U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10KSB

 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 1999

                        Commission File Number: 0-19170

                               JUNIPER GROUP, INC.
                 (Name of small business issuer in Its Charter)

           Nevada                                   11-2866771
-------------------------------------------------------------------------------
 (State or other jurisdiction           (IRS Employer Identification Number)
 of incorporation or organization)


                         111 Great Neck Road, Suite 604,
                           Great Neck, New York 11021
               (address of principal executive offices) (Zip Code)

       Registrant's Telephone Number, including area code: (516) 829-4670

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

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

                              Title of Each Class:
                    Common Stock (par value $.001 per share)
      12% Non-Voting Convertible Redeemable Preferred Stock $.10 par value

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

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

State issuer's revenues for its most recent fiscal year. - $717,630.

     The aggregate  market value of the Common Stock held by  non-affiliates  of
the Registrant was  approximately  $18,301,440  based upon the $2.65 average bid
price of these  shares on the NASDAQ  Stock  Market for the period March 1, 2000
through March 22, 2000.

     As of March 22, 2000,  there were  6,906,204  outstanding  shares of Common
Stock, $.001 par value per share.
<PAGE>

                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

A.       General

     The Company was incorporated in July 1987 under the name Juniper  Features,
Ltd.  as a New York  corporation,  and  commenced  entertainment  operations  in
January 1988. In late 1991, the Company recognized an opportunity to expand into
healthcare and formed JMSI in September,  1991. In December 1991, JMSI, acquired
all of the outstanding capital stock of PCI. Containment commenced operations in
September 1992. The Company and its subsidiaries operate their business from the
Company's Great Neck location.

     In February  1997, at the Company's  annual  meeting of  shareholders  (The
"Annual Meeting"),  the shareholders approved a proposal to change the Company's
state of  incorporation  from New York to  Nevada.  Re-incorporation  in  Nevada
allowed the Company to take advantage of certain provisions of the corporate law
of Nevada but did not result in any change in the business,  management, assets,
liabilities or net worth of the Company.

     In order to effect the Company's  re-incorporation  in Nevada, in 1997, the
Company was merged into a newly formed,  wholly-owned  subsidiary of the Company
incorporated in Nevada.  The Nevada  subsidiary,  named Juniper Group, Inc., was
formed on January 22, 1997.

     Juniper Group, Inc.'s (the "Company")  principal businesses are composed of
two (2) segments, healthcare and entertainment.

     Healthcare:  The healthcare  operations are conducted  through three wholly
owned subsidiaries of Juniper Medical Systems, Inc. ("JMSI"),  which is a wholly
owned subsidiary of the Company:

(a)  PartnerCare,  Inc.  ("PCI") is a managed care revenue  enhancement  company
     providing   various  types  of  services  such  as:  Managed  Care  Revenue
     Enhancement,  Comprehensive  Pricing  Reviews to newly evolving  integrated
     hospital,  and  Write-off  Review,  appeals of any third  party  rejections
     denials  of  accounts,   including  commercial  insurance,   managed  care,
     Medicare, Medicaid, Champus, etc.

(b)  Juniper Healthcare  Containment Systems, Inc.  ("Containment") is a company
     which develops and provides full service healthcare  networks for insurance
     companies  and managed care markets in the Northeast  U.S.  During 1999 and
     1998, no services were performed by this subsidiary.

(c)  Nuclear Cardiac Imaging,  Inc.("NCI"),  a New Jersey corporation.  NCI is a
     company newly formed in 1998  developing the business of providing  cardiac
     Spect  Imaging to  cardiologists  at their  offices  without  charge to the
     doctor. NCI charges the insurance carrier or managed care company directly.

     Entertainment:  The entertainment  segment is conducted principally through
Juniper  Pictures,  Inc.  ("Pictures"),  a wholly  owned  subsidiary  of Juniper
Entertainment,  Inc.  ("JEI"),  a wholly owned subsidiary of the Company,  which
engages in the acquisition,  exploitation and distribution of rights to films to
the various media (i.e., internet and audio streaming, home video, pay-per view,
pay television, cable television, networks and independent syndicated television
stations) in the domestic and foreign marketplace.

B.       Business of Issuer

           Managed Care Revenue Enhancement and Cost Containment Services

                  Managed Care Revenue Enhancement Program ("MCREP")

     PCI has  developed  a  comprehensive  program  that  addresses  the  entire
spectrum of business and revenue  issues  pertaining to the  hospital's  managed
care relationships. PCI assists hospitals in obtaining all the dollars that they
are entitled to under their managed care agreements.

     PCI's program also includes the profiling of managed care contracts and the
performance bench marking of these agreements.  PCI validates whether or not the
projected  financial value anticipated from these  arrangements can be obtained.
PCI's  assessments  include line item audits of claims  generated  through these
relationships,  as well as trending  reviews to identify,  and document  "Silent
PPO"  activity.  PCI also  identifies  managed  care  claims  that have not been
properly  paid, or have been  written-off.  PCI then actively  pursues payors to
expedite payments to the hospital for re-billed claims.

     These  programs  have enabled the Company to offer  services to the growing
number of hospitals and  integrated  networks  that are facing the  complexities
associated with managed care contracts

     PCI's MCREP business consists of the essential ingredients needed to assist
hospitals in maximizing the business value of their managed care contracts.  The
components of this Program are as follows:

*    Managed Care Contract Compliance

     PCI  identifies  all managed  care  contracts  and  benchmarks  performance
requirements  for each  contract.  Its clients are provided with  comprehensive,
easy to read profiles of the managed care contracts in the hospital's portfolio.
PCI evaluates claims generated by each payor for contract compliance.  Per diems
and  percentage  discounts  taken by payors are  validated  in  accordance  with
hospital  expectations.  MCREP provides the hospital with an immediate source of
additional revenue from closed accounts. MCREP becomes a second filter of claims
adjudication.  The  quality  process  results in a correct  bill and assures the
hospital that all revenue due is properly billed.

