events. The Company may also earn revenues from ticket sales to selected events.
When students are charged for admission to events,  ticket prices are set by the
Company and ticket receipts are collected by student  organizations and remitted
to the Company  after the  deduction of small  amounts to reimburse the costs of
collection.

Network Competition

     The Company believes that the Network is the only one of its kind currently
installed  on  college   campuses.   The  Company  believes  that  its  existing
installations  are an  important  competitive  factor  in the  marketing  of its
Network to prospective  colleges and  universities and its value to sponsors and
content providers.  The Network faces competition for its share of discretionary
student  spending from numerous other media and businesses in the  entertainment
industry.  The Company also competes with various forms of  entertainment  which
provide  similar value,  both on and off campus,  such as music groups and other
entertainers  which  tour  colleges  and  universities,  movie  videos and audio
cassettes, broadcast television, cable programming, special pay-per-view events,
sporting events and other forms of entertainment  which may be less expensive or
provide  other  advantages  to college  students.  The Company also competes for
advertising  dollars with traditional  media. If the Network is successful,  the
Company  expects that other companies may seek to enter or capitalize on college
markets and compete  directly with the Company.  The Network is not dependent on
any single school, advertiser, sponsor or program provider.

                     Media and Marketing Services Companies

     In addition to operating  the Network,  the Company  purchased and operates
four media and marketing services companies which primarily or exclusively serve
the young adult market.  In the order of acquisition  they are American  Passage
Media, Inc. ("American Passage"),  Campus Voice, L.L.C. ("Campus Voice"), Beyond
the Wall and Pik:Nik Media,  LLC ("Pik:Nik").  It is the Company's  intention to
integrate the operations and sales forces of these businesses.  Such integration
will enable each sales force to offer a full range of products  and  services to
the  Company's  clients.  The Company  believes that such ability will allow its
sales force to gain access to its clients' senior marketing personnel.

American Passage

     On September 13, 1996,  American  Passage,  a newly organized  wholly owned
subsidiary  of the Company,  acquired from  American  Passage Media  Corporation
("APMC")  substantially  all of APMC's  assets  relating to its college and high
school media and marketing services business.  The acquired  businesses included
APMC's college  newspaper  print  advertisement  placement  operations,  college
campus postering operations (including postering on newspaper distribution racks
called AdRaX(TM) that contain college newspapers on campus), high school focused
GymBoards(TM)  operations  and various other  advertiser  and event  sponsorship
related  activities.  APMC  has been  involved  in the  young  adult  media  and
marketing services business since 1976.


                                       4
<PAGE>

     American  Passage  represents  on a  non-exclusive  basis  virtually  every
college newspaper in the country that accepts national advertising.  The college
newspapers that American Passage represents have a combined  circulation of over
six million and  enrollment at these schools  totals over ten million  students.
American  Passage's  national  advertising  customers  include,   among  others,
MasterCard,  VISA,  AT&T,  TIAA/CREF,  Toyota,  Nike  and  Microsoft.   American
Passage's  resources  include a  proprietary  database  of every  major  college
newspaper and demographic and consumer data that enable it to create  customized
targeted media programs for its  advertising  clients.  In addition to providing
marketing and research  assistance to advertisers,  American  Passage assists in
the development and distribution of advertising  material to college newspapers.
At  the  time  of  acquisition,   American  Passage's  revenues  were  generated
principally from sales of advertisements run in college newspapers.

     American  Passage's  campus  postering  service  places  posters  and other
advertising  messages  on bulletin  boards on college  campuses  throughout  the
country.  Through a national  network  of  postering  representatives,  American
Passage's  postering  service  covers  more than  1,250  college  campuses  with
enrollment  totaling  over ten  million  students.  Advertisers,  which  include
American  Express and The Wall Street  Journal,  pay American  Passage a fee for
these  postering  services.  American  Passage's  AdRaX(TM)  location  media are
college newspaper distribution racks with large advertising display spaces above
the newspaper bin.  American  Passage has placed over 1,250  AdRaX(TM)  units at
prime  locations  at over 200 college  campuses.  Revenues  are  generated  from
monthly advertisements appearing on each unit. GymBoards(TM) are gender specific
message and  information  centers  that are  installed  in boys' and girls' high
school  locker  rooms at no cost to the  school  and are  customized  with  each
school's colors and mascot or nickname.  Each GymBoard(TM) consists of a coach's
message board, a panel of editorial  content of interest to high school athletes
and  a  single  advertising  panel,  which  are  protected  by  acrylic  covers.
GymBoards(TM)  are posted in more than 4,500 high schools  nationwide  with more
than four  million  students,  representing  about  one-third  of the total high
school market.  Advertising  is sold on a monthly basis from  September  through
May.

     In connection  with its acquisition of assets from APMC,  American  Passage
entered into an agreement to serve as the exclusive  representative for the sale
of national advertising for APMC's Directory of Classes  publication.  Directory
of Classes is the official class guide and registration  manual at approximately
eighty college  campuses with total  enrollments  of over 1.3 million  students.
This  agreement,  under which  American  Passage  will receive  specified  sales
commissions for as long as it achieves certain minimum sales levels, has enabled
American  Passage  to retain  the  right to sell  national  advertising  for the
Directory of Classes without  assuming  responsibility  for publishing it. Other
American Passage  activities  include serving as a  representative  for consumer
advertising  for the National  Association of Colleges and Employers  (NACE) Job
Choices  publication  and  marketing  and  executing  spring break  programs and
promotions  at the six resort  properties  operated by Paradise  Found Resorts &
Hotels located in Panama City Beach, Florida.

     As part of its print media services, American Passage also supplies clients
with  newspaper  inserts and assists  clients by providing  creative  input.  An
example of this is American Passage's custom publishing division,  which creates
the Nike SportsPage insert prepared on a monthly basis for insertion in selected
college newspapers.  It contains a monthly calendar of sports events at selected
campuses,  a personal  profile of an  intramural  athlete from each school and a
summary of intramural  activities on campus.  The insert is both an  information
source for students  and an  opportunity  for Nike to reinforce  its presence on
campus.  Inserts  can be  provided in color and in black and white and are often
used for clients' special offers to the campus community.

     American  Passage also provides event marketing and promotional  assistance
on  campus  to  clients  who want to use the  techniques  of  tabling  and other
face-to-face  contact with students.  Typically,  this service has been used for
food and beverage sampling, credit card solicitation and long distance telephone
service  solicitation.  Some examples of past sampling programs include programs
for  companies  such as  Tropicana,  Kraft  General  Foods,  Barq's  Root  Beer,
Microsoft, Associates Financial and CapitalOne.

Campus Voice

     On February 21, 1997, the Company, through its newly organized wholly owned
subsidiary,  Campus  Voice,  acquired  from a wholly owned  subsidiary of Sirrom
Capital  Corporation  substantially  all of the assets relating to a business of
operating a national network of proprietary, giant, metal-framed and plexi-glass
enclosed wallboards on college campuses. The network, which was started in 1981,
today consists of over 3,400 giant  wallboards  located on 391 college  campuses
across the United States reaching  approximately  3.8 million  college  students
and, according to pre-acquisition  data, generating almost 3 million impressions
per day.  It is the  oldest  and  largest  (in terms of  number  of  wallboards)
national network of its kind in the United States.


                                       5
<PAGE>

     There are an average of nine wallboards on each of the campuses that Campus
Voice serves,  located in high traffic areas such as student unions,  libraries,
vending areas,  bookstores,  residence  halls,  laundry rooms,  dining halls and
athletic  facilities.  Each  month,  posters  containing  editorial  content  of
interest to college students and paid advertisements are placed in the wallboard
units.

     After its  acquisition,  Campus Voice's  operating and publishing model was
completely revamped.  Campus Voice's sales efforts, which had been provided on a
contract basis by a third party, were brought in-house.  In addition,  editorial
content,  which was supplied by freelance  writers under contract,  was obtained
instead  from  popular  magazines  such as In Style,  Road & Track,  Yahoo!  and
Interview.  Finally,  the Campus  Voice  network was divided  into three  parts,
permitting  advertisers  to  purchase a portion of the  network on a regional or
targeted  basis.   Such  division  has  made  this  medium  more  attractive  to
advertisers by reducing their out-of-pocket costs.  Advertising clients that use
Campus Voice's services include,  among others,  Sprint,  Procter & Gamble, Sony
Pictures and Dreamworks SKG.

Beyond the Wall

     On April 11, 1997, the Company acquired the assets and certain  liabilities
of  Posters  Preferred,   Inc.  relating  to  its  business  of  publishing  and
distributing  a twice yearly  catalog to college  students  entitled  Beyond the
Wall(R). The business was originally started in 1993. Each year, Beyond the Wall
distributes  over 4.0  million of its  catalogs  to over 600  college  campuses,
making  it,  the  Company  believes,   the  largest  and  broadest   publication
specifically targeting college students. The catalog contains advertising images
which are available in poster-size reproductions, which students can purchase by
mail order as posters to be hung on their  walls.  The catalog  also  contains a
listing of video  cassettes of feature  films which are likewise  available  for
purchase.  In addition,  Beyond the Wall  maintains a web site at which students
can  download a screen saver with the same images that are found on the posters,
and has  distribution  agreements  with  on-campus  poster  vendors  for  direct
distribution of catalog posters.

     The Company  believes the catalog is  attractive to image and brand focused
advertisers who want to reach young adults.  Beyond the Wall's clients  include,
among others, VISA, J. Crew, Sara Lee, Casio, Calvin Klein, Procter & Gamble and
Volkswagen of America.

Pik:Nik Media

     On April 30, 1997,  Pik:Nik,  a newly organized  wholly owned subsidiary of
the  Company,  acquired  from  Pik:Nik,  LLC the assets and certain  liabilities
relating to its business of producing, marketing and distributing free postcards
containing advertising images.

