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================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                                    FORM 10-K

(Mark One)
[X]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d) OF THE  SECURITIES  AND
     EXCHANGE ACT OF 1934

                     FOR THE PERIOD ENDED DECEMBER 31, 2002

                                       OR

|_|  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  AND
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM              TO
                                                         ------------    -------

                         COMMISSION FILE NUMBER 0 - 1325


                               VICOM, INCORPORATED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                                    MINNESOTA
--------------------------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                  41 - 1255001
--------------------------------------------------------------------------------
                        (IRS Employer Identification No.)

              9449 Science Center Drive, New Hope, Minnesota 55428
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                   Telephone (763) 504-3000 Fax (763) 504-3060

                The Company's Internet Address: www.vicominc.net

     (Registrant's telephone number, facsimile number, and Internet address)

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

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

                    Common Stock ($0.01 par value per share)

<PAGE>

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  and Exchange Act
of 1934  during the  preceding  12 months (or for such  shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes |X| No |_|

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

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

                                 Yes |_| No |X|

     As of June 30, 2002, the aggregate market value of the voting stock held by
non-affiliates of the registrant,  computed by reference to the average high and
low prices on such date as reported  by the Nasdaq  Smallcap  was  approximately
$9,393,037.

     As of March 17,  2003,  there  were  13,642,405  outstanding  shares of the
registrant's common stock, par value $0.01 per share.

================================================================================

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                       Documents Incorporated By Reference

     Portions of the registrant's  definitive proxy statement to be filed within
120  days  after  the  end of  the  fiscal  year  covered  by  this  report  are
incorporated by reference into Part III hereof.

                                Table of Contents
<TABLE>
<CAPTION>
           Page
<S>        <C>
Part I     Item 1.  Business
                    Summary
                    Industry Overview
                    Products and Services
                    MultiBand, Inc.
                    Risk Factors
           Item 2.  Properties
           Item 3.  Legal Proceedings
           Item 4.  Submission of Matters to a Vote of Security Holders
Part II
           Item 5.  Market for the Registrant's Common Equity and Related Shareholder Matters
           Item 6.  Selected Financial Data
           Item 7.  Management's Discussion and Analysis of Financial Condition and Results of
                    Operations
          Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
           Item 8.  Consolidated Financial Statements and Supplementary Data
           Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial
                    Disclosure
Part III
          Item 10.  Directors and Executive Officers of the Registrant
          Item 11.  Executive Compensation
          Item 12.  Security Ownership of Certain Beneficial Owners and Management
          Item 13   Certain Relationships and Related Transactions
Part IV
          Item 14   Controls and Procedures
          Item 17   Exhibits, Financial Statement Schedules, and Reports on Form-8K
                    Signatures
</TABLE>



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Item 1

Business

     Vicom,  Incorporated (Vicom) is a Minnesota corporation formed in September
1975.  Vicom  is  the  parent  corporation  of  two  wholly-owned  subsidiaries,
Corporate Technologies, USA, Inc. (CTU), and MultiBand, Inc. (MultiBand).

     Vicom  completed an initial public offering in June 1984. In November 1992,
Vicom became a non-reporting  company under the Securities Exchange Act of 1934.
In July 2000, Vicom regained its reporting  company status.  In December,  2000,
Vicom stock began trading on the NASDAQ stock exchange under the symbol VICM.

     Vicom's website is located at: www.vicominc.net.

     Vicom recently  expanded its efforts to establish itself within the rapidly
evolving  telecommunications  and computer  industries.  Effective  December 31,
1998,  Vicom  acquired  the assets of the  Midwest  region of Enstar  Networking
Corporation (ENC), a data cabling and networking  company.  In late 1999, in the
context of a forward triangular  merger,  Vicom, to expand its range of computer
products  and  related  services,  purchased  the  stock of  Ekman,  Inc.  d/b/a
Corporate  Technologies,  and merged Ekman, Inc. into the newly formed surviving
corporation,  Corporate Technologies,  USA, Inc. (CTU). CTU provides voice, data
and video systems and services to business and government.  MultiBand,  Inc. was
incorporated in February 2000.  MultiBand,  Inc provides  voice,  data and video
services to multiple dwelling units (MDU's).

     As of March 17, 2003, CTU was providing  telephone equipment and service to
approximately 800 customers, with approximately 10,000 telephones in service. In
addition,  CTU provides  computer  products and services to approximately  2,100
customers. Telecommunications systems distributed by CTU are intended to provide
users  with  flexible,   cost-effective  alternatives  as  compared  to  systems
available from major telephone  companies,  including those formerly  comprising
the Bell System and from other interconnect telephone companies.

     CTU provides a full range voice, data and video communications  systems and
service,  system  integration,  training  and  related  communication  sales and
support  activities for commercial,  professional and  institutional  customers,
most of which are located in Minnesota and North Dakota.  CTU purchases products
and  equipment  from  NEC  America,  Inc.  (NEC),  Siemens  Enterprise  Networks
(Siemens),  Cisco Systems, Inc. (Cisco), Nortel Networks Corp. (Nortel), Tadiran
Telecommunications,  Inc.  (Tadiran),  and other manufacturers of communications
and  electronic  products  and  equipment.  CTU uses  these  products  to design
telecommunications systems to fit its customers' specific needs and demands.

     The products sold by CTU include Private Branch  Exchange (PBX),  telephone
systems, hubs and routers used as interconnection  devices in computer networks,
personal  computers,  desktop  video-conferencing  units, and the wire and cable
products required to make all the other  aforementioned  products  integrate and
operate as necessary.  CTU has trained  staff that install,  maintain and repair
the products we sell.  Repair of products is  performed  under either a time and
materials  basis  or an  extended  service  contract  basis,  at the  customer's
election, once the manufacturer's original warranty on a product has expired.

     Extended service contracts offered by CTU generally range in length from 12
to 36 months.  The contracts  provide for repair or replacement of all broken or
non-working   materials  and  the  labor  necessary  to  make  such  repairs  or
replacements,  subject  to  exceptions  for  customer  abuse or  negligence  and
problems due to fire, flood or other causes beyond CTU's control.


<PAGE>

     In February 2003, the Company formed a 50% owned subsidiary, Multiband USA,
Inc. This subsidiary will provide the digital  satellite signal to private cable
operations to multiple dwelling units.

     See Page 23 for financial information for each segment.

Industry Overview

     Vicom recently  expanded its efforts to establish itself within the rapidly
evolving telecommunications and computer industries.

     In the  current  climate of intense  global  competition  and  accelerating
technological  change,  businesses  increasingly  depend  upon  technology-based
solutions  to  enhance  their  competitive   position,   and  to  improve  their
productivity  and the quality of their products and services.  Today's  business
environment mandates the availability of efficient voice and video communication
channels  and  information  in  formats  suited  to a  wide  variety  of  users.
Businesses  are  looking  to a  variety  of  new  technologies  to  enhance  the
performance of their communication  systems and to allow Information  Technology
(IT)  systems  to  collect,  analyze  and  communicate  information  within  the
enterprise  and among  customers and  suppliers.  An  organization's  ability to
integrate  and deploy new  communication  and IT  technologies  in a unified and
cost-effective  manner has become critical to competing  successfully in today's
rapidly changing business environment.

     The  markets  and   technologies   for   communication   equipment  and  IT
applications  and  systems  continues  to converge  as  communication  equipment
migrates  from  proprietary  switches to  software-driven  systems  operating on
standardized computer platforms.  As a result,  businesses are integrating their
communication  and IT  systems.  As  previously  separate  communication  and IT
technologies converge and their interoperability  increases,  more organizations
will seek a unified technology solution. Vicom believes that these organizations
will  attempt  to  reduce  costs  and  management   complexity  by  establishing
relationships  with a small number of providers that offer a broad range of both
communication  and IT products and services  throughout the full life-cycle of a
project. Vicom believes it has positioned itself to be one of those providers.

     While   customers   continue  to  rely  heavily  on  technology  to  reduce
transaction  costs by  increasing  operational  efficiencies,  the  bias  toward
software-centric  solutions in lieu of hardware  continues.  Notwithstanding the
slow economic  conditions,  growth  continues to occur in areas such as customer
contact  solutions,   CTI  (computer  telephony  integration),   unified  media,
convergence (IP telephony), and mobility.

     Current financial  pressures also are making it increasingly  difficult for
communications  equipment  manufacturers to support a direct distribution model.
Most independent  distribution  channels lack an adequate geographic  footprint,
infrastructure,   processes,   and   resources   to   effectively   fulfill  the
manufacturer's  need to deploy complex high-end technology  solutions.  This has
resulted in the need for systems  integration and support services through third
party  providers.  A key competency being driven by the market is the ability to
effectively   integrate  disparate  technology  platforms  into  enterprise-wide
applications solutions.

     As a  result  of these  factors,  demand  for  communication  services  and
products  has been  relatively  flat.  Phillips  InfoTech  (InfoTech),  a market
research firm specializing in telecommunications  market information,  estimates
that the U.S. market for traditional  voice PBX systems will continue to decline
over the next five year as enterprises shift to converged solutions,  a combined
form of voice and data,  also  referred to as IP Telephony.  In 2001,  total PBX
line shipments declined 12.2% from the same period in 2000. In contrast, IP line
shipments  grew  nearly  230.0% to 1.6  million  lines  during the same  period.

<PAGE>

Purchases   associated   with   converged   solutions  are  forecasted  to  grow
approximately 29.0% between 2001 and 2002,  increasing to 47.8% growth from 2002
to 2003.  Recent  slowdowns in technology  spending may delay this  development,
however.  Overall revenues in the U.S. marketplace for voice and convergence are
projected to reach $5.6  billion by 2005.  Field  maintenance  and repair is the
largest,  but  slowest  growing  segment in services  associated  with the voice
marketplace.  This includes the maintenance and repair of PBX, Key/Hybrid, Voice
Processing:  IVR,  CTI,  ACD and fax.  Growth in 2001 was  estimated by Phillips
InfoTech at 2.8% to $4.2 billion,  with expected growth to $4.8 billion by 2005.
Spending in video conferencing  totaled an estimated $600.0 million in 2001, and
is  projected  to grow to $1.4  billion  by  2006,  while  the  audio  and  data
conferencing  market  is  projected  to grow to $2.4  billion  in 2004 from $1.7
billion in 2001,  according to Wainhouse  Research and Frost & Sullivan,  market
research firms specializing in collaboration and telecommunications data.


Products and Services

Corporate Technologies, USA (CTU)

     CTU provides other technical and customer services as described hereafter.

Pricing and Availability

     We use our volume and purchasing  power to achieve  competitive  pricing of
goods for our  clients.  We have the ability to provide a web-based  client site
that allows  clients to see  availability  and costs of hardware and software in
real time  through the Internet by accessing  current  pricing and  availability
from our manufacturers'  Internet websites.  This Internet-based model allows us
to extend product  procurement  services beyond the traditional 8 a.m. to 5 p.m.
schedule  and into a 7 days a week,  24 hours a day  service,  providing  a high
level of client flexibility.

Warranty Policy

     We strongly believe in the philosophy of "Service what you sell." We do not
knowingly  sell any  hardware  product  that we do not have  authorized  service
personnel  to  facilitate  any  warranty  work  that  needs to be  done.  We are
committed  to  fulfill  all  warranty  service  calls  in  accordance  with  the
manufacturer's warranty, which range in length from 30 days to one year from the
date of sale.

On Site and Depot Repair

     CTU  is  authorized  for  depot  and  on  site  warranty  repair  for  many
manufacturers,  including Apple Computers,  Nortel, Inc., Cisco, Hewlett Packard
Co., International Business Machines Corp. (IBM), Sun Microsystems, Inc., Compaq
Computer Corp., Xerox Corp., and Okidata Corp. With over $500,000 in spare parts
inventory,  we have made a conscious  effort to have the part clients need, when
they need it.

Wide Area Network Connectivity

     Our staff of Cisco and Nortel Wide Area  Network  (WAN)  trained  engineers
assist  organizations  with  integrating  their  multiple  sites,  allowing  the
exchange of information between geographically  separated sites. Our association
with local Internet  Service  Providers (ISPs) gives us the opportunity to offer
organizations  with  multiple  locations a single  source  provider  providing a
cost-effective solution to WAN needs.

<PAGE>


Technical Support for Networking

     We are committed to obtaining the highest vendor  authorizations  available
to  indicate  our  knowledge  and  expertise  to today's  complex  technological
environment.  Becoming the only  Microsoft  Solution  Partner,  Novell  Platinum
Reseller and Sun Microsystems Competency 2000 Certified reseller in North Dakota
is an indication of this  commitment.  Our staff of Certified  Novell  Engineers
(CNEs),  Microsoft  Certified System Engineers (MCSEs),  Sun Microsystems System
Engineers,  as well as certified  personnel in products such as Nortel and Cisco
routers,  gives CTU an  advantage  over other  resellers  in North  Dakota.  The
knowledge and skills of our system  engineers helps  organizations  meet today's
challenges  and  maintain  a  market  advantage.  Our  close  relationships  and
certification  levels with our vendors gives our staff access to resources  that
few other value added resellers can provide.

Training

     CTU is both a Novell  Authorized  Education  Center  (NAEC) and a Microsoft
Certified  Technical  Education Center (CTEC).  We also provide A+ Certification
training  and  end-user  training  on  most of  today's  most  popular  business
productivity  software,  either  on  site  or  at  our  Training  Center.  These
facilities  allow CTU and our clients to stay  current in today's  ever-changing
technology  environment.  We will be  evaluating  opportunities  to  expand  our
training center revenues to the other markets we serve.

Consulting

     As a  multi-service,  multi-vendor,  multi-site  integrator,  CTU  has  the
extensive  infrastructure  to offer  solutions to complex  technical  challenges
through our consulting service.  With years of experience in Local Area Networks
(LAN) and WAN technology,  our consultants are dedicated to finding the solution
that will solve our  customers'  needs now and in the future.  We  specialize in
providing an integrated cost-effective, single source solution.

Sales and Marketing

     As of  March  17,  2003,  we had 30  sales  and  marketing  personnel  with
expertise  in  telecommunications,  computers  and network  services.  CTU has a
consultative  approach  to  selling,  in  which  the  salesperson  analyzes  the
customer's  operations  and  then  designs  an  application-oriented   technical
solution to make the customer more  efficient and  profitable.  CTU uses several
techniques  to  pursue  new  customer   opportunities,   including  advertising,
participation in trade shows, seminars and telemarketing.

Customers

     CTU provides its products  and  services to  commercial,  professional  and
government  users  within  the  states  of  Minnesota  and North  Dakota.  CTU's
customers  are  diverse  and  represent  various  industries  such as  financial
services,  hospitality,  legal, manufacturing,  and education. In its year ended
December 31, 2002 CTU  received  approximately  22.8% of its  revenues  from two
customers, Merit Care and Microsoft Great Plains. In its year ended December 31,
2001,  CTU received  approximately  21.7 % of all revenues  from two  customers.
Those two customers  are  Microsoft  Great Plains and the State of North Dakota.
CTU received  approximately  27% of all revenues  from two customers in the year
2000.  These two  customers  are Great  Plains  Software  and the State of North
Dakota.


Customer Service

     CTU has 18 full-time  customer  service and related  support  personnel who
assist in project management  duties,  post-sale  communications  (which include
site surveys),  coordinated  network services,

<PAGE>

and end-user training.  Each key account is assigned its own individual customer
service representative to ensure efficient implementation.  The customer service
representative  works closely with the sales  representative and main technician
assigned to the project to facilitate the utmost in customer satisfaction.

Back Office

     Back office  refers to the hardware  and software  systems that support the
primary  functions of our operations,  including sales support,  order entry and
provisioning, and billing.

     Order  entry  involves  the  initial  loading  of  customer  data  into our
information  system.  Currently  our sales  representatives  take orders and our
customer  service  and  purchasing  representatives  load the  initial  customer
information  into our ILS  (Integrated  Logistic  System) billing and accounting
system. We use the ILS to manage and track the timely completion of each step in
the provisioning and installation  process. Our system is designed to enable the
sales or customer service representative to keep an installation on schedule and
notify the customer of any potential  delays.  Once an order has been completed,
we update our  billing  system to  initiate  billing of  installed  products  or
services.

Suppliers

     As previously  mentioned,  CTU purchases  products and equipment  from NEC,
Siemens,  Tadiran,  Cisco, Nortel, and other manufacturers of communications and
computer products.  The  telecommunication  products are purchased directly from
the  manufacturers.  The computer  products are purchased both directly from the
manufacturer and also indirectly from major wholesalers such as Ingram Micro and
Tech Data Corporation.

     In 2002,  Ingram  Micro  supplied  57.7% and Dell  Computer  11.8% of total
products purchased.  In 2001, Ingram Micro supplied 37.8% and Tech Data provided
18.9% of total products  purchased.  In 2000, Ingram Micro supplied 24% and Tech
Data provided 18% of total products purchased.

     The  products  CTU purchase  are  off-the-shelf  products.  CTU has several
alternate  suppliers of computer  products and could substitute any one of these
suppliers  with an  alternate  supplier  fairly  quickly  on the same or similar
terms.

     CTU  has  a   distribution   agreement  with  NEC,  its  main  supplier  of
telecommunication  products,  which expires June 30, 2003. CTU could replace NEC
with an alternate supplier fairly quickly,  but with a less competitive product.
However,  CTU's  replacement  of NEC could  have a  material  adverse  effect on
Vicom's business, operating results and financial condition.

MultiBand

     We have  expanded our  strategy to include the vast  potential of the multi
dwelling unit (MDU) market. Our experience in this market suggests that property
owners and managers are  currently  looking for a solution that will satisfy two
pressing  concerns.  The  first  problem  that they are  dealing  with is how to
satisfy the residents who desire to bring  satellite  television  service to the
unit without creating an eyesore or a structural/maintenance problem. The second
is how to allow competitive  access for local and long distance  telephone cable
television and Internet  services.  Our  MultiBandsm  offering  addresses  these
problems and provides the consumer several benefits, including:

     o    Lower Cost Per Service

     o    Blended Satellite and Cable Television Package


<PAGE>

     o    Multiple Feature Local Phone Services  (features such as call waiting,
          call forwarding and three-way calling)

     o    Better than Industry Average Response Times

     o    One Number for Billing and Service Needs

     o    One Bill for Local, Long Distance Cable Television and Internet

     o    "Instant On" Service Availability

     As we develop and market this  package,  we will keep a marketing  focus on
two levels of customer for this  product.  The primary  decision-makers  are the
property  owners/managers.  Their  concerns  are  focused  on  delivering  their
residents  reliability,  quality of service,  short  response  times,  minimized
disruptions  on the property,  minimized  alterations  to the property and value
added  services.  Each of these  concerns is addressed in our contracts with the
property owner,  which include annual reviews and 10 to 15 year terms as service
providers on the  property.  The  secondary  customer is the  end-user.  We will
provide the property with on-going marketing support for their leasing agents to
deliver clear, concise and timely information on our services. This will include
simple sign up options that should maximize our penetration of the property.

     When taken as a whole, and based on Vicom's  interpretations of U.S. Census
Bureau  statistics,  cable television,  telephone and internet services generate
over $170 billion of revenues  annually in the U.S.  These  statistics  indicate
stable growing markets with demand that is likely to deliver  significant values
to businesses that can obtain a subscriber base of any meaningful size.

Multiband Industry Analysis

Strategy

     For the near future, the services described below will be offered primarily
in Midwestern states.

Local Telephone Service

     Our primary  competition  will come from the local  incumbent  providers of
telephone and cable television services. In Minnesota, we expect to compete with
Qwest  (Qwest)  for  local  telephone  services  and  with  Comcast  for  PAY-TV
customers.  Although Qwest has become the standard for local telephone  service,
we believe we have the ability to underprice  their  service  while  maintaining
high levels of customer satisfaction.

Cable Television Service

     Comcast is the cable television service provider that has resulted from the
merger and acquisition of two  competitive  cable  providers.  This actually has
improved  the overall  continuity  of service.  However,  we have a  significant
consumer  benefit  in  that  we are  establishing  private  rather  than  public
television systems,  which allows us to deliver a package that is not laden with
local "public access" stations that clog the basic service package.  In essence,
we will be able to deliver a customized  service offering to each property based
upon pre-installation market research that we perform.