     During 1999, PCI has reviewed  managed care contracts for sevene  hospitals
to ensure  compliance and proper  reimbursement.  It has,  through this process,
identified unreimbursed claims on behalf of its clients.

*        Line Item Reviews and Administration

     PCI's team identifies and recovers all charges overlooked subsequent to the
presentation of the final hospital bill, as well as reviews previously submitted
claims. PCI's unique Line Item Reviews  simultaneously match units of service to
the medical  record  documentation  at the time of discharge.  Line Item Reviews
identify  the claims under and over charged by the payor.  While  reviewing  the
bills,  PCI is  simultaneously  auditing  the  medical  records.  This  critical
component  of the Managed  Care  Revenue  Enhancement  Program  also serves as a
quality  assurance  review of the  hospital's  medical  records.  By ensuring an
accurate final bill for submission to the insurance company, the hospital avoids
additional billing and collection expenses.

*        Silent PPO Reviews

     In the present era of managed care, hospitals often contract with a PPO for
the PPO to bring  patients to the  hospital  in  exchange  for a discount on the
hospital's  fees.  A  practice  has  arisen  whereby a PPO may sell or lease the
discounts that it has with a hospital to another PPO (with whom the hospital has
no agreement  to provide  discounted  fees) and,  unknown to the  hospital,  the
patients  of the  second  PPO  receive  substantial  discounts  even  though the
hospital never agreed to such an  arrangement.  This is referred to as a "Silent
PPO". This causes the hospital to lose  substantial fees by discounting fees for
which it is not contractually obligated.

     During 1999, PCI has performed Silent PPO reveiws for seven hospitals.

*        Regulatory Compliance

     With the growth of managed care companies and the increasing  dependence of
hospitals  and  physicians on such  companies  for payment,  the scrutiny of the
managed care contracts between the hospitals and physicians and the managed care
companies for proper compliance becomes critically important.

     During 1999, PCI has reviewed  managed care contracts for five hospitals to
ensure  compliance  and proper  reimbursement.  It has,  through  this  process,
identified unreimbursed claims on behalf of its clients.

 Healthcare Cost Containment Services

     Although revenues from previously existing contracts were recognized during
1998,  new  arrangements  ceased as of December 17, 1997.  Since that date,  the
Company is not providing such services to providers or networks.

Competition

     Based upon data  generated by the healthcare  industry and U.S.  Government
sources,  healthcare expenditures have increased from $249 billion in 1980 (9.1%
of gross  national  product) to an estimated  $700 billion in 1990 (12% of gross
national product). It is anticipated that healthcare expenditures will exceed $1
trillion  in the year  2000.  Many have  modified  their  traditional  insurance
coverage or made available to their  employees the opportunity to participate in
HMOs and PPOs. In a national survey by Foster Higgins,  reported by the New York
Times on January 20,  1998,  "managed  care plans  enrolled  85% of employees in
1997,  up from 77% in 1996,  and only 48%  five  years  ago."  The same  article
reported that 1997 was "the biggest one year shift out of traditional  indemnity
coverage  since  1994."  This has  enabled  them to take a more  active  role in
managing  healthcare  benefits  and  costs.  In  response  to the trend  towards
self-insurance  and increasing  competition  from HMOs and PPOs, group insurance
carriers have sought to control premium  increases  through the adoption of cost
containment programs.

     The Company  competes  for  consulting  business  primarily  with  multiple
service companies.  The Company competes for its MCREP clients by distinguishing
its services from those provided by multiple service companies,  which generally
do not use  benchmark  performance  levels of managed care  agreements or target
"Silent PPO" practices as does the Company.  Numerous  companies of varying size
offer revenue-optimization  services that may be considered competitive with the
Company.  The  Company  does  not  believe  that  any  single  company  commands
significant  market share.  Larger,  more  established  consulting firms have an
enhanced competitive  position,  due in part to established name recognition and
direct access to hospital clients through the provision of other services. Small
firms, although not necessarily offering those particular services comparable to
those of the Company, compete on the basis of price.

     The  managed  care  industry is highly  competitive.  The  Company's  MCREP
programs  will compete with other  providers of healthcare  services,  including
regional groups as well as national firms. Based upon these competitive factors,
the Company believes that it will be able to compete successfully in the markets
by adhering to its business  strategy,  although  there can be no assurance that
the Company will be able to compete successfully.

Sales and Marketing

     The  Company's  sales and  marketing  strategies  during 1999 and 1998 have
resulted in only a minimal  number of new clients for PCI's  managed care review
services.  Further,  no new contracts have been  developed  outside the New York
Metropolitan  area and of the four  contracts  within  the New  York  area,  two
represented  only  marginal  revenue  potential to PCI.  Outside of the New York
Metropolitan area, the sales and marketing effort for 1999 specifically targeted
New Jersey and Florida  hospital  chains and has not generated any sales to date
for  PCI.  The  former  President  of PCI,  Mr.  Richard  Vazquez  tendered  his
resignation  effective December 1999, having arrived at terms mutually agreeable
with the Company for the early termination of his employment contract.