     Pik:Nik's postcards are available through four separate programs. The first
program is called the Cities  Program in which free  postcards  are  distributed
using 1,000 of Pik:Nik's proprietary racks installed in major markets throughout
the country at restaurants, bars, cafes and clubs. Pik:Nik currently distributes
free postcards  through its proprietary  racks located in New York, Los Angeles,
San  Francisco,  Seattle,  Dallas,  Austin,  San Diego and Portland,  Oregon and
through  contract  distributors  in  Chicago.  The Company is planning to expand
Pik:Nik's  network  of  proprietary  racks to other  markets,  including  Miami,
Washington, D.C., Atlanta and Boston.

     Pik:Nik's second program is its College  Program.  As part of that program,
the Company installed racks at 100 bars (which have been designated as America's
Top 100  College  Bars(TM)  ) located  near  college  campuses.  These bars have
received national publicity with regard to this program, including an article in
Playboy  magazine,  and distribute tee shirts with their bar's name  prominently
displayed.  Through  an  exclusive  arrangement,  another  125  racks  have been
installed on college campuses in Barnes & Noble college  bookstores (the largest
private  manager of campus  bookstores in the United States) and in dining halls
and near Campus Voice(R) wallboards.

     A third program,  called the Cinema Program,  is the result of an exclusive
arrangement with General Cinemas.  Pursuant to that program,  Pik:Nik  installed
postcard racks at 100 of the largest  General  Cinema movie theaters  across the
country.  General Cinema receives a share of the revenues  generated by the sale
of postcards from these racks and also has its employees  periodically replenish
the racks with postcards.

     The fourth program  conducted by Pik:Nik is the  Conventions  Program.  The
Company  supplies  fixed racks and  manually  distributes  postcards  at various
conventions held throughout the United States. The cards are generally topically
related to each convention.


                                       6
<PAGE>

Competition

     The  Company's  combination  of the  Network  with its media and  marketing
services  businesses enables it to provide  comprehensive  marketing,  media and
promotional  services  to  advertisers,  sponsors  and  entertainment  companies
seeking to target the young adult and college  markets.  The Company's media and
marketing services businesses face competition for limited advertising  revenues
from advertisers and sponsors, from other similar companies and from other media
such as radio, television,  print media, direct mail marketing and the Internet.
The Company also competes with a wide variety of other  advertising  media,  the
range and diversity of which has increased  substantially  over the past several
years to include advertising  displays in shopping centers and malls,  airports,
stadiums,  movie  theaters and  supermarkets,  and on taxis,  trains,  buses and
subways. Some of the Company's  competitors,  principally in other media such as
radio and television,  are  substantially  larger,  better  capitalized and have
access to greater resources than the Company. There can be no assurance that the
Company  will be able to  compete  successfully  with such other  companies  and
media.

                                   Trademarks

     The Company has  registered  with the United  States  Patent and  Trademark
Office the names NET, Network Event Theater and Design, NET and Beyond the Wall.
The Company has applied to register the names American Passage, GymBoards, AdRaX
and Pulse Finder. In addition,  Campus Voice has five registered  trademarks and
11  applications  pending,  and  Pik:Nik  has three  applications  pending.  The
Company's rights in these marks may be a significant  part of its business.  The
Company is not aware of any claims of  infringement  or other  challenges to its
rights to use these  marks,  although  the  Company is aware of  numerous  other
registrations  of the mark NET. There can be no assurance the Company's marks do
not or will not infringe the  proprietary  rights of others,  that the Company's
marks would be upheld if  challenged  or that the Company would not be prevented
from using its marks. The Company does not hold any patents or copyrights.

                                    Employees

     As of  September  13,  1997,  the  Company  and  its  subsidiaries  had  78
employees,  of whom  three are part time.  None of the  Company's  employees  is
represented  by a collective  bargaining  unit,  and the Company  believes  that
relations with its employees is good.

ITEM 2. PROPERTIES

     The  Company's  principal  executive  offices are located in  approximately
16,800 square feet of leased space in New York City pursuant to a lease expiring
on October 31,  2000.  Annual  rent  payable  under that lease is  approximately
$392,000.  The  Company  also rents  office  space in Seattle,  Washington,  Los
Angeles, California,  Chicago, Illinois and Tempe, Arizona. The Company believes
it has  adequate  insurance  to cover the value of its leased  property  and the
personal property therein.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not a party to any pending legal proceeding and is not aware
of any contemplated proceeding that may be material.

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

     No matters  were  submitted  to a vote of the  Company's  security  holders
during the quarter ended June 30, 1997.


                                       7
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's common stock is traded in the over-the-counter  market and is
quoted on the Nasdaq  SmallCap  Market  ("Nasdaq")  under the symbol "NETS." The
following  table sets forth the high and low closing sales prices for the common
stock as  furnished  by Nasdaq.  The  quotations  reflect  inter-dealer  prices,
without retail mark-up,  mark-down or commission,  and may not represent  actual
transactions.

                                                          High         Low
                                                         ------       ------
      Fiscal 1996:                          
         Fourth Quarter............................       5 5/8        3 1/4
      Fiscal 1997:                          
         First Quarter.............................       4 1/8      1 27/32
         Second Quarter............................      5 7/16        2 3/4
         Third Quarter.............................       6 1/8        4 1/2
         Fourth Quarter............................       5 3/8        3 1/2
                                            
     As of September 25, 1997, there were  approximately 39 holders of record of
the Company's common stock.

     To date,  the Company has not declared or paid any  dividends on its common
stock. The payment by the Company of dividends, if any, is within the discretion
of the Board of Directors and will depend on the Company's earnings, if any, its
capital requirements and financial condition, as well as other relevant factors.
The  Board  of  Directors  does not  intend  to  declare  any  dividends  in the
foreseeable  future,  but  instead  intends  to retain  earnings  for use in the
Company's business operations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The  following  discussion  of  the  financial  condition  and  results  of
operations of the Company  should be read in conjunction  with the  consolidated
financial  statements  and  related  notes  thereto.  The  following  discussion
contains   certain   forward-looking   statements   that   involve   risks   and
uncertainties.  The Company's actual results could differ  materially from those
discussed  herein.  Factors that could cause or contribute  to such  differences
include, but are not limited to, the ability to obtain financing, integration of
the recently completed acquisitions, the management of growth, changing consumer
tastes and general economic conditions.  The Company undertakes no obligation to
release  publicly  the  results  of  any  revisions  to  these   forward-looking
statements that may be made to reflect any future events or circumstances.

     The Company's consolidated financial statements are not directly comparable
from period to period due to acquisition activity. Additionally, in August 1996,
the  Company  changed its year end from  December  31 to June 30. The  following
financial  analysis  compares the year ended June 30, 1997  ("1997") to the year
ended June 30, 1996 (unaudited) ("1996").

Results of Operations

     In 1997,  net revenues were  $6,439,000 as compared to $4,000 in 1996.  The
increase of $6,435,000 was primarily due to the acquisition of American Passage,
which accounted for $6,046,000 of the increase.  Additionally,  net revenues for
Campus Voice,  Pik:Nik and Beyond the Wall accounted for approximately  $145,000
of that  increase.  The  remaining  $244,000 of the  increase  was  generated by
revenues received from screening events on the campus theater Network.

     In 1997,  selling,  general and administrative  expenses were $9,006,000 as
compared to $2,908,000 in 1996.  The increase of $6,098,000 was primarily due to
the  acquisitions  of  American   Passage  and  Pik:Nik,   which  accounted  for
approximately  $5,100,000  and  $400,000  of  this  increase,  respectively.  In
addition,  $400,000 of that increase resulted from Network operations.  In 1997,
corporate  expenses were  $2,078,000.  These  expenses were included in selling,
general and administrative  expenses for 1996.  Corporate expenses are primarily
comprised  of  salaries  and   professional   fees  of  $845,000  and  $770,000,
respectively.


                                       8
<PAGE>

     In 1997,  depreciation  and  amortization  was  $1,253,000  as  compared to
$483,000 in 1996. The increase of $770,000 was primarily due to  acquisitions of
the media and marketing services businesses, which accounted for $425,000 of the
increase. The remainder of $345,000 was the result of additional Network theater
installations.

     In 1997,  operating  expenses were $12,337,000 as compared to $3,391,000 in
1996.  The increase of  $8,946,000  was  primarily  due to the  acquisitions  of
American Passage,  Campus Voice, Pik:Nik and Beyond the Wall. Operating expenses
for these subsidiaries were  approximately  $5,414,000,  $238,000,  $378,000 and
$80,000,  respectively.  The  remaining  increase of  $2,836,000  was due to the
expansion  of the  theater  Network  and an  increase  in the  number  of sales,
management and support staff.

     In 1997,  interest income was $274,000 as compared to $179,000 in 1996. The
increase of $95,000 was due to interest  earned on cash  balances  maintained by
the Company. The Company completed the Initial Public Offering in April 1996 and
earned  interest  income on the proceeds of such offering for only a three-month
period in 1996 as compared to a full year in 1997.

     In 1997,  interest  expense was  $390,000.  The  interest  expense  related
primarily  to debt  incurred in  connection  with the  acquisitions  of American
Passage,  Campus Voice and Pik:Nik.  Interest expense for these subsidiaries was
$310,000, $77,000, and $3,000, respectively.

     In 1997, provision for income taxes was $166,000.  The provision represents
state taxes imposed on revenues and net assets.

     In 1997,  net loss was  $6,157,000 as compared to  $3,208,000 in 1996.  The
increase  of  $2,949,000  was a result  of  increased  operating  expenses  from
acquisitions,  an increase in the number of management,  sales and support staff
resulting therefrom and the costs of further expansion of the theater Network.

