SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A
 (Mark One)

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

For the Fiscal Year Ended June 30, 1999
                                       OR
( )  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

Commission File No. 0-25474

                            SIMS COMMUNICATIONS, INC.
                   -------------------------------------------
                 (Name of Small Business Issuer in its charter)

                Delaware                                  65-0287558
         ------------------------                      -------------------
         (State of incorporation)                        (IRS Employer
                                                       Identification No.)
       18001 Cowan, Suites C&D
         Irvine, California                                        92614
   ----------------------------------------                     -----------
    (Address of Principal Executive Office)                       Zip Code

Registrant's  telephone number,  including Area Code: (949) 261-6665  Securities
registered  pursuant to Section  12(b) of the Act:  None  Securities  registered
pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

Check whether the Registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days.
                                      X
                                     YES      NO

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

The Company's revenues for the most recent fiscal year were $2,240,876.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Company,  (17,172,937 shares) based upon the average bid and asked prices of the
Company's Common Stock on September 30, 1999 was approximately $1,288,000.

As of  September  30,  1999 the Company had  17,635,639  issued and  outstanding
shares of common stock.


<PAGE>


ITEM 1.  DESCRIPTION OF BUSINESS

     SIMS  Communications,  Inc. (the "Company") was incorporated in Delaware in
August 1991 to rent cellular telephones through a stand-alone dispensing station
known as an Automated Communications Distribution Center ("ACDC"). Prior to 1996
the Company  operated  ACDC units for its own  account and also sold  franchises
which  provided  third  parties  the  right to  operate  ACDC  units at  various
franchised  locations.  At September 30, 1999, the Company was not operating any
ACDC units and the Company's  only  remaining  franchisee had four ACDC units in
operation.

   The Company changed its name to MedCom USA, Incorporated in October, 1999.

      In 1996 the Company introduced four programs in an effort to diversify and
broaden  the  Company's   product  and  service  mix:  (i)  cellular   telephone
activations,  (ii) sale of pre-paid  calling cards,  (iii) sale of long distance
telephone service and (iv) rental of cellular telephones using overnight courier
service.  With the exception of the sale of pre-paid  calling cards,  these four
programs were discontinued in December 1997.

      In  December  1996 the  Company  acquired  all the issued and  outstanding
shares of Link International,  Inc. ("Link").  Link manufactures and distributes
machines which dispense  prepaid calling cards ("PCD's") and terminals which are
used by  merchants  to perform a variety of  transactions,  including  accepting
credit  cards and bank  debit  cards in  payment  for sales of  merchandise  and
services. The PCD's are full sized stand-alone vending machines and are operated
by the Company. Long distance time for the prepaid calling cards is purchased by
the Company from various venders. Link also markets a proprietary scrip terminal
which  dispenses  a  receipt  to the  customer  which  can be  used  to pay  for
merchandise and/or services.

In June 1999 the Company sold 520 of Link's scrip  terminals to the employee who
was responsible for overseeing this aspect of the business. Although the Company
did not receive any material  cash  payment in  connection  with this sale,  the
purchaser  of the  assets  agreed to assume  $70,000  in  accounts  payable  and
approximately  $600,000 in capitalized  lease  obligations  associated  with the
acquisition  of the scrip  terminals.  The  assets  sold had a net book value of
approximately  $635,000.  The Company  recognized as income previously  recorded
deferred gross profit related to the scrip terminals totaling $212,805,  as well
as an immaterial gain related to the sale of the assets and the release from the
related  obligations.  Excluded  from the sale of Link's  assets  were 117 scrip
terminals  (45 of which are in  operation)  and all of the PCD's.  The purchaser
also agreed to hire all of the employees involved with this business line and to
assume the lease  obligation for the related office space.  The script terminals
were sold because this line of business was not  profitable  and, in the opinion
of the  Company's  management,  was  not  likely  to  become  profitable  in the
foreseeable future.

The Company is continuing to use the scrip  terminals and PCDs excluded from the
sale,  although this is not a major focus of the Company.  The script  terminals
and PCD's are managed by personnel  involved in other  aspects of the  Company's
business.

<PAGE>

      In  May  1998  the  Company  acquired  One  Medical   Services,   Inc.  in
consideration   for  142,350  shares  of  common  stock  and  187,500   warrants
exercisable  at $2.00 per share at any time prior to May 30,  2003.  The Company
has also  agreed to issue to the former  owners of One  Medical up to  1,485,000
additional  shares of common stock depending on the future operating  results of
One Medical.  The number of shares to be issued will be  determined  by dividing
the quarterly net income of One Medical (for each fiscal quarter  beginning June
30,  1998 and  ending  June  30,  2001),  by the  average  closing  price of the
Company's  common stock for the five day trading period prior to the end of each
quarter. One Medical provides a financial processing and communications  network
for the Home  Medical  Equipment  (HME)  industry.  In  addition  to  processing
information and verifying  insurance  medical cards,  this network  connects HME
buyers  with a  network  of HME  vendors.  This  proprietary  network  has  been
designated  for the medical and managed  healthcare  market,  but at the present
time is being  marketed to the retail  pharmacy  industry.  As of September  30,
1999, 80  pharmacies,  13 HME service  centers,  8 HME vendors and one catalogue
vendor were members of the One Medical network.

      In July 1999 the Company  licensed  its rights to the One Medical  Service
Network to an unrelated third party for  $1,377,000,  of which $300,000 was paid
by September  30,  1999,  $267,000 of which is to be paid by January 5, 2000 and
the remainder of which  ($810,000)  will be paid in accordance with the terms an
unsecured promissory note which bears interest at 7% per year. The principal due
on the note is to be reduced  by  license  royalties  due the  Company,  up to a
maximum of $6,000 per month, and prepaid phone card credits of $3,000 per month.
On July 30, 2002 the licensee is to make a one-time payment to the Company equal
to 25% of the then  outstanding  principal on the note. All unpaid principal and
interest is due on July 30, 2006.  The licensee can convert the amounts paid for
royalties  and the license fee into an 81% interest in One Medical  Services and
can  acquire  the  remaining  19% for the greater of $132,000 or its fair market
value.  The Licensee  also agreed to acquire the inventory as they needed it and
pay $200,000 of accounts  payable  related to the inventory.  The Licensee hired
the full time employees  involved with this operation.  The Company  retained as
employees  those  persons  who  devoted  less than full time to the One  Medical
Services   Network.   These  people   primarily   provide   technical   support,
installations,  repairs,  maintenance  of the  underlying  software  and billing
support.  The Company  charges  the  Licensee  for these  services on a time and
materials  basis.  The Licensee also assumed other overhead  associated with the
One Medical  operation.  The Company uses the prepaid  phone card credits in the
sale of its prepaid calling cards.

      The Company  licensed the rights to the One Medical  service  because this
line of business was not profitable.  The license also provides the Company with
monthly income.

     All historical  share data in this report have been adjusted to reflect the
following  stock  splits  relating to the  Company's  common  stock:  June 1995:
2-for-1 forward split,  February 1996:  1-for-10  reverse split,  February 1998:
1-for-4 reverse split.

      As of September 30, 1999  substantially all of the Company's revenues were
generated by the JustMed.com and the Movie Vision divisions.

<PAGE>


JustMed.com

      The JustMed.com division involves three components:

o     The MedCard health insurance verification and billing system

o     The JustMed.com website

o     The Med Store

MedCard System

      In November 1998 the Company  acquired,  from an unrelated  entity,  Dream
Technologies,  LLC (Dream),  an exclusive worldwide license to software programs
and related  technology known as the MedCard System.  In consideration  for this
acquisition,  Dream received  $450,000 in cash,  100,000 shares of the Company's
restricted  stock and a  three-year  warrant to purchase  350,000  shares of the
Company's common stock at $1.28 per share.

      The Company is  required  to pay a royalty to Dream  equal to  twenty-five
percent of the first  $1,000,000  of net monthly  revenue and ten percent of net
monthly  revenue in excess of $1,000,000.  The term net revenues means the gross
revenues received from the use of the MedCard software program less (a) terminal
lease costs of up to $50 per month,:  (b)  commissions  payable to agents  which
place  terminals  with end users;  and (c) network costs which include (i) claim
fees  payable to data  vendors,  (ii)  charges  for  verification  of  insurance
coverage  and (iii)  similar  telecommunications  charges  related to  obtaining
claims processing and/or benefits verification information.

      The  original  Medcard  license was for a period of fifteen  years and was
exclusive for the entire term provided at least  fifteen  thousand  systems were
sold to end users by May 31, 2001.  The Company,  as of March 31, 2000, had sold
approximately 850 systems.

      In May 2000 the license  agreement  with Dream was  amended  such that the
Company  acquired  all  rights to the  MedCard  system  including  all  software
programs,  intellectual  property,  trade  names  and  existing  contracts.  The
amendment effectively terminated the original License Agreement, except that the
royalty provisions of the original license agreement will remain in effect until
November 2013. In  consideration  for this  amendment,  Dream  received  100,000
shares of the  Company's  restricted  common  stock and a  warrant  to  purchase
400,000  shares  of the  Company's  common  stock at $3.57 per share at any time
prior to May 11, 2003. For financial  reporting  purposes the warrant had a cost
of  $449,446  based  upon an imputed  value of $1.12 per share,  using the Black
Scholes option pricing method with the following assumptions:  Expected life - 2
years, 48% volatility, risk free interest rate of 6.5% and 0% dividend rate. The
Company  believes the  acquisition of the rights to the technology and the other
aspects,  along with the simultaneous  termination of the License Agreement will
ensure its exclusive and perpetual use of the MedCard System.


<PAGE>

      The License  agreement  also required the Company to retain as consultants
two  owners  of Dream  Technologies  until May 31,  2001 at a fee of $2,000  per
person per week. in June 2000 the Company hired these  individuals  as employees
under two year employment contracts with essentially the same terms.

      The MedCard System is an electronic  processing system which  consolidates
insurance eligibility verification and processes medical claims and approvals of
credit card and debit card payments in under 30 seconds through a small terminal
or personal computer.  Using the MedCard system,  patients are relieved from the
problems  associated  with  eligibility  confirmation  and billings,  healthcare
providers'  reimbursements are accelerated and account  receivables are reduced.
The time it takes to collect  payments from insurance  providers  decreases from
months to days.

      The Company  also  markets a complete  billing  service  using the MedCard
System to hospitals and large practice groups. The Company receives a percentage
of the amounts collected under these arrangements,  as opposed to a fee for each
item processed.  As of March 31, 2000, the Company was providing this service to
one hospital and one medical practice group.

      The  Medcard  System also allows a patient's  primary  care  physician  to
request approval from the patient's insurance carrier or managed care plan for a
referral to a secondary  physician or  specialist.  The  secondary  physician or
specialist  can use the  MedCard  system to verify  that the  referral  has been
approved  by the  patient's  insurance  carrier,  thereby  eliminating  numerous
telephone calls that are normally required with referrals.  The MedCard system's
referral  capabilities  reduces paperwork and  administrative  costs,  increases
productivity  and provides  greater patient  information for the specialist,  as
well as a written record of the referral authorization.

      The MedCard system can record and track  encounters  between  patients and
health care providers for  performance  evaluation  and  maintenance of hospital
records.  After  examining a patient a physician is able to enter the  patient's
name, procedure code and diagnostic code at a nearby terminal.  This information
is then downloaded daily to MedCom's computer network, processed and transmitted
back to the hospital in both  summary and detail  reports  sorted by day,  week,
date and name of physician.

      The  MedCard  System  currently  operates  through  either a Point of Sale
Terminal or a personal computer.  The Point of Sale Terminals are purchased from
Hypercom USA, Inc.  (Hypercom) under a non-cancelable  agreement that expires in
February  2001. If the contract with Hypercom is not renewed,  the Company could
purchase its  terminals  from  another  supplier  although  this may result in a
disruption of the  Company's  sales process for a short period of time while its
software  is  reconfigured  to meet  the  specifications  of the  new  supplier.
However,  the Company  believes  that it is unlikely  that the Company will stop
purchasing terminals from Hypercom upon the expiration of the current agreement.
If this occurs, the Company anticipates that it will have adequate  notification
to make the  necessary  software  modifications  in a timely manner so as to not
disrupt operations. An on-line version is under development.


<PAGE>

      Revenues  from  the  MedCard  system  are  generated  through  the sale of
terminals,  for verifying  insurance  eligibility  and for processing  insurance
claims.  Potential  revenue  sources  include fees for credit card  transactions
processed  through the  terminal,  fees for  collection  of  receivables  if the
Company  provides  billing  services,  reimbursement  by insurance  carriers for
submission  of  claims  electronically,  fees for using  the  system's  referral
program and processing encounter data.

      The MedCard System is marketed through Company sales personnel, as well as
independent  sales  representatives  and  financial  institutions  such  as  EFS
National Bank, a subsidiary of Concord EFS, Inc.,  Physicians  Management Group,
and Healthtech  Systems.  Company sales personnel generally receive a commission
for sales of the terminals.  The Company receives a fixed amount per terminal if
the sale is not made by Company sales personnel. The Company also receives a fee
for each transaction processed through the MedCard System.

      For the year ended June 30, 1999, the majority of MedCard  Systems revenue
was  developed  by  Company  sales  personnel,   with  the  remaining   revenues
distributed  among  several  independent  sales  representatives,  none of whom,
individually,  resulted in a material  amount of MedCard  System sales.  For the
nine months  ending  March 31,  2000,  95% of terminal  sales were  completed by
Company  sales  personnel,  including  the sale of 500  terminals  to  Executive
Healthcare  Services and 68 terminals to  Physician  Management  Group,  both of
which are Independent Sales Organizations. The remaining MedCard System revenues
were  developed by several  other  independent  sales  representatives,  none of
which, individually, resulted in a material amount of sales.


      As of June 30,  2000 the  MedCard  system  was  able to  retrieve  on-line
eligibility  and  authorization   information  from  approximately  125  medical
insurance  companies  and  electronically  process and submit  billings  for its
healthcare providers to over 1,650 companies.  These insurance providers include
CIGNA,  Prudential,  Oxford  Health  Plan,  United  Health  Plans,  Blue  Cross,
Medicaid, Aetna, Blue Cross/Blue Shield and Metrahealth.

Website

      The JustMed.com website is an Internet web site which began functioning on
July 1, 1999. The website advertises  healthcare products and services which are
available to the general public and provides medical  information to the general
public.  Persons in need of  healthcare  products  and  services  can access the
website and order products or transfer to the more detailed websites  maintained
by the companies which provide the products and services. The Company expects to
generate revenues from this website by charging providers of healthcare products
and services fees for advertising on the website.  The Company will also receive
fees  when a  person  transfers  from  the  Company's  website  to the  websites
maintained by a provider of healthcare products or services. The Company expects
that  advertisers  on  its  website  will  include  distributors  of  healthcare
equipment and products,  hospitals,  physician practice groups, and clinics. The
Company is not currently marketing its web site.

<PAGE>


      The Company  obtains the  medical  and other  information  for its website
primarily  from three  independent  suppliers,  Healthology,  InfoSpace.com  and
iSyndicate. These suppliers operate under agreements with terms ranging from one
to two  years.  In the event  that any or all of these  providers  decide not to
renew their contract with the Company, the Company believes that it could locate
alternate  website  content  providers  with no  interruption  to the  Company's
business operations.

Med Store

      The Med Store is a feature of Sims' website which allows  consumers to use
their  computers  to  purchase a variety of  healthcare  products  and  services
supplied by unrelated  manufacturers  and healthcare  service  providers.  Items
available for purchase  include canes,  crutches,  walkers,  bath chairs,  blood
pressure units, cold therapies,  exercise  equipment and hot and cold packs. The
Med Store  became  operational  on July 1, 1999.  The  Company is not  currently
directly marketing the Med Store aside from its website.

      Accredited   Homecare   Pharmacy  and  Accredited   Medical  Services  are
responsible  for filling orders for products or services  purchased from the Med
Store.  The  providing of these  fulfillment  services can be  terminated at the
discretion of either party.  If the  fulfillment  companies  decide to no longer
service the Company,  management believes that another supplier could handle the
fulfillment process, with no disruption to the Company's operations.

Movie Vision

      In January 1998 the Company  issued  550,000 shares of its common stock to
the  shareholders  of Moviebar  Company USA and  Vectorvision,  Incorporated  in
consideration  for the  acquisition of businesses  known  collectively as "Movie
Vision."  Movie  Vision  rents  video  cassettes,  primarily  containing  motion
pictures,  through automated  dispensing units in hotels. Movie Vision currently
has video  cassette  dispensing  machines in  approximately  110 hotels and time
share  facilities in the United  States.  Machines are located in  approximately
twenty states with the largest  concentration  in Florida and California.  Movie
Vision services are marketed through Company personnel.

      The  customer can either rent a single video or purchase a video card that
entitles the customer to view an  unlimited  number of videos  during the rental
period (three to seven days).

DCB Actuaries & Consultants

      In April 2000,  the Company  acquired 100% of the stock of DCB Actuaries &
Consultants SRO (DCB), a Czech Republic based company and certain technology and
intellectual  property from DSM, LLC (DSM), a Florida limited liability company.
DCB developed and currently  operates a health insurance decision support system
with  advanced  data  structures.  The purchase  price of DCB was  approximately
$2,500,000 and was comprised of the following:


<PAGE>



      Series D preferred stock                            $ 494,000
      Purchase price - cash                               1,403,848
      Direct costs of acquisition - cash (estimated)        135,763
      Direct  costs  of acquisition - 12,880  shares
       of common stock                                       52,037
      Excess of  liabilities
       over assets of DCB                                   412,480

       Total acquisition value                           $2,498,128
                                                         ==========

The purchase price of the technology and intellectual property acquired from DSM
was approximately $3,305,000 and was comprised of the following:

      Series D preferred stock                           $2,356,000
      Purchase price - cash                                 746,153
      Direct costs of acquisition - cash (estimated)        104,488
      Direct costs of acquisition - 24,249 shares
       of common stock                                       97,963

       Total acquisition value                           $3,304,604
                                                         ==========

Each of the 2,850 shares of Series D preferred  stock issued in connection  with
the acquisition of DCB and the DSM technology are convertible  into 202.4 shares
of the Company's common stock at any time at the holder's option, for a total of
576,923  shares of common stock.  The Company can convert the Series D Preferred
shares into shares of Medcom's common stock, in the manner  described  above, at
any time after April 15, 2001 so long as the bid price of Medcom's  common stock
exceeds $4.94 and the shares of common stock issuable upon the conversion of the
Series D  Preferred  shares are  either  covered  by an  effective  registration
statement or are eligible for sale  pursuant to Rule 144 of the  Securities  and
Exchange Commission.