     As of December 31, 1999, PCI had three contracts for its MCREP business,  a
decrease  from five at December  31,  1998.  Revenue to PCI is  contingent  upon
generating revenue for each hospital under contract. For each contract in place,
based upon PCI's experience, each contract may be expected to average revenue on
an  annualized  basis of  approximately  $110,000.  The annual  revenue for each
contract fluctuates significantly depending upon many factors including, but not
limited to, the number of managed care agreements the hospital had entered,  the
capacity  of the  hospital's  information  system,  the nature of the work under
contract and the length of the period under contract.

     The Company does not have any other  customers the loss of which would have
a materially adverse effect upon the Company.

 Entertainment

     Pictures is engaged in the  distribution of films through  licensing to the
Internet,  home  video,  pay-per-view,   pay-cable,  and  commercial  television
broadcast  media  domestically  as  well as in  foreign  markets.  Pictures  has
exclusive  distribution  rights to eighty-one (81) films in various media within
various international markets.

     During 1999 and 1998, the Company curtailed its efforts in the distribution
of film  licenses  to  commit  and  focus  its  resources  on the  growth of the
healthcare  segment,  which  during  that time was the most  efficient  and cost
effective  strategy for the Company to maximize  revenue.  In 1999,  the Company
began directing  efforts toward  reestablishing a foothold in the film industry.
As a result,  during 1999, the Company entered into two sales contracts totaling
$137,000.  The Company expects to continue  recognizing  growth in revenues from
the sale of film licenses in 2000.

     Pictures  acquires  worldwide rights to films which are saleable to various
markets.  In acquiring the rights to a film,  Pictures analyzes the viability of
the product for  distribution in an effort to target the film's audience appeal.
Armed with its analysis,  Pictures markets the film, using sales representatives
and the efforts of its officers,  to the various media in a selective manner. In
addition,  Pictures  aids the media to which it markets its films by producing a
strategy   for   the    presentation    of   the   film,    with   a   view   to
programming/counter-programming against competitive media in the same market and
directing  a film to the proper  demographic  population  (i.e.,  female,  male,
child,  teenager and middle age) in order to produce the most favorable  outcome
regarding ratings and advertising revenue.

     Pictures   acquires  its  film  rights  from  independent  film  production
companies.  Pictures monitors the industry for available films, concentrating on
content,  quality,  theme, actors and actresses,  plot, format and certain other
criteria to determine the film's  suitability for the home video,  pay-per-view,
pay/cable  and  commercial  media to which  Pictures  markets its product,  both
domestically and internationally.

     Pictures  markets its product through its sales  representatives,  who also
assist Pictures at domestic and  international  trade shows to market  Pictures'
film library.

     Pictures acquires domestic and/or foreign  distribution rights to films for
a license period that typically spans between 10 and 20 years, during which time
Pictures  has the right to  distribute  such  films in various  media  (Internet
streaming,  video,  pay  cable,  syndication  and  free  TV).  Pictures  earns a
distribution  fee, which is based upon a percentage of gross  receipts  received
for the license.  In  addition,  the Company  recoups its  expenses  incurred in
making the sale (i.e. market costs, travel and entertainment,  advertising, fax,
phone,  mail,  etc.),  along with  recouping any advances made to producers upon
signing or within a fixed period of time thereafter (minimum guarantee) from the
gross  receipts.  The balance of gross receipts after such recoupment is paid to
the  producer.  Any minimum  guarantees  paid to the producer are payable over a
period of 3-8 years.

Competition

     Competition is intense in the motion  picture  distribution  industry.  The
Company is in  competition  with other motion  pictures  distribution  companies
including  many which  have  greater  resources  than the  Company,  both in the
acquisition of  distribution  rights to movie  properties and the sales of these
properties to the various markets (i.e. Internet, pay, cable and television).

Major Customers

     In  1999  and  1998,   New  York  Hospital   accounted  for  20%  and  51%,
respectively,  of the total revenue of the Company.  No other customer accounted
for greater than 10% of the Company's total revenue in 1998. In 1999, Maimonides
Hospital  and New  York  Downtown  Hospital  accounted  for 17% and 12% of total
revenue,  respectively.  Additionally,  JPI sold film rights to Eyeblast,  Inc.,
which accounted for 17% of total revenue.

Employees

     As of March 22, 2000, the Company had 6 full-time employees and 3 part-time
employees and independent contractors. Of the full-time employees, 5 work at the
Company's offices, some of whom spend portions of their time at clients.

                               Recent Developments
                               -------------------

     Presently,  the Company  believes has recruited  personnel whose skills and
experience bring a focused, operational and team-oriented business strategy. The
Company is  pursuing a series of  initiatives  to the  Internet  and  e-commerce
marketplace.  Potential  acquisitions in the computer technology field are being
evaluated.  The  Company  believes  that  this new  direction  toward  providing
networks, web hosting and web development will position the Company as a conduit
for intellectual materials,  such as video and audio streaming for the Internet.
During  1999,  the  Company  acquired a 1.8%  interest  in the  common  stock of
NetDIVE,  Inc., a privately  held Internet  company which provides a platform to
corporations  for  collaborative  communication.  In addition,  during 1999, the
Company  actively pursued several  acquisition  candidates in the healthcare and
computer technology industries.