Liquidity and Capital Resources

     The Initial  Public  Offering  raised net  proceeds of  approximately  $9.7
million,  of  which  $500,000  was  used to repay  previously  existing  Company
indebtedness.  Since the Initial  Public  Offering,  the  Company has  purchased
approximately   $1.2  million  of  Network   theater   equipment   and  invested
approximately $1.3 million of the proceeds of the Initial Public Offering in the
acquisitions of American Passage, Campus Voice, Beyond the Wall and Pik:Nik (the
remainder of the cash portion of the purchase prices having been borrowed).  The
balance  of the  proceeds  have  otherwise  been  used  to  fund  the  Company's
operations.

     On June 24, 1997, the Company sold an aggregate of 1,015,873  shares of its
common  stock.  The net  proceeds of that sale of $3.8 million are being used to
fund the Company's operations.

     The Company used $5.3 million of cash in  operating  activities  in 1997 as
compared to $2.4 million in 1996.  The increase of $2.9 million  represents  the
increase in depreciation  and  amortization,  net loss and increases in accounts
receivable  offset  substantially  by increases in short-term  liabilities.  The
increase of $13.0  million in cash  provided by investing  activities in 1997 as
compared to 1996  represents the  liquidation  of investment  securities to fund
acquisitions and capital expenditures.  The decrease of $3.3 million in net cash
provided by financing  activities  in 1997 versus 1996 is  primarily  due to the
Company's  spending  the  proceeds  of  its  Initial  Public  Offering,  selling
additional equity securities and borrowing funds from various sources.

     The Company's  primary capital  requirement  with respect to its operations
has been for  acquisitions  and for the  purchase  and  installation  of theater
equipment on college campuses for its Network of campus  theaters.  In the event
that the Company's plans and  assumptions  with respect to its Network change or
prove to be inaccurate,  if its  assumptions  with respect to American  Passage,
Campus Voice,  Beyond the Wall and Pik:Nik  being able to fund their  operations
and  make  debt  service  payments  out of  their  own  cash  flows  prove to be
inaccurate,  or if the working  capital or capital  expenditure  requirements of
Beyond the Wall or Pik:Nik  prove to be greater  than  anticipated,  the Company
could  be  required  to seek  additional  financing.  The  inability  to  obtain
additional  financing  will  have a  material  adverse  effect  on the  Company,
including possibly  requiring the Company to significantly  curtail or cease its
operations.

     As of June 30, 1997, the Company had approximately $4.2 million in cash and
cash  equivalents.  The Company believes that such amounts will be sufficient to
fund working capital, including debt service and interest requirements,  for the
year ending June 30,  1998.  In order to fund future debt  service and  interest
expense from operations,  the Company will have to improve its current operating
results.  The Company's  ability to make these  improvements  will be subject to
prevailing economic conditions and to legal,  financial,  business,  regulatory,
industry and other factors, many of which are beyond the Company's control.


                                       9
<PAGE>

     The Company also may seek additional  debt or equity  financing to fund the
cost of  additional  expansion  of its  Network  and the cost of  developing  or
acquiring additional media and marketing services businesses. To the extent that
the Company finances its requirements  through the issuance of additional equity
securities,  including  the  exercise of warrants  issued in the Initial  Public
Offering,  any such  issuance  would result in dilution to the  interests of the
Company's stockholders.

     Additionally,  to the extent that the Company incurs indebtedness or issues
debt  securities in connection  with financing  activities,  the Company will be
subject to all of the risks associated with incurring substantial  indebtedness,
including  the risks that  interest  rates may  fluctuate  and cash flows may be
insufficient to pay principal and interest on any such indebtedness. The Company
has  no  current  arrangements  with  respect  to,  or  sources  of,  additional
financing.  There can be no  assurance  that any  additional  financing  will be
available to the Company on acceptable terms, if at all.

ITEM 7. FINANCIAL STATEMENTS

     Information  with  respect  to this  item  appears  as a  separate  section
following Item 13 of this report.  Such  information is  incorporated  herein by
reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE

     None.


                                       10
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     The information  required by this Item is incorporated  herein by reference
to the Company's  definitive proxy statement to be filed with the Securities and
Exchange  Commission pursuant to Regulation 14A within 120 days after the end of
the fiscal year covered by this report (the "Company's Proxy Statement").

ITEM 10. EXECUTIVE COMPENSATION

     The information  required by this Item is incorporated  herein by reference
to the Company's Proxy Statement.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  required by this Item is incorporated  herein by reference
to the Company's Proxy Statement.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required by this Item is incorporated  herein by reference
to the Company's Proxy Statement.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a) Exhibits. See below.

     (b) The  Company  did not file any  reports  on Form 8-K  during the fourth
quarter of fiscal 1997.

Item 13(a)   Exhibits.

Exhibit No.
-----------

3.1         Certificate of  Incorporation  (incorporated by reference to Exhibit
            3.1  to  the   Company's   Registration   Statement  on  Form  SB-2,
            Registration No. 33-80935, filed on March 6, 1996).

3.2         Certificate   of   Amendment   of   Certificate   of   Incorporation
            (incorporated   by  reference  to  Exhibit  3.2  to  the   Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

3.3         Bylaws  (incorporated  by reference to Exhibit 3.3 to the  Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

4.1         Warrant  Agreement  (incorporated by reference to Exhibit 4.1 to the
            Company's  Registration  Statement  on Form SB-2,  Registration  No.
            33-80935, filed on March 6, 1996).

4.2         Underwriter's  Warrant  (incorporated by reference to Exhibit 4.2 to
            the Company's Registration Statement on Form SB-2,  Registration No.
            33-80935, filed on March 6, 1996).

10.1        Employment  Stock  Option  Plan  of  the  Company  (incorporated  by
            reference to Exhibit 10.1 to the Company's Registration Statement on
            Form SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.2        Employment  Agreement  between  the  Company  and  Harlan  D.  Peltz
            (incorporated   by  reference  to  Exhibit  10.2  to  the  Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

10.3        Employment Agreement between the Company and Don Leeds (incorporated
            by  reference  to  Exhibit 1 to the  Company's  Form  10-QSB for the
            quarterly period ended June 30, 1996).

10.4        Non-Incentive Stock Option Agreement dated June 17, 1996 between the
            Company and Don Leeds  (incorporated by reference to Exhibit 10.3 to
            the Company's  Form 10-QSB for the  quarterly  period ended June 30,
            1996).

10.5        Employment  Agreement  between  the  Company  and  Bruce  L.  Resnik
            (incorporated by reference to Exhibit 2 to the Company's Form 10-QSB
            for the quarterly period ended September 30, 1996).


                                       11
<PAGE>

Exhibit No.
-----------

10.6        Agreement dated December 19, 1995 between the Company and The Fields
            & Hellman Company  (incorporated by reference to Exhibit 10.4 to the
            Company's  Registration  Statement  on Form SB-2,  Registration  No.
            33-80935, filed on March 6, 1996).

10.7*       Revised  Agreement  dated May 20,  1997  between the Company and The
            Fields & Hellman Company.

10.8        NET Portfolio  Investors  Agreement  dated December 21, 1995 between
            the Company  and NET  Portfolio  Investors,  L.P.  (incorporated  by
            reference to Exhibit 10.5 to the Company's Registration Statement on
            Form SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.9        Form of  Shareholders  Agreement  between  Harlan  D.  Peltz and NET
            Portfolio Investors, L.P. (incorporated by reference to Exhibit 10.6
            to the Company's Registration  Statement on Form SB-2,  Registration
            No. 33-80935, filed on March 6, 1996).

10.10       Registration  Rights  Agreement  dated December 21, 1995 between the
            Company and NET Portfolio Investors, L.P. (incorporated by reference
            to Exhibit  10.7 to the  Company's  Registration  Statement  on Form
            SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.11       Standard  Form of School  Contract  (incorporated  by  reference  to
            Exhibit 10.8 to the Company's  Registration  Statement on Form SB-2,
            Registration No. 33-80935, filed on March 6, 1996).

10.12       Asset  Purchase  Agreement  dated  September 13, 1996 among American
            Passage Media Corporation, Gilbert Scherer, the Company and American
            Passage Media,  Inc.  (incorporated by reference to Exhibit 2 to the
            Company's Form 8-K filed on September 28, 1996).

10.13       $750,000  Subordinated  Promissory Note from American Passage Media,
            Inc.  to  American  Passage  Media   Corporation   (incorporated  by
            reference to Exhibit 32 to the Company's Form 8-K filed on September
            28, 1996).

10.14       Guaranty  by  the  Company  in  favor  of  American   Passage  Media
            Corporation (incorporated by reference to Exhibit 4 to the Company's
            Form 8-K filed on September 28, 1996).

10.15       Option  Agreement  between the Company and  American  Passage  Media
            Corporation (incorporated by reference to Exhibit 5 to the Company's
            Form 8-K filed on September 28, 1996).

10.16       Directory  of  Classes  Representation  Agreement  between  American
            Passage  Media,   Inc.  and  American   Passage  Media   Corporation
            (incorporated  by reference to Exhibit 8 to the  Company's  Form 8-K
            filed on September 28, 1996).

10.17       Business Loan Agreement  between  American  Passage Media,  Inc. and
            Signet Bank (incorporated by reference to Exhibit 9 to the Company's
            Form 8-K filed on September 28, 1996).

10.18*      Letter  agreement  dated  August 18, 1997 between  American  Passage
            Media, Inc. and Signet Bank amending the Business Loan Agreement.

10.19       Promissory  Note from American  Passage  Media,  Inc. to Signet Bank
            (incorporated  by reference to Exhibit 10 to the Company's  Form 8-K
            filed on September 28, 1996).

10.20       Commercial  Security  Agreement between American Passage Media, Inc.
            and Signet  Bank  (incorporated  by  reference  to Exhibit 11 to the
            Company's Form 8-K filed on September 28, 1996).

10.21       Commercial  Guaranty  from  the  Company  in favor  of  Signet  Bank
            (incorporated  by reference to Exhibit 12 to the Company's  Form 8-K
            filed on September 28, 1996).