DCB is a member of an  international  network  of  actuarial  consulting  firms,
Woodrow  Milliman,  an  international  network of actuarial and consulting firms
represented  in 34 countries,  employing  over 3,000 people  worldwide.  DCB was
formed in 1991 and currently employs approximately 65 professionals in the Czech
Republic,   primarily  highly  qualified  software   engineers,   actuaries  and
consultants.

DCB developed and operates a Health Information Gateway, which is a state of the
art,  web-based  infrastructure,  featuring  advanced data mining  capabilities,
designed to meet the information  needs of the worldwide health care industry in
a real time basis.  The Health  Information  Gateway can be a valuable  tool for
healthcare  entities of almost any size,  from the small  physician group to the
large hospital chain or insurance company and plan.

There are four main components,  each targeting a different group of users. They
include:


<PAGE>

o     Risk Management - Actuarial  analysis and PMPM predictions (per member per
      month  predicted  cost) are  provided.  These  features  are ideal for the
      insurance  company  or  managed  care  plan,  as  well  as for a  hospital
      concerned  with  controlling  its costs.  This  segment  is of  particular
      interest to those involved with the financial  implications of operating a
      healthcare facility or insurance concern.

o    Clinical  Services  -  Electronic  patient  record  system,  critical  care
     pathways and electronic medical documents are available.  On-line documents
     include x-rays,  diagnostic results, lab reports, EKGs and physician notes.
     The electronic  medical documents  feature allows a healthcare  provider to
     review these patient critical documents on-line,  possibly from home or the
     office.  More than one physician in multiple  locations can also review the
     records  simultaneously.  This has significant  implications  regarding the
     ability to provide  quick and effective  consultations.  This aspect can be
     used by healthcare providers of any size, while improving the care given to
     the patient.  The critical care pathways can indicate a standard  treatment
     regimen based upon the patient's  particular  background  and symptoms,  as
     compared  to the  actual  course of action  being  followed.  The  Clinical
     Services segment is geared towards the physicians and improving the overall
     standard of care and the ability to enhance the ease by which it is given.

o    Administrative and Management  Functions - The Health  Information  Gateway
     can  assist  with  quality  assurance  and  management,  as well as  claims
     analysis.  Market and sales scrutiny can also be accomplished.  This aspect
     covers not only  certain of the  financial  concerns,  but also enables the
     healthcare  provider  (from  the  small  physician  practice  to the  large
     hospital  organization  or  insurance  company) to review its  performance,
     against  its own goals or the results of other  similarly  sized or located
     organizations.  It provides a barometer of their overall  performance.  The
     reporting  features  can be tailored to meet the  information  needs of the
     user,  whether  they  are  a  small  independent  practitioner  or a  large
     healthcare chain.

o     Patient  Services  - The  patients  will  also  benefit  from  the  Health
      Information  Gateway.  They  will  be  able  to  monitor  personal  health
      profiles,  in  addition to their own medical  treatment  histories.  Early
      warning and reminder alerts will also be available on line.


    The Company intends to market DCB's Health Information Gateway to hospitals,
insurance companies,  consultants and governmental agencies in the United States
and abroad.  Both Company  personnel and outside  consultants  will market DCB's
products.  The Company will offer the Health Information Gateway in two formats,
a direct  license of the  technology  to the end user,  as well as providing the
service under an Application  Service Provider (ASP)  relationship.  By offering
both  alternatives,  the  Company  believes  it will be able to capture a larger
market share,  since it will be able to accommodate the needs of different sized
organizations  with varying budgetary  constraints.  The ASP center is currently
under construction in a newly leased facility in Florida.

<PAGE>


DCB's has other products related to healthcare,  pensions and medical insurance.
One such  product is its "VFlex"  product.  VFlex  stands for  Virtual  Flexible
Benefits.  Using VFlex,  employees will have the ability to administer their own
benefits  over a company's  intranet  from  anywhere  in the world.  The Company
anticipates  marketing  this  program  to large  companies  with  multi-national
operations.

Competition

      There are many  companies  that  compete  with the  Company at some level.
Competing health insurance  processing  systems include Envoy,  Medical Manager,
Medic, Spot Check and Mediphis. Leading consumer healthcare websites include AOL
Health   Channel,   Thrive  Online,   drkoop.com,   Mayo  Clinic  Health  Oasis,
InteliHealth,  Mediconsult.com, and OnHealth. The Company also faces competition
from a variety of sources with respect to its Movie Vision operations, including
premium  cable  companies  such as HBO and Showtime,  video on demand  companies
including  On  Command  Video  and  Lodgenet  Entertainment  as well as  smaller
vendors,  such as VTV and  Suite  View  that  provide  the same  service  as the
Company.   The  Company   anticipates  that  DCB  will  compete  with  Eclipsys,
Healtheon/Web  MD,  Medisoft and  McKesson/HBOC  in terms of providing  high end
technical  solutions to the healthcare  industry,  although  Company  management
believes that none of these competitors  provide as comprehensive a system as is
provided by DCB. Many of these  competitors are far better  capitalized than the
Company  and  control  significant  market  share in their  respective  industry
segments.

Employees and Offices

      As of September 30, 1999,  the Company  employed 18 persons on a full-time
basis. Nine employees serve in management or administrative  capacities, and the
remainder are hourly workers in the Company's operations.  None of the Company's
employees  are covered by a  collective  bargaining  agreement.  The Company has
never  experienced  an  organized  work  stoppage,   strike  or  labor  dispute.
Management considers the Company's relations with its employees to be good.

      The  Company's  executive  offices are located at 18001 Cowan,  Suite C&D,
Irvine,  California  92614 and  consist of 4,900  square feet of space which are
leased at an annual rent of $70,000.  This lease on the space  expires in August
2003. The Company leases a 7,000 square foot  production and office  facility in
Orlando,  Florida  at an annual  rent of  $50,000.  The  lease on this  facility
expires in December 2005. The Company's telephone number is (949) 261-6665.

ITEM  2. DESCRIPTION OF PROPERTIES

          See Item 1 of this report.


<PAGE>


ITEM 3.  LEGAL PROCEEDINGS.
--------------------------

      On  December  21,  1998 Albert  Levenberg  filed a  complaint  against the
Company in the Fifteenth Judicial Circuit Court, Palm Beach County, Florida. The
complaint seeks $250,000,  plus interest and legal costs,  related to loans made
by Mr.  Levenberg  to the  Company in 1994.  The Company  believes  the claim is
without merit as the loans had either been repaid or converted  into  franchises
for sale of ACDC units.

      On May 11, 1999 Arthur Fried, a former employee, filed a complaint against
the Company in the Orange  County,  California  Superior  Court  seeking  actual
damages of $269,000,  and an unspecified amount of general and punitive damages.
The former  employee  claims  that the  Company  breached  a written  employment
agreement  and made  certain  misrepresentations  to the  former  employee.  The
Company  believes  these claims are without  merit and has filed a  counterclaim
against the former employee.

      Other than the foregoing there are no material legal  proceedings to which
the Company is a party or to which its properties are subject.

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

      Not Applicable

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

      As of September 30, 1999, there were  approximately  350 beneficial owners
of the  Company's  common  stock.  The  Company's  common stock is traded on the
National  Association  of  Securities  Dealers  Automatic  Quotation  ("NASDAQ")
System.  Set forth  below are the range of high and low bid  quotations  for the
periods  indicated  as  reported  by  NASDAQ.   The  market  quotations  reflect
interdealer prices, without retail mark-up, mark-down or commissions and may not
necessarily  represent  actual  transactions.  The market  quotations  have been
adjusted to reflect a two for one forward  stock split,  which was  effective in
June 1995, a one-for ten reverse  stock split which was effective in March 1996,
and a one-for-four reverse stock split which was effective in February 1998.

               Quarter
               Ending                      High         Low

              9/30/97                      $2.31       $1.25
             12/31/97                      $5.00       $1.50
              3/31/98                      $2.87       $1.09
              6/30/98                      $2.75       $1.56

              9/30/98                      $2.88       $1.38
             12/31/98                      $2.44        $.56

<PAGE>

              3/31/99                      $2.25        $.44
              6/30/99                      $1.69        $.88

      Holders of Common Stock are  entitled to receive such  dividends as may be
declared by the Board of Directors  and, in the event of  liquidation,  to share
pro  rata  in  any  distribution  of  the  Company's  assets  after  payment  of
liabilities.  The Board of Directors is not obligated to declare a dividend. The
Company has not paid any  dividends on its Common Stock and the Company does not
have any current plans to pay any Common Stock dividends.

      The provisions in the Company's Articles of Incorporation  relating to the
Company's Preferred Stock would allow the Company's directors to issue Preferred
Stock with rights to multiple  votes per share and dividends  rights which would
have  priority  over any  dividends  paid with respect to the  Company's  Common
Stock.  The issuance of Preferred Stock with such rights may make more difficult
the removal of management even if such removal would be considered beneficial to
shareholders  generally,  and  will  have the  effect  of  limiting  shareholder
participation in certain  transactions  such as mergers or tender offers if such
transactions are not favored by incumbent management.

Issuance of Common Stock

      During the two years ended June 30, 1999 the Company issued:

846,827 shares pursuant to the exemption provided by Regulation S,

     28,200 shares upon the  conversion  of the Company's  series A and Series B
preferred stock,

2,679,271 shares in settlement of notes payable,

1,041,500 shares pursuant to the Company's stock bonus plans,

792,350 shares in connection  with the  acquisition of the Company's  Movie Bar,
One Medical and MedCard Divisions,

318,512 shares in payment of outstanding liabilities,

300,000 shares in connection  with the termination of certain  franchises  which
were previously sold by the Company (as well as related litigation),

2,716,968 shares for services rendered, and

5,883,379 shares for cash in private offerings.

      The shares  issued  upon the  conversion  of the Series A and B  preferred
stock and in  settlement  of the notes  payable were issued in reliance upon the
exemption provided by Section 3(a)(9) of the Securities Act of 1933.

<PAGE>

      The shares  issued  pursuant  to the Stock Bonus Plan were  registered  by
means of a registration statement on Form S-8.

      The  remaining  shares  issued or sold during the two years ended June 30,
1000 were issued or sold in reliance upon the exemption provided by Section 4(2)
of the Act. The persons who  acquired  these  shares were either  accredited  or
sophisticated investors. The shares of common stock were acquired for investment
purposes only and without a view to distribution. The persons who acquired these
shares were fully  informed and advised  about matters  concerning  the Company,
including the  Company's  business,  financial  affairs and other  matters.  The
persons  acquired  these  shares  for  their  own  accounts.   The  certificates
representing the shares of commons tock bear legends stating that the shares may
not be  offered,  cols  or  transferred  other  than  pursuant  to an  effective
registration  statement  under the  Securities  Act of 1933,  or  pursuant to an
applicable exemption from registration.  The shares are "restricted"  securities
as defined in Rule 144 of the Securities and Exchange Commission.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

      The following  selected  financial data should be read in conjunction with
the more  detailed  financial  statements,  related  notes and  other  financial
information included herein.

Statement of Operations Data:
----------------------------

                                             Years Ended June 30,
                                       1999                       1998
                                       ----                       ----

Revenues                            $2,212,376                   $980,951
Cost of Services                      (634,518)                  (523,479)
Operating and other
     Expenses                       (8,724,843)                (7,503,483)
Loss from Discontinued Operations              --                 (63,737)
                                 ----------------          ---------------
Net Loss                           $(7,146,985)               $(7,109,748)
                                   ============               ============

Balance Sheet Data:
------------------
                                             June 30,
                                    1999                    1998
                                    ----                    ----

Current Assets                $1,168,055                  $787,998
Total Assets                   6,374,862                 5,602,751
Current Liabilities            2,142,550                 2,785,015
Total Liabilities              2,268,256                 3,372,542
Working Capital (Deficit)       (974,495)               (1,997,017)
Shareholders' Equity           4,106,606                 2,230,209

No Common Stock dividends have been declared by the Company since its inception.


<PAGE>


Results of Operations

         The  following  table  shows  the  percentage  of the  Company's  gross
revenues  by  category  for the periods  indicated,  as well as the  anticipated
revenue percentage from each category for the year ending June 30, 2000.

                                                Percent of Gross Revenues
                                              -------------------------
                                                                  Year Ending
                                         Years Ending June 30,   June 30, 2000
                                         ---------------------
                                         1998         1999      (Projected) (1)
                                         ----         ----      ---------------

Rental of cellular telephones directly from
Company and from ACDC Units.              11%          --             --

Sale of ACDC units and related equipment.  --          --             4%

Fees paid by cellular telephone companies
for  activation of cellular telephones.   17%          --             --

Sale of prepaid calling cards.            14%          4%             1%

Sale of long distance telephone service.   4%          --             --

Revenues from Link International.         15%         28%             --

Revenues from Movie Vision                38%         40%            15%

Revenues from One Medical Service          1%          7%            10%

Revenues from JustMed.com                  --         19%            70%

Miscellaneous Income                       --          2%             --

(l)  There  can  be  no  assurance  that  these   percentages  will  not  change
     significantly  based  upon  events  that may not be  within  the  Company's
     control.  Projected revenues for the year ending June 30, 2000 constitute a
     forward-looking statement which is subject to risks and uncertainties which
     could  cause  actual  results to differ  materially  from those  projected.
     Factors that could cause or contribute to such differences  include lack of
     adequate  funding,  loss of major  customers  and  inability  to meet sales
     projections.

      Prior to 1996 the Company operated ACDC units for its own account and also
sold franchises  which provided third parties the right to operate ACDC units at
various  franchised  locations.  At  September  30,  1999,  the  Company was not
operating any ACDC units and the Company's  only  remaining  franchisee had four
ACDC units in operation.


<PAGE>

        In 1996 the Company  introduced  four programs in an effort to diversify
and  broaden the  Company's  product and service  mix:  (i)  cellular  telephone
activations,  (ii) sale of pre-paid  phone  cards,  (iii) sale of long  distance
telephone service and (iv) rental of cellular telephones using overnight courier
service.  With  the  exception  of the sale of  pre-paid  calling  cards,  these
programs were discontinued in December 1997.

      In  December  1996 the  Company  acquired  all the issued and  outstanding
shares of Link International, Inc. (see Item 1 of this report). In June 1999 the
Company sold 520 of Link's scrip  terminals to the employee who was  responsible
for overseeing this aspect of the Company's  business.  Although the Company did
not  receive  any  material  cash  payment in  connection  with this  sale,  the
purchaser  of the  assets  agreed to assume  $70,000  in  accounts  payable  and
approximately  $600,000 in capitalized  lease  obligations  associated  with the
scrip terminals. The assets sold had a net book value of approximately $635,000.
The Company  recognized  as income  previously  recorded  deferred  gross profit
related to the scrip terminals totaling $212,805,  as well as an immaterial gain
from the sale of the assets and the release from the related obligations.

      In January  1998 the  Company  acquired  its Movie  Vision  division  from
Moviebar  Company  USA  and  Vectorvision,   Incorporated.  Movie  Vision  rents
videocassettes,   primarily   containing  motion  pictures,   through  automated
dispensing units in hotels and time share facilities.

      In May 1998 the Company acquired One Medical Services, Inc. (see Item 1 of
this  report).  In July 1999 the Company  licensed its rights to the One Medical
Service Network to an unrelated third party (Licensee) for $1,377,000,  of which
$300,000  was paid by  September  30,  1999,  $267,000 of which is to be paid by
January 5, 2000 and the remainder of which  (810,000) will be paid in accordance
with the terms an unsecured promissory note which bears interest at 7% per year.
The  principal  due on the note is to be reduced by license  royalties and other
credits  up to a maximum  of $9,000  per  month.  The  Licensee  also  agreed to
purchase approximately $200,000 of the Company's inventory on an as needed basis
and to pay the related accounts payable. Such inventory is being released to the
Licensee as  requested  at which time the  Licensee  pays the  related  accounts
payable.  The  Licensee  hired  the  full  time  employees  involved  with  this
operation. The Company retained as employees those persons who devoted less than
full time to the One Medical Services Network. These employees primarily provide
technical  support,  installations,   repairs,  maintenance  or  the  underlying
software  and billing  support.  The  Company  charges  the  Licensee  for these
services on a time and materials basis. The Licensee also assumed other overhead
associated with the One Medical  operation.  This  transaction  will improve the
Company's cash flow by  eliminating  overhead,  recovering  amounts for services
provided and providing for future licensing and royalty fee income.

      In November  1998 the Company  acquired the world wide license to software
programs and related  technology known as the MedCard system. The MedCard system
is an electronic  processing  system which  consolidates  insurance  eligibility
verification and processes medical claims and approvals of credit card and debit
card payments in under 30 seconds through a single, small terminal or a personal
computer.  The MedCard system is a major component of the Company's  JustMed.com
division.

<PAGE>


      Revenues from the MedCard System are generated from the sale of terminals,
for  verifying  insurance  eligibility  and  for  processing  insurance  claims.
Potential  revenue sources include fees for credit card  transactions  processed
through the terminal, fees for collection of receivables if the Company provides
billing  services,  reimbursement  by insurance  carriers for submitting  claims
electronically,  fees for  using  the  system's  referral  program  and fees for
processing  encounter data. The Company anticipates that the MedCard System will
begin generating significant revenues during the year ending June 30, 2001.

Year Ended June 30, 1999

      During the year ended June 30, 1999, the Company's  revenue increased as a
result of the Company's  expansion  into  financial  processing  (Link debit and
scrip  terminals),  medical  transaction  processing  (One  Medical  and MedCard
operations) and automated motion picture rentals (Movie Vision division).  These
business  segments  produced  revenues  of  $625,801,   $583,777  and  $860,126,
respectively  for the year ended June 30, 1999.  Comparable  revenues from these
segments for the year ended June 30, 1998 were substantially less since the full
scale  distribution  of the Link debit and scrip  terminals  did not begin until
April  1998,  and  the One  Medical  and  MedCard  operations  did not  commence
operations until May 1998 and November 1998, respectively.  During the summer of
1999 the Company began directing its efforts toward its JustMed.com division. As
a result of this change in focus,  and as  discussed  above,  the Company sold a
major portion of its script  terminals in June 1999 and the Company licensed its
rights to the One Medical  Service  Network in July 1999. In connection with the
sale of the financial  processing  division,  the Company recognized $210,000 of
deferred gross profit.