ITEM 2.  DESCRIPTION OF PROPERTY

     The  Company's  executive,  healthcare  and film  distribution  offices are
located at 111 Great Neck Road,  Suite 604,  Great Neck,  New York  11021.  This
property  consists  of  2,026  square  feet of  offices  and is  subleased  from
Entertainment  Financing  Inc.("EFI"),  an  entity  affiliated  with  the  Chief
Executive Officer of the Company,  currently at approximately  $6,000 per month.
EFI's lease,  and the Company's  sublease on this space expires on May 31, 2002.
EFI has agreed  that for the term of the  sub-lease  the rent paid to it will be
substantially the same rent that it pays under its master lease to the landlord.

     In addition, in January 1995, the Company opened an office in Boca Raton,
Florida.  In September 1998, this office was closed.

     NCI  maintained an office in New Jersey from  September  1998 through April
1999.

ITEM 3. LEGAL PROCEEDINGS

     On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action  against the Company,  alleging that the Company has successor  liability
for a  judgment  entered  in March  of 1993 by the  Plaintiffs  against  Juniper
Releasing, Inc. ("Releasing"), a company affiliated with the Company's CEO. This
matter was settled in April 1998 for a payment of $310,000,  which is being paid
out over four years  ending  April 20,  2001.  The payment was secured by 93,320
shares of the Company's common stock .

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

     The Company held its annual meeting of  shareholders  on December 27, 1999.
The following resolutions were proposed and the vote tally was as set forth next
to each resolution:

(1)  The foregoing  nominees for election to the Board of Directors received the
     number of votes for their  election  set forth  opposite  their  respective
     names:

                                 VOTES CAST
                                ------------
                           FOR              WITHHELD
NOMINEES                 ELECTION           AUTHORITY
Vlado Paul Hreljanovic   3,290,744             889
Harold Horowitz          3,290,744             889
Marvin Rostolder         3,290,744             889

(2)  Proposal 2 asked for approval of the Company's  1999 Stock Option Plan. The
     following number of shares were voted by proxy or by ballot for and against
     the ratification of the Company's 1999 Stock Option Plan.

          FOR  3,290,250           AGAINST 1,383        ABSTAIN      0
               ---------                   ------                   ----

(3)  Proposal 3 sought  ratification  of the  appointment of the auditors of the
     Company for the fiscal year ended December 31, 1999.  The following  number
     of shares were voted by proxy or by ballot for and against the ratification
     of the appointment of the auditors for the year ended December 31, 1999.

          FOR  3,290,744          AGAINST    889         ABSTAIN      0
               ---------                     ---                    -----

There were no broker non-votes.

<PAGE>
                                     PART II

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

     The  Company's  common  stock is  traded  on the  National  Association  of
Securities Dealer Automated Quotation System ("NASDAQ") Small Cap Market,  under
the symbol "JUNI".  The Company's 12%  Convertible  Redeemable  Preferred  Stock
("Preferred  Stock")  is traded in the  Over-the-counter  Market on the NASD OTC
Bulletin  Board.  The  Company's  Class B Warrants  expired on May 1, 1998.  The
following  constitutes  the high and low sales prices for the common stock,  the
Class B Warrants  as  reported  by NASDAQ for each of the  quarters  of 1999 and
1998. The quotations  shown below reflect  inter-dealer  prices,  without retail
mark-up, mark-down or commission and may not represent actual transactions.

         1999                         HIGH                       LOW
         ----                         ----                       ---
FIRST QUARTER
Common Stock ..................        3.13                     1.00

SECOND QUARTER
Common Stock ..................        2.19                     1.25

THIRD QUARTER
Common Stock ..................        7.88                     1.38

FOURTH QUARTER
Common Stock ..................        4.56                     1.34


         1998                          HIGH                      LOW
         ----                          ----                      ---
FIRST QUARTER
Common Stock ...............(2)        9.38                      3.15
Class B Warrants ...........            (1)                       (1)

SECOND QUARTER
Common Stock ...............(2)        6.25                      1.10
Class B Warrants ...........            (1)                       (1)

THIRD QUARTER
Common Stock ...............           1.56                      0.75

FOURTH QUARTER
Common Stock ...............           1.44                      0.75

(1) Issue did not trade
(2) Prices have been adjusted to reflect a post 50 to 1 reverse stock split

     Preferred  Stockholders  are  entitled  to  receive  out of assets  legally
available  for  payment a dividend  at a rate of 12% per annum of the  Preferred
Stock  liquidation  preference  of $2.00 (or $.24 per annum) per share,  payable
quarterly  on March 1, June 1,  September 1 and December 1, in cash or in shares
of Common Stock having an equivalent fair market value.  Unpaid dividends on the
Company's  Preferred Stock cumulate.  The quarterly  payments due on September 1
and December 1, 1992,  and all payments due in 1993,  in 1994, in 1995, in 1996,
in 1997,  in 1998,  in 1999,  and the  payment due on March 1, 2000 have not yet
been paid and are  accumulating.  These dividends have not been declared because
earned surplus is not available to pay a cash dividend.  Accordingly,  dividends
will  accumulate  until such time as earned  surplus is  available to pay a cash
dividend  or until a post  effective  amendment  to the  Company's  registration
statement covering a certain number of common shares reserved for the payment of
Preferred Stock dividends is filed and declared effective,  or if such number of
common  shares  are  insufficient  to  pay  cumulative  dividends,   then  until
additional  common  shares  are  registered  with the  Securities  and  Exchange
Commission  (SEC).  No  dividends  shall be declared or paid on the Common Stock
(other than a dividend  payable  solely in shares of Common Stock) and no Common
Stock shall be  purchased,  redeemed  or  acquired  by the  Company  unless full
cumulative dividends on the Preferred Stock have been paid or declared,  or cash
or shares of Common  Stock have been set apart  which is  sufficient  to pay all
dividends  accrued on the Preferred Stock for all past and then current dividend
periods.