Long Distance Telephone Service

     AT&T  Corp.,  MCI  WorldCom  Inc.,  and  Sprint  Corp.  are  our  principal
competitors  in  providing  long  distance  telephone  service.  They  offer new
products  almost weekly.  Our primary  concern in this

<PAGE>

marketplace is to assure that we are competitive with the most recent advertised
offerings in the "long  distance  wars." We will meet this  challenge by staying
within a penny of the most  current  offering,  while still  maintaining  a high
gross margin on our product.  We accomplish  this through various carrier agency
associations.  We expect to  generate a high  penetration  in our long  distance
services amongst our local service  subscribers  because private property owners
in the  shared  tenant  environment  (similar  to a hotel  environment)  are not
required to offer multiple long distance carriers to their tenants.

Internet Access Service

     The clear  frontrunners  in this  highly  unregulated  market  are  America
Online,  Inc. and CompuServe  Corp.  They compete with local exchange  carriers,
long  distance  carriers,  Internet  backbone  companies  and  many  local  ISPs
(Internet  Service  Providers).  Competition  has  driven  this  to a flat  rate
unlimited access dial-up service market.  The general concern among consumers is
the quality of the connection and the speed of the download. Our design provides
the highest connection speeds that are currently available. The approach that we
will market is "blocks of  service."  Essentially,  we deliver the same high bit
rate service in small,  medium and large packages,  with an appropriate per unit
cost  reduction  for  those  customers  that  will  commit  to a higher  monthly
expenditure.

Market Description

     We  are  currently  marketing   MultiBandsm  to  MDU  properties  primarily
throughout  Minnesota.  We are focusing on properties that consist of 50 or more
units. We will target properties that range from 50 to 150 units on a contiguous
MDU property for television and Internet access only. We will survey  properties
that exceed 150 units for the  feasibility of local and long distance  telephone
services.

     We are initially  concentrating on middle to high-end rental complexes.  We
are also pursuing  selected college campus  apartment  buildings and resort area
condominiums.  A recent U.S.  Census Bureau table  indicates that there are more
than 65,000  properties in the United States that fit this profile.  Assuming an
average of 100 units per complex, our focus is on a potential subscriber base of
6,500,000.

     A recent Property  Owners and Manager Survey,  published by the U.S. Census
Bureau and dated March 28, 2000,  shows that the rental  properties are focusing
on improving  services and amenities that are available to their tenants.  These
improvements  are being  undertaken to reduce tenant  turnover,  relieve pricing
pressures on rents and attract  tenants from  competing  properties.  We believe
that  most of these  owners  or  managers  are not  interested  in being "in the
technology  business" and will use the services  that we are  offering.  Various
iterations of this package will allow the owners to share in the residual income
stream from the subscriber base.

Number of Units/Customers

     At December 31, 2002, MultiBand had 2,870 units wired for service and 1,125
customers using its services.



Backlog

     At December 31, 2002,  MultiBand was projecting that in 2003, it would wire
for its  services  in  excess  of  6,000  multi-dwelling  units.  The  Company's
timetable for  completing  and its ability to complete  these  installations  is
contingent  on its  ability to raise  additional  debt and/or  equity  financing
necessary to fund the installations.


<PAGE>

Employees

     As of March 15, 2003, Vicom employed four full-time  management  employees.
As of that same date, CTU had 111 full-time employees, consisting of 30 in sales
and marketing,  45 in technical  positions,  18 in customer  service and related
support,  10 in management and 8 in administration and finance.  As of March 15,
2003,  MultiBand,  Inc. has 2 full-time employees,  one in sales and the rest in
operations.

Risk Factors

     Our  operations  and our  securities  are  subject  to a number  of  risks,
including  but not limited to those  described  below.  If any of the  following
risks actually occur, the business,  financial condition or operating results of
Vicom and the trading  price or value of our common  stock  could be  materially
adversely affected.

General

     Vicom,  since 1998,  has taken  several  significant  steps to reinvent and
reposition  itself to take  advantage of  opportunities  presented by a shifting
economy and industry environment.

     Recognizing that voice,  data and video  technologies in the late twentieth
century were  beginning to  systematically  integrate as industry  manufacturers
were  evolving  technological  standards  from "closed"  proprietary  networking
architectures to a more "open" flexible and integrated approach,  Vicom, between
1998 and 2001,  purchased three competitors which, in the aggregrate,  possessed
expertise  in data  networking,  voice and data  cabling and video  distribution
technologies.

     In early  2000,  Vicom  created its  Multiband  subsidiary,  employing  the
aforementioned  expertise,  to provide communications and entertainment services
(local dial tone,  long  distance,  high-speed  internet and expanded  satellite
television  services) to residents in  Multi-Dwelling-Unit  properties (MDUs) on
one billing platform.  Although  Multiband related revenues  (installations  and
recurring  subscriber  fees) should  account for less than 10% of overall  Vicom
revenues  in  2002,  Vicom  expects   Multiband  related  revenues  to  increase
significantly  in 2003 as a percentage of overall  revenues.  These revenues are
expected to provide  higher gross  margins than the company's  more  traditional
sales to commercial enterprises.

     The specific risk  factors,  as detailed  below,  should be analyzed in the
context of the Company's anticipated Multiband related growth.

Net Losses

     The Company had net losses of $4,438,059 for the fiscal year ended December
31, 2002, $5,325,552 for the fiscal year ended December 31, 2001, and $4,235,831
for the fiscal year ended December 31, 2000. Vicom may never be profitable.

     The prolonged effects of generating losses without  additional  funding may
restrict our ability to pursue our business  strategy.  Unless our business plan
is  successful,  an investment in our common stock may result in a complete loss
of an investor's capital.

     If we cannot achieve profitability from operating activities, we may not be
able to meet:

     o    our capital expenditure objectives;

     o    our debt service obligations; or

     o    our working capital needs.


<PAGE>

Dependence on Asset-Based Financing

     Vicom currently depends on asset-based  financing to purchase product,  and
we cannot  guarantee  that  such  financing  will be  available  in the  future.
Furthermore,  we need additional  financing to support the anticipated growth of
our Multiband  subsidiary.  We cannot  guarantee  that we will be able to obtain
this additional financing.

     However,  the Company  recently  introduced a program  where it can control
capital  expenditures by contracting  Multiband services and equipment through a
landlord or third party  investor  owned  equipment  program.  This program both
significantly   reduces  any  Company  expenditures  in  a   Multi-dwelling-unit
installation  and permits the  Company to record  revenues  from the third party
sale of said equipment.

Goodwill

     In June 2001,  the  Financial  Accounting  Standards  Board (FASB)  adopted
Statement of Financial  Accounting  Standards  (SFAS) 142,  "Goodwill  and Other
Intangible  Assets" which changes the  amortization  rules on recorded  goodwill
from a monthly amortization to a periodic "impairment" analysis for fiscal years
beginning after December 15, 2001. In 2002, the Company  retained an independent
outside  expert to evaluate the impact of this new  Accounting  standard and the
expert concluded there was no impairment to goodwill. However, the Company could
be subject to a determination that its goodwill is impaired in the future. As of
December  31,  2002,  the Company had recorded  goodwill of  approximately  $2.7
million.

Deregulation

     Several regulatory and judicial  proceedings have recently  concluded,  are
underway or may soon be commenced that address issues  affecting  operations and
those of our competitors,  which may cause significant  changes to our industry.
We cannot predict the outcome of these developments,  nor can we assure you that
these changes will not have a material  adverse effect on us.  Historically,  we
have been a reseller of products and  services,  not a  manufacturer  or carrier
requiring  regulation of its  activities.  Pursuant to Minnesota  statutes,  our
Multiband  activity is specifically  exempt from the need to tariff our services
in multiple dwelling units (MDUs).  However, the  Telecommunications Act of 1996
provides  for  significant  deregulation  of  the  telecommunications  industry,
including  the  local  telecommunications  and  long-distance  industries.  This
federal  statute and the related  regulations  remain subject to judicial review
and additional rule-makings of the Federal Communications Commission,  making it
difficult  to  predict  what  effect  the  legislation  will  have  on  us,  our
operations, and our competitors.

Dependence on Strategic Alliances

     Vicom  has  a  distribution  agreement  with  NEC,  its  main  supplier  of
telecommunication  products,  which  expires June 30, 2003. An  interruption  or
substantial  modification of Vicom's  distribution  relationship  with NEC could
have a  material  adverse  effect on Vicom's  business,  operating  results  and
financial condition.

     In addition,  several suppliers,  or potential  suppliers of Vicom, such as
McLeod, WorldCom, WS Net, XO Communications and others have filed for bankruptcy
in recent  years.  While the  financial  distress of its  suppliers or potential
suppliers  could  have a material  adverse  effect on  Vicom's  business,  Vicom
believes that enough  alternate  suppliers exist to allow the Company to execute
its business plans.

Changes in Technology

     A portion of our projected future revenue is dependent on public acceptance
of broadband,  and

<PAGE>

expanded  satellite  television  services.   Acceptance  of  these  services  is
partially  dependent  on  the  infrastructure  of  the  internet  and  satellite
television which is beyond Vicom's  control.  In addition,  newer  technologies,
such as video-on-demand, are being developed which could have a material adverse
effect on the Company's competitiveness in the marketplace if Vicom is unable to
adopt or deploy such technologies.

Attraction and Retention of Employees

     Vicom's  success  depends  on  the  continued  employment  of  certain  key
personnel,  including  executive  officers.  If Vicom were unable to continue to
attract and retain a sufficient number of qualified key personnel, its business,
operating  results and financial  condition  could be  materially  and adversely
affected.  In  addition,  Vicom's  success  depends on its  ability to  attract,
develop,  motivate and retain highly skilled and educated  professionals  with a
wide  variety of  management,  marketing,  selling and  technical  capabilities.
Competition  for such  personnel  is intense  and is expected to increase in the
future.

Business Growth and Scalability

     Vicom's  Multiband  subsidiary,  as of December  31,  2002,  was  providing
communications  and entertainment  services to ten MDUs located in Minnesota and
North Dakota. Vicom needs to provide products and services to additional MDUs if
it is to become  profitable.  Vicom may need to go beyond its current geographic
territory to increase its MDU customers and attract additional financing.

     In  expanding  the  provision  of its  services  to  MDUs  in  its  current
territories  and beyond,  Vicom needs to  successfully  overcome a number of the
factors  listed  above  such as  attracting  the  capital  to  finance  expanded
installations, obtaining additional technical staff for installation and support
in its present  markets and beyond;  and extending its key vendor  relationships
into other markets.

Intellectual Property Rights

     Vicom relies on a  combination  of trade secret,  copyright,  and trademark
laws,  license  agreements,   and  contractual  arrangements  with  certain  key
employees to protect its proprietary  rights and the proprietary rights of third
parties from which Vicom licenses  intellectual  property.  If it was determined
that Vicom infringed the  intellectual  property  rights of others,  it could be
required to pay substantial  damages or stop selling  products and services that
contain  the  infringing  intellectual  property,  which  could  have a material
adverse  effect  on  Vicom's  business,   financial  condition  and  results  of
operations.  Also, there can be no assurance that Vicom would be able to develop
non-infringing  technology  or that it could  obtain a license  on  commercially
reasonable  terms, or at all.  Vicom's success depends in part on its ability to
protect the  proprietary  and  confidential  aspects of its  technology  and the
products  and  services  it  sells.  There  can be no  assurance  that the legal
protections  afforded  to Vicom or the steps  taken by Vicom will be adequate to
prevent misappropriation of Vicom's intellectual property.



Variability of Quarterly Operating Results; Seasonality

     Variations in Vicom's revenues and operating  results occur from quarter to
quarter  as a result  of a number of  factors,  including  customer  engagements
commenced  and  completed  during a quarter,  the number of  business  days in a
quarter,  employee  hiring and  utilization  rates,  the ability of customers to
terminate  engagements  without  penalty,  the size and scope of assignments and
general economic  conditions.  Because a significant portion of Vicom's expenses
are  relatively  fixed,  a variation  in the number of customer  projects or the
timing of the  initiation  or  completion  of projects  could cause  significant
fluctuations in operating  results from quarter to quarter.  Further,  Vicom has
historically experienced a seasonal fluctuation in its operating results, with a
larger  proportion of its revenues and  operating  income  occurring  during the
third quarter of the fiscal year.


<PAGE>

Certain Anti-Takeover Effects

     Vicom is subject to Minnesota statutes regulating business combinations and
restricting  voting rights of certain persons  acquiring shares of Vicom.  These
anti-takeover statutes may render more difficult or tend to discourage a merger,
tender offer or proxy contest,  the assumption of control by a holder of a large
block of Vicom's securities, or the removal of incumbent management.

Volatility of Vicom's Common Stock

     The  trading  price  of our  common  stock  has been  and is  likely  to be
volatile.  The  stock  market  has  experienced  extreme  volatility,  and  this
volatility has often been  unrelated to the operating  performance of particular
companies.  We cannot be sure that an active  public market for our common stock
will continue after this offering.  Investors may not be able to sell the common
stock at or above the price they paid for their common stock,  or at all. Prices
for the common stock will be determined in the marketplace and may be influenced
by many  factors,  including  variations in our  financial  results,  changes in
earnings estimates by industry research analysts,  investors'  perceptions of us
and general economic, industry and market conditions.

Future Sales of Our Common Stock May Lower Our Stock Price

     If our  existing  shareholders  sell a large number of shares of our common
stock,  the market price of the common stock could  decline  significantly.  The
perception in the public market that our existing shareholders might sell shares
of common stock could depress our market price.

FORWARD-LOOKING STATEMENTS

     This document  contains  forward-looking  statements  within the meaning of
federal   securities  law.   Terminology   such  as  "may,"  "will,"   "expect,"
"anticipate,"  "believe,"  "estimate,"  "continue,"  "predict," or other similar
words,  identify  forward-looking  statements.  These statements  discuss future
expectations,  contain  projections  of results of  operations  or of  financial
condition or state other forward-looking information. Forward-looking statements
appear in a number of places in this prospectus and include statements regarding
our intent,  belief or current  expectation  about,  among other things,  trends
affecting  the  industries  in which we operate,  as well as the  industries  we
service,  and our business and growth  strategies.  Although we believe that the
expectations  reflected  in  these  forward-looking   statements  are  based  on
reasonable assumptions,  forward-looking statements are not guarantees of future
performance  and  involve  risks and  uncertainties.  Actual  results may differ
materially from those predicted in the forward-looking statements as a result of
various factors, including those set forth in "Risk Factors."


Item 2:

Properties

     Vicom and its  subsidiaries  lease  principal  offices located at 2000 44th
Street SW, Fargo,  ND 58103 and 9449 Science Center Drive,  New Hope,  Minnesota
55428.  We have no foreign  operations.  The main Fargo office lease  expires in
2017 and covers  approximately  22,500  square feet.  The Fargo base rent ranges
from $21,577 to $24,360 per month. The New Hope office lease expires in 2006 and
covers  approximately  47,000  square  feet.  The New Hope base rent ranges from
$16,640 to $17,653 per month. Both the New Hope and Fargo leases have provisions
that call for the  tenants to pay net  operating  expenses,  including  property
taxes,  related to the  facilities.  Both  offices have  office,  warehouse  and
training facilities.


<PAGE>

     Vicom considers its current  facilities  adequate for its current needs and
believes that suitable additional space would be available as needed.

Item 3:

Legal Proceedings

     The  Company  is  involved  in legal  actions  in the  ordinary  course  of
business. However, as of December 31, 2002, Vicom was not engaged in any pending
legal  proceedings  where,  in the opinion of the Company and its  counsel,  the
outcome is likely to have a material adverse effect upon the business, operating
results and financial condition of the Company.

Item 4:

Submission of Matters to a vote of Security Holders

     The Company did not submit matters to a vote of security holders during the
last quarter of the fiscal year covered by this report.


<PAGE>



Item 5:

Market for the Registrant's Common Stock and Related Shareholder Matters

     Through May 17, 2000, Vicom's common stock was traded and quoted on the OTC
Bulletin  Board(R)  ("OTCBB")  under the symbol  "VICM." From May 18, 2000 until
August 21,  2000,  the common stock was quoted under the VICM symbol on the Pink
Sheets(R)  operated by Pink Sheets LLC.  From August 21,  2000,  to December 12,
2000,  Vicom's  common  stock was traded and quoted on the OTCBB  under the VICM
symbol.  Since then, the stock has been traded and quoted on the Nasdaq Smallcap
market  system.  The table  below sets forth the high and low bid prices for the
common stock  during each  quarter in the two years ended  December 31, 2001 and
December  31,  2002 and as  provided  by Nasdaq,  the OTCBB or the Pink  Sheets.
Market quotations  provided herein represent  inter-dealer prices without retail
mark-up,  mark-down  or  commission  and may not  necessarily  represent  actual
transactions.

            Quarter Ended                              High Bid      Low Bid
            -------------                              --------      -------
March 31, 2001 .........................                5.25           3.00
June 30, 2001 ..........................                4.38           2.38
September 30, 2001 .....................                3.00           1.01
December 31, 2001 ......................                2.14            .91
March 31, 2002 .........................                1.90           1.37
June 30, 2002 ..........................                1.75            .80
September 30, 2002 .....................                 .92            .52
December 31, 2002 ......................                1.12            .50

     As of March 17, 2003,  Vicom had 518  shareholders  of record of its common
stock and 13,642,405 shares of common stock outstanding.  As of that date, eight
shareholders  held a total of 27,831 of Class A Preferred,  one shareholder held
6,200 shares of Class B  Preferred,  five  shareholders  held a total of 127,510
shares  of Class C  Preferred,  and  seven  shareholders  held a total of 70,000
shares of Class E Preferred.

Recent Sales of Unregistered Securities

     The Company in 2002 issued  $460,000  worth of its common  stock to Pyramid
Trading LP. The common stock was issued at various prices  pursuant to a formula
tied to the trading price of the Company's common stock.

     The Company,  in the fourth quarter of 2002, issued $700,000 worth of Class
E Preferred Stock to various accredited investors.

     At various other times in 2002, the Company,  via  conversions of preferred
stock or investor  purchases of common  stock,  issued  common shares at various
prices.

     In  connection   with  these  sales,   we  relied  on  the  exemption  from
registration  provided by Sections 4(2) and 4(6) of the  Securities Act of 1933,
as well as Rule 506 of  Regulation D based on (i) our belief that the  issuances
did not involve a public offering,  (ii) the transactions involved fewer than 35
purchasers,  and (iii) because we had a reasonable basis to believe that each of
the shareholders  were either  accredited or otherwise had sufficient  knowledge
and  sophistication,  either  alone  or  with  a  purchaser  representative,  to
appreciate and evaluate the risks and merits  associated  with their  investment
decision.

<PAGE>


Common Stock

     Holders of common  stock are  entitled to one vote per share in all matters
to be voted upon by shareholders. There is no cumulative voting for the election
of directors,  which means that the holders of shares  entitled to exercise more
than 50% of the voting rights in the election of directors are able to elect all
of the directors.  Vicom's Articles of Incorporation provide that holders of the
Company's  common stock do not have  preemptive  rights to subscribe  for and to
purchase additional shares of common stock or other obligations convertible into
shares of common stock which may be issued by the Company.

     Holders of common  stock are  entitled  to receive  such  dividends  as are
declared by Vicom's Board of Directors  out of funds  legally  available for the
payment of dividends.  Vicom  presently  intends not to pay any dividends on the
common stock for the  foreseeable  future.  Any future  determination  as to the
declaration and payment of dividends will be made at the discretion of the Board
of  Directors.  In the event of any  liquidation,  dissolution  or winding up of
Vicom,  and  subject to the  preferential  rights of the  holders of the Class A
Preferred,  Class B Preferred,  Class C Preferred, Class D Preferred and Class E
Preferred,  the  holders of common  stock will be entitled to receive a pro rata
share of the net  assets of Vicom  remaining  after  payment  or  provision  for
payment of the debts and other liabilities of Vicom.

     All  of  the  outstanding  shares  of  common  stock  are  fully  paid  and
non-assessable.  Holders of common  stock of Vicom are not  liable  for  further
calls or assessments.