      Selling,  Marketing  and General and  Administration  expenses  (including
depreciation) increased to nearly $8,400,000 during the year ended June 30, 1999
compared to $5,900,000 in the prior year primarily due to the following:

1)      The  financial  processing  segment,  One Medical and Movie  Vision were
        operating  during all twelve months of fiscal 1999,  compared to shorter
        periods in the prior year.
2)      The Company  acquired  its MedCard  operation  in  November  1998.  As a
        result, only operations for the twelve month period ending June 30, 1999
        were affected by the expenses of this division.
3)      Depreciation and  amortization  expense was $1,099,871 in the year ended
        June 30, 1999  compared to $474,372 in the prior  period.  A substantial
        portion of this increase was the result of  depreciating  assets related
        to the Company's  ACDC  operations for a full year compared to the prior
        year.
4)      As a  result  of the  sale  of a  portion  of its  financial  processing
        division,  the Company  incurred  approximately  $140,000 of  commission
        expense in the quarter ended June 30, 1999.
5)      The Company incurred one-time expenses related to the closing of offices
        in New Jersey and Modesto,  California offices and in the termination of
        offices leases Florida.
6)      The  Company  expensed  approximately  $200,000 in  additional  reserves
        against note receivables deemed uncollectible at June 30, 1999. See Note
        5 to the Company's June 30, 1999 Financial Statements.

<PAGE>

      During the year ended June 30, 1999 equity-based compensation increased to
$2,540,338,  which was 50% greater  than the prior  period.  The Company  issued
shares of its common  stock to pay for the services  provided by  employees  and
outside consultants retained for a number of projects, including the development
of the Company's website, internet healthcare web portal and e-commerce business
applications.

Year Ending  June 30,  1998

     During the year ending June 30, 1998 the Company's  revenues  declined as a
result of the  suspension of the Company's  ACDC program and the  termination of
the  following  programs  which  were first  introduced  in 1996:  (i)  cellular
telephone  activations,  (ii) sale of long distance  telephone service and (iii)
rental of cellular telephones using overnight courier service.

      During fiscal 1998 the Company  concentrated  on its three new  divisions:
Link,  Movievision and One Medical Service.  During the year ended June 30, 1998
revenues  from the Link and Movie Vision  divisions  were  $148,000 and $371,000
respectively. Revenues from the One Medical Service division, which was acquired
effective May 30, 1998, were not significant during fiscal 1998.

      General  and  Administrative  expenses  as well as Selling  and  Marketing
expenses increased due to the acquisition of Link, Movie Vision, and One Medical
Service,  the lease of the Company's production facility in Tampa and changes in
the management of the Company.

      The following  factors also  contributed  to the Company's loss during the
year ended June 30, 1998:

      1) An expense  of  $1,687,422  as the  result of issuing  shares of stock,
options and warrants for services rendered.

      2) In  February  1998,  the  Company  settled a lawsuit  filed by a former
Master  Licensee of ACDC units  resulting in a special  charge of $424,300.  The
terms of the  settlement  require the Company to pay $115,000 over 21 months and
issue 300,000 shares of common stock to the former master licensee.

      3) In March  1997,  the  Company  entered  into a License  Agreement  with
Cancall Cellular  Communications,  Inc. ("Cancall") whereby the Company provided
Cancall with a license to operate  and/or  distribute  the Company's ACDC units,
prepaid  calling  card  machines  and  point-of-sale  terminals.  The  Licensing
Agreement  also required  Cancall to purchase a certain number of ACDC units and
point-of-sale terminals from the Company.  Between March and September 1997, the
Company sold 30 ACDC units to Cancall for  $705,000.  In payment of the $500,000
licensing fee and the 30 ACDC units,  Cancall  issued  1,807,800  shares of it's
Class B Preferred Stock to the Company.  As of September 30,1997 the Company had
valued the Cancall  Preferred  Stock at $1,310,000.  Subsequent to September 30,
1997 the Company and Cancall determined that Cancall would not be able to comply
with the terms of the Licensing  Agreement.  Accordingly,  Cancall (i) agreed to
rescind  the  licensing  agreement  and the  sale of the  ACDC  units  (ii)  the
equipment  previously  sold to Cancall were returned to the Company and (iii) an

<PAGE>

expense of  ($764,000)  was recorded  which  represented  the profit  previously
recorded  by the  Company on the sale of the ACDC  units and the  receipt of the
licensing  fee.  This  provision  was based on the fair market value of the ACDC
units that collateralized the note receivable.

      4) Between June through September 1996 the Company sold 30 ACDC units to a
master  licensee in  California  resulting in gross  revenues of  $664,000.  The
Company did not receive payment for the units, which were subsequently  returned
to the Company,  and a reserve of $374,980 (the profit  recognized for the units
sold)  was  recorded  for  uncollected   receivables,   which  reduced  the  net
collectable  amount of the note to equal the fair market value of the underlying
collateral.

      5) The Company recorded a valuation  reserve  ($200,000) for the Company's
investment in Smartphone,  a corporation which sold prepaid cellular telephones.
The Company's investment  represented a 10% interest in Smartphone.  The Company
wrote off its investment in Smartphone  since Smartphone  ceased  operations and
did not have any net worth.

      6) During  the year  ended  June 30,  1998,  the  Company's  ACDC  machine
operations changed from a primarily  franchise oriented operation to a primarily
company-owned  operation.  As such,  the Company  converted  the  existing  ACDC
inventory that was formerly held for sale to fixed assets and began depreciating
these units over their  remaining  estimated  useful lives.  This resulted in an
increase in depreciation expense during the year ended June 30, 1998.

      7) An increase in the ACDC depreciation and patent  amortization rates due
to the  classification  of ACDC  machines  from  inventory  to fixed  assets the
related depreciation and a full year of patent amortization.

Liquidity and Sources of Capital

    During  the  year  ending  June  30,  1999  the  Company's  operations  used
approximately  $3,400,000 of cash. In order to fund its  operating  losses,  the
Company  sold  shares  of its  common  stock  and  preferred  stock  in  private
placements. Approximately $1,400,000 was raised from the sale of preferred stock
and  approximately  $2,600,000  was raised from the sale of 3,636,879  shares of
common  stock.  The  3,636,879  shares of common  stock  were sold at  discounts
ranging from 11% to 60% of the then  prevailing  market  price of the  Company's
common  stock  since the  shares  were  restricted  securities,  as that term is
defined in Rule 144 of the  Securities  and Exchange  Commission.  None of these
shares were issued to  employees of the Company.  During  fiscal year 1999,  the
Company  also  issued  (i)  2,607,950  shares of common  stock in  exchange  for
services and equipment  valued at $2,340,423,  (ii)  2,260,675  shares of common
stock in settlement of outstanding  liabilities totaling  $1,796,201,  and (iii)
262,969 shares of common stock for other matters. The total shares issued during
the year was 8,768,473.

      During  the year ended  June 30,  1999 the  Company  granted  options  and
warrants  for the  purchase of  6,771,164  shares of common  stock to  officers,
employees  consultants  and other  third  parties.  The  exercise  prices of the

<PAGE>

warrants  issued to consultants  relating to 994,360 shares of common stock were
below the then prevailing market price of the Company's common stock on the date
the warrants  were granted  since the shares  issuable  upon the exercise of the
warrants were  restricted  securities as that term is defined in Rule 144 of the
Securities and Exchange Commission.

      Between July 1, 1999 and June 30, 2000, the Company  raised  approximately
$6,100,000,  net of  expenses  of  approximately  $659,000,  from  the  sale  of
6,562,645 shares of common stock at prices ranging from $.45 to $4.00 per share.
A total of  3,090,000  of these  shares were issued at prices below market since
the shares were restricted  securities.  None of these shares were issued to the
Company's employees.  The Company also issued approximately  1,860,000 shares of
common stock and received  approximately  $2,190,000  in cash as a result of the
exercise of options and  warrants at prices  ranging  between $.44 and $5.00 per
share.

      Proceeds  of  $567,000  from the  licensing  of the One  Medical  Services
Network were also used to fund the Company's operations.

      The Company does not have any available  credit,  bank  financing or other
external sources of liquidity. Due to historical operating losses, the Company's
operations have not been a source of liquidity.  In order to obtain capital, the
Company may need to sell  additional  shares of its common stock or borrow funds
from  private  lenders.  During the next  twelve  months the  Company  will need
capital to repay outstanding debt and fund receivables and inventory balances.

      The Company's  auditors stated in their report on the Company's  financial
statements for the year ended June 30, 1999 that due to the Company's  recurring
losses form operations there is substantial doubt as to the Company's ability to
continue in  business.  The  existence of such an  explanatory  paragraph in the
auditor's  opinion can make it more difficult for the Company to raise or borrow
additional funds.

      Although  the  Company  has  reduced  its  cash  requirements  for  normal
operations  through  the  sale of the Link  assets  and the  license  of the One
Medical  Services  Network,  it will  still need cash to fund  operating  losses
during the year  ending  June 30,  2000.  As of June 30,  2000 the  Company  had
approximately  $1,900,000  in cash.  The  Company  projects  that it may need to
obtain an additional  $1,000,000 to fund its operations  before its cash inflows
equal its cash  outflows,  depending upon whether the Company is able to finance
some of its  equipment  acquisitions.  The Company is  currently  attempting  to
obtain such equipment financing. The Company may also seek additional funding to
be able to capitalize upon the existing  opportunity for both the MedCard System
and DCB's health  Information  Gateway.  Obtaining this additional  funding will
allow the Company to fully  implement its business plan and to capitalize on the
market  potential  in a faster  manner.  The  Company may also be able to obtain
additional  funding,  if necessary,  by selling  additional shares of its common
stock. There can be no assurance,  however,  that the Company will be successful
in obtaining  additional  funding.  If the Company is  unsuccessful in obtaining
additional  funding for its operations,  the Company will, if necessary,  either
sell certain assets or divisions,  reduce its operations or otherwise reorganize
its operations so that its operating expenses would be less than its revenues.

<PAGE>


      During June 2000, the Company's  shareholders approved an amendment to the
Company's Articles of Incorporation increasing the authorized  capitalization of
the Company to 80,000,000 shares of common stock.

      As of June 30, 1999 the Company had borrowed $250,000 under a bank line of
credit, which was secured by a certificate of deposit. In July 1999, the Company
redeemed  the  certificate  of deposit and used the  proceeds to pay amounts due
under the line credit. The line of credit was then terminated.

      As of  June  30,  1999,  the  Company  had  defaulted  on the  payment  of
convertible  notes in the  principal  amount of $94,000.  Subsequent to June 30,
1999,  notes in the principal  amount of $69,000 were  converted  into shares of
common stock. A note with a balance of $25,000  remains unpaid as the Company is
unable to locate the lender.  With respect to the remaining  notes payable as of
June 30, 1999,  $11,214 was paid,  $343,905 was converted into 393,035 shares of
common stock and the maturity on the balance  ($70,000) was extended to November
1, 2000.  This note was converted  into 100,000  shares of the Company's  common
stock in June 2000.

      The  Company's  long-term  debt  consists  entirely of  obligations  under
capital leases.  As of June 30, 2000 and 1999, the Company is in compliance with
the covenants and provisions of these leases.

      In January  2000 the holders of the  Company's  Series C preferred  shares
converted the preferred  shares into  3,490,000  shares of the Company's  common
stock.  In payment of accrued  dividends  and other costs the Company  made cash
payments of $160,567 and issued  60,000 shares of its common stock plus warrants
to the holders of the Series C preferred shares.  The warrants allow the holders
to purchase 132,000 shares of the Company's common stock at a price of $0.75 per
share at any time prior to December 22,  2002.  For  assisting in arranging  the
conversion of the preferred shares,  the Company issued 175,000 shares of common
stock to a financial consultant.

Year 2000 Issue

      The "Year 2000" issue affects the Company's  installed  computer  systems,
network  elements,  software  applications  and other business systems that have
time-sensitive  programs  that may not properly  reflect or  recognize  the Year
2000. Because many computers and computer  applications define dates by the last
two digits of the year,  "00" may not be properly  identified  as the Year 2000.
This error could result in  miscalculations  or system  failures.  The Year 2000
issue does not materially  affect the Company's  computer  systems,  software or
other  business  systems.  The Company has conducted a review to identify  areas
that  could be  affected  and has  developed  an  implementation  plan to ensure
compliance.  The Company believes that with  modifications to existing  software
the issue will not pose  significant  operational  concerns  nor have a material
impact  on  financial   position  or  results  of   operations.   The  costs  of
modifications  are not expected to be material and will be expensed as incurred.
However,  failures of computer systems  maintained by third parties could have a
material impact on the Company's  ability to conduct  business.  The Company has

<PAGE>

requested that its major  independent  suppliers and support  providers  confirm
that they will be Year 2000 compliant.

ITEM 7.  FINANCIAL STATEMENTS

      See the financial statements attached to this report.

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

      Not applicable.

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

      The Company's officers and directors are as follows:

      Name              Age            Position

      Mark Bennett      40    President and a Director
      Michael Malet     51    Executive Vice President and a Director
      Alan Ruben        43    Chief Accounting and Financial Officer
      David Robinson    36    Vice President and Chief Technology Officer
      Vladimir Havlena  44    Managing Director - DCB Actuaries and Consultants,
                              s.r.o.
      Jeffrey Yablon    39    Vice President of Sales
      David Breslow     55    Director
      Julio Curra       40    Director

      Each  director  holds  office  until his  successor is duly elected by the
stockholders.  Executive  officers  serve  at  the  pleasure  of  the  Board  of
Directors.

      The  following  sets forth  certain  information  concerning  the past and
present principal  occupations of the Company's officers and directors and other
key employees.

      Mark Bennett has been the Company's  President since November 1997 and has
been a Director of the Company since  September  1997.  Mr. Bennett has been the
President,  Chief  Executive  Officer  and  a  Director  of  Link  International
Technologies, Inc., a subsidiary of the Company, since January 1996. Since April
1995 Mr. Bennett has also been the President of New View Technologies,  a wholly
owned  subsidiary of Link. From 1985 to 1987 Mr. Bennett was the General Manager
for  MovieBar,  a video  vending  company  servicing  the hotel and  hospitality
industry,  with installations in over 35,000 hotel rooms worldwide.  In 1987 Mr.
Bennett became Vice President of International Operations and General Manager of
MovieBar and was  subsequently  named as  President of MovieBar  Company USA. In
December 1995 Mr. Bennett resigned his position with MovieBar to co-found Link.

<PAGE>


     Michael Malet has been the Company's Vice President since November 1997 and
has been a director of the Company since  September 1997. Mr. Malet has been the
President of New View  Technologies,  Inc., a wholly  owned  subsidiary  of Link
International  Technologies,  Inc., since July 1995. From 1986 to 1987 Mr. Malet
was the President of Vending  Control  Systems,  a manufacturer of video vending
machines.  Mr.  Malet  was a  Sales  Manager  (1987-1990)  and  later  President
(1991-1995) of Keyosk  Corporation,  a Company  involved on the  development and
sale of  intelligent  on-line  vending  machines,  including the Company's  ACDC
Units.

     Alan Ruben joined the Company as Chief Accounting and Financial  Officer in
October 1999. Prior to joining the Company,  he was the Chief Financial  Officer
for Direct Container Line, Inc., an international  shipping company.  Previously
Mr.  Ruben  was the  Vice-President  and  Chief  Financial  Officer  for  Relsys
International,  Inc., a medical  software  development  company.  Mr. Ruben is a
certified public accountant,  licensed in the state of California.  He began his
career with Coopers & Lybrand and was in public accounting for eighteen years.

     David Robinson  joined the Company as Vice  President and Chief  Technology
Officer in April  2000.  Prior to joining  the  Company,  Mr.  Robinson  was the
President of DCB Actuaries & Consultant, s.r.o., since 1991. In 1986, he founded
DSM.net, a systems network integration  company, and has served as its President
since  inception.  In 1998, Mr. Robinson was appointed to the Board of Directors
of Woodrow Milliman, a worldwide actuarial and consulting firm

     Vladimir Havlena became the Managing Director of the Company's wholly owned
subsidiary, DCB Actuaries & Consultants, s.r.o. in April 2000. Mr. Havlena was a
founder and had worked as the Managing Director of DCB Actuaries and Consultants
since 1991.  Between 1987 and 1990 Mr. Havlena  received  several  post-graduate
degrees at the University of Brno, Czech Republic. Mr. Havlena graduated in 1981
from the Czech Technical University with a degree in engineering.

     Jeffrey  Yablon  joined the  Company as its Vice  President  of Sales.  Mr.
Yablon was the Vice  President of Sales for Olsten  Health  Service in New York.
Previously,  Mr. Yablon was employed by Abbott  Laboratories  for six years,  in
various  capacities,  including Director of Managed Care,  Director of Marketing
and Director of Alternate Site National Accounts.  He is a Certified  Healthcare
Executive  (CHE) of the American  College of Health Care Executives and a member
of the American  Association  of Health  Plans.  Mr.  Yablon was a member of the
Executive Board of the Metropolitan Healthcare  Administrators  Association.  In
addition to a bachelor's degree, he holds an MBA degree from Fairleigh Dickinson
University.

     David  Breslow has been a director of the Company  since March 1999.  Since
1996 Mr. Breslow has been the Executive Director of United Pharmacists  Network,
Inc., a corporation  involved in  purchasing,  management  and other services to
pharmacies.  Between  1976  and 1995  Mr.  Breslow  owned  and  managed  various
pharmacies in the Los Angeles, California metropolitan area.

     Julio Curra has been a director of the Company since March 1999. Since 1996
Mr. Curra has been the president of All-Line Communications, Inc., a corporation

<PAGE>

involved in  telecommunication  sales.  Between  1987 and 1996 Mr. Curra was the
president of Julio Curra & Associates, a firm also involved in telecommunication
sales.