     On March 16, 1999,  the Company made a  self-tender  for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12%  Preferred") for 475,777 shares of the Company's common stock. As a result,
191,153  shares of  preferred  stock were  redeemed  for  315,403  shares of the
Company's  common  stock.  As a  result,  there is  currently  42,747  shares of
Preferred Stock which remain outstanding.

     The 12% Preferred presently entitle the holder to convert to 0.04 shares of
common stock, par value $.001, of the Company, and the accrued dividend,  before
conversion,  of 12% per annum, payable, when declared by the Board of Directors,
in cash or stock at the Company's option, per share of 12% Preferred.  The total
cash  value of the  arrearage  of unpaid  dividends  as of  December  1, 1999 is
$89,769.

     The Company has not  declared  cash  dividends on its Common Stock and does
not  intend  to do so in  the  foreseeable  future.  If  the  Company  generates
earnings,  management's  policy is to retain such earnings for further  business
development.  It plans to maintain  this policy as long as  necessary to provide
funds for the Company's  operations.  Any future  dividend  payments will depend
upon the full payment of Preferred  Stock  dividends,  the  Company's  earnings,
financial  requirements and other relevant factors,  including  approval of such
dividends by the Board of Directors.

     As of  March  22,  2000,  there  were 234  shareholders  of  record  of the
Company's common stock, excluding shares held in street name.

Recent Sales of Unregistered Securities

     In 1999, the Company sold $658,700 of convertible debentures.  In 1998, the
Company  sold  $625,000 of  convertible  debentures.  During  1999,  $358,700 of
debentures were converted to 690,000 shares of the Company's common stock.

Changes  in  Securities

(a)  The  information  disclosed  in  Item 4 below  is  incorporated  herein  by
     reference.
(b)  N/A
(c)  Shares of Common Stock, $0.001 par value, sold during 1999 were as follows:
<TABLE>

     Date           Purchaser            No. of Shares            Consideration                    Exemption
-------------    --------------       ------------------    ----------------------------           ----------
<CAPTION>
<S>                <C>                  <C>             <C>                                              <C>    <C>

   3/31/99         Officers              142,835        The President and CEO of the Company
                                                        accepted common stock in lieu of accrued
                                                        salary and other amounts owed to him in
                                                        the amount of $53,563.                           4(2)

   3/31/99         Vendors               126,254        Vendors accepted common stock in lieu of         4(2)
                                                        unpaid fees in the amount of $64,489.

   3/31/99         Employees              50,667        An employee accepted common stock in lieu        4(2)
                                                        of accrued salary in the amount of $19,000.

   3/31/99         Debentures            133,333        A debenture for $100,000 was converted to        4(2)
                                                        common stock
   5/10/99        Owners of Preferred
                     Stock               315,403        Shares of Preferred Stock                       3a(9)

   5/20/99        Cordelle Investments   250,000        Purchase of 51% of Nuclear                       4(2)
                      Ltd.                              Cardiac Imaging

   5/26/99        Warrant Holders        300,000        Conversion of Warrants                           4(2)

   6/30/99        Officers               238,315        The President and CEO of the
                                                        Company accepted common
                                                        stock in lieu of accrued salary
                                                        and other amounts owed to him
                                                        in the amount of $93,488.                        4(2)

   6/30/99        Vendors                167,734        Vendors accepted common stock
                                                        in lieu of unpaid fees in the amount
                                                        of $90,261.                                      4(2)

   6/30/99        Employees               52,885         An employee accepted common
                                                         stock in lieu of accrued salary in the
                                                         amount of $20,384.                              4(2)

   6/30/99        Debentures             579,423         A debenture for $318,700 was
                                                         converted to common stock                       4(2)

   7/16/99        Officers                18,966        The President and CEO of the
                                                        Company accepted common stock
                                                        in lieu of accrued salary and
                                                        other amounts owed to him in
                                                        the amount of $7,112.                            4(2)

   7/20/99        Private Holders        530,909        Debentures for $340,000 were
                                                        converted to common stock                        4(2)

   9/30/99        Option Holders          84,808        Conversion of Options for $45,000                4(2)

   9/30/99        Vendors                 87,979        Vendors accepted common stock in
                                                        lieu of unpaid fees in the amount
                                                        of $66,790.                                      4(2)

  12/30/99        Employees               35,156        Employment                                       4(2)

10/31-12/31/99    Consultants             120,614        Services Rendered                               4(2)

10/21-12/20/99    Private Holders          95,588        Satisfaction of indebtedness                    4(2)

10/11-11/24/99    Officers                167,887        Services rendered                               4(2)

11/03/99          Former Directors         20,000        Payment in cash                                 4(2)

11/18/99          Directors                87,395        Services rendered                               4(2)

11/18/99          Employees                21,849        Services rendered                               4(2)

12/20/99          Private Holders           8,889        Payment in cash                                 4(2)


During 1999 the following options to purchase the Company's common stock were issued.

                                         No.
     Date          Purchaser          of Options           Consideration                        Exemption
-------------      ---------        ---------------     -------------------                       ---------

5/17-12/30/99      Officer                243,542         Services rendered                            4(2)

5/17/99            Board of Directors     390,000         Services rendered                            4(2)

5/17/99            Employees               25,000         Services rendered                            4(2)

12/30/99           Consultants            120,000         Services rendered                            4(2)


During 1999 the following debentures were issued by the Company.