10.22       Commercial  Pledge and Security  Agreement from the Company in favor
            of Signet  Bank  (incorporated  by  reference  to  Exhibit 13 to the
            Company's Form 8-K filed on September 28, 1996).

10.23*      Bill of Sale and Agreement dated January 31, 1997 among SCCGS, Inc.,
            Sirrom Capital Corporation, Campus Voice, L.L.C. and the Company.

10.24*      Loan Agreement  dated January 31, 1997 between Campus Voice,  L.L.C.
            and Sirrom Investments, Inc.

10.25*      $660,000 Senior Secured Promissory Note from Campus Voice, L.L.C. to
            Sirrom Investments, Inc.

10.26*      $300,000 Junior Secured Promissory Note from Campus Voice, L.L.C. to
            SCCGS, Inc.


                                       12
<PAGE>

Exhibit No.
-----------

10.27*      $1,263,222.83  Second  Junior  Secured  Promissory  Note from Campus
            Voice, L.L.C. to SCCGS, Inc.

10.28*      Security  Agreement  dated  January 31, 1997 between  Campus  Voice,
            L.L.C. and Sirrom Investments, Inc.

10.29*      Trademark  and Patent  Security  Agreement  dated  January  31, 1997
            between Campus Voice, L.L.C. and Sirrom Investments, Inc.

10.30*      Asset  Purchase   Agreement  dated  April  11,  1997  among  Posters
            Preferred, Inc., Dennis Roche, Brian Gordon and the Company.

10.31*      Asset  Purchase  Agreement  dated April 30, 1997 among the  Company,
            Pik:Nik  Media,  LLC,  Pik:Nik,  LLC  and  Garth  Holsinger,  Annett
            Schaefer-Sell and Sunny Smith.

10.32*      Stock Purchase  Agreement dated June 24, 1997 among Warburg,  Pincus
            Emerging  Growth  Fund,  Inc.,  Small  Company  Growth  Portfolio of
            Warburg, Pincus Institutional Fund, Inc. and the Company.

10.33*      Registration  Rights  Agreement  dated June 24, 1997 among  Warburg,
            Pincus Emerging Growth Fund, Inc., Small Company Growth Portfolio of
            Warburg, Pincus Institutional Fund, Inc. and the Company.

21*         Subsidiaries of the Company.

23*         Consent of Ernst & Young LLP.

27*         Financial Data Schedule.

----------
*  Filed herewith.


                                       13
<PAGE>

                           NETWORK EVENT THEATER, INC.
                        CONSOLIDATED FINANCIAL STATEMENTS

                                      Index

Report of Independent Auditors.............................................  F-2

Consolidated Balance Sheets at June 30, 1997 and 1996......................  F-3

Consolidated Statements of Operations for the years ended June 30, 1997
  and 1996 (unaudited), the six months ended June 30, 1996 and the year
  ended December 31, 1995..................................................  F-4

Consolidated Statements of Cash Flows for the years ended June 30, 1997
  and 1996 (unaudited), the six months ended June 30, 1996 and the year
  ended December 31, 1995..................................................  F-5

Consolidated Statement of Stockholders' Equity for the two years and six
  months ended June 30, 1997...............................................  F-6

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


                                      F-1
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors
Network Event Theater, Inc.

We have audited the accompanying  consolidated  balances sheets of Network Event
Theater,  Inc.  as of June  30,  1997 and  1996,  and the  related  consolidated
statements of operations, changes in stockholders' equity and cash flows for the
year ended June 30, 1997,  the six months ended June 30, 1996 and the year ended
December 31, 1995.  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 have  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 consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Network
Event Theater,  Inc. at June 30, 1997 and 1996, and the consolidated  results of
their  operations and their cash flows for the year ended June 30, 1997, the six
months ended June 30, 1996 and the year ended  December 31, 1995,  in conformity
with generally accepted accounting principles.


                                                     Ernst & Young LLP

New York, New York
September 10, 1997


                                      F-2
<PAGE>

                           NETWORK EVENT THEATER, INC.

                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                                 June 30,
                                                           --------------------
                                                             1997        1996
                                                           --------    --------
ASSETS
Current Assets:
   Cash and cash equivalents ...........................   $  4,185    $    267
   Accounts receivable, net of allowance
      for doubtful accounts of $73 at
      June 30, 1997 ....................................      1,439        --
   Investments .........................................       --         7,883
   Prepaid expenses ....................................        341        --
   Deposits and other current assets ...................        120          26
                                                           --------    --------
Total current assets ...................................      6,085       8,176

Property and equipment, net ............................      4,718       3,081
Intangible assets, net of accumulated
   amortization of $367 and $59 at June 30, 1997
   and 1996, respectively ..............................      6,339          59
Notes receivable .......................................         33        --
                                                           --------    --------
Total assets ...........................................   $ 17,175    $ 11,316
                                                           ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable ....................................   $    542    $    414
   Accrued employee compensation .......................        321        --
   Accrued professional fees ...........................        320        --
   Other accrued expenses ..............................        484          48
   Deferred revenues ...................................        301        --
   Current portion of long--term debt ..................        949        --
                                                           --------    --------
Total current liabilities ..............................      2,917         462

Long-term debt .........................................      5,275        --
Commitments 

Stockholders' Equity:
   Preferred stock, $.01 par value, 1,000 shares
      authorized, no shares issued and outstanding .....       --          --
   Common stock, $.01 par value, 17,000 shares
      authorized, 9,861 and 8,654 shares issued
      and outstanding at June 30,1997 and 1996,
      respectively .....................................         99          87
   Additional paid--in capital .........................     20,421      16,177
   Accumulated deficit .................................    (11,537)     (5,380)
   Unrealized depreciation on marketable 
      equity securities                                        --           (30)
                                                           --------    --------
Total stockholders' equity .............................      8,983      10,854
                                                           --------    --------

Total liabilities and stockholders' equity .............   $ 17,175    $ 11,316
                                                           ========    ========

                 See notes to consolidated financial statements


                                      F-3
<PAGE>

                           NETWORK EVENT THEATER, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                 Year ended                Six months ended     Year ended
                                                   June 30,                     June 30,        December 31,
                                         ---------------------------         -------------     --------------
                                           1997               1996               1996               1995   
                                         --------           --------           --------           --------
                                                          (Unaudited)                      
<S>                                      <C>                <C>                <C>                <C>   
Net Revenues .........................   $  6,439           $      4           $      4           $   --
                                                                                               
Operating Expenses:                                                                            
                                                                                               
   Selling, general and                                                                        
      administrative expenses ........      9,006              2,908              1,738              1,927
                                                                                               
   Corporate expenses ................      2,078               --                 --                 --
                                                                                               
   Depreciation and amortization .....      1,253                483                320                336
                                         --------           --------           --------           --------
                                                                                               
Total operating expenses .............     12,337              3,391              2,058              2,263
                                         --------           --------           --------           --------
                                                                                               
Loss from operations .................     (5,898)            (3,387)            (2,054)            (2,263)
                                                                                               
Interest income ......................        274                179                132                126
                                                                                               
Interest expense .....................       (390)              --                 --          
                                                                                               
Other income .........................         23               --                 --                 --
                                         --------           --------           --------           --------
                                                                                               
Loss before provision for income taxes     (5,991)            (3,208)            (1,922)            (2,137)
                                                                                               
Provision for income taxes ...........        166               --                 --                 --
                                         --------           --------           --------           --------
                                                                                               
Net loss .............................   $ (6,157)          $ (3,208)          $ (1,922)          $ (2,137)
                                         ========           ========           ========           ========
                                                                                               
Net loss per common share ............   $  (0.71)          $  (0.47)          $  (0.26)          $  (0.34)
                                         ========           ========           ========           ========
                                                                                               
Weighted average common shares                                                                 
   outstanding .......................      8,715              6,769              7,504              6,354
                                         ========           ========           ========           ========
</TABLE>

                 See notes to consolidated financial statements


                                      F-4
<PAGE>

                           NETWORK EVENT THEATER, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                             Year ended                Six months ended     Year ended   
                                                               June 30,                     June 30,        December 31,
                                                     ---------------------------         -------------     --------------
                                                       1997               1996               1996               1995   
                                                     --------           --------           --------           --------
                                                                      (Unaudited)                     
<S>                                                  <C>                <C>                <C>                <C>   
Cash Flows From Operating Activities        
Net loss .........................................   $ (6,157)          $ (3,208)          $ (1,922)          $ (2,137) 
Adjustments to reconcile net loss to                                                                          
   net cash used in operating activities:                                                                     
   Provision for bad debts .......................         73               --                 --                 --
   Depreciation and amortization .................      1,253                483                320                336
   Fair value of common stock issued                                                                          
     for services ................................       --                 --                 --                   60
   Changes in assets and liabilities:                                                                         
   Increase in prepaid expenses ..................       (341)              --                 --                 --
   (Increase) decrease in deposits and other                                                                  
   current assets ................................        (94)               (15)               (17)                 2
   Increase in accounts receivable ...............     (1,512)              --                 --                 --
   Increase (decrease) in accounts payable .......        128                350                (79)               507
   Increase in accrued employee compensation .....        321               --                 --                 --
   Increase in accrued professional fees .........        320               --                 --                 --
   Increase in other accrued expenses ............        436               --                 --                 --
   Increase in deferred revenues .................        301               --                 --                 --
   Decrease (increase) in deferred offering costs        --                 --                  207               (207)
                                                     --------           --------           --------           --------
Net cash used in operating activities ............     (5,272)            (2,390)            (1,491)            (1,439)
Cash Flows From Investing Activities                                                                          
   Capital expenditures ..........................     (1,194)            (3,308)              (859)            (2,545)
   Notes receivable ..............................        (33)              --                 --                 --
   Payment for business acquisitions .............     (4,842)              --                 --                 --
   Sale (purchase) of investments ................      7,913             (7,913)            (7,913)               987
                                                     --------           --------           --------           --------
Net cash provided by (used in)
  investing activities ...........................      1,844            (11,221)            (8,772)            (1,558)
Cash Flows From Financing Activities                                                                          
   Net proceeds from sale of common stock ........      3,783             10,416              9,509              2,865
   Proceeds from sale of warrants ................       --                  230                230               --
   Proceeds from long-term debt ..................      3,860               --                 --                 --
   Repayment of long-term debt ...................       (297)              --                 --                 --
                                                     --------           --------           --------           --------
Net cash provided by financing activities ........      7,346             10,646              9,739              2,865
                                                     --------           --------           --------           --------
Net increase (decrease) in cash and cash                                                                      
   equivalents ...................................      3,918             (2,965)              (524)              (132)
Cash and cash equivalents at beginning                                                                        
   of period .....................................        267              3,232                791                923
                                                     --------           --------           --------           --------
Cash and cash equivalents at end of period .......   $  4,185           $    267           $    267           $    791
                                                     ========           ========           ========           ========
Supplemental cash flow information;                                                                           
   Cash paid for interest ........................   $    279           $   --             $   --             $   --
                                                     ========           ========           ========           ========
   Cash paid for income taxes ....................   $    207           $   --             $   --             $   --
                                                     ========           ========           ========           ========
   Issuance of Common Stock in connection
      with acquisitions ..........................   $    473           $   --             $   --             $   --
                                                     ========           ========           ========           ========
   Debt assumed in conection with acquistions ....   $  2,553           $   --             $   --             $   --
                                                     ========           ========           ========           ========
</TABLE>
                                                                