      Robert Stevens is the Company's  Director of Development  and  Information
Technology.  He has been with the Company or its subsidiaries  since 1994. Prior
to joining the Company,  Mr. Stevens was the Vice  President of Development  for
three different companies. He was involved with a ten-year development effort on
EZ-Fax,  the first network fax server developed in 1984. He also spent seventeen
years at IBM, primarily in their complex systems group.

     Julie  Signorille  became the  Director  of  Operations  for the  Company's
MedCard  Division  in June  2000.  Ms.  Signorille  was the Vice-  President  of
Operations  for  Citibank,  serving as the  Director  of Banking  Operations  of
Citibank's  Internet Bank.  Ms.  Signorille has over fifteen years of management
experience,  primarily in  operations.  Prior to her tenure with  Citibank,  she
managed the day to day operations of a 36 branch-banking  network with assets in
excess of 6 billion dollars.

      Ron Pizzolo became the president of the Company's MedCard division in June
2000. Previously,  he had been providing services to the Company on a consulting
basis under the terms of the original License  Agreement for the MedCard System.
Mr. Pizzolo  developed and managed many of the features of the MedCard system as
it founder and president.  Prior to his involvement with MedCard,  he spent over
twenty years with a major national insurance company  supervising the settlement
of personal injury claims.

      Tony Pizzolo  became  Executive  Vice  President of the Company's  MedCard
division in June 2000. Previously, he had been providing services to the Company
on a consulting basis under the terms of the original License  Agreement for the
MedCard  System.  Prior to joining MedCard in 1997, Mr. Pizzolo was an executive
in a variety of service related businesses in the New York area.

     All of the Company's officers devote substantially all of their time on the
Company's  business.  Mr.  Breslow and Mr. Curra,  as  directors,  devote only a
minimal amount of time to the Company.

      Mr. Breslow and Mr. Curra are members of the Company's audit committee.

Change in Management

     In November 1997 Melvin Leiner, Darren Marks, James Caprio and Donald Marks
resigned as officers and directors of the Company.  David Barnhill also resigned
as a director in November  1997.  In November  1997 Mark  Bennett was  appointed
President  and Michael  Malet was  appointed  Executive  Vice  President  of the
Company. Mark Bennett,  Michael Malet, Chet Howard and George Pursglove remained
directors of the Company.  In September  1998 Cornelia  Eldridge was appointed a
director of the Company.  In February  1999 Mr.  Howard,  Mr.  Pursglove and Ms.
Eldridge  resigned as directors of the Company.  In March 1999 David Breslow and
Julio Curra were appointed directors of the Company. In October 1999, Alan Ruben
was appointed Chief Accounting and Financial Officer after Ian Hart's employment

<PAGE>

contract as chief financial officer expired.  In January 2000, Mr. Marvin Berger
resigned as the Company's  Vice  President of Sales & Marketing.  In April 2000,
Mr.  David  Robinson  and  Mr.  Vladimir  Havlena  joined  the  Company  as  its
Vice-President  and  Chief  Technology  Officer  and  Managing  Director  of DCB
Actuaries and  Consultants,  s.r.o.,  respectively.  Mr.  Jeffrey Yablon and Ms.
Julie Signorille  joined the Company in June 2000 as the Vice President of Sales
and Director of Operations for the MedCard  division,  respectively.  Mr. Ronald
Pizzolo and Mr.  Anthony  Pizzolo also joined the Company as the  President  and
Executive Vice President of the Company's MedCard division in June 2000.

ITEM 10.  EXECUTIVE COMPENSATION

      The following table sets forth in summary form the  compensation  received
by (i) the  Chief  Executive  Officer  of the  Company  and  (ii) by each  other
executive  officer of the Company who received in excess of $100,000  during the
fiscal years ended June 30, 1998 and 1999.

                                            Other Annual  Restricted   Options
    Name and        Fiscal   Salary   Bonus Compensation  Stock Awards Granted
Principal Position   Year     (1)      (2)       (3)         (4)        (5)
------------------  ------   ------   ----- ------------- -----------  -------

Mark Bennett,        1999   $128,482           $8,400           --    1,015,000
President and Chief  1998   $111,350    --     $8,400      $67,500      560,500
Executive Officer
Michael Malet,       1999  $112,462             $8,400          --      925,000
Vice President       1998  $100,923     --      $8,400     $58,500      457,000

(1)   The dollar value of base salary (cash and non-cash) received.
(2)  The dollar value of bonus (cash and non-cash) received.
(3)  Any other annual compensation not properly  categorized as salary or bonus,
     including perquisites and other personal benefits,  securities or property.
     Amounts in the table represent automobile allowances.

(4)  Amounts  reflect  the value of the  shares of the  Company's  common  stock
     issued as compensation for services.

      The table below shows the number of shares of the  Company's  Common Stock
owned by the officers listed above,  and the value of such shares as of June 30,
1999.

      Name                                Shares            Value
      ----                                ------            -----
      Mark Bennett                       224,900          $218,153
      Michael Malet                      117,400          $113,878

<PAGE>

(5)  The shares of Common  Stock to be received  upon the  exercise of all stock
     options granted during the fiscal years shown in the table.

Employment Contracts

      In March 1999 the Company  entered into  employment  agreements  with Mark
Bennett and Michael Malet. Each employment agreement provides for the following:

1.    Term of three years.

2.   Annual  salary of $137,500 in the case of Mr.  Bennett and  $120,000 in the
     case of Mr. Malet.

3.    Automobile allowance of $700 per month.

4.          Four weeks of paid  vacations  and the right to  participate  in any
            group medical,  group life  insurance or any other employee  benefit
            plan that the Company may, from time to time, maintain.

5.   Reimbursement  for any medical,  dental or optical  expenses not covered by
     any Company group healthcare plan.

6.   Disability  benefits equal to the employee's salary payable to the employee
     for the remaining term of the employment agreement.

7.   Premium  payments  for a  $1,000,000  term life  insurance  policy with the
     beneficiary to be designated by the employee.

      In the event that there is a change in the  control of the Company and the
employee is terminated  without cause or the employee resigns for cause then the
Company is required to pay the Company a lump-sum amount equal to the employee's
annual salary  multiplied by 2.99. The term  "resignation for cause" means there
is a material  change in the employee's  authority,  duties or  activities.  For
purposes  of the  employment  agreement  a change in the  control of the Company
means:  (1) the  acquisition  by any  person of more  than 15% of the  Company's
common  stock;  (2) the  acquisition  by any person  more than 50% of the voting
capital stock of any  subsidiary  of the Company;  (3) the merger of the Company
with another entity if after such merger the  shareholders of the Company do not
own at least 85% of voting capital stock of the surviving  corporation;  (4) the
approval by the  shareholders  of the Company of a plan to liquidate or dissolve
the Company;  (5) the sale of substantially all of the assets of the Company; or
(6) a  change  in a  majority  of the  Company's  directors  which  has not been
approved by at least two-thirds of the incumbent directors.

    If following a change in control the employee is terminated  without  cause,
all options granted to the employee  pursuant to any of the Company's  incentive
or non-qualified stock option plans will be fully vested.

<PAGE>


Options Granted During Fiscal Year Ending June 30, l999

     The following tables set forth information  concerning the options granted,
during the fiscal year ended June 30, 1999, to the persons named below,  and the
fiscal  year-end value of all unexercised  options  (regardless of when granted)
held by these persons. The options listed below were not granted pursuant to the
Company's incentive or non-qualified stock option plans.

                                % of Total Options    Exercise
                   Options      Granted to Employees  Price Per   Expiration
 Name             Granted (#)     in Fiscal Year       Share         Date
------            -----------   --------------------  ---------    ---------

Mark Bennett      1,015,000            33%             $0.82        4/16/04
Michael Malet       925,000            30%             $0.82        4/16/04

Option Exercises in Last Fiscal Year and Fiscal Year-End Values

                                               Number of        Value of Unexer-
                                          Securities Underlying    cised In-the-
                                           Unexercised Options     Money Options
                                            at June 30, 1999    at June 30, 1999
                  Shares                   -------------------- ---------------
                 Acquired          Value         Exercisable/      Exercisable/
Name            on Exercise (1)  Realized (2) Unexercisable (3)      Unexer-
                                                                    cisable (4)
-------------   ---------------  ------------ -----------------  ---------------

Mark Bennett             --              --       1,575,500/--     $152,250/--
Michael Malet            --              --       1,382,000/--     $138,750/--

(1) The number of shares  received  upon  exercise of options  during the fiscal
    year ended June 30, 1999.

(2) With respect to options  exercised  during the  Company's  fiscal year ended
    June 30,  1999,  the  dollar  value of the  difference  between  the  option
    exercise  price and the market value of the option  shares  purchased on the
    date of the exercise of the options.

(3) The total number of unexercised options held as of June 30, 1999,  separated
    between those options that were  exercisable and those options that were not
    exercisable.

(4) For all  unexercised  options  held as of June 30,  1999,  the excess of the
    market value of the stock underlying those options (as of June 30, 1999) and
    the exercise price of the option

Long Term Incentive Plans - Awards in Last Fiscal Year

      None.



<PAGE>


Employee Pension, Profit Sharing or Other Retirement Plans

      Except  as  provided  in the  Company's  employment  agreements  with  its
executive officers,  the Company does not have a defined benefit,  pension plan,
profit sharing or other retirement  plan,  although the Company may adopt one or
more of such plans in the future.

Compensation of Directors

      Standard  Arrangements.  At present the Company does not pay its directors
for attending  meetings of the Board of Directors,  although the Company expects
to adopt a  director  compensation  policy in the  future.  The  Company  has no
standard  arrangement pursuant to which directors of the Company are compensated
for any  services  provided  as a director  or for  committee  participation  or
special assignments.

      Except as  disclosed  elsewhere  in this report no director of the Company
received any form of  compensation  from the Company  during the year ended June
30, 1999.

Stock Option and Bonus Plans

      The Company has an Incentive Stock Option Plan, Non-Qualified Stock Option
Plans and Stock Bonus Plans. A summary description of each Plan follows. In some
cases these three Plans are collectively referred to as the "Plans".

Incentive Stock Option Plan.
---------------------------

      The  Incentive  Stock  Option Plan  authorizes  the issuance of options to
purchase up to 1,500,000 shares of the Company's  Common Stock,  less the number
of shares  already  optioned  under both this Plan and the  Non-Qualified  Stock
Option Plan. Only officers,  and employees of the Company may be granted options
pursuant to the Incentive Stock Option Plan.

      In order to  qualify  for  incentive  stock  option  treatment  under  the
Internal Revenue Code, the following requirements must be complied with:

      1.   Options granted pursuant to the Plan must be exercised no later than:

            (a)  The  expiration  of thirty (30) days after the date on which an
                 option holder's employment by the Company is terminated.

            (b)  The  expiration  of one year  after the date on which an option
                 holder's  employment  by the  Company  is  terminated,  if such
                 termination is due to the Employee's disability or death.

      2. In the event of an option  holder's  death  while in the  employ of the
Company,  his  legatees or  distributees  may  exercise  (prior to the  option's
expiration) the option as to any of the shares not previously exercised.

<PAGE>

      3. The total fair market value of the shares of Common  Stock  (determined
at the time of the grant of the  option) for which any  employee  may be granted
options  which  are  first  exercisable  in any  calendar  year  may not  exceed
$100,000.

      4.  Options  may not be  exercised  until one year  following  the date of
grant.  Options  granted to an employee  then owning more than 10% of the Common
Stock of the Company may not be  exercisable  by its terms after five years from
the date of grant.

      5. The  purchase  price  per share of Common  Stock  purchasable  under an
option is  determined by the Board of Directors but cannot be less than the fair
market value of the Common Stock on the date of the grant of the option (or 110%
of the fair  market  value in the case of a person  owning the  Company's  stock
which represents more than 10% of the total combined voting power of all classes
of stock).

      In June 2000, the Company's  shareholders ratified the Company's year 2000
Incentive  Stock  Option Plan,  which  provides  that up to 1,000,000  shares of
common stock may be issued upon the exercise of options granted  pursuant to the
year 2000  Incentive  Stock Option Plan. No options have been granted under this
plan as of June 30, 2000.

Non-Qualified Stock Option Plans.
--------------------------------

      The Non-Qualified  Stock Option Plans authorize the issuance of options to
purchase up to 3,000,000 shares of the Company's Common Stock less the number of
shares  already  optioned  under both this Plan and the  Incentive  Stock Option
Plan. The Company's employees, directors, officers, consultants and advisors are
eligible to be granted options pursuant to the Plan,  provided however that bona
fide services must be rendered by such consultants or advisors and such services
must  not  be  in  connection  with  the  offer  or  sale  of  securities  in  a
capital-raising  transaction.  The option  exercise  price is  determined by the
Board of  Directors  but cannot be less than the market  price of the  Company's
Common Stock on the date the option is granted.

      Options granted  pursuant to the Plan not previously  exercised  terminate
upon the first to occur of the following dates:

      (a)   The  expiration  of one year  after  the  date on  which  an  option
            holder's   employment   by  the  Company  is   terminated   (whether
            termination is by the Company, disability or death); or

      (b)   The  expiration  of the option  which occurs five (5) years from the
            date the option was granted.

      In the  event of an  option  holder's  death  while in the  employ  of the
Company,  his legatees or distributees  may exercise the option as to any of the
shares not previously exercised prior to the option's expiration.


<PAGE>

      In June 2000, the Company's  shareholders ratified the Company's year 2000
Non-Qualified  Stock Option Plan,  which provides that up to 2,000,000 shares of
common stock may be issued upon the exercise of options granted  pursuant to the
year 2000  Non-Qualified  Stock Option Plan.  No options have been granted under
this plan as of June 30, 2000.

Stock Bonus Plans.
-----------------

      Up to  2,400,000  shares of Common  Stock may be  granted  under the Stock
Bonus Plans.  Such shares may consist,  in whole or in part, of  authorized  but
unissued shares,  or treasury shares.  Under the Stock Bonus Plan, the Company's
employees, directors, officers, consultants and advisors are eligible to receive
a grant of the Company's shares; provided, however, that bona fide services must
be  rendered  by  consultants  or  advisors  and  such  services  must not be in
connection   with  the  offer  or  sale  of  securities  in  a   capital-raising
transaction.

      In June 2000, the Company's  shareholders ratified the Company's year 2000
Stock Bonus Plan,  which  provides that up to 500,000 shares of common stock may
be issued as bonuses  pursuant to the year 2000 Stock Bonus Plan. No Shares have
been issued under this plan as of June 30, 2000.

Other Options

      During the year ended June 30, 1999 the Company  granted  Mark Bennett and
Michael Malet options to purchase 1,015,000 and 925,000 shares respectively,  of
the Company's  common  stock.  The options may be exercised at any time prior to
April 16, 2004 at an exercise  price of $0.82 per share.  These options were not
granted pursuant to the Company's Incentive or Non-Qualified stock option plans.

Other Information Regarding the Plans.
-------------------------------------

      The Plans are administered by the Company's Board of Directors.  The Board
of Directors  has the  authority to interpret  the  provisions  of the Plans and
supervise the  administration of the Plans. In addition,  the Board of Directors
is  empowered  to select  those  persons  to whom  shares or  options  are to be
granted,  to  determine  the  number of shares  subject to each grant of a stock
bonus or an option and to determine  when, and upon what  conditions,  shares or
options  granted under the Plans will vest or otherwise be subject to forfeiture
and cancellation.

      In the discretion of the Board of Directors,  any option granted  pursuant
to the Plans may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also  accelerate  the date upon which any option (or any part of any options) is
first  exercisable.  Any shares issued  pursuant to the Stock Bonus Plan and any
options granted pursuant to the Incentive Stock Option Plan or the Non-Qualified
Stock Option Plan will be forfeited if the "vesting" schedule established by the
Board of  Directors  at the time of the  grant  is not  met.  For this  purpose,
vesting  means the period  during which the employee  must remain an employee of
the Company or the period of time a  non-employee  must provide  services to the
Company.  At the time an employee ceases working for the Company (or at the time

<PAGE>

a  non-employee  ceases to  perform  services  for the  Company),  any shares or
options not fully vested will be forfeited and  cancelled.  In the discretion of
the Board of Directors payment for the shares of Common Stock underlying options
may be paid through the delivery of shares of the Company's  Common Stock having
an aggregate  fair market value equal to the option price,  provided such shares
have  been  owned  by the  option  holder  for at least  one year  prior to such
exercise. A combination of cash and shares of Common Stock may also be permitted
at the discretion of the Board of Directors.

      Options  are  generally  non-transferable  except upon death of the option
holder.  Shares  issued  pursuant to the Stock Bonus Plan will  generally not be
transferable  until the  person  receiving  the  shares  satisfies  the  vesting
requirements imposed by the Board of Directors when the shares were issued.

      The Board of  Directors  of the Company may at any time,  and from time to
time,  amend,  terminate,  or suspend  one or more of the Plans in any manner it
deems  appropriate,  provided  that such  amendment,  termination  or suspension
cannot  adversely affect rights or obligations with respect to shares or options
previously  granted.  The  Board  of  Directors  may  not,  without  shareholder
approval:  make any  amendment  which would  materially  modify the  eligibility
requirements  for the Plans;  increase or decrease the total number of shares of
Common  Stock which may be issued  pursuant to the Plans except in the case of a
reclassification  of the Company's capital stock or a consolidation or merger of
the Company;  reduce the minimum  option price per share;  extend the period for
granting options;  or materially increase in any other way the benefits accruing
to employees who are eligible to participate in the Plans.

      The Plans are not qualified  under Section 401(a) of the Internal  Revenue
Code, nor are they subject to any provisions of the Employee  Retirement  Income
Security Act of 1974.

Summary.
-------

      The  following  sets forth certain  information  as of September 30, 1999,
concerning the stock options and stock bonuses  granted by the Company  pursuant
to its Plans.  Each option  represents  the right to  purchase  one share of the
Company's Common Stock.