                                       Value
     Date          Purchaser          of Debentures        Consideration                        Exemption
-------------      ---------        ---------------     -------------------                       ---------
3/29-7/8/99        Private Holders    658,000             Payment in cash

</TABLE>
___________________

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

RESULTS OF OPERATIONS

Fiscal Year 1999 vs Fiscal Year 1998

     The  Company's  revenues  decreased to $718,000 in 1999 from  $1,421,000 in
1998, representing a 49.5% decrease.

     Revenue  related to the Healthcare  segment  decreased to $581,000 in 1999,
from  $1,315,000 in 1998,  representing a 58% decrease.  The decrease in revenue
during 1999 was  predominately  attributed  to PCI whose  revenue  decreased  to
$581,000 in 1999,  from  $1,105,000 in 1998. This was the result of PCI's client
pool of hospitals decreasing from seven in 1998 to three in 1999.  Additionally,
the joint venture  relationship with Containment  ended in 1998,  resulting in a
$270,000 reduction in gross revenue.

     Revenue related to entertainment increased to $137,000 in 1999 from $46,000
in 1998.

     Operating  costs increased to $270,000 in 1999 from $154,000 in 1998, a 75%
increase.  The  Healthcare  operating  costs  increased to $213,000 in 1999 from
$136,000 in 1998, a 57% increase.  As a percentage of revenue,  operating  costs
for the Healthcare  segment  increased to 36% in 1999 from 10% in 1998.  This is
the result of 1) the termination of the joint venture with  Containment;  and 2)
the operating costs of PCI, a portion of which is not directly correlated to the
volume of revenue.

     Operating costs for  Entertainment  include film amortization and producers
royalties.  Where the  Company  acquires  licensing  rights  through  guaranteed
payments,  it records such guarantees on its balance sheet.  The amortization of
such  licensing  rights is  calculated  under  the film  forecast  method.  Film
amortization   represents   amortization  of  the  original   acquisition  price
capitalized on the balance sheet.  Producers  royalties  reflect current amounts
due  producer's  for their  share of current  revenue  for films with no minimum
guarantee obligation.

     Selling,  general and  administrative  expenses  increased to $1,984,000 in
1999 from $1,709,000 in 1998, a 16% increase.  Included in selling,  general and
administrative expenses are uncollectible receivables of $643,000,  depreciation
of $28,000 and other expenses which did not require use of the Company's cash in
1999 totaling approximately $500,000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had negative  working capital of $312,000 at December 31, 1999.
The ratio of current  assets to current  liabilities  was 0.64:1 at December 31,
1999. Cash flow used by operating activities during 1999 was $577,212.

     The Company has no material  commitments  for capital  expenditures  or the
acquisition  of films.  If cash flow  permits,  however,  the  Company  plans to
enhance its information system  capabilities to more efficiently and effectively
provide its healthcare services and to acquire additional films during 1999.

     During  1999,  the  Company  raised  approximately  $1,200,000  for working
capital,  acquisition  of its  interest  in  NetDIVE,  Inc.  and payment of debt
through  the sale of  unregistered  securities  (convertible  debentures,  notes
payable and common stock).

     The Company  believes  that it will need  additional  financing to meet its
operating cash  requirements for the current level of operations during the next
twelve  months,  and will  require  additional  capital in order to complete its
planned  expansion.  The Company has developed a plan to reduce its  liabilities
and improve cash flow through expanding  operations and raising additional funds
either  through  issuance of debt or equity.  From January 1, 2000 through March
22, 2000,  the Company raised  $178,000 from the sale of convertible  debentures
and through offerings under private placements.  The Company anticipates that it
will be able to raise the  necessary  funds it may require for the  remainder of
2000 through public or private sales of securities.  If the Company is unable to
fund its  cash  flow  needs  the  Company  may have to  reduce  or stop  planned
expansion, or possibly scale back operations.

       The Company currently does not have any lines of credit.

     The Company has issued  shares of its common stock on a number of occasions
without offering preemptive rights to existing Shareholders or procuring waivers
of their preemptive  rights.  No Shareholder has alleged any damage resulting to
him as a result of the sale of shares of  Common  Stock by the  Company  without
offering  preemptive  rights.  The amount of damages incurred by Shareholders by
reason of the failure to offer  preemptive  right, if any, is not  ascertainable
with any degree of accuracy.  The Company  believes that if any such claims were
asserted, the Company may have valid defenses.

     During 1999 and 1998,  the Company  focused its  resources on the growth of
the  healthcare  segment,  which,  during that time,  was the most efficient and
cost-effective strategy for the Company to maximize revenue.  Although resources
and capital  remain  limited,  the Company has begun  directing  efforts  toward
reestablishing a foothold in the film industry.  The Company expects to continue
recognizing growth in revenues from the sale of film licenses in 2000.

Healthcare

     During 1999 and 1998, the Company was unsuccessful in developing a quality,
comprehensive   national  marketing  effort.  This  was  primarily  due  to  the
restricted cash flow which was not available to support such a national campaign
needed to succeed fully into today's ever changing healthcare  environment.  The
marketing  methods used  previously  did not succeed and a more  technologically
drive plan is  currently  being  developed.  This period of change will  require
increased  investment in new and better technology  infrastructures  that should
make it more cost effective to serve PCI clients.

     New contracts which clearly define PCI's services have been  developed.  In
addition,  these  contracts  create  payment  terms which  should  expedite  the
collection process of PCI revenue from its new business.