Preferred Stock

     In December  1998,  Vicom  issued  2,550  shares of Class A  Preferred  for
$23,638  and  37,550  shares  of Class B  Preferred  for  $359,893.  The Class B
Preferred was offered to certain note holders at a conversion rate of $10.00 per
share  of  Class B  Preferred.  Each  share of  Class A  Preferred  and  Class B
Preferred is non-voting  (except as otherwise  required by law) and  convertible
into  five  shares  of  common   stock,   subject  to   adjustment   in  certain
circumstances.  Each holder of a share of Class A Preferred or Class B Preferred
has a  five-year  warrant  to  purchase  one share of common  stock at $3.00 per
share, subject to adjustment. During 2001, Vicom issued 67,655 shares of Class A
Preferred for $676,556.

     In June 2000, Vicom issued 80,500 shares of Class C Preferred for $805,000.
The Class C Preferred  was offered to certain note holders at a conversion  rate
of $10.00 a share. In September 2000,  Vicom issued an additional  72,810 shares
of Class C Preferred for $728,100. Each share of Class C Preferred is non-voting
(except as otherwise  required by law) and convertible  into two shares of Vicom
common stock, subject to adjustment in certain circumstances.

     In November  2000,  Vicom  issued  72,500  shares of Class D Preferred  for
$490,332. The Class D Preferred was sold to eight accredited investors at $10.00
per share.  Each share of Class D Preferred is  non-voting  (except as otherwise
required by law) and  convertible  into two and one-half  shares of Vicom Common
Stock, subject to adjustment in certain circumstances.

     In the second  quarter of 2002,  Preferred  Class D stocks  were  redeemed;
$100,000 converted to Common Stock, and $300,000 converted to a Note Payable.

     In the  fourth  quarter  of 2002,  Vicom  issued  70,000  shares of Class E
Preferred  for $700,000,  with $600,000  related to conversion of a note payable
from a director of the Company into Preferred Stock.

     The holders of the Class A Preferred, Class B Preferred, Class C Preferred,
Class D Preferred and Class E Preferred  (collectively,  "Preferred  Stock") are
entitled to receive, as and when declared by the Board, out of the assets of the
Company  legally  available  for  payment  thereof,  cumulative  cash  dividends
calculated  based on the $10.00 per share stated value of the  Preferred  Stock.
The per annum  dividend rate is

<PAGE>

eight percent (8%) for the Class A Preferred and ten percent (10%) for the Class
B  Preferred  and  Class C  Preferred,  fourteen  percent  (14%) for the Class D
Preferred  and fifteen  percent  (15%) in the Class E  Preferred,  to be paid in
kind.  Dividends  on the  Class A  Preferred,  Class  C  Preferred  and  Class D
Preferred are payable quarterly on March 31, June 30, September 30, and December
31 of each year.  Dividends on the Class B Preferred are payable  monthly on the
first day of each  calendar  month.  Dividends  on the  Preferred  Stock  accrue
cumulatively  on a  daily  basis  until  the  Preferred  Stock  is  redeemed  or
converted.

     In the event of any  liquidation,  dissolution or winding up of Vicom,  the
holders of the Class A  Preferred  and Class B  Preferred  will be  entitled  to
receive a  liquidation  preference  of $10.50 per share,  and the holders of the
Class C Preferred,  Class D Preferred and Class E Preferred  will be entitled to
receive  a  liquidation   preference  of  $10.00  per  share,  each  subject  to
adjustment. Any liquidation preference shall be payable out of any net assets of
Vicom  remaining  after  payment or provision for payment of the debts and other
liabilities of Vicom.

     Vicom may redeem the Preferred  Stock, in whole or in part, at a redemption
price of $10.50 per share for the Class A  Preferred  and the Class B  Preferred
and $10.00 per share for the Class C  Preferred,  Class D Preferred  and Class E
Preferred  (subject to adjustment,  plus any earned and unpaid dividends) on not
less than thirty days' notice to the holders of the  Preferred  Stock,  provided
that the closing bid price of the common stock exceeds $4.00 per share  (subject
to adjustment) for any ten consecutive  trading days prior to such notice.  Upon
Vicom's  call for  redemption,  the holders of the  Preferred  Stock  called for
redemption  will have the option to convert each share of  Preferred  Stock into
shares  of  common  stock  until the  close of  business  on the date  fixed for
redemption, unless extended by Vicom in its sole discretion. Preferred Stock not
so converted will be redeemed. No holder of Preferred Stock can require Vicom to
redeem his or her shares.

Equity Compensation

     The  following  table  sets  forth  certain  information  regarding  equity
compensation plan information as of December 31, 2002.

                      Equity Compensation Plan Information


<TABLE>
<CAPTION>
                                               Number of Securities                                 Number of securities
                                                 to be issued upon         Weighted-average       remaining available for
                                                    exercise of           exercise price of        future issuance under
                                               outstanding options,      outstanding options,    equity compensation plans
                                                   warrants and        warrants and restricted     (excluding securities
                                                 restricted stock               stock             reflected in column (a))
                                                 ----------------               -----             ------------------------
                                                        (a)                      (b)                          (c)
Equity compensation plans approved by
<S>                                                  <C>                         <C>                     <C>
security holders                                     1,093,157                   2.45                    2,106,843
Equity  compensation  plans not  approved by
security holders                                     4,372,462                   2.05                         N/A
                                                     ---------                                           --------
Total                                                5,465,619                                           2,106,843
</TABLE>


Item 6:

Selected Consolidated Financial Data

     The following  selected  financial data should be read in conjunction  with
our consolidated  financial statements including the accompanying notes and with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".  The data for each of the  fiscal  years in the three  year  period
ended  December 31, 2002,  have been  derived  from our  consolidated  financial
statements and accompanying notes contained in this prospectus. The Statement of
Operations  Data for the years ended  December  31, 1999 and1998 and the Balance
Sheet data at December 31, 2000, 1999 and 1998 has been derived from our audited
consolidated financial statements which are not contained in this filing.




<PAGE>
<TABLE>
<CAPTION>

Statement of Operations Data        2002              2001              2000              1999              1998
----------------------------    ------------      ------------      ------------      ------------      ------------
<S>                             <C>               <C>               <C>               <C>               <C>
Revenues ...................    $ 24,540,969      $ 32,260,777      $ 39,781,846      $ 20,388,870      $  6,458,113
Cost of products and
   services ................    $ 18,036,750      $ 25,245,186      $ 31,698,569      $ 16,247,898      $  4,841,111
Gross profit ...............    $  6,504,219      $  6,965,591      $  8,083,277      $  4,140,972      $  1,617,002
% of revenues ..............            26.5%             21.6%             20.3%             20.3%             25.0%
Selling, general and
 administrative expenses ...    $  9,337,292      $ 10,962,739      $ 11,852,041      $  5,823,945      $  2,839,862
% of revenues ..............            38.0%             34.0%             29.8%             28.6%             44.0%
Loss from Operations .......    $ (2,833,073)     $ (3,997,148)     $ (3,768,764)     $ (1,682,973)     $ (1,222,860)
Other expense net ..........    $ (1,604,986)     $ (1,328,404)     $   (458,067)     $   (139,461)     $   (170,888)
Loss before income taxes        $ (4,438,059)     $ (5,325,552)     $ (4,226,831)     $ (1,822,434)     $ (1,393,748)
Income tax provision .......    $          0      $          0      $      9,000      $    241,200      $     50,000
Net Loss ...................    $ (4,438,059)     $ (5,325,552)     $ (4,235,831)     $ (2,063,634)     $ (1,443,748)
Loss attributable to common
   stockholders ............    $ (4,591,637)     $ (5,758,221)     $ (5,082,011)     $ (2,101,603)     $ (1,443,748)
Loss per common share-basic
   and diluted .............    $       (.39)     $       (.66)     $      (0.72)     $      (0.55)            (0.68)
Weighted average shares
   outstanding .............      11,735,095         8,762,814         7,009,751         3,821,978         2,129,387


Balance Sheet Data                  2002              2001              2000              1999              1998
----------------------------    ------------      ------------      ------------      ------------      ------------
Working capital
   (deficiency) ............    $   (252,870)     $    426,549      $  2,870,114      $ (2,882,907)     $    (43,161)
Total assets ...............    $ 10,347,316      $ 12,209,681      $ 15,614,573      $ 12,598,745      $  6,630,917
Long-term debt .............    $  3,273,350      $  3,311,870      $  3,362,083      $    926,821      $    826,490
Stockholders' equity .......    $  2,642,285      $  4,184,001      $  5,876,352      $  1,026,344      $    689,775
</TABLE>

Item 7:

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION

     The  following  discussion  of  the  financial  condition  and  results  of
operations  of  Vicom,  Incorporated  should  be read in  conjunction  with  the
Condensed  Consolidated  Financial  Statements  and the Notes  thereto  included
elsewhere in this report.


<PAGE>


Years Ended December 31, 2002 and December 31, 2001

Results of Operations

     The   following   table  sets  forth   certain  items  from  the  Company's
consolidated  statements  of  operations  expressed  as a  percentage  of  total
revenue.


                            2002         2001
                           -------      -------
Revenues
Vicom                          .0%         .0%
CTU                         97.65%      99.22%
MultiBand, Inc.              2.35%        .78%
                           ------      ------
         Total Revenues     100.0%      100.0%
                           ======      ======
Cost of Sales
Vicom                          .0%        .02%
CTU                         71.89%      77.39%
MultiBand, Inc.              1.61%        .69%
                           ------      ------
Total Cost of Sales         73.50%      78.10%
                           ======      ======
Gross Margin                 26.5%      21.88%
Selling, General and        37.39%      34.45%
Administrative expenses
Operating Loss             (11.34%)    (12.56%)
Net Loss                   (17.78%)    (16.73%)

Revenues

     Total revenues  decreased 23.9% to $24,540,969 in 2002 from  $32,260,777 in
2001.

     Revenues  from  the  CTU  segment  which   traditionally   sells   computer
technologies  products and services  decreased 25.1% to $23,963,748 in 2002 from
$31,994,781 in 2001. This decrease in CTU segment  revenues  resulted  primarily
from weaker economic  conditions in 2002 and from CTU's desire to increase gross
margins versus maintaining top line revenues.

     Vicom segment had no revenues.

     Revenues from MultiBand increased 131% to $577,221 in 2002 from $249,590 in
2001.  This  increase  is due to the  expansion  of  Multiband  services  to ten
properties.

Gross Margin

     The  Company's  gross  margin  was  $6,504,219  for 2002,  as  compared  to
$6,965,591 for 2001.  The decrease of 6.6% in 2002 was due to reduced  revenues.
For 2002,  gross margin,  as a percentage of total  revenues,  was 26.50% versus
21.5% for 2001.  This  increase in gross margin  revenues is primarily due to an
increase  in sale of  services  constituting  a greater  percentage  of  overall
revenues than in the prior year. As the Company  continues to strive for bundled
sales of services,  and bundled  sales of equipment  and  services,  the Company
anticipates that it will maintain its gross margin percentages in fiscal 2003.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased 14.83% to $9,337,292
in 2002, compared to $10,962,739 in 2001. This decrease in expenses is primarily
related to  reductions  in  payroll,  benefits  and vehicle  expenses.  Selling,
general and administrative expenses were, as a percentage of revenues, 38.0% for
2002 and 33.9% for 2001.


<PAGE>

Interest Expense

     Interest  expense  was  $1,604,512  for 2002,  versus  $1,446,868  for 2001
reflecting  an increase in debt due to capital  raising  efforts,  valuation  of
warrants  issued with  Preferred  Stock and  convertible  notes,  and additional
borrowings.

Net Loss

     In 2002,  the Company  incurred a net loss of $4,438,059  compared to a net
loss of  $5,325,552  for 2001.  The decrease in net loss is  primarily  due to a
significant  reduction in payroll and benefit  related  expenses  from the prior
year.

Years Ended December 31, 2001 and December 31, 2000

Results of Operations

     The   following   table  sets  forth   certain  items  from  the  Company's
consolidated  statements  of  operations  expressed  as a  percentage  of  total
revenue.

                            2001         2000
                           -------      -------
Revenues
Vicom and VMTS                   0%         8.2%
CTU                           99.2%        91.6%
MultiBand, Inc.                .78%         0.2%
                           -------      -------
   Total Revenues            100.0%       100.0%
                           =======      =======
Cost of Sales
Vicom and VMTS                 .02%         6.2%
CTU                          77.39%        73.2%
MultiBand, Inc.                .69%         0.3%
                           -------      -------
Total Cost of Sales          78.10%        79.7%
                           =======      =======
Gross Margin                 21.88%        20.3%
Selling, General and         34.45%        29.8%
Administrative expenses
Operating Loss              (12.56%)       (9.5%)
Net Income Loss             (16.73%)      (10.6%)

Revenues

     Total revenues  decreased 18.9% to $32,260,777 in 2001 from  $39,781,846 in
2000.

     Revenues  from  the  CTU  segment  which   traditionally   sells   computer
technologies  products and services  decreased 12.2% to $31,994,781 in 2001 from
$36,460,217 in 2000. This decrease in CTU segment  revenues  resulted  primarily
from weaker economic  conditions in 2001 and from CTU's desire to increase gross
margins versus maintaining top line revenues.

     Revenues  from the  Vicom  segment  were  minimal  as Vicom  had no  active
operations in 2001.

     Revenues from Multiband  increased 240% to $249,591 in 2001 from $73,219 in
2000.  The year  2001 was the  first  full  year of  operations  for  Multiband.
Revenues for 2000 reflected only six months of operations.

<PAGE>


Gross Margins

     The  Company's  gross  margin  was  $6,965,591  for 2001,  as  compared  to
$8,083,277 for 2000. The decrease of 13.8% in 2001 was due to reduced  revenues.
For 2001,  gross margin,  as a percentage of total  revenues,  was 21.88% versus
20.3% for 2000. This increase in gross margin  percentage is primarily due to an
increase in service sales which have better margins than equipment sales.



Selling, General and Administrative Expenses

     Selling,  general and administrative expenses decreased 7.5% to $10,962,739
in 2001, compared to $11,852,041 in 2000. This decrease in expenses is primarily
related to reductions in payroll.  Selling,  general and administrative expenses
were, as a percentage of revenues, 33.9% for 2001 and 29.8% for 2000.

Interest Expense

     Interest  expense  was  $1,446,868  for  2001,  versus  $607,418  for  2000
reflecting  an increase in debt due to capital  raising  efforts,  valuation  of
warrants  issued  with  Preferred  Class  a stock  and  convertible  notes,  and
additional borrowings.

Net Loss

     In 2001,  the Company  incurred a net loss of $5,325,552  compared to a net
loss of  $4,235,831  for 2000.  The  increase  in losses  relates to  additional
depreciation and amortization  related to Multiband units,  additional  interest
expense and 20% decrease in revenues.


<PAGE>



Unaudited Quarterly Results

     The  following  table  sets forth  certain  unaudited  quarterly  operating
information  for  each of the  eight  quarters  in the  two-year  period  ending
December 31, 2002. This data includes, in the opinion of management,  all normal
recurring adjustments necessary for the fair presentation of the information for
the periods  presented when read in conjunction with the Company's  consolidated
financial statements and related notes thereto.  Results for any previous fiscal
quarter are not  necessarily  indicative of results for the full year or for any
future quarter. The Company has historically  experienced a seasonal fluctuation
in its operating results,  with a larger proportion of its revenues in the third
quarter of the fiscal year.

<TABLE>
<CAPTION>
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
                             Dec. 31,     Sept. 30,     June 30,     March 31,    Dec. 31,      Sept. 30,    June 30,     March 31,
                              2002         2002          2002         2002         2001          2001         2001         2001
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Revenues:
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
<S>                       <C>           <C>          <C>          <C>           <C>          <C>          <C>          <C>
Vicom                               0             0            0            0             0            0            0            0
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
CTU                         5,758,953     6,227,683    5,815,531    6,161,581     5,980,561    7,618,442    7,794,443   10,617,741
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
MultiBand                     192,771       154,950      128,893      100,607        88,634       60,092       35,786       65,078
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Total Revenues              5,951,724     6,382,633    5,944,424    6,262,188     6,069,195    7,678,534    7,830,229   10,682,819
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Cost of Sales               4,212,240     4,680,582    4,354,714    4,789,214     4,580,877    6,110,861    6,048,399    8,555,049
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Gross Margin                1,739,484     1,702,051    1,589,710    1,472,974     1,488,318    1,567,673    1,781,830    2,127,770
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
SG&A Expense                2,484,108     2,376,225    2,240,223    2,236,736     3,175,613    2,040,043    2,738,537    3,008,546
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Operating Loss              (744,624)     (674,174)    (650,513)    (763,762)   (1,687,295)    (472,370)    (956,707)    (880,776)
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Interest Expense            (462,420)     (349,388)    (426,869)    (365,835)     (427,924)    (352,735)    (373,771)    (292,438)
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Other Income (Expenses)        47,740      (93,171)       25,281       19,676       554,022    (480,955)          307       45,090
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Net Loss Before Taxes     (1,159,304)   (1,116,733)  (1,052,101)  (1,109,921)   (1,561,197)  (1,306,060)  (1,330,171)  (1,128,124)
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Income Tax (Benefit)
Provision                           0             0            0            0             0            0            0            0
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Net Loss                  (1,159,304)   (1,116,733)  (1,052,101)  (1,109,921)   (1,561,197)  (1,306,060)  (1,330,171)  (1,128,124)
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
Loss Per Common Share
Basic and Diluted               (.11)         (.09)        (.09)        (.10)         (.19)        (.15)        (.18)        (.14)
------------------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ ------------
</TABLE>

Liquidity and Capital Resources

Year Ended December 31, 2002

     Available working capital,  for 2002, decreased $679,419 due to Vicom's net
operating loss and net cash used in operating  activities of $869,721.  Proceeds
from issuance of long term debt, stock and warrants  totaling  $2,121,597 helped
offset Vicom's net operating  loss.  Vicom had a decrease of $38,344 in accounts
payable and other  current  liabilities  for 2002  versus  last  year's  period,
primarily due to significant  reductions in accounts receivables which were used
to reduce payables.

     Inventories  year to date  decreased  net of  reserves  $182,783  over last
year's  prior   period   inventories   due  to  a  decrease  in  revenues.   The
aforementioned  decrease  in  revenues  also  led  to  a  decrease  in  accounts
receivable net of reserves of $576,509.

     Total long term debt and capital  lease  obligation  decreased  by $102,631
during the year ended December 31, 2002.  The Company paid out $937,828  related
to capital lease  obligations and $131,605  related to long term debt during the
year ended December 31, 2002 versus $777,578 paid out in 2001.


<PAGE>

     In 2001, the Company entered into a long-term debt  agreement,  expiring in
2003,  with an  investment  fund.  The fund,  in exchange  for its $1.5  million
investment,  also  received  375,000  warrants  and the  right  to  convert  its
investment  into Vicom  common  stock at a  predetermined  price.  The effect of
recording the beneficial  conversion  feature and warrants  associated  with the
convertible loan resulted in a $1,500,000 discount  attributable to the warrants
in accordance with the Black-Scholes pricing model. The Company is expensing the
aforementioned  warrant  discount in eight quarterly  installments  over the two
year  term of the  loan.  $460,000  of the debt was  converted  to stock in 2002
pursuant to a formula tied to the trading price of the Company's Common Stock.

     In 2002, the Company borrowed $600,000 from a Director. This investment was
later  converted  into  Class E  Preferred  Stock.  Also in  2002,  the  Company
restructured  its  debenture  with  Convergent  Capital,  resetting  the date of
principal repayment to begin in August 2005.

     The Company  used  $1,275,434  for capital  expenditures  during  2002,  as
compared to  $1,884,945  in 2001.  The decrease was  primarily  attributed  to a
reduction in self-financed Multiband construction.

     In  2002,  the  Company  extinguished   $937,828  worth  of  capital  lease
obligations,  reduced its principal  indebtedness $460,000 to a note holder, and
converted  another  $600,000 worth of debt to Preferred Stock. All these events,
combined, with the aforementioned refinancing and delayed principal repayment to
its  largest  debt  holder,  should  materially  improve  projected  cash  flows
throughout 2003 provided Company operating losses continue to diminish.