                 See notes to consolidated financial statements


                                      F-5
<PAGE>

                           NETWORK EVENT THEATER, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 For the period January 1, 1995 to June 30, 1997
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                            Unrealized
                                   Common Stock             Additional                     Appreciation
                                ---------------------        paid-in        Accumulated    On Marketable
                                Shares        Amount         Capital          Deficit    Equity Securities      Total
                                -----        --------        --------        --------    ------------------    --------
<S>                             <C>          <C>             <C>             <C>              <C>              <C>      
Balances at                                                       
  December 31, 1994 ......      4,732        $     47        $  3,553        $ (1,321)        $   --           $  2,279 
                                                                                                              
Issuance of                                                                                                   
  common stock ...........      1,603              17           2,848            --               --              2,865
                                                                                                              
Fair value of stock                                                                                           
  issued as severance ....         19            --                60            --               --                 60
                                                                                                              
Net loss .................       --              --              --            (2,137)            --             (2,137)
                                -----        --------        --------        --------         --------         --------
Balances at                                                                                                   
  December 31, 1995 ......      6,354              64           6,461          (3,458)            --              3,067
                                                                                                              
Issuance of common                                                                                            
  stock upon the Initial                                                                                      
  Public Offering ........      2,300              23           9,486            --               --              9,509
                                                                                                              
Issuance of warrants                                                                                          
  upon the Initial Public                                                                                     
  Offering ...............       --              --               230            --               --                230
                                                                                                              
Unrealized depreciation on                                                                                    
  marketable securities ..       --              --              --              --                (30)             (30)
                                                                                                              
Net loss .................       --              --              --            (1,922)            --             (1,922)
                                -----        --------        --------        --------         --------         --------
Balances at                                                                                                   
  June 30, 1996 ..........      8,654              87          16,177          (5,380)             (30)          10,854
                                                                                                              
Issuance of common                                                                                            
  stock for acquisitions .        191               2             471            --               --                473
                                                                                                              
Sale of common                                                                                                
  stock ..................      1,016              10           3,773            --               --              3,783
                                                                                                              
Unrealized appreciation on                                                                                    
  marketable securities ..       --              --              --              --                 30               30
                                                                                                              
Net loss .................       --              --              --            (6,157)            --             (6,157)
                                -----        --------        --------        --------         --------         --------
                                                                                                              
Balances at                                                                                              
  June 30, 1997 ..........      9,861        $     99        $ 20,421        $(11,537)        $   --           $  8,983
                                =====        ========        ========        ========         ========         ========
</TABLE>

                 See notes to consolidated financial statements


                                      F-6
<PAGE>

                           NETWORK EVENT THEATER, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 1997


1.   Organization and Basis of Presentation

     Network Event Theater,  Inc.  ("NET"),  and its subsidiaries  (collectively
referred to as the  "Company") was  incorporated  under the laws of the State of
Delaware in  December  1995 to be the  successor  to the  business of  Universal
Access  Network,  L.P.  (the  "Partnership"),  a  Delaware  limited  partnership
organized  in  August  1993.  In  April  1996,   the   Partnership   effected  a
reorganization pursuant to which it assigned all of its assets to the Company in
exchange for 6,354,440  shares of the Company's  common stock,  and  distributed
those shares to its partners. The accompanying consolidated financial statements
of the Company  retroactively  reflect the  reorganization  with  respect to the
capitalization of the Company.  References to the Company include the activities
of its predecessor, the Partnership.

     On April 9, 1996,  the Company sold 2.3 million  shares of its common stock
and  2,645,000  warrants  to  purchase  shares of its  common  stock in a public
offering  (the  "Initial  Public   Offering")  in  which  the  Company  received
approximately $9.7 million of net proceeds,  of which $500,000 was used to repay
Company debt.

     The  Company  was  organized  to  develop,  own and  operate a  proprietary
national network of theaters on college  campuses (the  "Network").  The Network
delivers  entertainment and educational events via satellite for display through
high resolution video  projectors on movie theater sized screens.  Additionally,
as described  further in Note 4, the Company  intends to continue to develop and
acquire  collegiate  media and marketing  service  businesses to complement  and
enhance the reach of its Network.

2.   Significant Accounting Policies

Principles of Consolidation

     The accompanying  consolidated financial statements include the accounts of
the  Company  and  its  subsidiaries.   All  material   intercompany  items  and
transactions have been eliminated.

Fiscal Year End

     On August 21, 1996, the Company's board of directors  elected to change the
Company's fiscal year end to June 30th. Accordingly,  the consolidated financial
statements  include the results of operations and cash flows for the years ended
June 30, 1997 and 1996  (unaudited),  the six months ended June 30, 1996 and the
year ended  December 31, 1995.  Comparative  amounts for the year ended June 30,
1996 are unaudited.  In the opinion of management,  the information presented in
the financial  statements for the unaudited year ended June 30, 1996 reflect all
adjustments  necessary  for a fair  presentation  of the  Company's  results  of
operations and cash flows.

Cash Equivalents

     Highly  liquid  investments  with a maturity  of three  months or less when
purchased are generally considered to be cash equivalents.

Investments in Marketable Securities

     The Company  records its investment in marketable  securities in accordance
with Financial  Accounting  Standards Board  Statement No. 115,  "Accounting for
Certain  Investments in Debt and Equity  Securities"  ("SFAS No. 115"). SFAS No.
115  requires   management  to  determine  the  appropriate   classification  of
investment in debt  securities  at the time of purchase and to  reevaluate  such
designation as of each balance sheet date.

     The  Company's  securities  are  classified as  available-for-sale  and are
carried  at fair  value,  with the  unrealized  gains  and  losses,  net of tax,
reported as a separate  component of  stockholders'  equity.  Realized  gains or
losses on sales of investments are reflected in the  consolidated  statements of
operations.  The cost of securities sold is based on the specific identification
method.


                                      F-7
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


Property and Equipment

     Property and  equipment  are stated at cost.  Depreciation  of property and
equipment is provided for by the straight-line  method over the estimated useful
lives of the  assets.  These  lives are  estimated  to be five years for Network
theater  equipment;  six years for location based media equipment,  and three to
five  years for  furniture  and office  equipment.  Leasehold  improvements  are
amortized on a  straight-line  basis over the shorter of the term of the related
lease or the lives of the related improvements. Expenditures for maintenance and
repairs are charged to operations as incurred.

Intangible Assets

     Intangible  assets represent  acquisition costs in excess of the fair value
of businesses acquired and are amortized using the straight-line  method over 15
years.  Organization  costs are being amortized using the  straight-line  method
over five years, and were $35,000, net of accumulated amortization of $82,000 at
June 30, 1997.

     It is the Company's policy to account for intangible assets at the lower of
amortized cost or estimated  realizable  value.  As part of an ongoing review of
the  valuation  and  amortization  of  intangible  assets of the Company and its
subsidiaries, management assesses the carrying value of the intangible assets if
facts and  circumstances  suggest that there may be  impairment.  If this review
indicates that the intangible  assets will not be recoverable as determined by a
non-discounted  cash flow analysis of the  operating  results over the remaining
amortization  period,  the  carrying  value of the  intangible  assets  would be
reduced to estimated realizable value.

Revenue Recognition

     The  Company's  primary  source  of  revenue  is  derived  from the sale of
advertising  space in media  which are owned  either by the  Company or by third
parties and by the sale of marketing services.  Revenue is generally  recognized
in the month of media  publication  and in the case of marketing  services,  the
month such services are provided.

Advertising and Promotion Costs

     The Company expenses advertising costs as incurred. Advertising expense for
the years ended June 30, 1997 and 1996  (unaudited),  the six months  ended June
30,  1996 and the year ended  December  31,  1995 were  approximately  $564,000,
$70,000, $62,000 and $8,000, respectively.

Income Taxes

     The  Company,  which  operated as a  partnership  until its Initial  Public
Offering  (see Notes 1 and 3), has incurred  losses since its  inception.  Those
losses were  utilized by the  individual  partners in prior periods and were not
available to the  Company.  Commencing  with the Initial  Public  Offering,  the
Company  began   accounting  for  income  taxes  in  accordance  with  Financial
Accounting  Standards  Board  Statement No. 109,  "Accounting for Income Taxes".
Under this method,  deferred income taxes are provided for  differences  between
the carrying  amounts of the  Company's  assets and  liabilities  for  financial
reporting purposes and the amounts used for income tax purposes.