     This also required new staffing  including the  recruitment  of experienced
personnel  from  the  insurance  and  managed  care   industry.   Infrastructure
initiatives,  especially those associated with information systems capabilities,
are continuing to be addressed  through  investments in new hardware,  software,
staffing and technical support. The Company incurred  approximately  $98,000 and
$88,000 on these initiatives in 1999 and 1998, respectively.

Entertainment

     Although the Company's  resources and capital remain  limited,  the Company
has  begun  directing  efforts  toward  reestablishing  a  foothold  in the film
industry.  As a  result,  the  Company  obtained  two sales  contracts  for film
licenses totaling $137,000 in 1999. The Company expects to continue  recognizing
growth in revenues from the sale of film licenses in 1999.

     In 2000, the Company will consider  searching for full time sales personnel
and utilizing outside sales representatives.  Further, the Company is evaluating
opportunities  in the Internet and audio  streaming  industry and in  e-commerce
technology.  If cash flow permits,  the Company plans to enhance its information
system  capabilities  to actively  host web sites and create a conduit for video
and audio streaming of entertainment products to the Internet. Additionally, the
Company will consider  seeking  alliances  with other  e-commerce  companies and
utilizing  outside  sales  representatives.  Initially,  the Company  will begin
promoting its film library in the Internet markets.

ITEM 7.  FINANCIAL STATEMENTS

     The  response  to this item  follows  Item 13,  and is hereby  incorporated
herein.

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

         None
<PAGE>


                                    PART III

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

     The Company's Certificate of Incorporation  provides for no less than three
(3) Directors.  Each Director shall hold office until the next annual meeting of
shareholders  and until his  successor  has been elected and  qualified.  At the
present time there are a total of three (3) Directors. The Board of Directors is
empowered to fill vacancies on the Board. The Company's  Directors and Executive
Officers are listed below:

                                     POSITIONS
NAME                       AGE       W/COMPANY                  DIRECTOR SINCE

Vlado Paul Hreljanovic     52       Chairman of the Board,          1987
                                    President, CEO and
                                    acting CFO

Harold A. Horowitz         49       Director                        1991

Marvin Rostolder           57       Director                        1998

Yvonne T. Paultre          61       Secretary                       ---

DIRECTORS
---------
     Vlado Paul Hreljanovic has been the President,  Chief Executive Officer and
Chairman of the Board since 1987. Upon graduation  from Fordham  University,  he
joined  KPMG  (formerly  Peat  Marwick  Mitchell  & Co.) as an  accountant.  Mr.
Hreljanovic  is and has been the  sole  shareholder,  officer  and  director  of
Entertainment Financing, Inc., which only business is as lessee of the Company's
offices in Great Neck,  New York,  and the  sub-lessor  of such premises to the
Company.

     Harold A.  Horowitz has been a Director of the Company  since January 1991.
Since  October 1, 1995,  he has been a  principal  and  Chairman of the Board of
In-Stock Business Forms and Paper Products,  Ltd., and an independent consultant
to various public and private companies. Until October 1, 1995, Mr. Horowitz was
a Partner of the law firm of  Finkelstein,  Bruckman,  Wohl,  Most and  Rothman,
which firm was  securities  counsel to the Company.  Mr.  Horowitz is an adjunct
professor of  economics  at Yeshiva  University.  Mr.  Horowitz  received his JD
degree in 1976 from  Columbia  University  School of Law and  masters  degree in
economics  from  Columbia  University  in 1973.  He received  his BA degree from
Yeshiva University in 1971.

     Marvin  Rostolder  was elected to the Board of  Directors of the Company on
May 18, 1998. Mr.  Rostolder is the Chairman of the Board of Directors and Chief
Executive Officer of JM Marketing,  Inc., the licensee of SmallFrye Footwear. He
has served in that  capacity  since  March  1998.  Mr.  Rostolder  has served as
independent  consultant to various companies  including MedTech Co.,  BioImaging
Technology, Inc., Amba Sciences, Inc. and T.M. Marketing, Inc. From 1985 through
1998, Mr.  Rostolder served in various  capacities with North American  Transfer
Co., a registered  Stock Transfer  Agent and  Registrar,  which is the Company's
Transfer Agent.  Mr.  Rostolder is a graduate of the City University of New York
and  holds  a  Masters   degree  from  Long  Island   University  in  healthcare
administration.

OTHER OFFICER
-------------
     Yvonne  T.  Paultre  has  been  Secretary   since  1991.  Ms.  Paultre  has
supervisory responsibilities for the Company's employees, customer relations and
office  policies.  She is  also  responsible  for  operations  of the  Company's
television syndication area.

KEY EMPLOYEE
------------

     Richard O. Vazquez  resigned  December 14, 1999,  effective March 15, 2000.
Mr. Vazquez was formerly Vice  President for  Integrated  Networks at MultiPlan,
Inc. Prior to that he was the Associate  Executive Director of Elmhurst Hospital
and Medical Center. Mr. Vazquez has attained an MPA from Baruch College and a BA
from New York University.

         Section 16(a) Beneficial Ownership Reporting Compliance

     To the best of the Company's knowledge,  based solely on a review of copies
of Forms 3, 4 and 5 furnished to the Company and written representations that no
other reports were required  during the fiscal year ended December 31, 1999, the
Company's officers, directors, and 10% shareholders complied with all applicable
Section 16(a) filing requirements.

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth information with respect to the compensation
of the Chief  Executive  Officer of the  Company  for  services  provided to the
Company and its subsidiaries in 1999, 1998 and 1997. No other executive  officer
received salary and bonus in excess of $100,000 in any such year.