     Net cash used by operations was  approximately  $869,721 in 2002 versus net
cash used by operations of $502,110 in 2001. The cash used by operations in 2002
is due primarily to net operating losses, and reductions in accounts payable and
wholesale line of credit balances in that year.  During the years ended December
31, 2002 and December 31, 2001,  the Company  incurred  significant  net losses.
Although the majority of these losses were due to non-cash expenses, the Company
still  continued to incur cash losses as well due to general  corporate  expense
and continuing  expenses  related to the building out of its Multiband  network.
The Company in 2002  significantly cut its selling,  general and  administrative
expenses which led to a material decrease in cash losses.  The on-going addition
of Multiband  properties in the Company's  portfolio also  generated  additional
cash  flows in 2002 and these  Multiband  cash  flows are  projected  to improve
meaningfully  in 2003.  Management of Vicom  believes that, for the near future,
cash generated from new investments combined with existing credit facilities are
adequate to meet the anticipated  liquidity in capital resource  requirements of
its  business,  contingent  upon Company  operating  results for the next twelve
months.

Year Ended December 31, 2001

     Available working capital,  for 2001,  decreased  $2,443,565 due to Vicom's
net  operating  loss and net cash  used in  operating  activities  of  $502,110.
Proceeds from issuance of long term debt, stock and warrants totaling $3,190,262
helped offset Vicom's net operating loss.  Vicom had a decrease of $1,114,332 in
accounts payable and other current  liabilities for 2001 versus 2000,  primarily
due to significant  reductions in accounts receivables which were used to reduce
payables.

     Inventories  year to date  decreased  net of  reserves  $705,050  over 2000
inventories  due to a decrease  in  revenues.  The  aforementioned  decrease  in
revenues  also led to a decrease  in  accounts  receivable  net of  reserves  of
$3,087,313.

     Total long term debt and  capital  lease  obligation  decreased  by $82,852
during the year ended December 31, 2001.  The Company paid out $315,770  related
to capital lease  obligations and $461,808  related to long term debt during the
year ended December 31, 2001 versus $777,578 paid out in 2000.


<PAGE>

     In 2001,  the Company  entered  into  wholesale  line of credit  agreements
totaling  $1,450,000 with two financial  institutions for the purchase of resale
merchandise  from certain  suppliers,  interest  generally at 0% (if paid within
certain  terms),  and  collateralized  by the related  inventories  and accounts
receivable.

     In 2001, the Company entered into a long-term debt  agreement,  expiring in
2003,  with an  investment  fund.  The fund,  in exchange  for its $1.5  million
investment,  also  received  375,000  warrants  and the  right  to  convert  its
investment  into Vicom  common  stock at a  predetermined  price.  The effect of
recording the beneficial  conversion  feature and warrants  associated  with the
convertible loan resulted in a $1,500,000 discount  attributable to the warrants
in  accordance  with the  Black-Scholes  Option-Pricing  Model.  The  Company is
expensing the  aforementioned  warrant discount in eight quarterly  installments
over the two year term of the loan.

     The Company  used  $1,884,945  for capital  expenditures  during  2001,  as
compared to $1,316,022 in 2000. These 2001 and 2000  expenditures were primarily
for construction related to Multiband installations.

     Net cash used by operations was  approximately  $502,110 in 2001 versus net
cash used by operations  of  $3,640,226 in 2000.  The cash used by operations in
2001 is due  primarily  to net  operating  losses,  and  reductions  in accounts
payable and wholesale  line of credit  balances in that year.  During the fiscal
years ended December 31, 2001 and 2000,  the Company  incurred  significant  net
losses.  These net losses  were  primarily  incurred  due to  general  corporate
expense and the expense of building out its  Multiband  network.  The Company in
2001 significantly cut its payroll expense in an effort to mitigate these losses
in the future and conserve  cash. In addition,  the Company  expects to generate
additional cash flows in 2002 and beyond as Multiband  building projects convert
from work-in-process to completed projects capable of generating subscriber cash
flows. However, there can be no assurance that the Company will be successful in
achieving  the  aforementioned  increase  in cash  flows.  Management  of  Vicom
believes that, for the next twelve months,  cash generated from new  investments
combined with existing  credit  facilities are adequate to meet the  anticipated
liquidity in capital  resource  requirements  of its business,  contingent  upon
company operating  results.  Management  estimates capital  expenditures for the
year ending December 31, 2002 will approximate  $450,000.  Management intends to
obtain  additional  debt or  equity  capital  to meet all of its  existing  cash
obligations and fund commitments on planned Multiband projects,  however,  there
can be no assurance that the sources will be available or available on favorable
terms to the Company.

Critical Accounting Policies

Impairment of Long-Lived Assets

The  Company's  long-lived  assets  include  property,  equipment  and leasehold
improvement. At December 31, 2002, the Company had net property and equipment of
$3,248,973,  which represents  approximately  31% of the Company's total assets.
The estimated  fair value of these assets is dependent on the  Company's  future
performance. In assessing for potential impairment for these assets, the Company
considers  future  performance.  If these forecasts are not met, the Company may
have to record an  impairment  charge not  previously  recognized,  which may be
material.  In 2002,  the Company  recorded an impairment of $119,480 on property
plant and  equipment.  During the years ended  December  31, 2001 and 2000,  the
Company did not record any impairment losses related to long-lived assets.



Impairment of Goodwill

We  periodically   evaluate   acquired   businesses  for  potential   impairment
indicators.  Our judgments regarding the existence of impairment  indicators are
based on legal factors,  market  conditions and

<PAGE>

operational performance of our acquired businesses. Future events could cause us
to  conclude  that impairment indicators exist and that goodwill associated with
our  acquired  businesses, which amounts to $2,748,879 (or 26% of total assets),
may  be  impaired.  Any  resulting impairment loss could have a material adverse
impact  on  our  financial condition and results of operations. During the years
ended  December  31,  2002,  2001  and  2000,  the  Company  did  not record any
impairment  losses  related  to  goodwill.

Inventories

We value our inventory at the lower of the actual cost or the current  estimated
market value of the inventory.  We regularly review inventory quantities on hand
and record a provision for excess and obsolete  inventory.  Rapid  technological
change,  frequent new product  development,  and rapid product obsolescence that
could result in an increase in the amount of obsolete  inventory  quantities  on
hand characterize our industry.

Recent Accounting Pronouncements

In April 2002,  FASB issued SFAS No. 145,  "Rescission of FASB Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections,"
effective for fiscal years  beginning  after May 15, 2002. The Company  believes
the  adoption of SFAS No. 145 will not have a material  effect on the  Company's
consolidated financial position or results of operations.

In June 2002, FASB issued SFAS No. 146,  "Accounting  for Costs  Associated with
Exit or  Disposal  Activities."  SFAS No.  146  requires  the  recognition  of a
liability  for a cost  associated  with an exit or  disposal  activity  when the
liability is incurred  versus the date the Company  commits to an exit plan.  In
addition, SFAS No. 146 states the liability should be initially measured at fair
value.  The  requirements  of SFAS No. 146 are  effective  for exit or  disposal
activities that are initiated after December 31, 2002. The Company  believes the
adoption  of SFAS  No.  146 will not have a  material  effect  on the  Company's
consolidated financial position or results of operations.

In October 2002, FASB issued SFAS No. 147,  "Acquisitions  of Certain  Financial
Institutions."  SFAS No. 147 is effective  October 1, 2002. The adoption of SFAS
No. 147 did not have a material effect on the Company's  consolidated  financial
position or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation - Transition and Disclosure."  SFAS No. 148 is an amendment to SFAS
No. 123 providing  alternative  methods of transition for a voluntary  change to
the fair value based method of accounting for stock-based employee  compensation
and also provides required additional disclosures about the method of accounting
for  stock-based  employee  compensation.   The  amendments  are  effective  for
financial statements for fiscal years ending after December 15, 2002 and for the
interim  periods  beginning  after  December 15, 2002.  The Company  adopted the
annual  disclosure  provisions of SFAS No. 148. The Company has currently chosen
not to adopt the  voluntary  change to the fair value based method of accounting
for  stock-based  employee  compensation,  pursuant to SFAS No. 148,  which,  if
adopted,  could have a material effect on the Company's  consolidated  financial
position or results of operations.


Disclosures about Contractual Obligations and Commercial Commitments

     The following summarizes our contractual  obligations at December 31, 2002,
and  the  effect  these  contractual  obligations  are  expected  to have on our
liquidity and cash flows in future periods (in thousands):


<PAGE>

<TABLE>
<CAPTION>
                               Total     1 Year of Less    1-3 Years    Over 3 Years
                            -----------    -----------    -----------    -----------
<S>                         <C>            <C>            <C>            <C>
Operating Leases            $ 4,954,000    $   519,000    $ 1,382,000    $ 3,053,000
Capital Leases                  272,282         79,307        156,894         36,081
Long Term Debt                4,090,140        321,589      2,923,507        845,044
Wholesale Line of Credit      1,290,383      1,290,383             --             --
                            -----------    -----------    -----------    -----------
Total                       $10,606,805    $ 2,210,279    $ 4,462,401    $ 3,934,125
                            ===========    ===========    ===========    ===========
</TABLE>


Forward Looking Statements

     From time to time,  the  Company  may  publish  forward-looking  statements
relating  to  such  matters  as  anticipated  financial  performance,   business
prospects,  technological  developments,  new products, Year 2000 compliance and
similar matters. The Private Securities Litigation Reform Act of 1995 provides a
safe  harbor  for  forward-looking  statements  including  those  made  in  this
document. In order to comply with the terms of the Private Securities Litigation
Reform  Act,  the  Company  notes  that a variety  of  factors  could  cause the
Company's   actual  results  and  experience  to  differ   materially  from  the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performance,  developments  and results of the  Company's  business
include the following:  national and regional economic  conditions;  pending and
future legislation affecting the IT and telecommunications  industry;  stability
of  foreign  governments;  market  acceptance  of  the  Company's  products  and
services;  the Company's  continued ability to provide integrated  communication
solutions for customers in a dynamic industry;  and other  competitive  factors.
Because these and other factors  could affect the Company's  operating  results,
past financial  performance  should not  necessarily be considered as a reliable
indicator of future performance,  and investors should not use historical trends
to anticipate future period results.


<PAGE>



Item 7A

Quantitative and Qualitative Disclosure About Market Risk

     Vicom is not  subject to any  material  interest  rate risk as any  current
lending agreements are at a fixed rate of interest.

Item 8.

Consolidated Financial Statements and Supplementary Data




<PAGE>



                      VICOM, INCORPORATED AND SUBSIDIARIES

                               New Hope, Minnesota

                        December 31, 2002, 2001, and 2000






                        CONSOLIDATED FINANCIAL STATEMENTS

                     Including Independent Auditors' Report



<PAGE>



                      VICOM, INCORPORATED AND SUBSIDIARIES

                                TABLE OF CONTENTS


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

Independent Auditors' Report                                                  1

Independent Auditors' Report                                                 1A

Financial Statements

    Consolidated Balance Sheets                                               2

    Consolidated Statements of Operations                                     3

    Consolidated Statements of Stockholders' Equity                       4 - 7

    Consolidated Statements of Cash Flows                                     8

    Notes to Consolidated Financial Statements                           9 - 28

Supplemental Information

    Independent Auditors' Report on Supplementary Information                29

    Independent Auditors' Report on Supplementary Information               29A

    Valuation and Qualifying Accounts                                        30


<PAGE>



                          INDEPENDENT AUDITORS' REPORT



To Stockholders, Board of Directors, and Audit Committee
Vicom, Incorporated and subsidiaries

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Vicom,
Incorporated  and subsidiaries as of December 31, 2002 and 2001, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the  years  then  ended.  These  consolidated   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting  principles used and significant estimates made by management as well
as evaluating the overall financial statement presentation.  We believe that our
audits provides 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 Vicom,
Incorporated  and subsidiaries as of December 31, 2002 and 2001, and the results
of their operations and their cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.


                                          /s/ VIRCHOW, KRAUSE & COMPANY, LLP


Minneapolis, Minnesota
February 14, 2003



                                     Page 1
<PAGE>



                          INDEPENDENT AUDITOR'S REPORT



Board  of  Directors  and  Stockholders
Vicom,  Incorporated  and  Subsidiaries
New  Hope,  Minnesota


We  have  audited  the  accompanying  consolidated  statements  of  operations,
stockholders' equity, and cash flows of Vicom, Incorporated and Subsidiaries for
the  year  ended December 31, 2000.  These consolidated financial statements are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express  an  opinion  on  these  consolidated  financial statements based on our
audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An  audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the  consolidated  financial  statements referred to above of
Vicom,  Incorporated  and Subsidiaries present fairly, in all material respects,
the  consolidated  results of their operations and their cash flows for the year
ended  December  31,  2000,  in  conformity with accounting principles generally
accepted  in  the  United  States  of  America.




                                       /s/ Lurie Besikof Lapidus & Company, LLP

Minneapolis,  Minnesota
February  15,  2001




                                       Page 1A
<PAGE>



                      VICOM, INCORPORATED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2002 and 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                     ASSETS
                                                                                    2002             2001
                                                                            ------------     ------------
CURRENT ASSETS
<S>                                                                         <C>              <C>
    Cash and cash equivalents                                               $    540,375     $    624,845
    Accounts receivable, net                                                   1,948,004        2,573,749
    Inventories, net                                                           1,463,658        1,646,441
    Other current assets                                                         226,774          295,324
                                                                            ------------     ------------
        Total Current Assets                                                   4,178,811        5,140,359
                                                                            ------------     ------------

PROPERTY AND EQUIPMENT, NET                                                    3,248,973        4,059,831
                                                                            ------------     ------------

OTHER ASSETS
    Goodwill                                                                   2,748,879        2,748,879
    Other assets                                                                 170,653          260,612
                                                                            ------------     ------------
        Total Other Assets                                                     2,919,532        3,009,491
                                                                            ------------     ------------

           TOTAL ASSETS                                                     $ 10,347,316     $ 12,209,681
                                                                            ============     ============


                       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Wholesale line of credit                                                $  1,290,383     $  1,324,807
    Current portion of long-term debt                                            321,589           85,789
    Current portion of capital lease obligations                                  59,570          309,906
    Accounts payable                                                           1,735,931        1,800,285
    Accrued liabilities                                                          714,479          776,417
    Deferred service obligations and revenue                                     309,729          416,606
                                                                            ------------     ------------
        Total Current Liabilities                                              4,431,681        4,713,810

LONG-TERM DEBT, NET                                                            3,114,006        2,669,510
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                                159,344          642,360
                                                                            ------------     ------------
        Total Liabilities                                                      7,705,031        8,025,680
                                                                            ------------     ------------


COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY
    Cumulative convertible preferred stock, no par value:
        8% Class A (27,831 and 28,872 shares issued and outstanding)             418,252          433,867
        10% Class B (6,200 and 8,700 shares issued and outstanding)               62,000           87,000
        10% Class C (131,510 and 139,510 shares issued and outstanding)        1,699,407        1,800,447
        14% Class D (0 and 40,000 shares issued and outstanding)                      --          417,500
        15% Class E (70,000 and 0 shares issued and outstanding)                 395,778               --
    Common stock, no par value (13,110,477 and 10,679,450 shares issued;
        13,065,410 and 10,604,113 shares outstanding)                          4,465,832        3,443,104
    Stock subscriptions receivable                                              (633,195)        (631,619)
    Options and warrants                                                      26,632,299       24,957,912
    Unamortized compensation                                                    (682,089)      (1,209,143)
    Accumulated deficit                                                      (29,715,999)     (25,115,067)
                                                                            ------------     ------------
           Total Stockholders' Equity                                          2,642,285        4,184,001
                                                                            ------------     ------------


               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 10,347,316     $ 12,209,681
                                                                            ============     ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     Page 2
<PAGE>



                      VICOM, INCORPORATED AND SUBSIDIARIES



                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years Ended December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  2002             2001             2000
                                                          ------------     ------------     ------------
REVENUES                                                  $ 24,540,969     $ 32,260,777     $ 39,781,846
                                                          ------------     ------------     ------------
COST AND EXPENSES
<S>                                                         <C>              <C>              <C>
    Cost of products and services                           18,036,750       25,295,186       31,698,569
    Selling, general and administrative                      9,337,292       10,962,739       11,852,041
                                                          ------------     ------------     ------------
        Total Costs and Expenses                            27,374,042       36,257,925       43,550,610
                                                          ------------     ------------     ------------

LOSS FROM OPERATIONS                                        (2,833,073)      (3,997,148)      (3,768,764)
                                                          ------------     ------------     ------------

OTHER INCOME (EXPENSE)
    Interest expense                                        (1,604,512)      (1,446,868)        (607,418)
    Interest income                                             64,083           63,717           23,291
    Other income                                               (64,557)          54,747          126,060
                                                          ------------     ------------     ------------
        Total Other Expense                                 (1,604,986)      (1,328,404)        (458,067)
                                                          ------------     ------------     ------------

           Loss Before Income Taxes                         (4,438,059)      (5,325,552)      (4,226,831)

PROVISION FOR INCOME TAXES                                          --               --            9,000
                                                          ------------     ------------     ------------

NET LOSS                                                  $ (4,438,059)    $ (5,325,552)    $ (4,235,831)

    Preferred stock dividends                                  153,578          432,669          846,180
                                                          ------------     ------------     ------------

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS                  $ (4,591,637)    $ (5,758,221)    $ (5,082,011)
                                                          ============     ============     ============

LOSS PER COMMON SHARE- BASIC AND DILUTED                  $      (0.39)    $      (0.66)    $      (0.72)
                                                          ============     ============     ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND
    DILUTED                                                 11,735,095        8,762,814        7,009,751
                                                          ============     ============     ============
</TABLE>

          See accompanying notes to consolidated financial statements.



                                     Page 3
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 Years Ended December 31, 2002, 2001, and 2000
                     Cumulative Convertible Preferred Stock
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                        8% Class A                10% Class B                  10% Class C
                                                -------------------------   -------------------------   -------------------------
                                                   Shares        Amount        Shares       Amount         Shares       Amount
                                                -----------   -----------   -----------   -----------   -----------   -----------
<S>                                                   <C>     <C>                <C>      <C>                         <C>
BALANCES, December 31, 1999                           2,550   $    23,638        37,550   $   359,893            --   $        --
 Stock issued:
   Options and warrants exercised                        --            --            --            --            --            --
   Other cash                                            --            --            --            --       153,310     1,533,100
   Conversion of notes payable                           --            --            --            --            --            --
   Conversion of preferred stock                     (2,550)      (23,638)       (9,000)      (86,259)           --            --
Redemption of preferred stock                            --            --        (5,714)      (54,765)       (2,500)      (25,000)
Issuance costs                                           --            --            --            --            --            --
Warrants issued:                                         --            --
   Warrant dividend                                      --            --            --            --            --            --
   Common stock                                          --            --            --            --            --            --
   Preferred stock                                       --            --            --            --            --            --
   Services                                              --            --            --            --            --            --
   Cash                                                  --            --            --            --            --            --
Restricted stock:                                        --            --
   Issued                                                --            --            --            --            --            --
   Forfeited                                             --            --            --            --            --            --
   Amortization expense                                  --            --            --            --            --            --
Preferred stock dividends                                --            --            --            --            --       442,903
Net loss                                                 --            --            --            --            --            --
                                                -----------   -----------   -----------   -----------   -----------   -----------

BALANCES, December 31, 2000                              --            --        22,836       218,869       150,810     1,951,003
 Stock issued:
    Cash                                             32,050       320,500            --            --            --            --
    Stock subscriptions receivable                       --            --            --            --            --            --
    Acquisition of assets                            10,640       106,400            --            --            --            --
    Purchase of intangible asset                         --            --            --            --            --            --
    Guarantee of debt financing                          --            --            --            --            --            --
    Conversion of accounts payable                    3,500        35,000            --            --            --            --
    Conversion of accrued liabilities                 9,631        96,306            --            --            --            --
    Conversion of notes payable                       5,804        58,044            --            --            --            --
    Conversion of preferred stock                   (31,000)     (310,000)      (13,150)     (131,500)       (7,800)      (78,000)
    Conversion of dividends payable                   6,030        60,300            --            --            --            --
 Redemption of preferred stock                       (7,783)      (77,830)         (986)         (369)       (3,500)      (35,000)
 Discount on preferred stock related to                  --       145,147            --            --            --       (37,556)
  warrants
 Interest receivable on stock subscription               --            --            --            --            --            --
  receivable
 Warrants issued:                                        --            --
    Preferred stock                                      --            --            --            --            --            --
    Common stock                                         --            --            --            --            --            --
    Debt                                                 --            --            --            --            --            --
 Deferred compensation expense related to                --            --            --            --            --            --
  stock options issued below fair market value
 Deferred compensation expense                           --            --            --            --            --            --
 Restricted stock:                                       --            --
    Issued                                               --            --            --            --            --            --