Earnings Per Share

     The  calculation of earnings per share assumes that all common stock issued
through the date of the Company's  Initial  Public  Offering (See Notes 1 and 3)
was outstanding for all periods.  Loss per common share is based on the net loss
for the period divided by the weighted  average number of shares of common stock
outstanding  for the period.  Shares  issuable  upon the  exercise of all common
stock equivalents and other potentially  dilutive securities are not included in
the accompanying consolidated statements of operations since their effect is not
dilutive.

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS 128"). FAS
128  establishes  standards  for  computing  and  presenting  earnings per share
("EPS") and supersedes APB Opinion No. 15,  "Earnings Per Share" ("Opinion 15").
FAS 128 replaces the  


                                      F-8
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


presentation  of primary  EPS with a  presentation  of basic EPS which  excludes
dilution and is computed by dividing income available to common  stockholders by
the weighted average number of common shares outstanding during the period. This
statement  also requires dual  presentation  of basic EPS and diluted EPS on the
face of the income statement for all periods presented.  Diluted EPS is computed
similarly to fully diluted EPS pursuant to Opinion 15, with some  modifications.
FAS 128 is effective for financial  statements  issued for periods  ending after
December 15, 1997,  including  interim periods.  Early adoption is not permitted
and the statement  requires  restatement  of all prior period EPS data presented
after  the  effective   date.   The  Company  does  not   anticipate   that  the
implementation  of FAS 128 will have a material impact on the Company's net loss
or net loss per share. 

Use of Estimates

     The  preparation of the financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates. 

Risks and Uncertainties

     Financial   instruments   which   potentially   subject   the   Company  to
concentrations  of credit  risk  consist  primarily  of trade  receivables.  The
Company's revenue is principally derived from the sale of advertising space, the
placement of advertising in various media and the provision of media services to
advertisers, sponsors and entertainment companies.

     The Company routinely  assesses the financial strength of its customers and
does not require  collateral or other security to support customer  receivables.
Credit losses are provided for in the consolidated  financial  statements in the
form of an allowance for doubtful accounts. 

3.   Initial Public Offering

     In April  1996,  the  Company  completed  its  Initial  Public  Offering of
2,300,000  shares of the  Company's  common stock for $5.00 per share,  and sold
2,645,000  warrants  at $.10 per  warrant.  The  warrants  entitle the holder to
purchase one share of the Company's  common stock for $5.00 per share commencing
April 1997 and  expiring  five years after such date (See Note 10).  The Company
realized net  proceeds of  approximately  $9.7  million from the Initial  Public
Offering  of  which  $500,000  was  used to repay  previously  existing  Company
indebtedness.

4.   Acquisitions

American Passage Acquisition

     In September 1996, the Company,  through its newly  organized  wholly owned
subsidiary,   American  Passage  Media,  Inc.  ("American  Passage"),   acquired
substantially  all of the assets relating to a college and high school media and
marketing  services  business.  The  businesses  acquired  included the seller's
college  newspaper  print  advertisement  placement  operations,  college campus
postering  operations  including  postering on  distribution  racks that contain
college  newspapers,  high school focused  GymBoards(TM)  operations and various
other advertiser and event sponsorship related activities.  As consideration for
the assets,  the Company:  (1) paid  $4,423,000 in cash,  including  acquisition
costs,  (2) issued a two-year  subordinated  promissory  note for $750,000,  (3)
issued a  contingent  option to purchase up to 100,000  shares of the  Company's
common  stock  pursuant  to an option  agreement,  (4)  entered  into a two-year
consulting agreement  aggregating  $273,600,  which was terminated in June 1997,
and (5)  assumed  certain of the  contractual  obligations  of the  seller.  The
aggregate  purchase  price of  $5,173,000,  which  includes  acquisition  costs,
exceeded the fair value of the net assets acquired by approximately $4,839,000.


                                      F-9
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


Campus Voice Acquisition

     In February 1997,  the Company,  through its newly  organized  wholly owned
subsidiary, Campus Voice, LLC ("Campus Voice") acquired substantially all of the
assets  relating to a business of  operating a national  network of  proprietary
giant wallboards on college campuses.  As consideration  for the assets,  Campus
Voice  issued  junior  secured  promissory  notes  in the  aggregate  amount  of
approximately  $1,563,000.  The seller  also agreed to advance up to $660,000 of
working capital to Campus Voice from the date of the  acquisition  until January
1, 1998 on a senior, secured basis, as defined. The seller had advanced $360,000
of that  amount as of June 30,  1997.  All of the  Campus  Voice debt is secured
solely by the assets and cash flow of Campus Voice and is not an  obligation  of
NET. The aggregate  purchase  price of $1,728,000,  which  includes  acquisition
costs,  exceeded  the fair value of the net  assets  acquired  by  approximately
$573,000.

Beyond the Wall Acquisition

     In April 1997, the Company  acquired the assets and certain  liabilities of
Posters  Preferred,  Inc., an entity that  distributes  twice yearly catalogs of
posters  available  for sale to  college  students.  As  consideration  for this
purchase, the Company issued to the seller 70,000 shares of the Company's common
stock valued at  $350,000;  assumed  certain  trade  accounts  payable and other
obligations  of the  seller;  is  obligated  to issue up to 6,666 of  additional
shares of the Company's  common stock in each of 1998,  1999 and 2000 subject to
the  satisfaction  of certain  conditions;  and agreed to pay to the seller cash
amounts to the extent that the market  price of shares of the  Company's  common
stock would be less than $5.00 per share on the first anniversary of the date of
each  issuance  of shares  pursuant to the  purchase  agreement.  The  aggregate
purchase price of $391,000, including acquisition costs, exceeded the fair value
of the net assets acquired by approximately $397,000.

Pik:Nik Acquisition

     In April 1997, a newly  organized  wholly owned  subsidiary of the Company,
Pik:Nik Media, LLC,  acquired the assets and liabilities  relating to a business
of producing,  marketing and distributing free post cards containing advertising
images. As consideration for the purchase,  Pik:Nik paid the seller an aggregate
amount of  $69,000;  paid to certain  creditors  $20,000 and agreed to pay those
creditors an additional $240,000, plus interest, in installments over 36 months.
The Company also issued to the principals of the seller and certain creditors an
aggregate of 29,118 shares of the Company's common stock valued at approximately
$124,000;  and the Company agreed to pay additional amounts of cash and to issue
additional shares to the principals of the seller subject to the satisfaction of
certain  conditions  during each of the four successive  fiscal years commencing
July 1, 1997. The aggregate  purchase price of $576,000,  including  acquisition
costs,  exceeded  the fair value of the net  assets  acquired  by  approximately
$780,000.

     These  acquisitions  have been  accounted for using the purchase  method of
accounting. Accordingly, the purchase price of each of the acquisitions has been
allocated to the assets acquired and the liabilities assumed based on their fair
values at the respective date of the acquisition.  Included in intangible assets
is the excess of cost over the assets  acquired  and  liabilities  assumed.  The
results of operations of the  businesses  acquired are included in the Company's
consolidated results of operations from the respective dates of acquisition.

     The  following  unaudited  pro forma  information  is  presented  as if the
Company  had  completed  the   acquisitions   as  of  July  1,  1996  and  1995,
respectively:

                                                  Year ended       Year ended
                                                 June 30, 1997    June 30, 1996
                                                 -------------    -------------
     Net revenue...............................   $ 9,069,000      $ 8,548,000
     Net loss applicable to common stock.......    (6,736,000)      (4,037,000)
     Net loss per common share.................          (.77)            (.53)
     Common shares outstanding.................     8,715,000        7,504,000

     The pro  forma  information  above  is not  necessarily  indicative  of the
results of operations that would have occurred had the transactions been made at
the beginning of the respective periods.


                                      F-10
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


5.   Long-Term Debt

     A summary of long-term debt as of June 30, 1997 is as follows:

     Note Payable to Bank (A)................................   $3,500,000
     Subordinated Promissory Note (B)........................      469,000
     Junior Secured Promissory Notes ( C)....................    1,671,000
     Senior Indebtedness - Working Capital Line (D)..........      360,000
     Other (E)...............................................      224,000
                                                                ----------
                                                                 6,224,000
     Less current portion....................................     (949,000)
                                                                ----------
                                                                $5,275,000
                                                                ==========

     (A) In September  1996,  in  conjunction  with the  acquisition  of certain
assets (see Note 4), American Passage entered into a five year $3.5 million bank
loan (the "Loan").  The Loan is secured by all of American  Passage's assets and
is  guaranteed  by NET. The Loan is payable in quarterly  installments  with the
final  installment  due in September  2001.  In August 1997,  the bank agreed to
delay the principal payments  aggregating $350,000 due in June 1997 and December
1997 to the final  maturity of the Loan in September  2001.  Interest is payable
monthly at a variable  rate of interest set each ninety days based either on 400
basis points above LIBOR for U.S.  Dollar deposits of ninety day maturity or 100
basis  points above the prime rate of the Bank.  At June 30,  1997,  the current
rate of interest was 9.8% per annum.

     (B)  Additionally,  in September 1996,  American Passage issued a two-year,
unsecured subordinated  promissory note to the seller in the principal amount of
$750,000 bearing interest thereon at the rate of 8% per year, guaranteed by NET.
The note is payable in eight  equal  quarterly  installments  of  principal  and
accrued interest commencing in December 1996.

     (C ) In February  1997,  in  conjunction  with the  acquisition  of certain
assets (see Note 4), Campus Voice issued two junior secured  promissory notes in
the aggregate of  $1,563,000  with a maturity  date in December  2006.  The debt
accrues interest at the rate of 12.0%, but no interest or principal payments are
due to be paid until June 1999.  Subsequent  to such date,  interest  is payable
monthly and principal payments are due annually until full repayment in December
2006. Accrued interest is included in the outstanding amount shown above.