                       Total Shares  Shares Reserved    Shares      Remaining
                         Reserved    for Outstanding   Issued As  Options/Shares
Name of Plan            Under Plan       Options      Stock Bonus   Under Plan
------------            ----------    --------------  -----------  ------------

1998 Incentive Stock
     Option Plan            1,500,000      688,000          N/A      812,000
1996 Non-Qualified Stock
     Option Plan            1,500,000      607,500          N/A      892,500
1998 Non-Qualified Stock
     Option Plan            1,500,000           --          N/A    1,500,000
1996 and 1998 Stock Bonus
     Plans                  1,500,000          N/A     1,497,625       2,375

<PAGE>

1999 Stock Bonus Plan         900,000          N/A        46,571     853,429

Stock Bonuses

      The Company,  in accordance  with the terms of its Stock Bonus Plans,  has
issued  shares  of Common  Stock to  certain  Company  officers,  employees  and
consultants.  The following  persons  (including  former officers and directors)
received shares of the Company's common stock as stock bonuses:

                                     Shares Issued as Stock Bonus
                                  ------------------------------
    Name                  1996       1997       1998      1999       2000
    ----                  ----       ----       ----      ----       ----

Mark Bennett                                    18,750
Michael Malet                        5,000      16,250
Other employees and
   consultants as a group461,250   111,875     174,000  710,500     46,571
                         -------   -------     -------  -------     ------
                        461,250    116,875     209,000  710,500     46,571
                        =======    =======     =======  =======     ======

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
-------------------------------------------------------------------------

     The following table sets forth, as of September 30, 1999,  information with
respect to the only persons owning  beneficially  5% or more of the  outstanding
Common Stock and the number and percentage of  outstanding  shares owned by each
director  and officer  and by the  officers  and  directors  as a group.  Unless
otherwise  indicated,  each owner has sole voting and investment powers over his
shares of Common Stock.
                                                             Percent of
Name and Address                     Shares Owned (1)         Class (2)
----------------                     -----------------      -------------

Mark Bennett                             224,900                  1%
18001 Cowan, Suite C&D
Irvine, CA 92614

Michael Malet                            117,400                  *
18001 Cowan, Suite C&D
Irvine, CA 92614

Marvin Berger                             65,000                  *
18001 Cowan, Suite C&D
Irvine, CA  92614

David Breslow                             10,000                  *
701 N. Brand, #380
Glendale, CA  91203


<PAGE>

Julio Curra                                   --                 --
1767 Veterans Memorial Hwy. #6
Islandia, NY  11722                      _______               ____

Officers and Directors as a Group
 (5 persons)                             417,300                 3%
                                         =======              =====

Less than 1%

(1) Excludes  shares  issuable  prior to December  31, 1999 upon the exercise of
    options or warrants granted to the following persons.

      Name                   Options exercisable prior to December 31, 1999
      ----                   ----------------------------------------------

      Mark Bennett                            1,575,500
      Michael Malet                           1,382,000
      Marvin Berger                              25,000
      David Breslow                              10,000
      Julio Curra                                    --

(2) Excludes any shares issuable upon the exercise of any warrants or options or
    upon the conversion of any promissory notes or other convertible securities.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Effective January 30, 1998 the Company issued 550,000 shares of its common
stock to the shareholders of Moviebar Company USA and Vectorvision, Incorporated
in consideration for the acquisition of businesses  collectively known as "Movie
Vision."  Movie  Vision  rents  video  cassettes,  primarily  containing  motion
pictures,  through automated  dispensing units in hotels. Movie Vision currently
has video cassette dispensing machines in approximately 110 hotels in the United
States. For financial  statement  purposes,  the acquisition of Movie Vision was
valued at $1,100,000. Mark Bennett, the President and a director of the Company,
was shareholder of both Moviebar Company USA and Vectorvision,  Incorporated and
received  55,000  shares of the Company's  common stock in connection  with this
transaction.

      During the fiscal  1998 the  Company  issued  18,750  shares of its common
stock to David  Markowski,  a former  officer and  director of the  Company,  in
consideration for services provided to the Company.  The Company also issued Mr.
Markowski  6,250 shares of common stock  pursuant to the  Company's  stock bonus
plan.

    During  the year ended June 30,  1998,  the  Company  acquired  One  Medical
Services,  Inc.  David  Breslow,  a director of the  Company,  is the  Executive
Director of an entity that owned forty  percent  (40%) of the acquired  company.
One Medical  Services was valued at $1,067,398.  This  transaction was completed
before Mr. Breslow became a member of the Company's Board of Directors.


<PAGE>

      See  "Stock  Option  and  Bonus  Plans"  in  Item 10 of  this  report  for
information  concerning stock options and stock bonuses granted to the Company's
present officers and directors.


<PAGE>



ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

Number              Exhibit                                 Page Number

 3.1   Certificate  of Incorporation                              (1)
                                                       ------------------------

3.1.1 Amendment to Certificate of Incorporation                   (3)
                                                       ------------------------

3.2   Bylaws of the Company                                       (1)
                                                       ------------------------

4.1   Incentive Stock Option Plan
                                                       ------------------------

4.2   Non-Qualified Stock Option Plans                 ------------------------

4.3   Stock Bonus Plans
                                                       -----------------------

10.5  July 1999 Licensing Agreement relating
        to One Medical System                          _____________

23    Consents of Accountants                          Previously Filed

27    Financial Data Schedule                          Previously Filed

(1) Incorporated  by reference,  and as same exhibit number,  from  Registration
    Statement on Form SB-2 (Commission File Number 33-70546-A).

(2)  Incorporated by reference, and as same exhibit number, from Amendment No. 1
     to Registration Statement on Form SB-2 (Commission File Number 33-70546-A).

(3)  Incorporated by reference, and as same exhibit number, from Amendment No. 5
     to Registration Statement on Form SB-2 (Commission File Number 33-70546-A).



<PAGE>




                              FINANCIAL STATEMENTS




<PAGE>


                   SIMS COMMUNICATIONS, INC. AND SUBSIDIARIES


                                Table of Contents


                                                                     Page

Independent Auditors' Report.........................................F - 1

Financial Statements

   Consolidated Balance Sheet........................................F - 2

   Consolidated Statements of Operations.............................F - 3

   Consolidated Statements of Stockholders' Equity...................F - 4

   Consolidated Statements of Cash Flows.............................F - 5

Notes to Consolidated Financial Statements...........................F - 6


<PAGE>



                          INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
SIMS Communications, Inc. and Subsidiaries
Irvine, California


We  have  audited  the   accompanying   consolidated   balance   sheet  of  SIMS
Communications,  Inc.  and  Subsidiaries  as of June 30,  1999  and the  related
consolidated statements of operations,  stockholders' equity, and cash flows for
the years  ended June 30,  1999 and 1998.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of SIMS Communications,
Inc. and  Subsidiaries  as of June 30, 1999 and the results of their  operations
and cash flows for the years  ended June 30,  1999 and 1998 in  conformity  with
generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has suffered recurring losses from operations
which raise  substantial doubt about its ability to continue as a going concern.
Management's  plan in regard to these  matters is also  described in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.




                                         Ehrhardt Keefe Steiner & Hottman PC
August 19, 1999
Denver, Colorado


<PAGE>


                   SIMS COMMUNICATIONS, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheet
                                  June 30, 1999

                                       Assets
Current assets
   Cash and cash equivalents                                      $  189,772
       Restricted cash (Note 7)
                                                                     250,000
   Accounts receivables, less allowance for doubtful                 250,913
    accounts of $31,811
   Inventories                                                       227,033
   Prepaid expenses                                                  100,337
   Notes receivable, current portion (Note 5)                        150,000
                                                                   ----------
         Total current assets                                      1,168,055

Property and equipment, net (Note 4)                               2,296,643
                                                                   ----------

Other assets
   Notes receivable less allowance of $575,062 (Note 5)              241,200
   Licensing rights, net of accumulated amortization of              885,558
$38,500
   Patents, net of accumulated amortization of $189,446              327,299
   Royalty advances (Note 3)                                         515,907
   Goodwill, net of accumulated amortization of $136,070             819,299
(Note 3)
   Other                                                             120,901
                                                                   ----------
         Total other assets                                        2,910,164
                                                                   ----------

Total assets                                                      $6,374,862
                                                                   ==========

                        Liabilities and Stockholders' Equity
Current liabilities
   Accounts payable                                               $  649,154
   Accrued expenses                                                  622,820
   Bank line of credit (Note 7)                                      250,000
   Notes payable (Note 8)                                            519,119
   Current obligations under capital leases (Note 8)                  43,432
   Dividends payable                                                  58,025
                                                                    ----------
         Total current liabilities                                 2,142,550

Long-term liabilities
   Obligations under capital lease (Note 8)                          125,706
                                                                    ----------

         Total liabilities                                         2,268,256
                                                                    ----------
Commitments and contingencies (Notes 2 and 14)

Stockholders'  equity (Notes 10, 11 and 12) Preferred stock,
  Series A, B and C, $.001 par value,
    152,600 shares authorized - 50,000 (A), 100,000 (B),
    2,060 (C) 10,995 shares issued and outstanding at June                11
    30, 1999 (liquidation preference of $1,930,000)
   Common stock $.0001 par value 40,000,000 shares
    authorized, 16,727,506 issued and outstanding                      1,673
   Additional paid in capital                                     32,093,851
   Accumulated deficit                                           (27,988,929)
                                                                  -----------
         Total stockholders' equity                                4,106,606
                                                                   ----------
Total liabilities and stockholders' equity                        $6,374,862
                                                                   ==========

                 See notes to consolidated financial statements.



<PAGE>


                      Consolidated Statements of Operations

                                                   Year Ended June 30,
                                              ------------------------------
                                                  1999               1998
                                                  ----               ----
Revenue (Note 13)
   Telecommunications                           $142,672           $446,524
   Financial processing                          625,801            147,533
   Automated movie rentals                       860,126            371,416
   Medical transaction processing                583,777             15,478
                                               -----------        -----------
        Total revenue                          2,212,376            980,951
                                               -----------        -----------

Cost  of  services   (exclusive  of
depreciation and amortization shown
separately below) (Note 13)
   Telecommunications                             86,252            245,468
   Financial processing                          236,517            128,133
   Automated movie rentals                       180,549            145,040
   Medical transaction processing                131,200              4,838
                                                 -------             -----
       Total cost of services                    634,518            523,479
                                                 -------            -------

Gross profit                                   1,577,858            457,472
                                              ----------        -----------

Operating expenses
   General and administrative (Note 11)        6,101,305          4,405,486
   Depreciation and amortization               1,099,871            474,372
   Selling and marketing                       1,164,761          1,058,252
   Loss on termination of licensing                    -            764,000
   and equipment agreement (Note 6)
   Research and development                            -             32,760
   Litigation settlement (Note 14)                     -            444,300
                                               ----------         ---------
        Total expenses                         8,365,937          7,179,170
                                               ----------         ---------

Operating loss                                (6,788,079)        (6,721,698)
                                               ----------        -----------

Other income (expense)
   Interest expense                             (337,153)          (158,263)
   Interest income                                28,772             28,424
   Loss on write down of investment (Note 6)           -           (200,000)
   Other                                           7,500              5,526
                                                ---------        -----------
                                                (300,881)          (324,313)
                                                ---------        -----------

Loss from continuing operations before
 income taxes                                 (7,088,960)        (7,046,011)

Income tax benefit (Note 9)                            -                  -
                                              -----------        ----------

Net loss from continuing operations           (7,088,960)        (7,046,011)

Net loss from discontinued operations (Note 16)        -            (63,737)
                                              -----------       -----------

Net loss                                      (7,088,960)        (7,109,748)

Preferred stock dividend                          58,025                  -
                                              -----------         ----------

Net loss applicable to common shareholders   $(7,146,985)        $(7,109,748)
                                              ===========        ===========

Basic and diluted loss per common share from      $(0.67)             $(1.78)
continuing operations                         ===========        ===========

Basic and diluted loss per common share from         $ -               $(.01)
                                              ===========        ===========
 discontinued operations
Basic and diluted net loss per common share       $(0.67)             $(1.79)
                                              ===========        ===========

Weighted  average  common shares  outstanding
(Notes 11 and 12)                             10,602,609           3,961,389
                                              ===========        ===========

                See notes to consolidated financial statements.

<PAGE>


                   SIMS COMMUNICATIONS, INC. AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity
                       Years Ended June 30, 1999 and 1998
<TABLE>
      <S>            <C>          <C>        <C>          <C>         <C>        <C>          <C>           <C>           <C>

                                 Preferred Stock
                      -------------------------------------------
                     Series A and B                     Series C          Common Stock

                                                                                           Additional
                    Number of              Number of               Number of               Paid-in      Accumulated
                    Shares      Amount     Shares       Amount     Shares      Amount      Capital       Deficit        Total


Balance June 30,
 1997              125,250       $125          --       $   --     2,120,499   $ 212      15,134,683   $(13,307,196)  $1,827,824
Issuance of common
stock in connection
with acquisitions
 (Notes 3 and 12)       --         --          --           --       692,350      69       1,327,691             --    1,327,760
Issuance of common
stock for cash
(ranging from $.80 to
$1.00) net offering
costs of $633,421
(Note 12)               --         --          --           --     2,246,500     225       1,475,855             --    1,476,080
Issuance of common
stock for conversion
of notes payable to
investors in connection
with a Regulation S
offering, net of
expenses of $162,956
(Note 12)               --         --          --           --       846,827      85         936,959             --      937,044
Issuance of common
stock in exchange
for services (Note 12)  --         --          --           --     1,015,749     102       1,696,134             --    1,696,236
Unearned compensation
 expense (Note 12)      --         --          --           --            --      --        (136,475)            --     (136,475)
Issuance of common
 stock upon conversion
 of notes payable
 and interest (Note 12) --         --          --           --       506,791      50         707,039             --      707,089
Issuance of common
 stock upon conversion
 of former officer
 notes payable and
 accrued salaries
 (Note 12)              --         --          --           --       230,317      23         419,174             --     419,197

<PAGE>

Issuance of common
 stock in connection
 with litigation
 settlement (Notes 12
   and 16)              --         --          --           --       300,000      30         309,270             --    309,300
Imputed value of
 stock option grants
 in exchange for
 consulting and
 other services
 (Note 12)              --         --          --           --            --      --         775,902             --    775,902
Net loss for the
 year ended June 30,
 1998                   --         --          --           --            --      --              --    (7,109,748)  (7,109,748)
                  --------    -------       -----        -----          ----    ----          ------    -----------   ----------
Balance -
 June 30, 1998     125,250        125          --           --     7,959,033     796      22,646,232   (20,416,944)   2,230,209
Issuance of
 common stock
 for cash ranging
 from $.44 to
 $1.00 per share,
 net of $307,925
 of offering costs      --         --          --           --     3,636,879     364      2,552,748             --    2,553,112
Issuance of
 preferred stock
 at $1,000 per share,
 net of $253,154 and
 issuance of common
 stock for offering
 costs                  --         --        1,745            2      134,769      13      1,871,830       (425,000)  1,446,845
Issuance of
 common stock for
 services and equipment --         --           --           --    2,607,950     261      2,340,162             --   2,340,423
Issuance of common
 stock for accounts
 payable                --         --           --           --      150,700      15        123,415             --     123,430
Imputed value of
 stock option grants
 in exchange for
 consulting and other
 services              --          --           --           --           --       --       424,671             --     424,671
Issuance of common
 stock for conversion
 of notes payable,
 franchise deposits
 and accrued interest  --          --           --           --     2,109,975      211    1,672,786             --   1,672,997
Issuance of common
 stock and warrants
 in connection with
 MedCard acquisition   --          --           --           --       100,000       10      461,894             --     461,904
Conversion of
 Preferred Stock   (116,000)     (116)          --           --        28,200        3          113             --         --
Dividend on Series
 C Preferred Stock     --          --           --           --            --       --           --        (58,025)   (58,025)
Net loss for the year
 ended June 30, 1999   --          --           --           --            --       --           --     (7,088,960) (7,088,960)
                     -----------------------------------------------------------------------------------------------------------
Balance -
 June 30, 1999       9,250       $  9         1,745         $ 2     16,727,506   $ 1,673  $32,093,851  $(27,988,929) $4,106,606
                   ========== ========       =======  ==========   ===========   =======  ==========   ============   =========
</TABLE>

                                 See notes to consolidated financial statements.
<PAGE>


                   SIMS COMMUNICATIONS, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows


                                                           Year Ended June 30,
                                                  -----------------------------

                                                         1999            1998
                                                     -----------      ----------
Cash flows from operating activities
   Net loss                                         $(7,088,960)    $(7,109,748)
                                                    -----------      -----------
   Adjustments to reconcile net loss to net cash
    used in operating activities
     Depreciation                                      854,779         400,552
     Amortization                                      245,092          73,820
     Imputed value of options granted for services     424,671         127,661
      and interest
     Impairment of investment                               --         200,000
     Termination of licensing and equipment                 --         764,000
agreement
     Provision for uncollectible notes receivable      178,387         400,902
     Officer salaries converted to equity                   --         419,197
     Stock issued for services, interest, and in
      connection with litigation settlement          2,425,072       1,869,061
     Changes in assets and liabilities
       Accounts and other receivables                 (126,156)        167,832
       Inventories                                     (53,564)         51,574
       Prepaid expenses                                 (7,670)        113,193
       Royalty advances                               (515,907)             --
       Accounts payable                                229,526        (147,349)
       Accrued expenses                                 40,425        (103,339)
       Franchise deposits and customer deposits             --         (11,493)
                                                    ----------       ----------
                                                     3,694,655       4,325,611
         Net cash used in operating activities      (3,394,305)     (2,784,137)
                                                    ----------       ----------

Cash flows from investing activities
   (Advances) repayments on notes receivable, net           --         (54,372)
   Acquisition costs paid, net of cash acquired       (462,154)       (424,095)
   Capital expenditures                                (57,398)        (34,122)
   Change in other assets                                5,851          62,664
                                                    ----------       ----------
         Net cash used in investing activities        (513,701)       (449,925)
                                                    ----------       ----------

Cash flows from financing activities
   Proceeds from issuance of long-term debt            537,892         805,459
   (Payments on) proceeds from officer advances             --         (65,809)
   Payments under capital lease obligation            (127,216)        (10,200)
   Proceeds from issuance of common and preferred    3,999,957       2,820,781
stock, net
   Payments on long-term debt                         (326,733)       (348,191)
                                                     ----------      ----------
         Net cash provided by financing activities   4,083,900       3,202,040
                                                    ----------       ----------

Net increase (decrease) in cash                        175,894         (32,022)

Cash and cash equivalents at beginning of year         263,878         295,900
                                                    ----------       ----------

Cash and cash equivalents at end of year            $  439,772      $  263,878
                                                    ==========       ==========

Supplemental disclosure of cash flows information
  Cash paid during the year for  interest  was
  $164,167  (1999) and $169,345 (1998).