</TABLE>

<TABLE>
<CAPTION>
                                                        14% Class D            15% Class E
                                                  -------------------------   --------------
                                                    Shares        Amount      Shares  Amount
                                                  -----------   -----------   ------  ------
<S>                                                             <C>                      <C>
BALANCES, December 31, 1999                                --   $        --       --     $--
 Stock issued:
   Options and warrants exercised                          --            --       --      --
   Other cash                                          72,500       490,332       --      --
   Conversion of notes payable                             --            --       --      --
   Conversion of preferred stock                           --            --       --      --
Redemption of preferred stock                              --            --       --      --
Issuance costs                                             --            --       --      --
Warrants issued:
   Warrant dividend                                        --            --       --      --
   Common stock                                            --            --       --      --
   Preferred stock                                         --            --       --      --
   Services                                                --            --       --      --
   Cash                                                    --            --       --      --
Restricted stock:
   Issued                                                  --            --       --      --
   Forfeited                                               --            --       --      --
   Amortization expense                                    --            --       --      --
Preferred stock dividends                                  --       312,481       --      --
Net loss                                                   --            --       --      --
                                                  -----------   -----------   ------  ------

BALANCES, December 31, 2000                            72,500       802,813       --      --
 Stock issued:
    Cash                                                   --            --       --      --
    Stock subscriptions receivable                         --            --       --      --
    Acquisition of assets                                  --            --       --      --
    Purchase of intangible asset                           --            --       --      --
    Guarantee of debt financing                            --            --       --      --
    Conversion of accounts payable                         --            --       --      --
    Conversion of accrued liabilities                      --            --       --      --
    Conversion of notes payable                        10,000       100,000       --      --
    Conversion of preferred stock                          --            --       --      --
    Conversion of dividends payable                        --            --       --      --
 Redemption of preferred stock                        (42,500)     (425,000)      --      --
 Discount on preferred stock related to                    --       (60,313)      --      --
  warrants
 Interest receivable on stock subscription                 --            --       --      --
  receivable
 Warrants issued:
    Preferred stock                                        --            --       --      --
    Common stock                                           --            --       --      --
    Debt                                                   --            --       --      --
 Deferred compensation expense related to                  --            --       --      --
  stock options issued below fair market value
 Deferred compensation expense                             --            --       --      --
 Restricted stock:
    Issued                                                 --            --       --      --
</TABLE>


                                     Page 4
<PAGE>


<TABLE>
<CAPTION>

<S>                                                  <C>      <C>                 <C>     <C>               <C>       <C>
    Forfeited                                            --            --            --            --            --            --
    Amortization expense                                 --            --            --            --            --            --
 Repricing of warrants                                   --            --            --            --            --            --
 Embedded value with Pyramid Trading warrants            --            --            --            --            --            --
 Preferred stock dividends                               --            --            --            --            --            --
 Net loss                                                --            --            --            --            --            --
                                                  ---------   -----------   -----------   -----------   -----------   -----------

BALANCES, December 31, 2001                          28,872       433,867         8,700        87,000       139,510     1,800,447
 Stock issued:
    Cash                                                 --            --            --            --            --            --
    Notes receivable                                     --            --            --            --            --            --
    Acquisition of assets                             1,859        18,590            --            --            --            --
    Guarantee of debt financing                          --            --            --            --            --            --
    Services rendered                                    --            --            --            --            --            --
    Conversion of accounts payable                       --            --            --            --            --            --
    Conversion of notes payable and accrued              --            --            --            --            --            --
      interest
    Conversion of accrued interest                       --            --            --            --            --            --
    Conversion of preferred stock                        --            --        (2,500)      (25,000)       (2,500)      (25,000)
 Redemption of preferred stock                       (2,900)      (29,000)           --            --        (5,500)      (55,000)
 Discount on preferred stock related to                  --        (5,205)           --            --            --       (21,040)
   warrants issued
 Interest receivable on stock subscription               --            --            --            --            --            --
 receivable
 Warrants issued:
    Preferred stock                                      --            --            --            --            --            --
    Common stock                                         --            --            --            --            --            --
    Debt                                                 --            --            --            --            --            --
 Deferred compensation expense related to                --            --            --            --            --            --
  stock options issued below fair market value
 Deferred compensation expense                           --            --            --            --            --            --
 Restricted stock:
    Issued and outstanding                               --            --            --            --            --            --
    Forfeited                                            --            --            --            --            --            --
    Amortization expense                                 --            --            --            --            --            --
 Embedded value with Pyramid Trading warrants            --            --            --            --            --            --
 Preferred stock dividends                               --            --            --            --            --            --
 Net loss                                                --            --            --            --            --            --
                                                  ---------   -----------   -----------   -----------   -----------   -----------

BALANCES, December 31, 2002                          27,831   $   418,252         6,200   $    62,000       131,510   $ 1,699,407
                                                  =========   ===========   ===========   ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>

<S>                                                              <C>                <C>     <C>
    Forfeited                                               --            --            --           --
    Amortization expense                                    --            --            --           --
 Repricing of warrants                                      --            --            --           --
 Embedded value with Pyramid Trading warrants               --            --            --           --
 Preferred stock dividends                                  --            --            --           --
 Net loss                                                   --            --            --           --
                                                   -----------   -----------   -----------  -----------

BALANCES, December 31, 2001                             40,000       417,500            --           --
 Stock issued:
    Cash                                                    --            --        10,000      100,000
    Notes receivable                                        --            --            --           --
    Acquisition of assets                                   --            --            --           --
    Guarantee of debt financing                             --            --            --           --
    Services rendered                                       --            --            --           --
    Conversion of accounts payable                          --            --            --           --
    Conversion of notes payable and accrued            (30,000)     (300,000)       60,000      600,000
      interest
    Conversion of accrued interest                          --            --            --           --
    Conversion of preferred stock                      (10,000)     (100,000)           --           --
 Redemption of preferred stock                              --            --            --           --
 Discount on preferred stock related to                     --       (17,500)           --     (304,222)
   warrants issued
 Interest receivable on stock subscription                  --            --            --           --
 receivable
 Warrants issued:
    Preferred stock                                         --            --            --           --
    Common stock                                            --            --            --           --
    Debt                                                    --            --            --           --
 Deferred compensation expense related to                   --            --            --           --
  stock options issued below fair market value
 Deferred compensation expense                              --            --            --           --
 Restricted stock:
    Issued and outstanding                                  --            --            --           --
    Forfeited                                               --            --            --           --
    Amortization expense                                    --            --            --           --
 Embedded value with Pyramid Trading warrants               --            --            --           --
 Preferred stock dividends                                  --            --            --           --
 Net loss                                                   --            --            --           --
                                                   -----------   -----------   -----------  -----------

BALANCES, December 31, 2002                                 --   $        --        70,000  $   395,778
                                                   ===========   ===========   ===========  ===========
</TABLE>




          See accompanying notes to consolidated financial statements.

                                     Page 5
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years Ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                             Common Stock          Stock         Options
                                                  ---------------------------  Subscriptions       and        Unamortized
                                                     Shares         Amount       Receivable      Warrants     Compensation
                                                  ------------   ------------   ------------   ------------   ------------
<S>                                                  <C>         <C>            <C>            <C>            <C>
BALANCES, December 31, 1999                          4,984,845   $  4,551,745   $         --   $    217,028   $   (258,659)
 Stock issued:
   Options and warrants exercised                    1,427,217      3,953,471             --       (163,703)            --
   Other cash                                          860,828      1,804,921             --             --             --
   Conversion of notes payable                         580,100      1,185,054             --             --             --
   Conversion of preferred stock                        57,500        109,897             --             --             --
Redemption of preferred stock                               --             --             --             --             --
Issuance costs                                         249,959       (679,110)            --             --             --
Warrants issued:
   Warrant dividend                                         --     (9,699,079)            --     13,255,869             --
   Common stock                                             --             --             --        495,971             --
   Preferred stock                                          --             --             --        234,668             --
   Services                                                 --             --             --        208,000             --
   Cash                                                     --             --             --        100,000             --
Restricted Stock:
   Issued                                               35,000        200,185             --             --       (200,185)
   Forfeited                                           (58,268)       (87,010)            --             --         87,010
   Amortization expense                                     --             --             --             --         93,696
Preferred stock dividends                                   --             --             --             --             --
Net loss                                                    --             --             --             --             --
                                                  ------------   ------------   ------------   ------------   ------------
BALANCES, December 31, 2000                          8,137,181      1,340,074             --     14,347,833       (278,138)
 Stock issued:
   Cash                                              1,092,953        421,566             --             --             --
   Stock subscriptions receivable                      800,000        610,000       (610,000)            --             --
   Acquisition of assets                                87,000        261,000             --             --             --
   Purchase of intangible asset                         50,000         83,750             --             --             --
   Guarantee of debt financing                         100,000        120,000             --             --             --
   Conversion of accounts payable                           --             --             --             --             --
   Conversion of accrued liabilities                    10,000          9,007             --             --             --
   Conversion of notes payable                          20,000         50,000             --             --             --
   Conversion of preferred stock                       382,027        528,742             --             --             --
   Conversion of dividends payable                          --             --             --             --             --
Redemption of preferred stock                               --             --             --             --             --
Discount on preferred stock related to warrants             --             --             --             --             --
Interest receivable on stock subscription
receivable                                                  --             --        (21,619)            --             --
Warrants issued:
   Preferred stock                                          --             --             --         87,403             --
   Common stock                                             --             --             --        544,683             --
    Debt                                                    --             --             --      1,382,126             --
 Deferred compensation expense related to stock
  options issued below fair market value                    --             --             --      1,244,250     (1,244,250)
 Deferred compensation expense                              --             --             --             --        239,461
 Restricted stock:
    Issued                                              83,000        308,145             --             --       (308,145)
    Forfeited                                          (82,711)      (289,180)            --             --        289,180
    Amortization expense                                    --             --             --             --         92,749
 Repricing of warrants                                      --             --             --      6,919,692             --
</TABLE>

<TABLE>
<CAPTION>

                                                  Accumulated
                                                    Deficit         Total
                                                 ------------   ------------
<S>                                              <C>            <C>
BALANCES, December 31, 1999                      $ (3,867,301)  $  1,026,344
 Stock issued:
   Options and warrants exercised                          --      3,789,768
   Other cash                                              --      3,828,353
   Conversion of notes payable                             --      1,185,054
   Conversion of preferred stock                           --             --
Redemption of preferred stock                              --        (79,765)
Issuance costs                                             --       (679,110)
Warrants issued:
   Warrant dividend                                (3,556,790)            --
   Common stock                                            --        495,971
   Preferred stock                                         --        234,668
   Services                                                --        208,000
   Cash                                                    --        100,000
Restricted Stock:
   Issued                                                  --             --
   Forfeited                                               --             --
   Amortization expense                                    --         93,696
Preferred stock dividends                            (846,180)       (90,796)
Net loss                                           (4,235,831)    (4,235,831)
                                                 ------------   ------------
BALANCES, December 31, 2000                       (12,506,102)     5,876,352
 Stock issued:
   Cash                                                    --        742,066
   Stock subscriptions receivable                          --             --
   Acquisition of assets                                   --        367,400
   Purchase of intangible asset                            --         83,750
   Guarantee of debt financing                             --        120,000
   Conversion of accounts payable                          --         35,000
   Conversion of accrued liabilities                       --        105,313
   Conversion of notes payable                             --        208,044
   Conversion of preferred stock                           --          9,242
   Conversion of dividends payable                         --         60,300
Redemption of preferred stock                              --       (538,199)
Discount on preferred stock related to warrants        68,948        116,226
Interest receivable on stock subscription
receivable                                                 --        (21,619)
Warrants issued:
   Preferred stock                                         --         87,403
   Common stock                                            --        544,683
    Debt                                                   --      1,382,126
 Deferred compensation expense related to stock
  options issued below fair market value                   --             --
 Deferred compensation expense                             --        239,461
 Restricted stock:
    Issued                                                 --             --
    Forfeited                                              --             --
    Amortization expense                                   --         92,749
 Repricing of warrants                             (6,919,692)            --
</TABLE>



                                     Page 6
<PAGE>




<TABLE>
<CAPTION>
<S>                                                 <C>             <C>             <C>          <C>            <C>
 Embedded value with Pyramid Trading warrants               --             --             --        431,925             --
 Preferred stock dividends                                  --             --             --             --             --
 Net loss                                                   --             --             --             --             --
                                                  ------------   ------------   ------------   ------------   ------------

BALANCES, December 31, 2001                         10,679,450      3,443,104       (631,619)    24,957,912     (1,209,143)
 Stock issued:
    Cash                                             1,571,334        287,414          7,850             --             --
    Notes receivable                                        --        (40,563)        40,563             --             --
    Acquisition of assets                                   --             --             --        (18,590)            --
    Guarantee of debt financing                         25,000         14,750             --             --             --
    Services rendered                                   12,000         14,700             --             --             --
    Conversion of accounts payable                       7,500          7,255             --             --             --
    Conversion of notes payable and accrued            554,569        460,001             --             --             --
    interest
    Conversion of accrued interest                     117,787        119,881             --             --             --
    Conversion of preferred stock                      140,000        150,000             --             --             --
 Redemption of preferred stock                              --             --             --             --             --
 Discount on preferred stock related to warrants            --             --             --             --             --
 issued
 Interest receivable on stock subscription                  --             --        (49,989)            --             --
 receivable
 Warrants issued:
    Preferred stock                                         --             --             --        324,324             --
    Common stock                                            --             --             --        575,119             --
    Debt                                                    --             --             --        879,382             --
 Deferred compensation expense related to stock             --         53,745             --        (53,345)         4,307
  options issued below fair market value
 Deferred compensation expense                              --             --             --             --         78,292
 Restricted stock:
    Issued and outstanding                              22,434         21,255             --             --        (21,255)
    Forfeited                                          (19,597)       (65,710)            --             --         65,710
    Amortization expense                                    --             --             --             --        400,000
 Embedded value with Pyramid Trading warrants               --             --             --        (32,503)            --
 Preferred stock dividends                                  --             --             --             --             --
 Net loss                                                   --             --             --             --             --
                                                  ------------   ------------   ------------   ------------   ------------

BALANCES, December 31, 2002                         13,110,477   $  4,465,832   $   (633,195)  $ 26,632,299   $   (682,089)
                                                  ============   ============   ============   ============   ============
</TABLE>

<TABLE>
<CAPTION>

<S>                                                   <C>            <C>
 Embedded value with Pyramid Trading warrants               --        431,925
 Preferred stock dividends                            (432,669)      (432,669)
 Net loss                                           (5,325,552)    (5,325,552)
                                                  ------------   ------------

BALANCES, December 31, 2001                        (25,115,067)     4,184,001
 Stock issued:
    Cash                                                    --        395,264
    Notes receivable                                        --             --
    Acquisition of assets                                   --             --
    Guarantee of debt financing                             --         14,750
    Services rendered                                       --         14,700
    Conversion of accounts payable                          --          7,255
    Conversion of notes payable and accrued                 --        760,001
    interest
    Conversion of accrued interest                          --        119,881
    Conversion of preferred stock                           --             --
 Redemption of preferred stock                              --        (84,000)
 Discount on preferred stock related to warrants        (9,295)      (357,262)
 issued
 Interest receivable on stock subscription                  --        (49,989)
 receivable
 Warrants issued:
    Preferred stock                                         --        324,324
    Common stock                                            --        575,119
    Debt                                                    --        879,382
 Deferred compensation expense related to stock             --          4,707
  options issued below fair market value
 Deferred compensation expense                              --         78,292
 Restricted stock:
    Issued and outstanding                                  --             --
    Forfeited                                               --             --
    Amortization expense                                    --        400,000
 Embedded value with Pyramid Trading warrants               --        (32,503)
 Preferred stock dividends                            (153,578)      (153,578)
 Net loss                                           (4,438,059)    (4,438,059)
                                                  ------------   ------------

BALANCES, December 31, 2002                       $(29,715,999)  $  2,642,285
                                                  ============   ============

</TABLE>

          See accompanying notes to consolidated financial statements.


                                     Page 7
<PAGE>

                    VICOM, INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 2002, 2001, and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                     2002          2001          2000
                                                              -----------   -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                           <C>           <C>           <C>
    Net loss                                                  $(4,438,059)  $(5,325,552)  $(4,235,831)
    Adjustments to reconcile net loss to cash flows from
      operating activities:
        Depreciation                                              981,985     1,019,581       673,074
        Amortization                                              133,472       391,183       428,770
        Amortization of deferred compensation                     482,999       332,210            --
        Amortization of original issue discount                 1,103,314       797,169            --
        Write off of notes receivable and investment               60,000            --            --
        Impairment reserve on property and equipment              119,480            --            --
        Common stock issued for services                           27,700            --            --
        Loss on sale of property and equipment                     31,412           846            --
        Interest receivable on stock subscription receivable      (49,989)      (21,619)           --
        Warrants issued for services                                   --        87,403       208,000
        Warrants issued with debt conversion                      183,903            --            --
        Discount on preferred stock related to warrants                --       (33,178)           --
        Changes in operating assets and liabilities:
           Accounts receivable, net                               576,509     3,087,313      (291,843)
           Inventories, net                                       182,783       705,050      (320,406)
           Other current assets                                  (205,483)       47,031       225,234
           Other assets                                            43,210            --        (2,178)
           Wholesale line of credit                               (34,424)     (708,533)    2,033,340
           Accounts payable and accrued liabilities                38,344      (978,479)   (2,092,811)
           Deferred service obligations and revenue              (106,877)       97,465      (265,575)
                                                              -----------   -----------   -----------
               Net Cash Flows from Operating Activities          (869,721)     (502,110)   (3,640,226)
                                                              -----------   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from sale of property and equipment                1,239,313        60,019            --
    Purchases of property and equipment                        (1,275,434)   (1,884,945)   (1,316,022)
    Payments received on notes receivable                           6,786        59,084        45,331
    Issuance of notes receivable                                       --            --       (96,897)
                                                              -----------   -----------   -----------
        Net Cash Flows from Investing Activities                  (29,335)   (1,765,842)   (1,367,588)
                                                              -----------   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Decrease in checks issued in excess of deposits                    --            --      (126,297)
    Proceeds from long-term debt and warrants issued with
      long-term debt                                            1,172,064     1,919,650     2,282,160
    Net payments under short-term loans                                --            --    (1,307,400)
    Principal payments on notes and installment obligations            --            --    (2,482,624)
    Payments on long-term debt                                   (131,605)     (461,808)           --
    Payments on capital lease obligations                        (937,828)     (315,770)           --
    Proceeds from issuance of stock and warrants                  949,533     1,270,612     8,448,760
    Stock issuance costs                                               --            --      (679,110)
    Redemption of preferred stock                                 (84,000)     (538,199)      (79,765)
    Preferred dividends                                          (153,578)     (143,167)      (90,796)
                                                              -----------   -----------   -----------
        Net Cash Flows from Financing Activities                  814,586     1,731,318     5,964,928
                                                              -----------   -----------   -----------

           Net Change in Cash and Cash Equivalents                (84,470)      957,114      (536,634)


 CASH AND CASH EQUIVALENTS - Beginning of Year                    624,845     1,161,479       204,365
                                                              -----------   -----------   -----------

     CASH AND CASH EQUIVALENTS - END OF YEAR                  $   540,375   $   624,845   $ 1,161,479
                                                              ===========   ===========   ===========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                     Page 8
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000


--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies
================================================================================

    Nature of Business

Vicom,  Inc. (the Company) was  incorporated in Minnesota in September 1975. The
Company  provides  voice,  data and video  services to business,  government and
multi-dwelling  customers.  The  Company's  products  and  services  are sold to
customers located throughout the midwest  geographical area of the United States
of America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern that  contemplates  the realization
of assets and satisfaction of liabilities in the normal course of business.  For
the years ended  December 31, 2002,  2001,  and 2000,  the Company  incurred net
losses of $4,438,059,  $5,325,552 and $4,235,831,  respectively. At December 31,
2002,  the Company had an  accumulated  deficit of  $29,715,999.  The  Company's
ability to continue as a going concern is dependent on it  ultimately  achieving
profitability  and/or raising additional  capital.  Management intends to obtain
additional  debt or equity capital to meet all of its existing cash  obligations
and fund commitments on planned  Multiband  projects,  however,  there can be no
assurance that the sources will be available or available on terms  favorable to
the Company.  Management anticipates that the impact of the actions listed below
will generate sufficient cash flows to pay current  liabilities,  long-term debt
and capital lease obligations and fund the Company's future operations:

1.   Continued   reduction  of  operating   expenses  by  controlling   payroll,
     professional fees and other general and administrative expenses.
2.   Solicit  additional  equity  investment  in the  Company by either  issuing
     preferred or common stock.
3.   Continue to market Multiband services and acquire additional multi-dwelling
     unit customers.
4.   Control  capital   expenditures  by  contracting   Multiband  services  and
     equipment through a landlord- owned equipment program.