     (D) In connection with the Campus Voice  acquisition,  the seller agreed to
advance up to $660,000 of senior  indebtedness  which is to be used as a working
capital line for Campus Voice.  This senior debt accrues interest at the rate of
8.0% per annum and  requires  that the  interest  be paid  monthly and is due in
December  1999.  Campus  Voice is  obligated  to apply  its Free Cash  Flow,  as
defined, to prepayment of the senior indebtedness. As of June 30, 1997, $360,000
of such senior indebtedness had been advanced to Campus Voice.

     All of the Campus Voice debt is secured  solely by the assets and cash flow
of Campus Voice and is not an obligation of NET.

     (E) In April 1997, in  conjunction  with the  acquisition of certain assets
(see Note 4),  Pik:Nik  assumed  notes to  certain  of the  seller's  creditors,
aggregating  $240,000.  These notes bear interest at the rate of 8.0% per annum.
Principal  and  accrued  interest  are payable in monthly  installments  over 36
months. The final maturity of the notes is in May 2000.

     At June 30, 1997,  the aggregate  amounts of long-term  debt due during the
next five years are as follows:

       Year Ending June 30,
             1998............................................    $   949,000
             1999............................................        700,000
             2000............................................      1,266,000
             2001............................................        876,000
             2002 and thereafter.............................      2,433,000
                                                                 -----------
                                                                 $ 6,224,000
                                                                 ===========


                                      F-11
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


     The fair value of the long-term debt approximates net book value.

6.   Property and Equipment

     Property and equipment consists of the following at:

                                                 June 30, 1997    June 30, 1996
                                                 -------------    -------------
     Network theater equipment ..............      $4,024,000       $3,686,000
     Location based media equipment..........       1,693,000              --
     Furniture and office equipment..........         521,000           50,000
     Leasehold improvements..................          17,000              --
                                                   ----------       ----------
                                                    6,255,000        3,736,000
     Less accumulated amortization             
       and depreciation......................      (1,537,000)        (655,000)
                                                   ----------       ----------
                                                   $4,718,000       $3,081,000
                                                   ==========       ==========
                                                                
7.   Income Taxes                                                              

     At June 30, 1997,  the Company had a net operating  loss  carryforward  for
income tax purposes of approximately $7,029,000 that will begin to expire in the
year 2011. For financial reporting purposes, a valuation allowance of $2,832,000
has  been   recognized  to  offset  the  deferred  tax  asset  related  to  this
carryforward. The net operating loss carryforward at June 30, 1996 is subject to
limitations brought about by the Company's change of tax year end.  Accordingly,
only  one-sixth of the  approximately  $1,104,000 net operating loss may be used
per year for the next six years to offset income.

     Deferred income taxes reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the  Company's  deferred tax assets as of June 30, 1997 and June 30, 1996 are as
follows:

                                                 June 30, 1997    June 30, 1996
                                                 -------------    -------------
     Deferred tax assets:
       Net operating loss carryforwards......     $2,390,000        $  375,000
       Other.................................        442,000               --
                                                  ----------        ----------
     Total deferred tax assets...............      2,832,000           375,000
     Valuation allowance.....................     (2,832,000)         (375,000)
                                                  ----------        ----------
     Net deferred tax........................     $     --          $     --
                                                  ==========        ==========

     No federal tax  provision has been provided for at June 30, 1997 due to the
significant  losses incurred to date.  State tax provision has been provided for
at June 30, 1997 in the amount of $166,000.  These taxes are primarily  based on
net revenues and net assets.

8. Related Party Transactions

Programming Services Agreement

     In 1995,  the Company  entered into a consulting  agreement  with an entity
owned by Freddie  Fields and Jerome  Hellman  ("F&H")  pursuant to which Messrs.
Fields and  Hellman  served as  Chairman  and  President,  respectively,  of the
Company's  programming  division.  This  agreement  was  scheduled  to expire on
December 31, 1997. On May 20, 1997, the Company entered into a revised agreement
which  relieved  Messrs.  Fields  and  Hellman of their  obligation  to devote a
substantial  portion of their  business  time to the Company,  but provided that
each would  continue to be  available  to perform  consulting  services  for the
Company  and that Mr.  Fields,  at his  election,  would  continue to serve as a
director of the  Company.  F&H is entitled  to receive  royalties  of 10% of the
pre-tax income of the Company until December 1999.


                                      F-12
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


     F&H is  entitled to receive an annual fee for its  services.  For the years
ended June 30, 1997 and 1996 (unaudited), the six months ended June 30, 1996 and
the year ended December 31, 1995 such fees totaled $500,000,  $375,000, $225,000
and $300,000,  respectively,  and were fully  expensed.  The annual fees for the
year ended June 30, 1998 will be $275,000.  The Company may at any time elect to
pay 50% of the remaining balance in a single cash payment and 50% by issuing F&H
registered  shares of the Company's common stock.  However,  as of September 30,
1997, the Company has not elected to take this option.

     Additionally,  F&H receives an annual fee for overhead  (primarily relating
to the  Company's  office  in Los  Angeles,  California)  paid in equal  monthly
installments. The annual overhead fee for the years ended June 30, 1997 and 1996
(unaudited),  the six months ended June 30, 1996 and the year ended December 31,
1995 of $269,000,  $256,000,  $131,000  and  $250,000,  respectively,  was fully
expensed.  Such fees for the year  ended  June 30,  1998 will be  $138,000.  The
Company  believes that these  overhead fees are  comparable to terms which could
have been obtained from an unrelated third party.

     In December 1995 the Company also granted F&H an option to purchase 552,560
shares of common stock at an exercise  price of $1.58 per share which expires in
December 2005 if not exercised prior to that date.

9. Commitments

Leases

     The Company has various  leases for office  space.  Rental  expense for the
years ended June 30, 1997 and 1996  (unaudited),  the six months  ended June 30,
1996 and the year ended December 31, 1995 were approximately $278,000,  $47,000,
$32,000 and $20,000, respectively.

     The minimum  annual  rental  commitments  under  non-cancellable  operating
leases are as follows:

         Year Ending June 30,
                  1998.......................................    $  562,000
                  1999.......................................       519,000
                  2000.......................................       567,000
                  2001.......................................       284,000
                  2002.......................................       170,000
                                                                 ----------
                                                                 $2,102,000
                                                                 ==========

10.  Stockholders' Equity

     The Company  issued  2,645,000  warrants at the time of its Initial  Public
Offering  (See Notes 1 and 3). The  warrants  entitle the  registered  holder to
purchase  one  share  of the  Company's  common  stock  for  $5.00,  subject  to
adjustment  in  certain  circumstances,  at any time until  April 2,  2001.  The
warrants are redeemable by the Company,  upon consent of the  underwriter,  upon
notice of not less than 30 days,  at a price of $.10 per warrant,  provided that
the closing bid  quotation  of the common stock on all 20 trading days ending on
the third day prior to the day on which the  Company  gives  notice  has been at
least $7.50, as adjusted for certain dilutive events.

     In June 1997,  the Company sold an  aggregate  of  1,015,873  shares of its
common  stock.  The net proceeds of that sale of $3.8 million are being used for
general corporate purposes. The Company is obligated to register these shares as
soon as practicable.

11.  Stock Option Plan

     The Company has adopted a Stock  Option Plan (the "Plan") in order to grant
employees  providing  services to the Company incentive stock options.  The Plan
allows  for the  granting  of options to  purchase  up to 400,000  shares of the
Company's  stock.  The exercise price of the options granted in 1997 were at the
fair market value on the date of grant.


                                      F-13
<PAGE>

                           NETWORK EVENT THEATER, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 June 30, 1997


     The following table  summarizes the Plan's  transactions for the year ended
June 30, 1997 and for the six months ended June 30, 1996:

     Options granted.............................................    200,000
     Options canceled or expired.................................       --
     Options exercised...........................................       --
                                                                    --------
     Options outstanding at June 30, 1996........................    200,000
                                                                    ========

     Options granted.............................................    140,000
     Options canceled or expired.................................    (40,000)
     Options exercised...........................................       --
                                                                    --------
     Options outstanding at June 30, 1997........................    300,000
                                                                    --------
     Average price of options exercised..........................   $   -- 
     Weighted average exercise price at June 30, 1997 ...........   $   3.42
     Options exercisable at June 30, 1997........................    133,333
     Options available for future grant at June 30, 1997.........    100,000
     Options available for future grant at June 30, 1996.........    200,000

     The range of the exercise  prices for options  outstanding at June 30, 1997
was $3.00 to $5.00.

     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees,"  and related  interpretations  in accounting for
the Plan. Accordingly,  no compensation expense has been recognized for the Plan
to date. Had compensation cost for the Company's Plan been determined based upon
the fair value at the grant date for awards under the Plan  consistent  with the
methodology  prescribed under Financial Accounting Standards Board Statement No.
123, "Accounting for Stock-Based  Compensation," the Company's net loss and loss
per share would have been increased by approximately $232,000, or $.03 per share
and $34,000,  or $.01 per share for the year ended June 30, 1997 and for the six
months ended June 30, 1996, respectively.  The fair value of the options granted
during the year ended June 30,  1997 and the six months  ended June 30,  1996 is
estimated at $232,000 and $606,000, respectively, on the date of grant using the
Black-Scholes option-pricing model with the following assumptions:

      Assumption                                  June 30, 1997   June 30, 1996
      -----------                                 -------------   -------------
      Risk-free interest rate....................   5.91%           5.26%
      Dividend yield.............................   0%              0%
      Volatility factor of the expected market 
        price of the Company's common stock......   1.016           1.368
      Average life...............................   3 years         3 years

12.  401(k) Plan

     During  1997,  the Company  established  a 401(k) Plan (the "Plan") for the
benefit of all eligible  employees.  Eligible  participants  under this plan are
defined  as all  full-time  employees  with one year of  service.  All  eligible
participants may elect to contribute a portion of their compensation to the Plan
subject  to  Internal  Revenue  Service   limitations.   The  Company  may  make
discretionary  matching contributions to the plan, subject to board approval. In
1997 the amount of this matching expense was approximately $20,000.