Non-cash investing and financing activities (Note 15)


                 See Notes to Consolidated Financial Statements

<PAGE>



Note 1 - Organization and Significant Accounting Policies

Organization

Sims  Communications,  Inc. and  Subsidiaries  was  incorporated in the state of
Delaware  on  August  15,  1991.   The  Company   provides  low  cost,   turnkey
point-of-sale   (POS)   transaction   automation   solutions  to  retailers  and
pharmacies.  These  solutions  include a  comprehensive  network of  transaction
processing  applications using its patented,  intelligent DebitLink POS terminal
with custom  software.  Functions  include  processing  on-line  credit card and
medical  reimbursement  approvals,  processing  automated home medical equipment
product  orders  and  payments,  processing  credit  card  and ATM  charges  and
payments, cash-backs, activating prepaid phone cards, obtaining prepaid cellular
phone  service,  securing  check  guarantees  and  authorizations  and  tracking
customer  affinity  programs.  Additionally,  the Company  rents  videocassettes
through its automated  dispensing units. Most recently,  the Company has evolved
such that while the primary business is still telecommunications;  the Company's
telecommunications  expertise and technology have been applied to the healthcare
industry  in  general  and  electronic  processing  of medical  claims,  on-line
insurance eligibility verification and e-commerce, specifically. And, as a means
to establish and gain  recognition for SIMS' new identity,  the Company included
in its proxy, a ballot to change the name of SIMS Communications, Inc. to MEDCOM
USA,  Incorporated.  Upon  acceptance of the proposed name change,  MedCom USA's
ticker symbol on The Nasdaq Stock Market will be "EMED."

Principles of Consolidation

The   consolidated   financial   statements   include   the   accounts  of  SIMS
COMMUNICATIONS,  Inc. and its wholly owned  subsidiaries  SIMS  Franchise  Group
Inc., SIMS Communications International,  Inc., Link International Technologies,
Inc.,  New View  Technologies,  Inc. and  JustMed.com,  Inc.  Additionally,  the
consolidated  financial  statements include the accounts of One Medical Service,
Inc., Moviebar Company USA, Inc., and Vector Vision, Inc. since their respective
dates of  acquisition.  The financial  statements also include the operations of
the Company's MedCard division from the date of the acquisition of the licensing
rights (Note 3). All significant  intercompany  balances and  transactions  have
been eliminated in consolidation.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  requires  management  to  make  certain  estimates  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses during the reporting  period.  Management  believes that such estimates
have been based on reasonable  assumptions and that such estimates are adequate,
however, actual results could differ from those estimates.


<PAGE>




Note 1 - Organization and Significant Accounting Policies (cont'd)

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents.

Inventories

Inventories consist primarily of movie video cassettes,  terminals that are held
for sale and other associated  miscellaneous parts and are recorded at the lower
of cost or market determined by the first-in, first-out method.

Property and Equipment

Property and  equipment is stated at cost.  Equipment  under  capital  leases is
valued at the lower of fair  market  value or net  present  value of the minimum
lease payments at inception of the lease. Depreciation is provided utilizing the
straight-line  method over the estimated useful lives for owned assets,  ranging
from 5 to 7 years,  and the related  lease term for leasehold  improvements  and
equipment  under capital  leases.  Expenditures  for maintenance and repairs are
charged to expense as incurred.

Net loss Per Common Share

Basic  earnings per share is calculated by dividing net income  attributable  to
common shareholders by the weighted average number of common shares outstanding.
Dilutive earnings per common share is computed similarly,  but also gives effect
to the impact  convertible  securities,  such as convertible debt, stock options
and warrants,  if dilutive,  would have on net income and average  common shares
outstanding  if converted at the beginning of the year. The Company has incurred
losses in each of the periods  covered in these  financial  statements,  thereby
making the inclusion of convertible securities and stock options in the 1999 and
1998  dilutive  earnings  per  share  computations  antidilutive.   Accordingly,
convertible securities and stock options have been excluded from the calculation
of dilutive  earnings per share.  Basic and dilutive  earnings per share are the
same for each period presented.

Antidilutive securities excluded from dilutive earnings per share.

        Security                   Price            Shares      Expiration Date

Stock options and warrants    $0.44  -  $13.00     9,988,429     7/1999-12/2006
Convertible Preferred Stock   $1.28  -  $  1.50    1,249,271         10/2001


<PAGE>



Note 1 - Organization and Significant Accounting Policies (cont'd)

Licensing Rights

Licensing rights capitalized in connection with the MedCard licensing  agreement
are being amortized over the length of the agreement of fifteen years.

Goodwill

The excess of the cost of the net tangible and identifiable intangible assets of
acquired businesses is stated at cost and is being amortized over seven years.

Revenue Recognition

Revenues from the sale of  intelligent  vending  equipment are  recognized  upon
delivery of the  equipment.  Revenue  related to the  providing of technical and
other support related to the One Medical  Services  Program is recognized as the
services are rendered. Revenue from the sale of MedCard units is recognized upon
shipment of the unit. Revenue from the billing services using the MedCard System
is  recorded at the time the billing  service is  rendered at the  expected  net
realizable  value of the Company's share of the moneys to be collected.  Revenue
is recognized  upon the sale of phone cards at the time of the sale.  Revenue on
the rental of cellular  phones  through ACDC  machines is recognized at the time
the rental is completed.  Processing  fees related to medical  transactions  and
financial  processing are  recognized as revenue at the time the  transaction is
completed.  Deferred  gross profit on equipment,  which has been sold and leased
back, is recognized over the term of the resulting lease. Automated movie rental
revenues  are  recognized  at the time of rental and based upon usage of prepaid
movie cards (where applicable).

Patents

Patent  costs are  those  costs  related  to filing  for  patents  and the value
allocated to patents based upon the  acquisition  of Link  Technologies  and its
subsidiaries.  They are amortized on the straight-line basis over their expected
economic life of seven years.

Fair Value of Financial Instruments

The  carrying  amounts  of  financial   instruments   including  cash  and  cash
equivalents,  receivables,  accounts payable, and accrued expenses  approximates
fair value at June 30, 1999 because of the  relatively  short  maturity of these
instruments.

The carrying  amounts of debt issued  approximates  fair value because  interest
rates  on  these  instruments  approximate  market  interest  rates  and all are
classified as current maturities.



<PAGE>




Note 1 - Organization and Significant Accounting Policies (cont'd)

Income Taxes

The Company uses the asset and liability  method of accounting for income taxes.
Under the asset and liability  method,  deferred tax assets and  liabilities are
recognized for the future tax consequences  attributable to differences  between
the financial  statement carrying amounts of existing assets and liabilities and
their  respective tax basis.  Deferred tax assets and  liabilities  are measured
using  enacted tax rates  expected  to be  recovered  or settled.  The effect on
deferred tax assets and  liabilities  of a change in tax rates is  recognized in
income in the period that includes the enactment date.

Impairment of Long-Lived Assets

The Company  follows the Statement of Financial  Accounting  Standards (SFAS No.
121) "Accounting for the Impairment of Long-Lived  Assets." Under the provisions
of this statement, the Company has evaluated its long-lived assets for financial
impairment  and  will  continue  to  evaluate  them  as  events  or  changes  in
circumstances  indicate that the carrying amount of such assets may not be fully
recoverable.

The Company evaluates the  recoverability of long-lived assets not held for sale
by measuring the carrying  amount of the assets against  estimated  undiscounted
cash flows associated with them. At the time such evaluations  indicate that the
future  undiscounted cash flows of certain  long-lived assets are not sufficient
to recover the carrying value of such assets,  assets are adjusted to their fair
values.

Research and Development

Research  and  development  costs  consist  primarily  of costs  related  to the
conceptual  formation,  design,  tooling and  development  of prototypes and are
expensed as incurred.

Concentration of Credit Risks

Financial  instruments that potentially  subject the Company to concentration of
credit risk consist primarily of temporary cash investments and receivables. The
Company  places  its  cash  investments  with  high  credit  quality   financial
institutions  and,  by policy  limits the amount of credit  exposure  to any one
institution.  The  Company  grants  credit to hotels that the Company has placed
automated  movie  rental  units in. The  Company  periodically  performs  credit
analysis  and  monitors  the  financial  condition  of its  clients  in order to
minimize  credit  risk.  Additionally,  the  Company  attempts to limit its note
receivable credit risk by maintaining sufficient  collateral,  which consists of
the equipment which gave rise to the original note, when available.



<PAGE>


Note 2 - Continued Operations

Reclassifications

Certain   accounts  in  the  June  30,  1998  financial   statements  have  been
reclassified to conform to the June 30, 1999 presentation.

The  accompanying  financial  statements  have been  prepared on a going concern
basis  which   contemplates   the  realization  of  assets  and  liquidation  of
liabilities in the ordinary  course of business.  During the year ended June 30,
1999, the Company continued to suffer recurring losses from operations in excess
of $7,000,000, resulting in an accumulated deficit of approximately $27,500,000.
Subsequent to June 30, 1999,  the Company has raised  approximately  $400,000 in
private  placement  offerings and is continuing  to look for  additional  equity
capital.  Additionally,  the  Company  has  entered  into an  Exclusive  License
Agreement with an outside party for its One Medical  Services,  Inc.  subsidiary
whereby it will receive  $567,000 over the next six months and an 8% 7-year note
payable  in the amount of  $810,000  (see Note 17).  There can be no  assurances
however  that the Company will be  successful  in  obtaining  additional  equity
financing,  if needed, or if available on terms satisfactory to the Company,  or
be able to generate  significant profits from the operations described above. If
the Company is unsuccessful in obtaining  additional funding for its operations,
it would if  necessary  either  sell  certain  assets or  divisions,  reduce its
operations or otherwise  reorganize  its  operations to the extent  necessary so
that its operating expenses would be less than its revenues.

      Although the  Company's  common  stock is  currently  listed on the NASDAQ
Small Cap Market ("NASDAQ"), there is no assurance that the Company's stock will
continue to be listed.  The National  Association  of Securities  Dealers,  Inc.
("NASD") requires for continued  inclusion on the NASDAQ Small Cap Market,  that
the Company  must  maintain  $2,000,000  in tangible  net worth and that the bid
price of the  Company's  common stock must be at least $1.00.  If delisted  from
NASDAQ,  the  Company's  stock  would  trade  in  the  unorganized   interdealer
over-the-counter   market   through  the  OTC  Bulletin   Board  which  provides
significantly  less  liquidity than NASDAQ.  Securities  which are not traded on
NASDAQ may be more difficult to sell and may be subject to more price volatility
than NASDAQ listed  securities.  The  consolidated  financial  statements do not
include  any  adjustments  that might be  necessary  if the Company is unable to
continue as a going concern.

Note 3 - Acquisitions

Moviebar Company USA, Inc. and Vector Vision, Inc.

In January 1998, the Company  purchased the net assets of Moviebar  Company USA,
Inc.  and all of the  outstanding  stock  of  Vector  Vision,  Inc.,  valued  at
$1,126,714  in  exchange  for  550,000  shares of the  Company's  common  stock.
Additionally,  the  Company  issued  options to  purchase  25,000  shares of the
Company's  common  stock at $ 2.20 per  share  (Notes 10 and 11).  The  acquired
companies rent motion picture video cassettes through automated dispensing units


<PAGE>



Note 3 - Acquisitions (cont'd)

that are located in hotels  throughout the United States.  The acquisitions were
accounted for under the purchase method of accounting.

Moviebar Company USA, Inc. and Vector Vision, Inc. (cont'd)
-----------------------------------------------------------

The  aggregate  purchase  price has been  allocated to the net assets  purchased
based on the fair market values at the date of acquisition, as follows:

      Cash                                                   $   6,518
      Accounts receivable                                       90,928
      Inventory                                                 24,500
      Property and equipment                                 1,127,768
      Accounts payable                                        (123,000)
                                                             ---------
                                                             $1,126,714

The common stock issued in connection  with the  acquisition was recorded at the
market value of the stock at the date of the acquisition of $2.00 per share.

No pro forma  statements of operations  are presented as the effect would not be
material to the Company's operations.

One Medical Services, Inc.

In June 1998, the Company  purchased all of the outstanding stock of One Medical
Services,  Inc.,  ("One  Medical")  valued at $1,067,398 in exchange for 142,350
shares of the  Company's  common  stock and  additional  consideration  detailed
below.  Additionally,  the Company issued warrants to purchase 187,500 shares of
the  Company's  common  stock at $ 2.00 per share (Notes 10 and 11). The Company
has also  agreed to issue to the former  owners of One  Medical up to  1,485,000
additional  shares of common stock depending on the future operating  results of
One Medical.  One Medical,  has developed,  in conjunction  with the Company,  a
communications  and  transaction  platform  which allows  pharmacies,  insurance
companies,  medical  providers and suppliers to process  transactions  through a
Debit Link terminal for such items as ordering,  medical reimbursement  approval
and payment.  The  acquisition  was accounted  for under the purchase  method of
accounting.

The  aggregate  purchase  price has been  allocated to the net assets  purchased
based on the fair market values at the date of acquisition, as follows:



<PAGE>



Note 3 - Acquisitions (cont'd)

One Medical Services, Inc. (cont'd)

      Cash                                               $   13,047
      Fixed Assets                                            2,282
      Contract Values                                       100,000
      Goodwill                                              952,069
                                                         ----------
                                                         $1,067,398

      Acquisition costs                                  $  443,660
      Promissory note assumed                               182,108
      Fair value of common stock and options issued         441,630
                                                         ----------
                                                         $1,067,398

The common  stock issued in  connection  was recorded at the market value of the
stock at the date of the acquisition of $1.60 per share.

No pro forma  statements of operations  are presented as the effect would not be
material to the Company's operations.

Subsequent to June 30, 1999,  the Company has licensed the One Medical  Services
technology to an outside party (see Note 17).

MedCard Management Systems, Inc.

In November,  1998, the Company purchased  certain assets of MedCard  Management
Systems, Inc. of Islandia, New York ("MedCard"), along with the licensing rights
to the MedCard  name and the  MedCard  System  software  and network for fifteen
years.  The term of the  agreement  may be extended  after fifteen years for ten
successive  one-year periods.  The MedCard System is a comprehensive  electronic
processing  system that  consolidates  insurance  eligibility  verification  and
processes  medical claims and approval of credit card/debit card payments within
30 seconds. Consideration for the transaction included cash of $450,000, 100,000
shares of restricted common stock valued at $1.28 per share,  which approximated
market,  and warrants to purchase 350,000 shares of common stock with an imputed
value of $333,904.  At June 30, 1999,  licensing rights related to the agreement
totaled $885,558 net of $38,500 of accumulated amortization.


<PAGE>



Note 3 - Acquisitions (cont'd)

MedCard Management Systems, Inc. (cont'd)

In connection with the acquisition of the licensing rights,  the Company entered
into a royalty agreement  requiring future royalty payments based on sales (Note
14). The Company has provided  additional  funding  related to these  operations
that are recorded as royalty  advances.  As of June 30, 1999,  royalty  advances
totaled $515,907.

Note 4 - Property and Equipment

Property and equipment consist of the following:
                                                           June 30,
                                                             1999
   Property and equipment
      Vehicles                                           $   20,608
      Furniture and fixtures                                137,209
      Machinery and equipment                             4,144,429
      Software                                              100,450
      Less accumulated depreciation and amortization     (2,106,053)
                                                         ----------
                                                         $2,296,643

Note 5 - Notes Receivable

The Company made  advances to and entered into a joint  venture  agreement  with
Commonwealth Group International, Inc. and Frederick C. Sayle. The $150,000 note
receivable  bears  interest  at a rate  of 10% per  annum,  with  principal  and
interest  originally payable by February 1, 1998.  Additionally,  the Company is
entitled to 16.7% of the gross revenues from agreements with Commonwealth  Group
International,  Inc. which include cable television and cellular  communications
licenses owned by CGI-UKRAINE Ltd and ASWEST,  Commonwealth Group International,
Inc.  joint  venture  partners.  The Company has received  interest on the notes
through  June 30,  1999 and  believes  that  both  principal  and  interest  are
collectible at June 30, 1999.

As of June 30,  1997,  the Company had sold  equipment to a customer for a total
sales price of $664,000. The total amount of $664,000 is payable under the terms
of a note  receivable  which bears  interest at 8.5%.  Principal and interest is
payable  commencing  by  December  31,  1997 in equal  monthly  installments  of
approximately  $14,000 through November 30, 2002. No payments have been received
as of June 30,  1999.  Accordingly,  the Company has  recorded an  allowance  of
$452,800 which reduces the net balance to $211,200, which approximates the value
of the underlying collateral.



<PAGE>



Note 5 - Notes Receivable (cont'd)

The Company has an unsecured note receivable for $30,000, which was collected in
October 1999.

The  Company  has a note  receivable  from an entity  owned  entirely  by former
officers of the Company, with a balance of $122,262.  This amount has been fully
reserved against because collection is considered to be unlikely and the Company
does not have any collateral for this note.

Note 6 - Investments

During the year ended June 30,  1998,  the Company  terminated  a licensing  and
equipment  agreement with a Canadian  Company that had  originally  been entered
into in the year  ended June 30,  1997 in  exchange  for  preferred  stock.  The
equipment was returned to the Company,  the preferred  stock was returned to the
Canadian  Company and a loss  provision for $764,000 was provided for during the
year ended June 30, 1998.

Note 7 - Bank Line of Credit

The Company  maintains a secured  revolving line of credit with a bank for up to
$250,000.  The  balance at June 30, 1999 was  $250,000.  The  line-of-credit  is
secured by a restricted  certificate  of deposit with a balance at June 30, 1999
of approximately  $250,000.  The line-of-credit  bears interest at 5.77% payable
monthly.  The  line-of-credit  expired  June 5, 1999 and on July 13,  1999,  the
Company voluntarily redeemed the certificate of deposit and applied the proceeds
toward repayment of the credit line principal and accrued interest in full.