    Principles of Consolidation

The   consolidated   financial   statements   include  the  accounts  of  Vicom,
Incorporated   (Vicom)  and  its  wholly  owned   subsidiaries,   Vicom  Midwest
Telecommunication Systems, Inc. (VMTS), Corporate Technologies, USA, Inc. (CTU),
and Multiband, Inc. (Multiband) which provides voice, data and video services to
residential multi-dwelling units. All significant inter-company transactions and
balances have been eliminated in consolidation.

    Revenues and Cost Recognition

The Company earns revenues from four sources:  1) Video and computer  technology
products  which  are  sold  but  not  installed,   2)  Voice,   video  and  data
communication products which are sold and installed, 3) Service revenues related
to  communication  products which are sold and both installed and not installed,
and 4) Multiband user charges to multiple dwelling units.

Revenues  from video and computer  technology  products,  which are sold but not
installed, are recognized when delivered and the customer has accepted the terms
and has the ability to fulfill the terms.

Customers  contract  for both the purchase  and  installation  of voice and data
networking  technology  products and certain video technologies  products on one
sales   agreement,   as   installation  of  the  product  is  essential  to  the
functionality  of the product.  Revenues and costs on the sale of products where
installation  is involved are  recognized  under the  percentage  of  completion
method. Costs are expensed as incurred.  The amount of revenue recognized is the
portion that the cost expended to date bears to the  anticipated  total contract
cost, based on current  estimates to complete.  Contract costs include all labor
and  materials  unique to or installed in the  project,  as well as  subcontract
costs.  Costs and  estimated  earnings in excess of billings are  classified  as
current  assets;  billings  in  excess  of  costs  and  estimated  earnings  are
classified as current liabilities.



                                     Page 9
<PAGE>
                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
================================================================================

Service revenues related to technology products including  consulting,  training
and support are recognized when the services are provided.  The Company,  if the
customer elects, enters into equipment maintenance  agreements for products sold
once  the  original  manufacturer's  warranty  has  expired.  Revenues  from all
equipment  maintenance  agreements are recognized on a straight-line  basis over
the terms of each contract. Costs for services are expensed as incurred.

Multiband  user  charges  are  recognized  as revenues in the period the related
services are provided.

Warranty costs incurred on new product sales are substantially reimbursed by the
equipment suppliers.

    Cash and Cash Equivalents

The Company includes as cash  equivalents  certificates of deposit and all other
investments  with  original  maturities  of three months or less when  purchased
which are readily  convertible  into known amounts of cash. The Company deposits
its cash in high credit quality financial institutions.  The balances, at times,
may exceed federally insured limits.

    Accounts Receivable

The Company reviews customers' credit history before extending  unsecured credit
and  establishes  an allowance  for  uncollectible  accounts  based upon factors
surrounding  the  credit  risk of  specific  customers  and  other  information.
Invoices are due 30 days after  presentation.  Accounts  receivable over 30 days
are  considered  past due.  The  Company  does not accrue  interest  on past due
accounts  receivable.  The Company writes off accounts  receivable when they are
deemed  uncollectible.  Accounts  receivable  are shown net of an allowance  for
uncollectible  accounts of $236,000  and $178,000 at December 31, 2002 and 2001,
respectively.  Accounts  receivable  over 90 days were  $331,000 and $557,000 at
December 31, 2002 and 2001, respectively.

    Inventories

Inventories,  consisting principally of purchased telecommunication,  networking
and  computer  equipment  and parts,  are stated at the lower of cost or market.
Cost is  determined  using an  average  cost  method for  telecommunication  and
networking  equipment  and the  first-in,  first-out  (FIFO) method for computer
equipment.  Nonmonetary  exchanges  of  inventory  items with third  parties are
recorded  at the net book value of the items  exchanged  with no gains or losses
recognized.   The  Company  established  a  reserve  to  account  for  potential
obsolescence   of  $340,900   and  $321,000  at  December  31,  2002  and  2001,
respectively.

    Property and Equipment

Property,   equipment   and  leasehold   improvements   are  recorded  at  cost.
Improvements are capitalized  while repairs and maintenance costs are charged to
operations  when  incurred.  Property and equipment is  depreciated or amortized
using the straight-line method over estimated useful lives ranging from three to
seven years. Leasehold improvements are amortized using the straight-line method
over the shorter of the lease term or the estimated useful life of the assets.

    Debt Issuance Costs

Debt issuance  costs are amortized  over the one year life of the loan using the
straight-line method, which approximates the interest method.


                                    Page 10
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000


--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
================================================================================

    Goodwill

Goodwill  represents  the  excess of  acquisition  costs  over the fair value of
identifiable net assets acquired and was being amortized using the straight-line
method over ten years.  Accumulated  amortization  was  $782,278 at December 31,
2002 and 2001.  The Company  did not record any  impairment  charges  related to
goodwill and property and  equipment  during the years ended  December 31, 2002,
2001 and 2000.

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  (SFAS) No. 141,  "Business  Combinations",
effective  for  acquisitions  initiated  on or after July 1, 2001,  and No. 142,
"Goodwill and Other  Intangible  Assets",  effective for fiscal years  beginning
after  December 15,  2001.  SFAS No. 141  requires  that the purchase  method of
accounting be used for all business combinations  initiated after June 30, 2001,
and includes guidance on the initial recognition and measurement of goodwill and
other  intangible  assets  arising  from  business  combinations.  SFAS No.  142
indicates that goodwill (and intangible  assets deemed to have indefinite lives)
will no longer be  amortized  but will be  subject to annual  impairment  tests.
Other  intangible  assets will continue to be amortized over their useful lives.
The  Company  adopted  SFAS No.  142  effective  January 1,  2002.  The  Company
performed the required  goodwill  impairment test during the year ended December
31, 2002. As part of adopting this standard, the Company obtained an independent
appraisal  to assess the fair value of its business  units to determine  whether
goodwill carried on its books was impaired and the extent of such impairment, if
any. The independent  appraisal used the income method to measure the fair value
of its  business  units.  Under the income  method,  value is  dependent  on the
present value of future economic  benefits to be derived from ownership.  Future
net cash flows available for distribution  are discounted at market-based  rates
of return to provide  indications  of value.  The  independent  appraiser used a
discount factor of 18.35%.  Based upon this independent  appraisal,  the Company
determined that its current  goodwill  balances were not impaired as of December
31, 2002.

Components of intangible assets are as follows:

<TABLE>
<CAPTION>
                                                        December 31, 2002              December 31, 2001
                                                   --------------------------      --------------------------
                                                     Gross                           Gross
                                                    Carrying       Accumulated      Carrying     Accumulated
                                                     Amount       Amortization       Amount      Amortization
                                                   ----------      ----------      ----------      ----------
Intangible assets subject to amortization
<S>                                                <C>             <C>             <C>             <C>
     Domain name                                   $   83,750      $   22,333      $   83,750      $    5,583
Intangible assets not subject to amortization
     Goodwill                                      $3,531,157      $  782,278      $3,531,157      $  782,278
</TABLE>


Amortization of intangible assets was $16,750, $5,583 and $0 for the years ended
December 31, 2002, 2001 and 2000,  respectively.  Estimated amortization expense
of intangible  asses for the years ending December 31, 2003, 2004, 2005 and 2006
is $16,750, $16,750, $16,750 and $11,167,  respectively. The Company's net loss,
excluding goodwill  amortization expense, for the years ended December 31, 2002,
2001 and 2000 would have been as follows had we adopted  SFAS No. 142 on January
1, 2000:


                                    Page 11
<PAGE>




                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
================================================================================

<TABLE>
<CAPTION>
                                                                     2002              2001                2000
                                                            -------------       -----------       -------------
<S>                                                         <C>                 <C>               <C>
Loss attributable to common stockholders - as reported      $  (4,591,637)      $(5,758,221)      $  (5,082,011)
SFAS No. 142 amortization adjustment                        $          --       $   345,600       $     335,074
Loss attributable to common stockholders - as adjusted      $  (4,591,637)      $(5,412,621)      $  (4,746,937)
Basic and diluted net loss per share - as reported          $       (0.39)      $     (0.66)      $       (0.72)
Basic and diluted net loss per share - adjusted             $       (0.39)      $     (0.62)      $       (0.68)
</TABLE>

    Intangible Asset

The Company  amortizes a domain name acquired during the year ended December 31,
2001 over its  estimated  useful  life of five  years  using  the  straight-line
method.

    Credit Risk

Credit risk on accounts  receivable,  although  concentrated  in one  geographic
region,  is  minimized  as a result  of the  large  and  diverse  nature  of the
Company's customer base.

    Advertising Costs

Advertising  costs are charged to expense as  incurred.  Advertising  costs were
$104,788,  $230,629 and $188,444 for the years ended December 31, 2002, 2001 and
2000,  respectively,  and are  included in selling,  general and  administrative
expenses in the consolidated statements of operations.

    Shipping and Handling Costs

In accordance  with Emerging  Issues Task Force (EITF) Issue 00-10,  "Accounting
for Shipping and Handling Fees and Costs," the Company is including shipping and
handling  revenues  in  revenues  and  shipping  and  handling  costs in cost of
products and services.

    Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under
this method, deferred tax assets and liabilities are recognized for the expected
future tax  consequences  attributable  to  temporary  differences  between  the
financial  statement and income tax reporting  bases of assets and  liabilities.
Deferred  tax assets are  reduced by a  valuation  allowance  to the extent that
realization is not assured.

    Stock-Based Compensation

In accordance with Accounting  Principles Board (APB) Opinion No. 25 and related
interpretations, the Company uses the intrinsic value-based method for measuring
stock-based compensation cost which measures compensation cost as the excess, if
any, of the quoted market price of the Company's  common stock at the grant date
over the  amount the  employee  must pay for the stock.  The  Company's  general
policy is to grant stock options at fair value at the date of grant. Options and
warrants issued to nonemployees  are recorded at fair value, as required by SFAS
No. 123  "Accounting  for  Stock-Based  Compensation,"  using the Black  Scholes
pricing model.



                                    Page 12
<PAGE>




                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
================================================================================

Pursuant to APB No. 25 and related interpretations, $482,999, $332,210 and $0 of
compensation   cost  has  been  recognized  in  the  accompanying   consolidated
statements of operations for the years ended  December 31, 2002,  2001 and 2000,
respectively.  Had compensation cost been recognized based on the fair values of
options at the grant dates  consistent  with the provisions of SFAS No. 123, the
Company's net loss and loss  attributable to common  stockholders  and basic and
diluted loss per common share would have been  increased  to the  following  pro
forma amounts:

<TABLE>
<CAPTION>
                                                            2002              2001              2000
                                                     -----------       -----------       -----------
<S>                                                  <C>               <C>               <C>
Loss attributable to common stockholders             $(4,591,637)      $(5,758,221)      $(5,082,011)
Pro forma loss attributable to common shares         $(4,915,649)      $(6,131,692)      $(5,415,432)

Basic and diluted net loss per share:
   As reported                                       $     (0.39)      $     (0.66)      $     (0.72)
   Pro forma loss attributable to common shares      $     (0.42)      $     (0.70)      $     (0.77)

Stock-based compensation:
   As reported                                       $   482,999       $   332,210       $         0
   Proforma                                          $   324,012       $   373,471       $   333,421
</TABLE>


In determining the compensation  cost of the options granted during fiscal 2002,
2001,  and 2000,  as  specified  by SFAS No. 123,  the fair value of each option
grant has been  estimated  on the date of grant using the  Black-Scholes  option
pricing model and the weighted average  assumptions  used in these  calculations
are summarized as follows:

<TABLE>
<CAPTION>
                                                      2002                   2001                 2000
                                         ------------------    ------------------    -----------------
<S>                                                  <C>                   <C>                   <C>
Risk-free interest rate                              4.40%                 5.00%                 6.46%
Expected life of options granted                  10 years              10 years               5 years
Expected volatility range                             170%                  110%                   51%
Expected dividend yield                                 0%                    0%                    0%
</TABLE>

    Net Loss per Share

Basic net loss per common share is computed by dividing the loss attributable to
common  stockholders by the weighted average number of common shares outstanding
for the  reporting  period.  Diluted  net loss per common  share is  computed by
dividing loss  attributable  to common  stockholders  by the sum of the weighted
average number of common shares  outstanding  plus all  additional  common stock
that would have been  outstanding if potentially  dilutive common shares related
to  common  share  equivalents  (stock  options,  stock  warrants,   convertible
preferred  shares,  and issued but not  outstanding  restricted  stock) had been
issued.  All options,  warrants,  convertible  preferred shares,  and restricted
stock  outstanding  during the years ended December 31, 2002, 2001 and 2000 were
anti-dilutive.

    Recent Accounting Pronouncements

In April 2002,  FASB issued SFAS No. 145,  "Rescission of FASB Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections,"
effective for fiscal years  beginning  after May 15, 2002. The Company  believes
the  adoption of SFAS No. 145 will not have a material  effect on the  Company's
consolidated financial position or results of operations.


                                    Page 13
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
================================================================================

In June 2002, FASB issued SFAS No. 146,  "Accounting  for Costs  Associated with
Exit or  Disposal  Activities."  SFAS No.  146  requires  the  recognition  of a
liability  for a cost  associated  with an exit or  disposal  activity  when the
liability is incurred  versus the date the Company  commits to an exit plan.  In
addition, SFAS No. 146 states the liability should be initially measured at fair
value.  The  requirements  of SFAS No. 146 are  effective  for exit or  disposal
activities that are initiated after December 31, 2002. The Company  believes the
adoption  of SFAS  No.  146 will not have a  material  effect  on the  Company's
consolidated financial position or results of operations.

In October 2002, FASB issued SFAS No. 147,  "Acquisitions  of Certain  Financial
Institutions."  SFAS No. 147 is effective  October 1, 2002. The adoption of SFAS
No. 147 did not have a material effect on the Company's  consolidated  financial
position or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation - Transition and Disclosure."  SFAS No. 148 is an amendment to SFAS
No. 123 providing  alternative  methods of transition for a voluntary  change to
the fair value based method of accounting for stock-based employee  compensation
and also provides required additional disclosures about the method of accounting
for  stock-based  employee  compensation.   The  amendments  are  effective  for
financial statements for fiscal years ending after December 15, 2002 and for the
interim  periods  beginning  after  December 15, 2002.  The Company  adopted the
annual  disclosure  provisions of SFAS No. 148. The Company has currently chosen
not to adopt the  voluntary  change to the fair value based method of accounting
for  stock-based  employee  compensation,  pursuant to SFAS No. 148,  which,  if
adopted,  could have a material effect on the Company's  consolidated  financial
position or results of operations.

    Management's Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
Significant  management estimates relate to the allowances for doubtful accounts
and  inventory  obsolescence,  property and  equipment  estimated  useful lives,
goodwill carrying value and the valuation of deferred income tax assets.

    Financial Instruments

The carrying amounts for all financial instruments  approximates fair value. The
carrying amounts for cash and cash equivalents,  accounts  receivable,  accounts
payable  and accrued  liabilities  approximate  fair value  because of the short
maturity of these  instruments.  The fair value of capital lease obligations and
long-term  debt  approximates  the  carrying  amounts  based upon the  Company's
expected  borrowing  rate  for  debt  with  similar  remaining   maturities  and
comparable risk.

    Reclassifications

Certain accounts in the prior years' consolidated financial statements have been
reclassified  for comparative  purposes to conform with the  presentation in the
current year consolidated financial statements.  These  reclassifications had no
effect on net loss or stockholders' equity.


                                    Page 14
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 2 - Business Acquisitions
================================================================================

On May 21, 2001, the Company purchased certain assets and assumed certain
liabilities of Red River Computers, Inc. The purchase price was allocated to the
acquired assets and assumed liabilities based on the estimated fair values as of
the acquisition date. The purchase price was allocated to assets and liabilities
acquired as follows:

Inventories                                            $ 210,895
Property and equipment                                    28,223
Service obligations                                       (2,154)
                                                       ---------
   Net assets acquired                                   236,964
Goodwill                                                 180,442
                                                       ---------
   Total purchase price                                $ 417,406
                                                       =========

The  consideration  consisted of $50,000 in cash,  87,000  common  shares of the
Company with an assigned  value of $261,000,  and 10,460 Class A 8%  cumulative,
convertible  preferred  shares of the Company with an assigned value of $106,406
based on a $10 per share stated value.  The value assigned to common stock of $3
per share was based on the approximate average of the Company's common stock ten
trading days before May 21, 2001. The  consolidated  results of operations on an
unaudited  pro forma basis are not  presented  separately  as the results do not
differ significantly from historical amounts presented herein.

--------------------------------------------------------------------------------
NOTE 3 - Property and Equipment
================================================================================

Property and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                    2002              2001
                                                             -----------       -----------
<S>                                                          <C>               <C>
Leasehold improvements                                       $   732,931       $   130,733
Property and equipment - owned                                 4,230,560         3,621,407
Property and equipment under capital lease  obligations
                                                                 456,124         1,388,184
In process equipment (Multiband)                                      --           947,252
                                                             -----------       -----------
                                                               5,419,615         6,087,576
Less accumulated depreciation and amortization                (2,170,642)       (2,027,745)
                                                             -----------       -----------
                                                             $ 3,248,973       $ 4,059,831
                                                             ===========       ===========
</TABLE>

Depreciation and amortization expense on property and equipment was $981,985,
$1,019,581 and $673,074 for the years ended December 31, 2002, 2001 and 2000,
respectively.


                                    Page 15
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000


--------------------------------------------------------------------------------
NOTE 4 - Other Assets
================================================================================

Other assets consisted of the following at December 31:

                                                   2002          2001
                                               --------      --------
Current assets:
   Current portion of notes receivable         $ 52,977      $ 60,092
   Prepaid expenses and other                   173,797       235,232
                                               --------      --------
                                               $226,774      $295,324
                                               ========      ========

Noncurrent assets:
   Notes receivable, less current portion      $     --      $ 33,908
   Domain name                                   61,417        78,167
   Prepaid expenses and other                   109,236       148,537
                                               --------      --------
                                               $170,653      $260,612
                                               ========      ========

At December 31, 2002 and 2001,  the Company had notes  receivable of $52,977 and
$94,000.  The notes are due through December 2003 with interest ranging from 12%
to 16% and are secured by equipment and unsecured.

--------------------------------------------------------------------------------
NOTE 5 - Accrued Liabilities
================================================================================

Accrued liabilities consisted of the following at December 31:

                                   2002          2001
                               --------      --------
Payroll and related taxes      $398,415      $396,285
Other                           316,064       380,132
                               --------      --------
                               $714,479      $776,417
                               ========      ========

--------------------------------------------------------------------------------
NOTE 6 - Wholesale Line of Credit
================================================================================

At December 31,  2002,  the Company has a  $1,450,000  wholesale  line of credit
agreement  with a financial  institution,  which  expires  with 30 day notice by
either  party,  for the  purchase of certain  resale  merchandise  from  certain
suppliers.  Interest is generally at 0% (if paid within certain terms, generally
30 days),  and the  wholesale  line of credit is  collateralized  by the related
inventories,  accounts  receivable and the $1,450,000 letters of credit noted in
Note 7. The  wholesale  line of credit  agreement  is an  agreement  between the
Company, financial institution,  and certain vendors of the Company. The Company
receives  no  funds  from the  financial  institution,  but  pays the  financial
institution rather than certain vendors.  The balance outstanding was $1,290,383
and $1,324,807 at December 31, 2002 and 2001, respectively.