                                      F-14
<PAGE>

                                   SIGNATURES

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

                                              NETWORK EVENT THEATER, INC.

                                              By:    /s/ HARLAN D. PELTZ
                                                 -------------------------------
                                                         Harlan D. Peltz
                                                   Chief Executive Officer and 
                                                      Chairman of the Board

Date:  September 29, 1997

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.

        Signature                         Title                     Date
        ---------                         ----                      ----

     /S/ HARLAN D. PELTZ        Chief Executive Officer and   September 29, 1997
-----------------------------      Chairman of the Board
       Harlan D. Peltz             (Principal Executive
                                   Officer)
                             
        /s/ DON LEEDS           President and Director        September 29, 1997
-----------------------------
          Don Leeds          
                             
     /s/ BRUCE L. RESNIK        Executive Vice President,     September 29, 1997
-----------------------------      Chief Financial Officer
       BRUCE L. RESNIK             and Secretary (Principal
                                   Financial Officer and
                                   Principal Accounting
                                   Officer)
                             
      /s/ FREDDIE FIELDS        Director                      September 29, 1997
-----------------------------
        Freddie Fields       
                             
                                Director                      September __, 1997
-----------------------------
         Jeffrey Berg        
                             
        /s/ JAN MILLER          Director                      September 29, 1997
-----------------------------
          Jan Miller         
                             
       /s/ METIN NEGRIN         Director                      September 29, 1997
-----------------------------   
         Metin Negrin        
                             
       /s/ JOSEPH TAHL          Director                      September 29, 1997
-----------------------------
         Joseph Tahl         
                             
     /s/ GEORGE LINDEMANN       Director                      September 29, 1997
-----------------------------
       George Lindemann      
                             

                                       14
<PAGE>

                                 EXHIBIT INDEX

Exhibit No.
-----------

3.1         Certificate of  Incorporation  (incorporated by reference to Exhibit
            3.1  to  the   Company's   Registration   Statement  on  Form  SB-2,
            Registration No. 33-80935, filed on March 6, 1996).

3.2         Certificate   of   Amendment   of   Certificate   of   Incorporation
            (incorporated   by  reference  to  Exhibit  3.2  to  the   Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

3.3         Bylaws  (incorporated  by reference to Exhibit 3.3 to the  Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

4.1         Warrant  Agreement  (incorporated by reference to Exhibit 4.1 to the
            Company's  Registration  Statement  on Form SB-2,  Registration  No.
            33-80935, filed on March 6, 1996).

4.2         Underwriter's  Warrant  (incorporated by reference to Exhibit 4.2 to
            the Company's Registration Statement on Form SB-2,  Registration No.
            33-80935, filed on March 6, 1996).

10.1        Employment  Stock  Option  Plan  of  the  Company  (incorporated  by
            reference to Exhibit 10.1 to the Company's Registration Statement on
            Form SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.2        Employment  Agreement  between  the  Company  and  Harlan  D.  Peltz
            (incorporated   by  reference  to  Exhibit  10.2  to  the  Company's
            Registration  Statement  on Form SB-2,  Registration  No.  33-80935,
            filed on March 6, 1996).

10.3        Employment Agreement between the Company and Don Leeds (incorporated
            by  reference  to  Exhibit 1 to the  Company's  Form  10-QSB for the
            quarterly period ended June 30, 1996).

10.4        Non-Incentive Stock Option Agreement dated June 17, 1996 between the
            Company and Don Leeds  (incorporated by reference to Exhibit 10.3 to
            the Company's  Form 10-QSB for the  quarterly  period ended June 30,
            1996).

10.5        Employment  Agreement  between  the  Company  and  Bruce  L.  Resnik
            (incorporated by reference to Exhibit 2 to the Company's Form 10-QSB
            for the quarterly period ended September 30, 1996).

10.6        Agreement dated December 19, 1995 between the Company and The Fields
            & Hellman Company  (incorporated by reference to Exhibit 10.4 to the
            Company's  Registration  Statement  on Form SB-2,  Registration  No.
            33-80935, filed on March 6, 1996).

10.7*       Revised  Agreement  dated May 20,  1997  between the Company and The
            Fields & Hellman Company.

10.8        NET Portfolio  Investors  Agreement  dated December 21, 1995 between
            the Company  and NET  Portfolio  Investors,  L.P.  (incorporated  by
            reference to Exhibit 10.5 to the Company's Registration Statement on
            Form SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.9        Form of  Shareholders  Agreement  between  Harlan  D.  Peltz and NET
            Portfolio Investors, L.P. (incorporated by reference to Exhibit 10.6
            to the Company's Registration  Statement on Form SB-2,  Registration
            No. 33-80935, filed on March 6, 1996).

10.10       Registration  Rights  Agreement  dated December 21, 1995 between the
            Company and NET Portfolio Investors, L.P. (incorporated by reference
            to Exhibit  10.7 to the  Company's  Registration  Statement  on Form
            SB-2, Registration No. 33-80935, filed on March 6, 1996).

10.11       Standard  Form of School  Contract  (incorporated  by  reference  to
            Exhibit 10.8 to the Company's  Registration  Statement on Form SB-2,
            Registration No. 33-80935, filed on March 6, 1996).

10.12       Asset  Purchase  Agreement  dated  September 13, 1996 among American
            Passage Media Corporation, Gilbert Scherer, the Company and American
            Passage Media,  Inc.  (incorporated by reference to Exhibit 2 to the
            Company's Form 8-K filed on September 28, 1996).

10.13       $750,000  Subordinated  Promissory Note from American Passage Media,
            Inc.  to  American  Passage  Media   Corporation   (incorporated  by
            reference to Exhibit 32 to the Company's Form 8-K filed on September
            28, 1996).


                                       15
<PAGE>

Exhibit No.
-----------

10.14       Guaranty  by  the  Company  in  favor  of  American   Passage  Media
            Corporation (incorporated by reference to Exhibit 4 to the Company's
            Form 8-K filed on September 28, 1996).

10.15       Option  Agreement  between the Company and  American  Passage  Media
            Corporation (incorporated by reference to Exhibit 5 to the Company's
            Form 8-K filed on September 28, 1996).

10.16       Directory  of  Classes  Representation  Agreement  between  American
            Passage  Media,   Inc.  and  American   Passage  Media   Corporation
            (incorporated  by reference to Exhibit 8 to the  Company's  Form 8-K
            filed on September 28, 1996).

10.17       Business Loan Agreement  between  American  Passage Media,  Inc. and
            Signet Bank (incorporated by reference to Exhibit 9 to the Company's
            Form 8-K filed on September 28, 1996).

10.18*      Letter  agreement  dated  August 18, 1997 between  American  Passage
            Media, Inc. and Signet Bank amending the Business Loan Agreement.

10.19       Promissory  Note from American  Passage  Media,  Inc. to Signet Bank
            (incorporated  by reference to Exhibit 10 to the Company's  Form 8-K
            filed on September 28, 1996).

10.20       Commercial  Security  Agreement between American Passage Media, Inc.
            and Signet  Bank  (incorporated  by  reference  to Exhibit 11 to the
            Company's Form 8-K filed on September 28, 1996).

10.21       Commercial  Guaranty  from  the  Company  in favor  of  Signet  Bank
            (incorporated  by reference to Exhibit 12 to the Company's  Form 8-K
            filed on September 28, 1996).

10.22       Commercial  Pledge and Security  Agreement from the Company in favor
            of Signet  Bank  (incorporated  by  reference  to  Exhibit 13 to the
            Company's Form 8-K filed on September 28, 1996).

10.23*      Bill of Sale and Agreement dated January 31, 1997 among SCCGS, Inc.,
            Sirrom Capital Corporation, Campus Voice, L.L.C. and the Company.

10.24*      Loan Agreement  dated January 31, 1997 between Campus Voice,  L.L.C.
            and Sirrom Investments, Inc.

10.25*      $660,000 Senior Secured Promissory Note from Campus Voice, L.L.C. to
            Sirrom Investments, Inc.

10.26*      $300,000 Junior Secured Promissory Note from Campus Voice, L.L.C. to
            SCCGS, Inc.

10.27*      $1,263,222.83  Second  Junior  Secured  Promissory  Note from Campus
            Voice, L.L.C. to SCCGS, Inc.

10.28*      Security  Agreement  dated  January 31, 1997 between  Campus  Voice,
            L.L.C. and Sirrom Investments, Inc.

10.29*      Trademark  and Patent  Security  Agreement  dated  January  31, 1997
            between Campus Voice, L.L.C. and Sirrom Investments, Inc.

10.30*      Asset  Purchase   Agreement  dated  April  11,  1997  among  Posters
            Preferred, Inc., Dennis Roche, Brian Gordon and the Company.

10.31*      Asset  Purchase  Agreement  dated April 30, 1997 among the  Company,
            Pik:Nik  Media,  LLC,  Pik:Nik,  LLC  and  Garth  Holsinger,  Annett
            Schaefer-Sell and Sunny Smith.

10.32*      Stock Purchase  Agreement dated June 24, 1997 among Warburg,  Pincus
            Emerging  Growth  Fund,  Inc.,  Small  Company  Growth  Portfolio of
            Warburg, Pincus Institutional Fund, Inc. and the Company.

10.33*      Registration  Rights  Agreement  dated June 24, 1997 among  Warburg,
            Pincus Emerging Growth Fund, Inc., Small Company Growth Portfolio of
            Warburg, Pincus Institutional Fund, Inc. and the Company.

21*         Subsidiaries of the Company.

23*         Consent of Ernst & Young LLP.

27*         Financial Data Schedule.

----------
*  Filed herewith.


                                       16