Note 8 - Notes Payable and Capital Leases
                                                               June 30, 1999
8.0%  convertible  notes  payable -  individuals,
 interest  payable  quarterly, principal  due at
 maturity  dates  ranging  from August 1997 to
 May 1998.  Debt includes conversion to common
 stock feature with conversion rates ranging from
 $1.25  to  $2.50  per  share. Currently in default.                94,000


Note  payable  -  individual,  non-interest  bearing  -
 payable  in  monthly  installments  of $1,500  through             37,500
 June 2000.

Note payable - franchisee,  bearing interest at 10%,
 principal and interest due October 31, 1999; debt
 includes  conversion  to common stock feature at $.875
 per share.                                                        317,619




<PAGE>


Note 8 - Notes Payable and Capital Leases (cont'd)

Convertible  Bridge  Financing  Note  -  corporation,
  bearing  interest  at 4%, principal and interest
  due July 28, 1999. Debt includes conversion to common
 stock feature at $.70 per share.                                   70,000
                                                                ----------
Total current maturities                                        $  519,119
                                                                ==========

Capital Leases

The Company leases various office and other equipment which are accounted for as
capitalized  leases. The following is a schedule of future minimum capital lease
payments  together with the net present value of the minimum lease obligation as
of June 30, 1999.

         Year Ending June 30,

               2000                                        $68,843
               2001                                        67,818
               2002                                        67,818
               2003                                        15,797
               2004                                        3,814
                                                           -----
               Total                                       224,090
               Less interest                               (54,952)
                                                           -------
                                                           169,138
               Less current portion                        (43,432)
                                                           -------

                                                           $125,706

The assets recorded under capital leases are as follows:

        Furniture, fixtures and equipment                  $162,630
        Less accumulated depreciation                       (13,379)
                                                            -------

                                                           $149,251

Depreciation  expense for equipment  under capital lease was $70,418 and $14,679
for the years ended June 30, 1999 and 1998, respectively.

Note 9 - Income Taxes

Deferred  tax  liabilities  and assets are  determined  based on the  difference
between the financial  statement and tax basis of assets and  liabilities  using
enacted tax rates in effect for the year in which the  differences  are expected


<PAGE>



Note 9 - Income Taxes (cont'd)

to reverse. The measurement of deferred tax assets is reduced, if necessary,  by
the  amount of any tax  benefits  that,  based on  available  evidence,  are not
expected to be realized.

The principal temporary  differences that will result in deferred tax assets and
liabilities  are certain  expenses and losses  accrued for  financial  reporting
purposes  not  deductible  for tax  purposes  until paid,  depreciation  for tax
purposes in excess of  depreciation  for  financial  reporting  purposes and the
deferral of franchise costs and franchise sales revenues for financial reporting
purposes which are recognized for tax purposes in the period paid. The effect of
the  differences  outlined  above and the benefit of the Company's net operating
loss  carryforward   generated  a  long-term  deferred  tax  asset  that  totals
approximately  $8,800,000  and has been  reduced  100% by a valuation  allowance
because of a lack of profitable operating history. Accordingly,  there is no net
deferred  tax  asset  reflected  in  the  accompanying   consolidated  financial
statements.  The Company will continue to assess the valuation  allowance and to
the  extent  it is  determined  that it is more  likely  than  not  that the tax
benefits will be realized,  the tax benefit of the remaining net deferred assets
will be recognized at that time.

The differences between the federal income tax rate and the effective income tax
rate as reflected in the accompanying statements of operations are:

                                                               Year Ended
                                                                June 30,
                                                      -------------------------
                                                          1999           1998
                                                      -----------     ----------

Statutory federal income tax rate (benefit)              (34.0)%        (34.0)%
Valuation allowance for net operating loss                34.0           34.0
                                                          ----           ----

Effective tax rate (benefit)                                --%            -- %
                                                       ========       =========

The deferred tax asset consists of the following:
                                                                  June 30,
                                                                    1999

      Total long-term deferred tax asset                         $8,800,000
      Valuation allowance
                                                                 (8,800,000)

                                                                 $       --
                                                                 ==========

At June 30, 1999,  the Company has  approximately  $26,000,000  of net operating
loss  carryforwards  for  income tax  reporting  purposes  which  expire in 2007
through 2014.  During 1995,  1998 and 1999,  there were  transactions  involving
changes in  ownership  which  restrict the  utilization  of net  operating  loss
carryforwards in the future.


<PAGE>



Note 10 - Stock Option and Bonus Plans

The Company's Incentive Stock Option Plans, Non-Qualified Stock Option Plans and
Stock Bonus Plans are  collectively  referred to as the "Plans".  The  following
sets forth certain  information as of June 30, 1999 concerning the stock options
and stock  bonuses  granted by the Company  pursuant  to the Plans.  Each option
represents the right to purchase one share of the Company's Common Stock.

                                              Shares
                                   Total    Reserved for    Shares    Remaining
                                  Shares     Outstanding    Issued     Shares/
                                 Reserved     Options      as Stock    Options
                                Under Plans                 Bonus    Under Plans

1998 Incentive Stock Option Plan 1,500,000    688,000         N/A       812,000
1996 Non-Qualified Stock         1,500,000    607,500         N/A       892,500
   Option Plan
1998 Non-Qualified Stock         1,500,000         --         N/A     1,500,000
   Option Plan

1996 and 1998 Stock Bonus        1,500,000      N/A        1,497,625      2,375
Plans
1999 Stock Bonus Plan              500,000      N/A               --    500,000


Incentive Stock Option Plan.
---------------------------

The 1998  Incentive  Stock  Option Plan  authorizes  the  issuance of options to
purchase up to 1,500,000  shares of the Company's  Common  Stock.  The Incentive
Stock Option Plan will remain in effect until 2008 unless terminated  earlier by
action of the Board.  Only officers,  directors and key employees of the Company
may be granted options pursuant to the Incentive Stock Option Plan.

Non-Qualified Stock Option Plans

The  Non-Qualified  Stock Option Plans  collectively  authorize  the issuance of
options to purchase up to 3,000,000  shares of the Company's  Common Stock.  The
Company's employees,  directors, officers, consultants and advisors are eligible
to be granted  options  pursuant to the Plans,  provided  however that bona fide
services must be rendered by such consultants or advisors and such services must
not be in connection  with the offer or sale of securities in a  capital-raising
transaction. The option exercise price and expiration date are determined by the
Board of Directors .




<PAGE>


Note 10 - Stock Option and Bonus Plans (cont'd)

Non-Qualified Stock Option Plans (cont'd)

The following is a summary of options granted:

<TABLE>
<S>                                <C>          <C>          <C>           <C>          <C>           <C>            <C>
                                          Non-Qualified  Options and                                              Weighted
                              Incentive      Stock        Warrants      Weighted                                   Average
                                Stock     Options and    Issued Not      Average     Weighted      Currently    Exercise Price
                             Options and    Warrants     Related to a    Exercise  Average Rair    Exercisable  - Currently
                               Warrants                     Plan         Price        Value                      Exercisable

Outstanding June 30, 1997       683,500       10,000      250,765       $  4.96                      944,265       $   4.96
                                                                                                   ---------       ---------
   Options   and   warrants    (161,000)           -            -         (4.00)
      expired or cancelled

   Options transferred
      between Plans            (522,500)     522,500            -          4.86
   Options   and   warrants
      granted                         -       75,000    2,362,000          1.73        1.17
                              ---------    ---------   -----------     ----------   ---------
Outstanding June 30, 1998             -      607,500    2,612,765          2.56                    3,220,265           2.56
                                                                                                   ---------          -----
   Options   and   warrants                       -             -             -
      expired or forfeited      (3,000)

   Options   and   warrants
      granted                  691,000            -     6,080,164          1.04         .69
                              ----------   ---------    ----------     ----------   ---------
Outstanding June 30, 1999      688,000      607,500     8,692,929        $ 1.53                    8,840,429        $  1.61
                             ===========  ===========   ==========     ==========                   =========     ==========
</TABLE>


<TABLE>
<S>                                    <C>             <C>              <C>              <C>              <C>
June 30, 1999
                                      Options and  Warrants Outstanding            Options and Warrants Exercisable
                                                                     Weighted
                                                    Weighted          Average                          Weighted
                                    Number           Average         Remaining         Number          Average
                                  Outstanding       Exercise        Contractual      Exercisable       Exercise
Range of Exercisable Price                            Price            Life                              Price

$.44 - $3.00                       9,064,614       $   1.15             3.50        7,916,614          $  1.18
$4.00 - $8.00                        872,565           4.91             3.96          872,565             4.91
$10.00 - $13.00                       51,250          11.76              .22           51,250            11.76
                               -------------    -------------    -------------    -------------    -------------

                                   9,988,429       $   1.53             3.52        8,840,429        $    1.61
                               =============     ============    =============    =============    =============

</TABLE>

<PAGE>


Note 10 - Stock Option and Bonus Plans (cont'd)

Non-Qualified Stock Option Plans (cont'd)

The Company  accounts for stock based  compensation in accordance with Financial
Accounting  Standards  Board  Statement  No.  123,  "Accounting  for Stock Based
Compensation," ("FAS 123") which encourages,  but does not require, companies to
recognize  compensation  expense  for grants of stock,  stock  options and other
equity instruments to employees. FAS 123 requires the recognition of expense for
such  grants,   described   above,  to  acquire  goods  and  services  from  all
nonemployees.  Additionally,  although expense  recognition is not mandatory for
issuances to employees,  FAS 123 requires companies that choose not to adopt the
new fair value  accounting  rules to disclose  pro forma net income and earnings
per share information using the new method.

The Company has adopted the disclosure-only  provisions of FAS 123. Accordingly,
no  compensation  cost has been recognized for the issuances of stock options to
employees.  For the years ended June 30, 1999 and 1998, employees of the Company
were issued options to purchase a total of 3,281,000 and 1,806,500 shares of the
Company's  common  stock,  respectively,  at rates  ranging from $.81 to $13 per
share expiring from September 1999 to December 2006.

Had  compensation  cost for the Company's  issuances of stock options during the
years  ended June 30, 1999 and 1998 been  determined  based on the fair value at
the date of grant  consistent with the provisions of FAS 123, the Company's 1999
and 1998 net loss and loss per share would have been  increased to the pro forma
amounts indicated below:

                                                      June 30,
                                            -----------------------------

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

       Net loss - as reported                $(7,088,960)    $(7,109,748)
       Net loss - pro forma                  $(9,469,523)    $(9,227,346)
       Net loss per share - as reported      $      (.67)    $     (1.79)
       Net loss per share - pro forma        $      (.89)    $     (2.33)

The Company utilizes the  Black-Scholes  options-pricing  model to calculate the
fair value of each individual issuance of options or warrants with the following
assumptions used for grants during the year ended June 30, 1999; dividends yield
of 0.0%; expected average annual volatility of 133.86%; average annual risk-free
interest rate of 6.0%; and expected terms averaging 3 years.

Stock Bonus Plans

Up to  2,000,000  shares of Common  Stock may be granted  under the Stock  Bonus
Plan.  Such shares may consist,  in whole or in part, of authorized but unissued
shares,  or  treasury  shares.  Under  the  Stock  Bonus  Plans,  the  Company's
employees, directors, officers, consultants and advisors are eligible to receive
a grant of the Company's shares; provided, however, that bona fide services must
be rendered by consultants or advisors and such services must not be in

<PAGE>



Note 10 - Stock Option and Bonus Plans (cont'd)

connection   with  the  offer  or  sale  of  securities  in  a   capital-raising
transaction. As of June 30, 1999, 1,497,625 shares of the Company's common stock
have been issued under the Stock Bonus Plans.

Note 11 - Stockholders' Equity

Common Stock

The Company is authorized to issue 40,000,000  shares of $.0001 par value Common
Stock.

Preferred Stock

The  Company  is  authorized  to issue up to  300,000  shares of $.001 par value
Preferred  Stock.  The  Board of  Directors  has the  authority  to  divide  the
Preferred  Stock into series and,  within the  certain  limitations,  to set the
relevant terms of such series created.

In April  1995,  the  Company  established  the  Series A  Preferred  Stock  and
authorized the issuance of up to 50,000 shares. Each share of series A Preferred
Stock is entitled  to a dividend at the rate of $1.60 per share when,  as and if
declared by the Board of Directors.  Dividends not declared are not  cumulative.
Additionally,  each share of Series A Preferred  Stock is  convertible  into .20
shares of the  Company's  Common Stock at any time after July 1, 1999.  Upon any
liquidation or dissolution of the Company,  each  outstanding  share of Series A
Preferred  Stock is  entitled  to  distribution  of $20 per  share  prior to any
distribution to the holders of the Company's  common stock. As of June 30, 1999,
the Company has 9,250 shares of Series A Preferred Stock issued and outstanding.

In March  1996,  the  Company  established  the  Series B  Preferred  Stock  and
authorized  the  issuance  of up to  100,000  shares.  Each  share  of  series B
Preferred Stock is entitled to a dividend at the rate of $.15 per share when, as
and if  declared  by the Board of  Directors.  Dividends  not  declared  are not
cumulative.  Additionally, each share of Series B Preferred Stock is convertible
into  one  share  of  the  Company's  Common  Stock.  Upon  any  liquidation  or
dissolution of the Company,  each outstanding  share of Series B Preferred Stock
is entitled to distribution of $1.00 per share prior to any  distribution to the
holders  of the  Company's  common  stock.  As of June 30,  1999,  all  Series B
Preferred shares had been converted and there were no shares outstanding.

In  November,  1998,  the  Company's  board of  directors  amended the  original
certificate  of  designation  for its Series C Preferred  Stock ("Series C") and
authorized  the  issuance  of up to 2,060  shares.  Each  share of the  Series C
Preferred  Stock is entitled to a dividend at the rate of $.06 per share and has
a stated  value of $ 1,000 per  share.  Dividends  on all shares of the Series C
Preferred  Stock shall begin to accrue and accumulate from the date of issuance.
Additionally,  each share of Series C Preferred Stock is convertible into shares
of the  Company's  Common  Stock  at an  adjustable  conversion  rate.  Upon any
liquidation or dissolution of the Company,

<PAGE>


Note 11 - Stockholders' Equity (cont'd)

Preferred Stock (cont'd)

each  outstanding  share of Series C Preferred Stock is entitled to distribution
of the stated amount per share prior to any  distribution  to the holders of the
Company's common stock. From November,  1998 to January,  1999, the Company sold
1,700  shares of its 6%  Series C  Preferred  Stock to a group of  institutional
investors  for  $1,700,000  net of  $253,154  in  offering  costs.  The  Company
recognized   $425,000  as  the  value  of  the  guaranteed  embedded  beneficial
conversion  feature related to the Series C Preferred  Stock. For each preferred
share,  the Company will issue warrants on certain dates.  The warrants  entitle
the holder to purchase  common  stock at prices  ranging from $1.27 to $1.50 per
share.  While the  Company has the right to redeem the  preferred  shares at any
time; the redemption  price varies from 110% to 125% of face value  depending on
the redemption  date. In connection with the preferred stock sales,  the Company
issued 45 shares of preferred,  14,769  shares of common and 37,500  warrants to
purchase common at prices ranging from $1.27 to $1.50 per share to the placement
agent.  In addition,  the Company  issued  120,000 shares of common stock to the
investment banking group and 200,000 warrants to purchase common stock at prices
of $2.50 to $5.00 per share. The dividend attributable to the Series C preferred
stock was $58,025 at June 30, 1999.

For the years  ended June 30,  1999 and 1998,  the  Company  did not declare any
dividends.

Equity Transactions

During the year ended June 30, 1999, the following equity transactions occurred:

The Company sold 3,636,879 shares of common stock at prices ranging from $.44 to
$1 per  share in  private  placements  raising  $2,553,112  net of  $307,925  in
offering costs.

The  Company  issued  2,607,950  shares of its common  stock for  $2,340,423  of
services and equipment  received,  which  included  466,150 shares of its common
stock valued at $431,445 that were issued to its  employees  under the Company's
Stock Bonus Plan.

The Company  issued 150,700 shares of its common stock for $123,430 for services
previously rendered.

The  Company  issued  2,109,975  shares of its common  stock in order to convert
$1,672,997  worth of long-term  debt,  notes  payable,  franchisee  deposits and
accrued interest into stockholders' equity.

The Company  issued  100,000  shares of its common  stock  valued at $128,000 in
connection  with the  acquisition  of certain  assets of MedCard  including  the
exclusive  licensing  rights to the MedCard name and the MedCard System software



<PAGE>



Note 11 - Stockholders' Equity (cont'd)

Equity Transactions (cont'd)

and network. Additionally, the Company issued options to purchase 350,000 shares
of the common stock at $1.34 per share. The options expire in November, 2001 and
have an imputed  value of $333,904  which was  allocated as part of the purchase
price of the licensing rights acquired (Note 2).

The Company  issued  options to purchase  150,000  shares of its common stock at
$.59 per share to a company retained as its investment banker in connection with
any future  offerings.  As no such offering took place, the imputed value of the
options, $77,730, has been charged to stock based compensation at June 30, 1999.

The Company  issued  options to purchase  50,000  shares of its common  stock at
$1.50  per  share  in  connection  with a loan  advanced  to the  Company  by an
individual.  The imputed  value of the  options,  $40,101,  has been  charged to
interest expense during the year ended June 30, 1999.

The Company  issued  options to purchase  420,000  shares of its common stock at
rates  ranging from $.82 to $2.50 per share.  These  options  expire  September,
2001.  $306,840 of expense has been  recognized  based on imputed values ranging
from $.61 to $1.50 per option.

The total value of the  above-mentioned  stock and warrants  that is included in
general and administrative  expenses in the accompanying  consolidated statement
of operations was $2,540,338 during the year ended June 30, 1999.

During the year ended June 30, 1998, the following equity transactions occurred:

The Company acquired all of the outstanding stock of Vector Vision, Inc. and the
net assets of MovieBar  Company USA,  Inc.  valued at a combined  $1,100,000  in
exchange  for  550,000   shares  of  the   Company's   common  stock  (Note  3).
Additionally,  the  Company  issued  options to  purchase  25,000  shares of the
Company's  common stock at $2.20.  These  options  expire  January  2003.  These
options have an imputed  value of $26,714 that was allocated to the value of the
assets as part of the purchase price.