                                    Page 16
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000


--------------------------------------------------------------------------------
NOTE 7 - Long-term Debt
================================================================================

Long-term debt consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                            2002               2001
                                                                   ----------------   ------------------
<S>                                                                <C>                <C>
       Note payable - Pyramid Trading Limited Partnership, net of  $       902,971    $         609,722
       unamortized original issue discount and beneficial
       conversion of note payable into common stock of $59,250
       and $812,500 at December 31, 2002 and 2001, respectively,
       quarterly interest only payments through December 2002 at
       8%, due May 2004, unsecured (see Note 16).

       Debenture payable - Convergent Capital Partners I, L.P.,          1,804,705            2,045,618
       net of original issue discount of $595,295 and $204,382 at
       December 31, 2002 and 2001, respectively, monthly interest
       only payments through July 2005, monthly installments of
       $102,273 including interest at 14% (effective interest
       rate 18.4%), thereafter, due  May 2007, secured by
       substantially all of the assets of the Company.

       Demand debenture payable - Convergent Capital Partners I,           100,000                    -
       L.P., monthly interest only payments at 14% through May
       2007, due on demand or May 2007, secured by substantially
       all of the assets of the Company.

       Note payable - Lexus Tower Limited Partnership, monthly             418,872                    -
       installments of $5,987 including interest at 8.4%, due
       through November 2010, secured by certain assets of the
       Company.

       Notes payable, interest at 6% to 14% due through March 2011, secured by
       certain assets of the Company.

                                                                           209,047               99,959
                                                                   ----------------   ------------------
        Total long-term debt                                             3,435,595            2,755,299
        Less: current portion                                             (321,589)             (85,789)
                                                                   ----------------   ------------------
        Long-term debt, net                                        $     3,114,006    $       2,669,510
                                                                   ================   ==================
</TABLE>


                                    Page 17
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 7 - Long-term Debt (cont.)
================================================================================

Future maturities of long-term debt are as follows for the years ending
December 31:

<TABLE>
<CAPTION>
<S>                                                          <C>
         2003                                                $          321,589
         2004                                                         1,022,065
         2005                                                           566,005
         2006                                                         1,335,437
         2007                                                           649,810
         Thereafter                                                     195,234
                                                             ------------------
         Total future minimum payments                                4,090,140
         Less: original issue discounts and beneficial
           conversion of note payable into common stock
                                                                      (654,545)
                                                             ------------------
         Present value of future minimum payments                     3,435,595
         Less: current portion                                        (321,589)
                                                             ------------------
             Long-term debt, net                             $        3,114,006
                                                             ==================
</TABLE>


In  2000,  the  Company  entered  into a  $2,250,000  debenture  agreement  with
Convergent  Capital  Partners I, L.P.,  with interest at 14% payable monthly and
monthly  payments of  $102,273  from August 1, 2003  through  June 1, 2005.  The
debenture is secured by  substantially  all Company  assets.  In connection with
this debenture,  the Company issued 150,000 warrants to purchase common stock at
prices  ranging from $1.50 to $5.20 per share.  The proceeds of $2,250,000  were
allocated  between the  debenture  and the warrant  based on the  relative  fair
values of the securities at the time of issuance. The warrants were valued using
the Black Scholes pricing model. The resulting original issue discount, the fair
value of the warrant,  is being  amortized over the life of the debenture  using
the straight-line method, which approximates the interest method.

In 2002, the Company  amended the debenture  agreement with  Convergent  Capital
Partners I, L.P.,  and  borrowed an  additional  $150,000  with  interest at 14%
payable  monthly and monthly  principal  payments  from August 2005  through May
2007.  In  connection  with this  debenture,  the Company  issued an  additional
500,000  seven-year  warrants to purchase  common stock at $1.10 per share.  The
additional  warrants  were valued using the Black  Scholes  pricing  model.  The
resulting  original  issue  discount,  the fair value of the  warrant,  is being
amortized over the life of the debenture using the straight-line  method,  which
approximates  the  interest  method.  The  Company was in  violation  of certain
covenants of this debt  agreement.  A waiver was obtained  from the lender.  The
debenture payable may be redeemed at the Company's option at a premium declining
ratably thereafter to par value in April 2005.

On January 23, 2001, the Company borrowed $1,500,000 and issued a warrant to the
lender to purchase  375,000  common  shares at $4.00 per share  through  January
2003.  The  debt is also  convertible  into  common  stock of the  Company  at a
conversion  rate of $4.75  per share  through  January  2003.  The  proceeds  of
$1,500,000  were allocated  between the note, and the fair value of the warrants
based on using the Black Scholes pricing model. An additional  375,000 five-year
warrants  were  issued  in April  2002 and the fair  value of the  warrants  was
expensed as additional  interest  expense as of December 31, 2002. The resulting
original  issue  discount,  the fair value of the  warrant,  and the  beneficial
conversion  of the note  payable  into  common  stock as  defined  in EITF 00-27
"Application of Issue No. 98-5 to Certain  Convertible  Instruments"),  is being
amortized  over the life of the  note  using  the  straight-line  method,  which
approximates the interest method (see Note 16).



                                    Page 18
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 7 - Long-term Debt (cont.)
================================================================================

During 2002, the Company borrowed $600,000 and issued a five-year warrant to one
of its  directors  to purchase  120,000  common  shares at $1.50 per share.  The
proceeds of $600,000 were  allocated  between the note and the fair value of the
warrants  using the Black Scholes  pricing model.  The resulting  original issue
discount,  the fair value of the warrants,  was being amortized over the life of
the note using the straight-line  method which approximates the interest method.
In December  2002,  the lender  converted the note payable into 60,000 shares of
Class E convertible  preferred stock. The remaining  unamortized  original issue
discount amount was expensed at the time of the conversion.

Interest expense to related parties for the years ended December 31, 2002, 2001,
and 2000 was approximately $228,000, $3,000 and $153,000, respectively.

The Company also had $1,450,000 of outstanding letters of credit at December 31,
2002 and 2001 (see Note 6).

--------------------------------------------------------------------------------
NOTE 8 - Capital Lease Obligations
================================================================================

The Company has lease financing facilities for property, equipment and leasehold
improvements. Leases outstanding under these agreements bear interest at an
average rate of 10.56% and expire through October 2007. The obligations are
secured by the property under lease. Total cost and accumulated amortization of
the leased equipment was $456,124 and $219,332 at December 31, 2002 and
$1,388,184 and $492,532 at December 31, 2001.

Future minimum capital lease payments are as follows for the years ending
December 31:

<TABLE>
<CAPTION>
<S>                                                           <C>
          2003                                                $           79,307
          2004                                                            52,298
          2005                                                            52,298
          2006                                                            52,298
          2007                                                            36,081
                                                              ------------------
          Total                                                          272,282
          Less: amounts representing interest                            (53,368)
                                                              ------------------
          Present value of future minimum lease payments                 218,914
          Less: current portion                                          (59,570)
                                                              ------------------
          Capital lease obligations, net of current portion   $          159,344
                                                              ==================
</TABLE>

--------------------------------------------------------------------------------
NOTE 9 - Stockholders' Equity
================================================================================

    Capital Stock Authorized

The articles of incorporation  authorize the Company to issue 50,000,000  shares
of no par  capital  stock.  Authorization  to  individual  classes  of stock are
determined by a Board of Directors  resolution.  The authorized classes of stock
at December  31, 2002 are the  following:  275,000  shares of Class A cumulative
convertible  preferred  stock,  60,000 shares of Class B cumulative  convertible
preferred  stock,  250,000  shares of Class C cumulative  convertible  preferred
stock,  250,000 shares of Class D cumulative  convertible  preferred  stock, and
400,000 shares of Class E cumulative convertible preferred stock.


                                    Page 19
<PAGE>

--------------------------------------------------------------------------------
NOTE 9 - Stockholders' Equity (cont.)
================================================================================

    Cumulative Convertible Preferred Stock

Dividends  on Class A,  Class C,  Class D, and  Class E  cumulative  convertible
preferred  stock are cumulative  and payable  quarterly at 8%, 10%, 14%, and 15%
per annum, respectively. Cumulative convertible preferred stock can be converted
into common  shares at any time as follows:  Class A and Class B - five  shares,
Class C - two shares,  Class D - two and  one-half  shares,  and Class E - eight
shares.  The intrinsic value of any beneficial  conversion option is recorded as
preferred stock dividends at the time of preferred stock issuance.  Dividends on
Class B  preferred  are  cumulative  and payable  monthly at 10% per annum.  The
dividends  are  based on $10 per  share for all  preferred  shares.  The Class B
preferred was offered to certain note payable holders at a conversion of $10 per
Class B preferred share. All preferred stock is non-voting. Warrants to purchase
shares of the  Company's  common  stock were given with the issuance of Class A,
Class B,  Class D, and Class E  preferred  stock and were  valued at fair  value
using the Black Scholes pricing model. The Company may, but is not obligated to,
redeem  the  preferred  stock at  $10.50  per  share for Class A and Class B and
$10.00  per share for Class C,  Class D, and  Class E,  whenever  the  Company's
common stock price exceeds certain defined  criteria as defined in the preferred
stock  agreements.  Upon the Company's call for  redemption,  the holders of the
preferred  stock called for redemption have the option to convert each preferred
share into shares of the  Company's  common  stock.  Holders of preferred  stock
cannot require the Company to redeem their shares. The liquidation preference is
the same as the redemption price for each class of preferred stock.

    Stock Compensation Plans

The Company has a 1999 Stock  Compensation  Plan,  which permits the issuance of
restricted stock and stock options to key employees and agents.  All outstanding
incentive stock options granted under the prior 1997 Stock Options Plan continue
until all agreements  have expired.  There are 2,500,000  shares of common stock
reserved for  issuance  through  restricted  stock,  non-qualified  stock option
awards and incentive  stock option awards.  The Plans also provide that the term
of each award be  determined  by the Board of  Directors.  Under the Plans,  the
exercise  price of incentive  stock options may not be less than the fair market
value of the stock on the award  date,  and the options  are  exercisable  for a
period not to exceed ten years from award date.

The Company also has a 2000 Non-employee Director Stock Compensation Plan, which
permits the  issuance of stock  options  for 300,000  shares of common  stock to
non-employee  directors.  The  exercise  price of the stock  options is the fair
market value of the stock on the award date, and the options are exercisable for
a period not to exceed ten years from award date.

    Employee Stock Purchase Plan

The Company has a 2000 Employee Stock  Purchase Plan,  which allows for the sale
of 400,000  shares of Company common stock to qualified  employees.  At December
31, 2002, no shares were issued under the Plan.

    Stock Subscriptions Receivable

The Company has stock  subscriptions  receivable  including interest  receivable
totaling $633,195 and $631,619 due to the Company at December 31, 2002 and 2001,
respectively,  from the issuance of common stock. Monthly interest only payments
at interest  ranging from 9% to 10% are required  through December 2003 at which
time any unpaid  stock  subscription  receivable  is due.  The  receivables  are
secured by the common stock issued.


                                    Page 20
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 9 - Stockholders' Equity (cont.)
================================================================================

    Restricted Stock

The Company awards  restricted common shares to selected  employees.  Recipients
are not required to provide any consideration other than services. Company share
awards are subject to certain  restrictions on transfer,  and all or part of the
shares  awarded  may be subject to  forfeiture  upon the  occurrence  of certain
events,  including  employment  termination.  The intrinsic value at the date of
grant related to the shares awarded is generally amortized over three years, the
vesting term of the awards. Compensation expense recorded during the years ended
December 31, 2002,  2001, and 2000 in connection  with the  amortization  of the
award cost was $78,292, $92,749 and $93,696, respectively.

Restricted stock activity is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                             2002          2001                       2000
                                                -----------------   -----------------    -----------------
<S>                                                        <C>               <C>                   <C>
Outstanding, January 1                                     75,337            113,829               199,939
     Issued                                                22,434             83,000                35,000
     Vested                                              (33,107)           (38,781)              (62,842)
     Forfeited                                           (19,598)           (82,711)              (58,268)
                                                -----------------   -----------------    -----------------
Outstanding, December 31                                   45,066             75,337               113,829
                                                =================   =================    =================
</TABLE>


    Stock Options

Stock option activity is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                 Options                           Weighted-Average Exercise Price
                              --------------------------------------------   -------------------------------------
                                      2002        2001               2000            2002        2001             2000
                              -------------   ------------   ------------    ------------    -----------   -----------
<S>                              <C>             <C>              <C>        <C>             <C>           <C>
Outstanding, January 1           1,050,024       1,145,507        998,591    $       2.55    $      2.31   $      1.09
     Granted                       249,300         839,500        440,700            0.96           1.20          4.26
     Exercised                           -       (615,933)      (221,217)               -           0.51          0.75
     Forfeited                   (206,167)       (319,050)       (72,567)            1.86           2.11          2.10
                              -------------   ------------   ------------    ------------    -----------   -----------
Outstanding, December 31         1,093,157       1,050,024      1,145,507    $       2.45    $      2.55   $      2.31
                              =============   ============   ============    ============    ===========   ===========
</TABLE>


The  weighted-average  grant-date fair value of options granted during the years
ended  December  31,  2002,   2001,  and  2000  was  $0.86,   $2.94  and  $2.38,
respectively.

Options outstanding and exercisable as of December 31, 2002, are as follows:

<TABLE>
<CAPTION>
                                            Outstanding                                    Exercisable
                         ---------------------------------------------------   ------------------------------------
                                                    Weighted - Average
                                               -----------------------------
                                                               Remaining                               Weighted-
   Range of Exercise                            Exercise      Contractual                              Average
        Prices                 Options            Price        Life-Years          Options         Exercise Price
------------------------  -------------------  ------------  ---------------   -----------------   ----------------
<S>                                 <C>         <C>                  <C>                <C>        <C>
       $.60 to    $1.00             319,300     $    0.64            7.90               240,000    $         0.64
      $1.50 to    $2.50             410,991          1.94            7.69               380,991              1.97
      $2.88 to    $4.40             128,333          3.48            7.52                73,083              3.39
      $4.75 to    $6.75             234,533          5.25            7.50               213,766              5.13
                          -----------------     ----------   -------------    -----------------    --------------
       $.60 to    $6.75           1,093,157     $    2.45            7.69               907,840    $         2.48
                          =================     ==========   =============    =================    ==============
</TABLE>


                                    Page 21
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 9 - Stockholders' Equity (cont.)
================================================================================

    Stock Warrants

Stock warrants activity is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                               Outstanding                         Weighted - Average Exercise Price
                              --------------------------------------------       ------------------------------------
                                    2002             2001             2000           2002          2001          2000
                              ----------       ----------       ----------       --------      --------      --------
<S>                            <C>              <C>                <C>           <C>           <C>           <C>
Outstanding, January 1         9,564,450        8,093,464          836,100       $   2.37      $   8.71      $   2.12
     Granted                   2,546,690        9,483,530        8,760,964           1.46          2.32          8.42
     Exercised                        --               --       (1,206,000)            --            --          3.00
     Forfeited                (7,783,744)      (8,012,544)        (297,600)          2.25          8.75          5.00
                              ----------       ----------       ----------       --------      --------      --------
Outstanding, December 31       4,327,396        9,564,450        8,093,464       $   2.05      $   2.37      $   8.71
                              ==========       ==========       ==========       ========      ========      ========
</TABLE>


The weighted-average grant-date fair value of warrants granted during the years
ended December 31, 2002, 2001 and 2000 was $1.00, $1.79 and $1.63, respectively.

Warrants outstanding and exercisable as of December 31, 2002, are as follows:

                                                      Weighted - Average
                                               ---------------------------------
                                                                    Remaining
   Range of Exercise                                               Contractual
        Prices                 Warrants        Exercise Price      Life-Years
------------------------  -------------------  ---------------   ---------------
      $1.00 to    $1.25           1,582,690     $        1.08              5.21
      $1.50 to    $2.00           1,039,373              1.76              3.92
      $2.24 to    $2.40           1,109,800              2.32              3.27
      $3.00 to    $4.00             474,613              3.92              0.62
      $4.44 to    $5.20             120,920              4.69              4.66
                          -----------------     -------------    --------------
      $1.00 to    $5.20           4,327,396     $        2.05              3.89
                          =================     =============    ==============

Stock warrants were awarded for:

                                       2002           2001           2000
                                  ---------      ---------      ---------
Warrant dividend                         --             --      7,531,744
Warrant repricing                        --      8,012,544             --
Common stock                        728,357        441,642        898,300
Cash                                     --             --        150,000
Services rendered                   103,333        455,756             --
Preferred stock                     420,000         48,588         80,920
Multiband startup                        --             --         50,000
Debt issuance and guarantees      1,295,000        525,000         50,000
                                  ---------      ---------      ---------
                                  2,546,690      9,483,530      8,760,964
                                  =========      =========      =========

The warrant  dividend was declared in April 2000. For each share of common stock
outstanding,  one warrant was issued to purchase common stock at $8.75 per share
for two years. These warrants have expired as of December 31, 2002.


                                    Page 22
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 9 - Stockholders' Equity (cont.)
================================================================================

On August 2,  2001,  the  Company  approved  the  repricing  of all  outstanding
warrants  issued at $8.75 to $2.25.  The  expiration  date of these warrants was
extended to October 11, 2002. The Company recorded $6,919,692 to the accumulated
deficit  related to the change in warrant value using the Black Scholes  pricing
model.

All warrants were recorded at fair value using the Black Scholes pricing model.

The fair value of stock  warrants is the  estimated  present value at grant date
using  the Black  Scholes  pricing  model  with the  following  weighted-average
assumptions:

<TABLE>
<CAPTION>
                                          2002                  2001                 2000
                             ------------------    ------------------    -----------------
<S>                                      <C>                   <C>                   <C>
Risk-free interest rate                  3.90%                 5.30%                 6.49%
Expected life                        4.5 years             4.5 years             2.2 years
Expected volatility                     151.3%                 94.3%                   28%
Expected dividend rate                      0%                    0%                    0%
</TABLE>


--------------------------------------------------------------------------------
NOTE 10 - Income Taxes
================================================================================

The  Company  has  generated   federal  and  state  net   operating   losses  of
approximately $19,100,000 and $9,100,000, respectively, which, if not used, will
begin to expire in 2004.  Future  changes in the  ownership  of the  Company may
place limitations on the use of these net operating loss carryforwards.

The Company has  recorded a full  valuation  allowance  against its deferred tax
asset due to the uncertainty of realizing the related  benefits.  The income tax
provision is as follows for the years ended December 31:

                           2002                   2001       2000
--------      -----------------      -----------------     ------
Current       $              --      $              --     $9,000
Deferred                     --                     --         --
              -----------------      -----------------     ------
              $              --      $              --     $9,000
              =================      =================     ======

Components of net deferred income taxes are as follows at December 31:

                                                         2002              2001
                                                  -----------       -----------
Deferred income tax assets:
     Net operating loss carryforwards             $ 7,633,000       $ 7,250,000
     Goodwill                                          90,000           100,000
     Asset valuation reserves                         231,000           200,000
     Accrued liabilities                               69,000           100,000
                                                  -----------       -----------
                                                    8,023,000         7,650,000
Less valuation allowance                           (7,952,000)       (7,550,000)
                                                  -----------       -----------
                                                       71,000           100,000
Deferred income tax liabilities - depreciation        (71,000)         (100,000)
                                                  -----------       -----------
Net deferred income tax assets                    $        --       $        --
                                                  ===========       ===========


                                    Page 23
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 10 - Income Taxes
================================================================================

Income tax computed at the U.S. federal statutory rate reconciled to the
effective tax rate is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                               2002          2001          2000
                                                             ------        ------        ------
<S>                                                           <C>           <C>           <C>
Federal statutory tax rate benefits                           (35.0)%       (35.0)%       (34.0)%
State tax, net of federal benefit                              (5.0)         (5.0)          0.0
Change in valuation allowance net of net operating loss
  carryforward not recognized                                  36.1          33.0          34.4
Other                                                           3.9           7.0          (0.2)
                                                             ------        ------        ------
Effective tax rate                                              0.0%          0.0%          0.2%
                                                             ======        ======        ======
</TABLE>


State income tax effect for the year ended December 31, 2000 is not material and
therefore not separately shown.

The Company has the following net operating loss carryforwards at December 31,
2002, for income tax purposes:

                            Federal Net        State Net
  Year of Expiration     Operating Loss     Operating Loss
  ------------------     --------------     --------------
         2004          $       1,050,000  $       1,050,000
         2005                    599,000            599,000
         2007                    501,000            501,000
         2008                     59,000             57,000
         2009                     22,000             22,000
         2011                    595,000            575,000
         2012                     25,000                  -
         2018                  1,122,000          1,096,000
         2019                  1,585,000            992,000
         2020                  4,839,000          1,587,000
         2021                  4,726,000          1,435,000
         2022                  3,960,000          1,227,600
                       ------------------ -----------------
                       $      19,083,000  $       9,141,600
                       ================== =================

Under Internal Revenue Code Section 382, utilization of federal losses expiring
prior to 2019 are limited to approximately $375,000 each year.


                                    Page 24
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 11 - Supplemental Cash Flows Information
================================================================================

<TABLE>
<CAPTION>
                                                                2002             2001             2000
                                                         -----------      -----------      -----------
<S>                                                      <C>              <C>              <C>
Cash paid for interest                                   $   512,167      $ 1,286,155      $   647,742
Noncash investing and financing transactions:
    Repricing of warrants                                         --        6,919,692               --
    Stock options issued below fair market value                  --        1,244,250               --
    Stock options issued for commissions earned               53,745        1,244,250               --
    Stock subscriptions receivable received for
        stock                                                     --          610,000               --
    Issuance of preferred and common stock for
       acquisition of assets                                  18,590          386,000               --
    Current liabilities converted to stock                    59,755          225,613               --
    Common stock issued for guarantee of debt                 14,750          120,000               --
    Issuance of stock for intangible asset                        --           83,750               --
    Warrant dividend                                              --               --       13,255,869
    Refinancing  of debt                                          --               --        1,603,189
    Notes payable and accrued interest converted
       to common and preferred stock                       1,164,882          227,009        1,185,054

    Capitalized lease equipment purchases                    174,986               --        1,310,081
    Preferred dividend attributable to beneficial
       conversion of preferred stock                              --               --          755,384
    Conversion of preferred stock to common stock            150,000          528,742          109,897
    Conversion on preferred stock into note payable          400,000               --               --
    Reduction of note receivable related to
       commission earned on equity transactions               40,563               --               --
    Warrants issued related to modifications of
       long-term debt                                        528,650               --               --
</TABLE>


--------------------------------------------------------------------------------
NOTE 12 - Retirement Savings Plan
================================================================================

The Company has 401(k) profit sharing plan covering  substantially all full-time
employees. Employee contributions are limited to the maximum amount allowable by
the Internal Revenue Code. The Company made no discretionary  contributions  for
any of the years presented.


                                    Page 25
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 13 - Commitments and Contingencies
================================================================================

    Operating leases

Office space is leased under related party  operating  leases  expiring  through
2006. In addition to basic  monthly  rents ranging from $16,640 to $17,653,  the
Company pays building  maintenance costs, real estate taxes and assessments.  In
addition,  the Company  leases  vehicles under  operating  leases from an entity
owned by a relative of a  stockholder/officer  and various equipment under other
leases.

The Company has various other operating  leases for its corporate  office space,
vehicles and various  equipment with lease terms ranging from one to five years.
The  monthly  base rents  range  from  $50,944 to  $53,727.  The leases  contain
provisions  for payments of real estate taxes,  insurance and common area costs.
Total  rent  expense  for the  years  ended  December  31,  2002,  2001 and 2000
including  common area costs and real estate taxes was  approximately  $566,000,
$689,000 and  $650,000,  respectively.  Rent  expense  with related  parties for
December 31, 2002, 2001, 2000 was approximately $462,000, $561,000 and $619,000,
respectively.

Future minimum rental payments are as follows for the years ending December 31:

                    Year                 Amount
                    ----                 ------

                    2003          $         519,000
                    2004                    492,000
                    2005                    472,000
                    2006                    418,000
                    2007                    276,000
                 Thereafter               2,777,000
                                  -----------------
                                  $       4,954,000
                                  =================

    Legal proceedings

The Company is involved in legal actions in the ordinary course of its business.
Although the outcome of any such legal actions  cannot be predicted,  management
believes  that there is no pending  legal  proceedings  against or involving the
Company for which the outcome is likely to have a material  adverse  effect upon
the Company's consolidated financial position or results of operations.

--------------------------------------------------------------------------------
NOTE 14 - Significant Customers and Suppliers
================================================================================

One  customers  represented  approximately  13% of  revenues  for the year ended
December 31, 2002. One customer  represented  approximately  15% of revenues for
the year ended December 31, 2001. Two customers  represented  approximately  27%
(18% and 9%) of revenues for the year ended December 31, 2000.

The Company  purchased  materials from major suppliers  approximately as follows
for the years ended December 31:

                           Supplier
         ----------------------------------------------
              A                B               C
         -------------   --------------   -------------
  2002       58%              6%              12%
  2001       38%              19%             12%
  2000       24%              18%              -%


                                    Page 26
<PAGE>

--------------------------------------------------------------------------------
NOTE 15 - Business Segments
================================================================================

Prior  to  November  1,  1999,  Vicom  and VMTS  operated  as one  segment,  for
integrated voice, video, and data networking technologies products and services.
With the  acquisition  of Ekman on November 1, 1999,  the Company  added the CTU
segment which sold computer technologies products and services.

Since  integrated  voice,  video and date networking  technologies  products and
services are rapidly merging with computer  technologies  products and services,
the  Company in 2000  merged its  integrated  voice,  video and data  networking
products and services  operations  with its computer  technologies  products and
services  operations  in its  CTU  subsidiary.  By  the  end of  2000,  the  CTU
subsidiary   functioned  as  one  segment  for  integrated  voice,  video,  data
networking and computer technologies products and services, under one management
structure,  with one  management  financial  reporting  system,  and  having one
unified marketing name.

With the start up of Multiband in February  2000,  the Company added the segment
providing voice, data, and video services to residential multi-dwelling units.

Segment disclosures are as follows:

<TABLE>
<CAPTION>
                                          Vicom                CTU            Multiband            Total
                                       ------------       ------------       ------------       ------------
Year Ended December 31, 2002:
<S>                                    <C>                <C>                <C>                <C>
   Revenues                            $         --       $ 23,963,748       $    577,221       $ 24,540,969
   Income (loss) from operations         (1,810,241)           172,689         (1,195,521)        (2,833,073)
   Identifiable assets                    3,151,891          5,282,233          1,913,192         10,347,316
   Depreciation and amortization            142,426            482,390            490,641          1,115,457
   Capital expenditures                       2,126            989,450            458,844          1,450,420


                                          Vicom                CTU            Multiband            Total
                                       ------------       ------------       ------------       ------------

Year Ended December 31, 2001:
   Revenues                            $         --       $ 32,011,187       $    249,590       $ 32,260,777
   Loss from operations                  (2,079,592)          (299,553)        (1,618,003)        (3,997,148)
   Identifiable assets                    3,171,968          5,786,796          3,250,917         12,209,681
   Depreciation and amortization            418,655            550,075            442,034          1,410,764
   Capital expenditures                       6,900            491,532          1,386,513          1,884,945

                                          Vicom
                                        and VMTS               CTU            Multiband            Total
                                       ------------       ------------       ------------       ------------

Year Ended December 31, 2000:
   Revenues                            $  3,248,310       $ 36,460,217       $     73,319       $ 39,781,846
   Loss from operations                  (1,558,914)          (463,762)        (1,746,088)        (3,768,764)
   Identifiable assets                      868,438         12,388,215          2,357,920         15,614,573
   Depreciation and amortization            301,445            727,449             72,950          1,101,844
   Capital expenditures                      22,273            344,898          2,258,932          2,626,103
</TABLE>


Segment  disclosures are provided by entity to the extent  practicable under the
Company's accounting system.


                                    Page 27
<PAGE>


                      VICOM, INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001 and 2000

--------------------------------------------------------------------------------
NOTE 16 - Subsequent Events (Unaudited)
================================================================================

In February 2003, the Company formed a 50% owned subsidiary, Multiband USA, Inc.
This  subsidiary  will  provide the digital  satellite  signal to private  cable
operations to multiple dwelling units.

In February 2003, the note payable to Pyramid  Trading  Limited  Partnership was
extended  through May 2004.  As part of this  extension  the  Company  issued an
additional  253,000 five year warrants at and exercise price of $1.00 per share.
All of the remaining note payable balance will be converted into common stock of
the Company as described by the amendment,  and 100% of the outstanding  balance
has been reclassified to long term debt.



                                    Page 28
<PAGE>

            INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION




To Stockholders, Board of Directors, and Audit Committee
Vicom, Incorporated and subsidiaries
New Hope, Minnesota


Our  report on our  audits of the basic  consolidated  financial  statements  of
Vicom,  Incorporated  and subsidiaries for the years ended December 31, 2002 and
2001  appears  on page 1. The  audits  were made for the  purpose  of forming an
opinion on the basic  consolidated  financial  statements  taken as a whole. The
supplementary  information  on page 30 is presented  for purposes of  additional
analysis  and  is  not a  required  part  of the  basic  consolidated  financial
statements.  Such  information  has been  subjected to the  auditing  procedures
applied in the audits of the basic consolidated financial statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
consolidated financial statements taken as a whole.


                                             /s/ VIRCHOW, KRAUSE & COMPANY, LLP


Minneapolis, Minnesota
February 14, 2003



                                    Page 29
<PAGE>




            INDEPENDENT AUDITOR'S REPORT - SUPPLEMENTARY INFORMATION




Board  of  Directors  and  Stockholders
Vicom,  Incorporated  and  Subsidiaries
New  Hope,  Minnesota


Our report on our audit of the basic consolidated financial statements of Vicom,
Incorporated and Subsidiary for 2000 appears on page 1.  That audit was made for
the purpose of forming an opinion on the basic consolidated financial statements
taken  as  a  whole.  The  supplementary information on page 30 is presented for
purposes  of  additional  analysis  and  is  not  a  required  part of the basic
consolidated  financial  statements.  Such information has been subjected to the
auditing  procedures  applied  in  the audit of the basic consolidated financial
statements  and,  in  our  opinion, is fairly stated in all material respects in
relation  to  the  basic  consolidated  financial  statements  taken as a whole.




                                   /s/ Lurie Besikof Lapidus & Company, LLP

Minneapolis,  Minnesota
February  15,  2001




                                    Page 29A
<PAGE>

                      VICOM, INCORPORATED AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                  Years Ended December 31, 2002, 2001 and 2000

<TABLE>
<CAPTION>
                   Column A                                      Column B         Column C             Column D         Column E
                  -----------                                 ----------------    --------            ----------        -------

                                                                                 Additions
                                                                                 Charged to
                                                               Balance at        Costs and                           Balance at End
                  Description                                 Beginning of Yea    Expenses            Deductions        of Year
                  -----------                                 ----------------    --------            ----------        -------
ALLOWANCE DEDUCTED FROM ASSET TO WHICH IT APPLIES
Allowance for doubtful accounts receivable:
<S>  <C>                                                       <C>                <C>              <C>                   <C>
     2002                                                      $  178,000         $  58,000        $       -             $236,000
     2001                                                         159,000           141,000          122,000(A)           178,000
     2000                                                         140,000           176,000          157,000(A)           159,000
Allowance for inventory obsolescence:
     2002                                                          321,000           19,900               -               340,900
     2001                                                          200,000          121,000               -               321,000
     2000                                                          330,000          245,000          375,000(B)           200,000
Notes receivable:
     2002                                                               -            30,000               - (A)            30,000
     2001                                                               -                -                -                     -
     2000                                                          105,000               -           105,000(A)                 -
Allowance for doubtful utilization of prepaid advertising:
     2002                                                               -                -                -                     -
     2001                                                               -                -                -                     -
     2000                                                          392,000               -           392,000(C)                 -
</TABLE>

(A)  Write-off uncollectible receivables
(B)  Write-off obsolete inventory
(C)  Write-off unusable prepaid advertising



                                    Page 30
<PAGE>


Item 9.

Changes in and  Disagreements  with  Accountants  on  Accounting  and  Financial
Disclosure

     On October 22, 2001 Vicom dismissed Lurie Besikof Lapidus and Company,  LLP
as  Vicom's  independent  public  accountants.  On that same date,  Vicom  Inc.,
subject to shareholder approval, retained Virchow, Krause and Company, LLP to be
Vicom's  principal  independent  accountants.  These changes were reflected on a
Form 8K  originally  filed  with the SEC on  October  26,  2001 and  amended  on
November 5, 2001.

Item 10. Directors and Executive Officers of the Registrant

     Information  with respect to the directors  and  executive  officers of the
Company  set  forth  under  "Information  Concerning  Directors,   Nominees  and
Executive  Officers" and under "Compliance with Section 16 (a) "in the Company's
definitive  proxy statement for the annual meeting of shareholders to be held on
or about May 30, 2003, is incorporated herein by reference.

Item 11. Executive Compensation

     Information  with  respect  to  Executive   Compensation  set  forth  under
"Executive  Compensation"  in the Company's  definitive  proxy statement for the
annual  meeting  of  shareholders  to be  held  on or  about  May  30,  2003  is
incorporated  herein by reference (other than the subsections  captioned "Report
of the Compensation and Stock Option Committee" and "Performance Group").

Item 12. Security Ownership of Certain Beneficial Owners and Management

     Information with respect to security ownership of certain beneficial owners
and management,  set forth under "Beneficial Ownership of Principal Shareholders
and  Management"  in the  Company's  definitive  proxy  statement for the annual
meeting of  shareholders  to be held on or about May 30, 2003,  is  incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions

     Information with respect to certain relationships and related transactions,
set forth  under  "Information  Concerning  Directors,  Nominees  and  Executive
Officers" in the Company's  definitive proxy statement for the annual meeting of
shareholders  to be held on or about May 30,  2003,  is  incorporated  herein by
reference. Item 14. Controls and Procedures

     Within  90  days  prior  to the  date  of the  Report,  we  carried  out an
evaluation,  under  the  supervision  and with the  participation  of our  Chief
Executive and Chief Financial  officers,  of the effectiveness of the design and
operation  of our  disclosure  controls  and  procedures  (as  defined  in Rules
13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934). Based upon that
evaluation,  our Chief Executive  Officer and Chief Financial  Officer concluded
that our disclosure  controls and procedures are effective in alerting them on a
timely  basis to material  information  required to be disclosed in our periodic
reports  to  the  Securities  and  Exchange  Commission.   There  have  been  no
significant  changes in our internal  controls or in other  factors  which could
significantly affect internal controls subsequent to such evaluation.

<PAGE>


Item 17. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)  Financial Statements, Financial Statement Schedules and Exhibits.

1.   Financial Statements

See Index to Consolidated Financial Statements and Financial Statement Schedules
on page 19 of this report.

2.   Financial Statement Schedules

All schedules to the Consolidated  Financial Statements normally required by the
applicable accounting regulations are included in Item 8 or are not applicable.

3.   Exhibits

See Index to Exhibits on page 51 of this report.


<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of Section 13 or Section 15(d) of Securities
Exchange Act of 1934, the registrant has duly caused this amendment no. 2 to its
10-K  Report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                    VICOM, INC.
                                    Registrant
Date: March 31, 2003                By:/s/ James L. Mandel
                                    --------------------------------------------
                                    James L. Mandel
                                    Chief Executive Officer

Date: March 31, 2003                By: Steven M. Bell
                                    --------------------------------------------
                                    Steven M. Bell
                                    Chief Financial Officer


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


<PAGE>



                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, James Mandel,  Chief Executive  Officer of Vicom  Incorporated,  certify
that:

     1. I have reviewed this annual report on Form 10-K of Vicom Incorporated;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the consolidated financial statements,  and other
financial  information  included in this annual  report,  fairly  present in all
material respects the financial condition,  results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
function);

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6. The registrant's  other certifying  officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Dated:  March 31, 2003                     /s/James Mandel
                                           ------------------------------------
                                           Chief Executive Officer


<PAGE>



                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, Steven Bell,  Chief  Financial  Officer of Vicom  Incorporated,  certify
that:

     1. I have reviewed this annual report on Form 10-K of Vicom Incorporated;

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the consolidated financial statements,  and other
financial  information  included in this annual  report,  fairly  present in all
material respects the financial condition,  results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
function);

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6. The registrant's  other certifying  officer and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Dated:  March 31, 2003                         /s/ Steven Bell
                                               ---------------------------------
                                               Chief Financial Officer

<PAGE>




                                INDEX TO EXHIBITS

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

2.1           Asset  Purchase   Agreement  and  related  documents  with  Enstar
              Networking Corporation dated December 31, 1998(1)
2.2           Agreement and Plan of Merger with Ekman,  Inc.  dated December 29,
              1999(1)
3.1           Amended and Restated Articles of Incorporation of Vicom, Inc.(1)
3.2           Restated Bylaws of Vicom, Incorporated(1)
3.3           Articles of Incorporation of Corporate Technologies, USA, Inc.(1)
3.4           Bylaws of Corporate Technologies, USA, Inc.(1)
4.1           Certificate of Designation  of the Relative  Rights,  Restrictions
              and  Preferences  of 8% Class A Cumulative  Convertible  Preferred
              Stock and 10% Class B Cumulative Convertible Preferred Stock dated
              December 9, 1998(1)
4.2           Form of Warrant Agreement(1)
4.3           Warrant Agreement with James Mandel dated December 29, 1999(1)
4.4           Warrant Agreement with Marvin Frieman dated December 29, 1999(1)
4.5           Warrant Agreement with Pierce McNally dated December 29, 1999(1)
4.6           Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)
4.7           Warrant Agreement with David Ekman dated December 29, 1999(1)
4.8           Certificate of Designation  of the Relative  Rights,  Restrictions
              and Preferences of 10% Class C Cumulative Convertible Stock(2)
4.9           Certificate of Designation  of the Relative  Rights,  Restrictions
              and Preferences of 14% Class D Cumulative Convertible Stock(6)
4.10          Certificate of Designation  of the Relative  Rights,  Restrictions
              and Preferences of 15% Class E Cumulative Convertible Stock(6)
5.1           Opinion of Steven M. Bell, Esq.(4)
10.1          Vicom Lease with Marbell Realty dated June 20, 1996(1)
10.2          Employment Agreement with Marvin Frieman dated October 1, 1996(1)
10.3          Employment Agreement with Steven Bell dated October 1, 1996(1)
10.4          Employment Agreement with James Mandel dated August 14, 1998(1)
10.5          Vicom  Associate  Agreement  with NEC  America,  Inc.  dated  June
              1999(1)
10.6          Loan Agreement with Wells Fargo dated June 17, 1999(1)
10.7          Employment Agreement with David Ekman dated December 29, 1999(1)
10.8          Debenture Loan Agreement  with  Convergent  Capital dated March 9,
              2000(1)
10.9          Corporate  Technologies,  USA,  Inc.  lease with David Ekman dated
              January 19, 2000(1)
10.10         Amendment  dated July 11, 2000 to debenture  loan  agreement  with
              Convergent Capital dated March 9, 2000.(2)
10.11         Corporate  Technologies  agreement with Siemens dated December 14,
              2001(4)
10.12         Note with Pyramid Trading, L.P. (4)
10.14         Employment Agreement of Steven M. Bell dated January, 1, 2002(5)
10.15         Employment Agreement of James Mandel dated January 1, 2002(5)
19.1          2000 Non-Employee Director Stock Compensation Plan (3)
19.2          2000 Employee Stock Purchase Plan (3)
21.1          List of subsidiaries of the registrant(1)
23.1          Consent of Virchow, Krause & Company, LLP (6)
23.2          Consent of Lurie, Besikof, Lapidus & Company, LLP (6)
24.1          Power  of  Attorney   (included  on  signature  page  of  original
              registration statement)
99.1          Section 906 of Sarbanes-Oxley Act of 2002 - James Mandel(6)
99.2          Section 906 of Sarbanes-Oxley Act of 2002 - Steven Bell(6)

(1)  Previously  filed  as the same  exhibit  to the  Registrant's  Registration
     Statement on Form 10, as amended.

(2)  Previously filed as the same exhibit to the original Registration Statement
     on Form S-1 filed on August 11, 2000 and  declared  effective on August 18,
     2000.

(3)  Previously  filed as the same exhibit to  Registrant's  Proxy  Statement on
     Form 14A, filed on July 31, 2000.

(4)  Previously filed as the same exhibit to the original Registration Statement
     on Form S-1 filed on August 15, 2001 and  declared  effective on August 20,
     2001.

(5)  Previously  filed as the same exhibit to  Registrant's  Form 10-Q filed May
     15, 2002

(6)  Filed herewith.

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