The Company  acquired all of the  outstanding  stock of One Medical Service Inc.
valued at $227,760 in exchange for 142,350 shares of the Company's  common stock
(Note 3). Additionally, the Company issued options to purchase 187,500 shares of
the  Company's  common  stock at $2.00.  These  options  expire May 2003.  These
options  have an imputed  value of $213,870  that was  allocated  as part of the
purchase price to goodwill.

The Company  issued  2,246,500  shares of the  Company's  common  stock at rates
ranging  from $.80 per share to $1.00 per share in  private  placements  raising
$1,476,080 net of $254,546 in offering  related expenses and $407,657 of imputed
option  value.  Additionally,  the Company  issued  options to purchase  354,000


<PAGE>



Note 11 - Stockholders' Equity (cont'd)

Equity Transactions (cont'd)

shares of the Company's common stock at rates ranging from $.80 to $2.00.  These
options expire May 2000 and January 2002. These options have an imputed value of
$407,657 that was included in offering expenses.

The Company sold $1,100,000 of convertible notes to investors in connection with
a Regulation S offering  raising  $937,044 net of $162,956 in related  expenses.
These notes were converted to 846,827 shares of the Company's common stock.

The Company issued 1,015,749 shares of the Company's common stock for $1,696,236
of professional  services and consulting  received.  265,000 shares of the stock
issued  have  a  two  year  vesting  period.  As  such,   $136,475  of  unearned
compensation  expense has been  recorded and will be amortized to expense over a
one-year  period.  Additionally,  the Company issued options to purchase 110,000
shares of the Company's common stock at rates ranging from $1.00 to $5.00. These
options expire January 2003.  $127,661 of expense has been  recognized  based on
imputed values ranging from $.84 to $1.33 per option.

The Company converted  $707,089 of convertible debt and accrued interest payable
to 506,791 shares of the Company's stock at rates ranging from $.40 to $1.60 per
share.

The Company  issued  230,317  shares of its common  stock in repayment of former
officer notes and accrued salaries of $419,197.

The Company  issued  300,000  shares of its common  stock  valued at $309,300 in
connection with the litigation settlement with a former Instafone master license
holder (Note 16).

The total value of the  above-mentioned  stock and warrants  that is included in
general and administrative  expenses in the accompanying  consolidated statement
of operations was $1,687,422 during the year ended June 30, 1998.

Note 12 - Stock Splits

In  February  1998,  the  Company  declared  a 1  for  4  reverse  stock  split.
Accordingly,  all  weighted  average  share,  per share and  option  information
throughout the  consolidated  financial  statements has been restated to reflect
these split.

Note 13 - Business Segments

The  Company  has  four  reportable  segments:   telecommunications,   financial
processing,  automated  movie rentals and medical  transaction  processing.  The
telecommunications  segment  is  responsible  for the  sales and  processing  of


<PAGE>

Note 13 - Business Segments (cont'd)

cellular  telephone  activations and rentals,  prepaid  cellular phone cards and
other telecommunications  related services. The financial processing segment has
developed,  in conjunction with the Company's intelligent "Debit Link" system, a
monetary transaction processing platform that eliminates the need for ATM's used
primarily in major fast food chains.  The automated  movie rentals segment rents
videocassettes  through automated dispensing units in hotels,  primarily located
in the states of Florida  and  California.  The medical  transaction  processing
segment has developed,  in  conjunction  with the Company's  intelligent  "Debit
Link" system, a communications and transaction  processing platform which allows
pharmacies to access on-line credit card and medical reimbursement  approval and
automated  product ordering and payment.  This segment also includes the MedCard
System, a comprehensive electronic processing system that consolidates insurance
eligibility  verification  and  process  medical  claims and  approval of credit
card/debit  card  payments  within 30 seconds.  The  accounting  policies of the
segments  are  the  same  as  those  described  in the  summary  of  significant
accounting  policies.  The Company's  reportable segments are strategic business
units that offer different products and services.

Operating results and other financial data are presented for the four reportable
segments of the Company for the years ended June 30, 1999 and 1998.  Net revenue
includes  sales  to  external  customers  within  that  segment.  There  are  no
significant  transfers  between  segments.   Cost  of  services  includes  costs
associated with net revenue within the segments.  Depreciation  and amortization
includes expenses related to depreciation and amortization directly allocated to
the segment.  Segment income (loss) does not include general and  administrative
expenses,   selling  and  marketing,  other  operating  expenses,  other  income
(expense)  items or income taxes.  Identifiable  assets are those assets used in
segment  operations,  which consist primarily of cash,  receivables,  inventory,
prepaid expenses, machinery, equipment, licensing rights and goodwill. Corporate
assets are principally patents.


<TABLE>
<S>                        <C>           <C>           <C>            <C>         <C>            <C>
                                                                   Medical
                         Tele-        Financial    Automated     Transaction   Corporate
                     Communications   Processing   Movie Rental   Processing   and Other     Consolidated

June 30, 1998:

Net revenues         $  446,524       $ 147,533    $ 371,416     $  15,478    $       -      $  980,951


Cost of services     $  245,468       $ 128,133    $ 145,040     $   4,838    $       -      $  523,479

Depreciation and
 amortization        $  245,700       $      --    $  94,058     $       -    $  134,614     $  474,372

Selling, General                                                              $7,029,111     $7,029,111
 & Administrative

(Income (Loss)       $  (44,644)      $  19,400    $ 132,318     $  10,640   $(7,163,725)   $(7,046,011)
 from continuing
 operations
 before income
 taxes

Identifiable         $2,224,685       $ 467,962   $1,450,122    $1,058,714    $   401,268   $ 5,602,751
 assets

</TABLE>


<PAGE>


Note 13 - Business Segments (cont'd)

June 30, 1999:

<TABLE>
<S>                        <C>            <C>          <C>           <C>             <C>         <C>
Net revenues         $  142,672       $ 625,801    $ 860,126     $ 583,777     $        -    $2,212,376

Cost of services     $   86,252       $ 236,517    $ 180,549     $ 131,200     $     -       $  634,518


Depreciation and
 amortization        $  504,686       $ 117,768    $ 265,802     $ 136,458     $ 75,157     $ 1,099,871


Selling, General
 & Administrative                                                            $7,566,947     $ 7,566,947


Income (Loss)        $ (448,266)      $ 271,516    $ 413,775     $ 316,119  $(7,642,104)   $(7,088,960)
 from continuing
 operations
 before income
 taxes

Identifiable         $1,812,851       $ 573,362    $1,197,108    $2,464,242    $327,279   $  6,374,862
 assets


</TABLE>


Product or Service Type     Year Ended June 30, 1999   Year Ended June 30, 1998
-----------------------     ------------------------   ------------------------

Rental of cellular               $       0                 $   103,774
   telephones
Activation fees for
  cellular telephones                    0                     158,309
Sale of prepaid calling             89,635                     144,457
   cards
Sale of long distance
   telephone service                     0                      39,984
Financial processing               625,801                     147,533
   revenue
Movie rentals                      860,126                     371,416
One medical revenues               156,712                      15,478
MedCard system                     427,065                           0
Other                               53,037                           0
                                   --------               ------------
Total                         $  2,212,376                $    980,951
                                 ============              ============

Note 14 - Commitments and Contingencies

Operating Leases

The  Company  leases  administrative   offices  and  warehouse  locations  under
noncancelable  operating  leases in California  and Florida.  The minimum annual
rent  generally  increases  each year by an amount based in the  Consumer  Price
Index.  The Company is also generally  responsible for paying its portion of the
common area maintenance, real estate taxes and insurance expenses. Additionally,
the Company also leases various office equipment under  noncancelable  operating
leases  with terms up to 5 years.  Rental  expense  for the years ended June 30,
1999 and 1998 was $279,550 and $113,275, respectively.

<PAGE>

Note 14 - Commitments and Contingencies (cont'd)

Future minimum lease commitments at June 30, 1999 are as follows:

           Year Ending June 30,

                 2000                                    $  287,000
                 2001                                       238,000
                 2002                                       236,000
                 2003                                       192,000
                 2004                                       119,000
                 Thereafter                                 105,000
                                                         ----------
                                                         $1,177,000

Employment Agreements

The Company has entered into three-year  employment agreements with its two most
senior  officers.  The  agreements  entitle the officers to an annual  salary of
$137,500 and $120,000, respectively. As additional compensation, each officer is
entitled  to receive an  incentive  bonus  computed  based upon  annual  Company
revenues from operations and is entitled to other benefits, including such items
as an automobile  allowance,  health and life  insurance,  vacation and sick pay
benefits.

The Company has also  entered  into a three year  employment  agreement  with an
officer of a subsidiary of the Company  commencing on June 1, 1998.  The officer
is entitled to a salary of $96,000 per year.  As  additional  compensation,  the
officer is entitled to receive incentive bonus stock options computed based upon
annual  performance  criteria and is entitled to other benefits,  including such
items as an automobile allowance,  health and life insurance,  vacation and sick
pay benefits.  As part of an Exclusive Licensing Agreement with an outside party
dated July 20, 1999, the Company and the executive  terminated  this  employment
agreement (Note 17).

Additionally, the Company has entered into three year employment agreements with
another officer and two other employees.  These agreements  amount to a total of
$187,000 in annual  base  compensation.  In  connection  with these  agreements,
43,274 shares of the Company's common stock and options to purchase up to 34,000
shares of the  Company's  common stock at rates ranging from $1.00 to $2.00 were
issued.  These agreements are automatically  renewable for a period of two years
after the third anniversary date. As additional compensation, each individual is
entitled to receive an incentive  bonus computed  based upon annual  performance
criteria as determined in the  applicable  agreements and is entitled to certain
other benefits, including such items as an automobile allowance, health and life
insurance,  vacation and sick pay benefits.  One of the  agreements  entitle the
individual to additional compensation of $92.50 for

<PAGE>


Note 14 - Commitments and Contingencies (cont'd)

Employment Agreements (cont'd)

each POS transaction  automation  terminal placed in service or sold.  Effective
June  10,  1999,  the  Company  and  this  employee  terminated  the  employment
agreement.

Royalty Agreement

In connection with the acquisition of the licensing  rights of MedCard (Note 3),
the Company entered into a royalty agreement with the licensor. The Company will
pay the licensor 25% of monthly  revenues,  less direct costs,  generated by the
licensed  software.  Royalties on net revenues in excess of $1,000,000 per month
shall be paid at 10%  instead of 25%.  The  agreement  requires  the  Company to
advance  $550,000 of royalty  fees  payable to the licensor and then retain as a
credit 40% of the future monthly royalty payments until the advance is offset in
full.

The Company has entered into an agreement  with Telemac,  Inc., the developer of
the software for real time billing.  This agreement  provides for the Company to
pay Telemac 7% of gross receipts based on cellular telephone rentals.

Additionally, the Company has an agreement with an individual requiring payments
based  upon the net  profits of Cellex  Communications,  Inc.  (Cellex).  20% of
Cellex's net profits are to be remitted to this individual pursuant to the terms
of the  agreement.  As of June 30, 1998,  Cellex has remitted  $22,818 in profit
participation payments to this individual.  Effective December 1997, the Company
discontinued  the operations of Cellex (Note 16). As of June 30, 1999, no monies
had been remitted for profit participation for the current year.

Consulting Agreements

The  Company  has  entered  into  various  consulting  agreements  with  outside
consultants.  These  agreements  entitle the  consultant  to issuances of common
stock and  options  as well as cash  compensation  in  exchange  for  consulting
services relating to such things as raising  additional debt and equity capital,
sales development,  investor and public relations and general strategic business
consulting.  For the year ended June 30,  1999,  the  Company  issued  2,123,300
shares of common stock and options to acquire  360,000 shares of common stock at
rates ranging from $.82 to $2.00 per share in exchange for  consulting  services
valued at  $2,134,296.  As of June 30,  1999,  75,000  shares  remained  payable
pursuant to the terms of two of the consulting agreements.  No other outstanding
obligations  existed as of June 30, 1999  pursuant to the terms of the remaining
consulting agreements.  For the year ended June 30, 1998, the Company has issued
483,551  shares of common stock and options to acquire  100,000 shares of common
stock at rates  ranging from 1.00 to 5.00 per share in exchange  for  consulting
services valued at $ 1,029,412.



<PAGE>



Note 14 - Commitments and Contingencies (cont'd)

Litigation

During the year ended June 30, 1998, an action was brought  against  subsidiary,
Vector  Vision,  Inc.  The  litigation  alleged  the  former  employee  was owed
approximately  $80,000 in  un-reimbursed  expenses  and moneys  advanced  to the
company.  The Company settled the matter for approximately  $50,000. As security
for the settlement,  the Company gave the individual a collateral  assignment of
revenue  generated  from a location using the Company's  automated  movie rental
system as well as related  equipment  and  agreed to have a judgment  of $80,000
entered  against them should they default in payment.  As of June 30, 1999,  the
Company owed $8,000 to the former employee under the settlement agreement;  this
amount is included in accrued expenses.

During  February  1998,  the Company  reached a settlement  with a former master
license  holder (the  "license  holder") for Holland,  Belgium and Germany.  The
Company  issued  300,000 shares of common stock valued at $309,300 and agreed to
pay  $135,000 in cash,  resulting in a special  charge of $424,300.  At June 30,
1998, $90,000 was due to license holder and included in accrued expenses. During
the fiscal year ended June 30, 1999, the Company made $15,000 in payments to the
license holder in accordance  with the settlement  agreement.  On April 7, 1999,
the license holder converted the balance of the amount due ($75,000) into 70,755
shares of the Company's common stock (see Note 11).

Additionally, in the fiscal year ended June 30, 1998, a franchisee demanded that
the Company repurchase his franchises for approximately $1,000,000 or a suit for
breach of the  franchise  agreement  would be filed.  On February 19, 1999,  the
Company  negotiated a settlement with the franchisee  whereby the Company issued
571,429 shares of common stock to satisfy $500,000 of the  franchisee's  deposit
liability (see Note 11). In addition,  the Company issued a 10% Promissory  Note
for $317,619 in favor of the franchisee due October 31, 1999 (see Note 8).

A suit has been filed  against  the  Company by a former  employee  for  damages
totaling $269,000.  Management believes the claim is without merit and has filed
a counterclaim against the plaintiff.

The Company is also involved in various claims and legal actions  arising in the
ordinary  course  of  business.  In the  opinion  of  management,  the  ultimate
disposition  of these  matters  will not have a material  adverse  effect on the
Company's financial position, results of operations, or liquidity.

Note 15 - Statements of Cash Flows

During the year ended June 30, 1999:

The  Company   acquired   $860,810  of  fixed  assets  through  capital  leases,
satisfaction of notes receivable and for stock.

<PAGE>

Note 15 - Statements of Cash Flows (cont'd')


The  Company  accrued  dividends  payable of  $58,025 on the Series C  Preferred
Stock.

The  Company  incurred  various  noncash  transactions  in  connection  with the
acquisition of the MedCard licensing rights (Note 3).

The Company converted $500,000 of franchise deposits,  $1,068,348 of convertible
notes and  interest  payable and  $123,430 of accounts  payable  into  2,260,675
shares of common stock.

The Company converted $327,661 of franchise deposits into notes payable.

The Company  converted  116,000  shares of Series A and B  Preferred  Stock into
21,950 shares of common stock.

The Company sold $635,237 of fixed assets by  transferring  the related  capital
leases to the acquiring entity.

During the fiscal year ended June 30, 1998:

The Company acquired $44,096 of fixed assets through capital leases.

The Company  converted  $707,089 of  convertible  notes and interest  payable to
506,791 shares of common stock.

The Company converted  $419,197 of officer notes payable and salaries to 230,317
shares of common stock.

The Company  incurred  various  noncash  transactions  related to their business
acquisitions (Note 3).

The Company  transferred  $603,652 of ACDC units and equipment from inventory to
fixed assets in anticipation of placing these units at Company owned sites.

The Company terminated a licensing and equipment agreement which resulted in the
return of  $441,000  of ACDC  units and  equipment  into  fixed  assets  and the
reversal of $105,000 of deferred revenue.

Note 16 - Discontinued Operations

Effective  December 1997, the Company  decided to discontinue  the operations of
Cellex  communications  Inc.,  which  provided  cellular  activation and prepaid
cellular time services.  The Company expects no additional  revenues or expenses
and has no material  remaining  assets or liabilities.  For the years ended June
30,  1999 and 1998,  there was a loss on the  disposal  of the  segment  and the
discontinued operations resulted in a charge of $63,737.

<PAGE>


Note 17 - Subsequent Event

On July 20, 1999, the Company  entered into an agreement with a corporation  for
the exclusive  licensing  rights to market the One Medical Service  system.  The
Company  received  $200,000  upon  execution of the document and will receive an
additional  $367,000 over the following six months.  The Company also received a
7-year 8% unsecured note receivable,  in the amount of $810,000,  as part of the
transaction.  The note  shall be paid off by  monthly  royalty  payments  to the
Company and other  scheduled  payment  amounts  over its term.  The Licensee can
convert  the moneys  paid for  royalty  and  licensing  fees into an  eighty-one
percent  (81%)  ownership  in One  Medical  Service.  It can  also  acquire  the
remaining  nineteen percent (19%) for the greater of $132,000 or the fair market
value of such interest. The Licensee agreed to acquire approximately $200,000 of
inventory on an as needed basis and pay the related  accounts  payable when they
purchase the inventory and assume other overhead associated with the One Medical
operation.  The Licensee also hired the full time employees that were associated
with the One Medical operations.



<PAGE>






                                   SIGNATURES


    In accordance  with Section 13 or 15(a) of the Exchange Act, the  Registrant
has caused this Report to be signed on its behalf by the undersigned,  thereunto
duly authorized on the 12th day of July 2000 .

                                  SIMS COMMUNICATIONS, INC.

                                  By /s/ Mark Bennett
                                     ------------------------
                                     Mark Bennett, President

                                  By /s/ Alan Ruben
                                     ------------------------
                                    Alan Ruben , Principal Financial Officer and
                                     Chief  Accounting Officer

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

Signature                            Title                    Date

 /s/ Mark Bennett
Mark Bennett                        Director              July 14, 2000

 /s/ Michael Malet
Michael Malet                       Director              July 14, 2000

 /s/ David Breslow
David Breslow                       Director              July 14, 2000

 /s/ Julio Curra
Julio Curra                         Director              July 14, 2000