SUMMARY COMPENSATION TABLE
<TABLE>
                                                                                                    Long Term
                                                                                                    Compensation
                                      Annual                                                        Securities
                                    Compensation                                    Other Annual   Underlying
Name and Principal Position            Year           Salary           Bonus       Compensation     Options (#)
---------------------------        ----------         ------       -------------   -----------     ------------
<CAPTION>
<S>                                   <C>            <C>             <C>             <C>                <C>

Vlado Paul Hreljanovic                1999           $178,377           -    (1)     $40,400 (2)        -
Chairman of the Board and             1998           $175,460        $86,191 (3)     $31,200 (4)        -
Chief Executive Officer               1997           $172,757        $19,500 (5)     $52,900 (6)        -

</TABLE>

(1)  Throughout 1999, Mr.  Hreljanovic  received 383,542 options with a cashless
     exercise  feature to purchase  shares of the Company's  common stock.  Such
     options  were  issued in  recognition  of efforts  exerted on behalf of the
     Company and its  subsidiaries.  The exercise  prices of the options  ranged
     from $.48 to $.68.  As of  December  31,  1999,  220,000  options  remained
     unexercised.

(2)  Other compensation for Mr. Hreljanovic in 1999 was primarily  comprised of,
     among other things, automobile repairs and insurance of $13,000, and health
     and life insurance of $27,400.

(3)  Paid in 57,461 shares of the Company's unregistered common stock, valued at
     $86,191 issued on January 1, 1998, in recognition of efforts exerted by Mr.
     Hreljanovic on behalf of the Company and its subsidiaries.


(4)  Other compensation for Mr. Hreljanovic in 1998 was primarily  comprised of,
     among other things, automobile repairs and insurance of $12,900, and health
     and life insurance of $18,200.

(5)  Paid in 13,000 shares of the Company's  unregistered  common stock, valued
     at $19,500 issued on June 18, 1997, in  recognition  of efforts  exerted by
     Mr. Hreljanovic on behalf of the Company and its subsidiaries.

(6)  Other compensation for Mr. Hreljanovic in 1997 was primarily  comprised of,
     among other things,  automobile payments,  including lease, maintenance and
     insurance of $30,600, and health and life insurance of $22,300.

Aggregate Option Exercises in Last Fiscal Year and Year-end Options
<TABLE>

                                                                Number of
                                                                Securities             Value of
                                                                Underlying            Unexercised
                                                               Unexercised           In-the-Money
                                  Shares                        Options at            Options at
                                 Acquired                       Year-end (#)          Year-end ($)
                                    On        Value             Exercisable            Exercisable
Name and Principal Position      Exercise    Realized          Unexercisable          Unexercisable
----------------------------     --------    ----------       ---------------      -----------------
<CAPTION>
<S>                               <C>         <C>             <C>                  <C>

Vlado Paul Hreljanovic            528,773     $2,836,064      220,000/0            $407,000/$0
Chairman of the Board and
Chief Executive Officer

Harold A. Horowitz                 87,395     $  185,714      160,000/0            $312,000/$0
Director

Marvin Rostolder                    -             -           190,000/0            $395,000/$0
Director

Yvonne T. Paultre                  21,849     $  46,427        25,000/0            $ 51,000/$0
Secretary
</TABLE>


1)       As of December 31, 1999, the closing price was $2.53.

     Compensation of Directors: In 1999, Mr. Horowitz and Mr. Rostolder received
options to purchase 160,000 and 80,000 shares of common stock at exercise prices
from $.48 to $.68,  per share,  respectively,  as additional  compensation  as a
member of the Board of Directors.

     Employment Agreements: Mr. Hreljanovic has an Employment Agreement with the
Company which expires on April 30, 2005, and that provides for his employment as
President and Chief Executive  Officer at an annual salary adjusted annually for
the CPI Index and for the reimbursement of certain expenses and insurance. Based
on the foregoing  formula,  Mr.  Hreljanovic's  salary in 1999 was approximately
$178,000.  Additionally,  the employment agreement provides that Mr. Hreljanovic
may receive shares of the Company's  common stock as  consideration  for raising
funds for the Company.  Due to a working capital deficit,  the Company is unable
to pay the entire salary in cash to Mr.  Hreljanovic  pursuant to his employment
agreement.  In  the  best  interests  of the  Company,  in  lieu  of  cash,  Mr.
Hreljanovic  has agreed to accept and the Board of  Directors  has  approved the
issuance  of shares of the  Company's  common  stock as  payment  for the unpaid
salary of 1999 and 1998. In 1999, the Company issued options to purchase 383,542
shares of common stock at prices ranging from $.48 to $.68. In 1998, the Company
issued 187,636 shares of common stock to Mr. Hreljanovic to liquidate the amount
owed to him for his 1998 and 1997  salary and 57,461  shares of common  stock as
additional   compensation  for  achieving  certain  performance  benchmarks  for
obtaining new hospital contracts.

     Under the terms of this employment  agreement,  the Chief Executive Officer
of the  Company  is  entitled  to receive a cash  bonus of a  percentage  of the
Company's pre-tax profits if the Company's pre-tax profit exceeds $100,000.

     Additionally,  if the  employment  agreement  is  terminated  early  by the
Company after a change in control (as defined by the agreement),  the officer is
entitled to a lump sum cash payment equal to approximately  three times his base
salary.

     Mr. Vazquez, President of PCI, had an employment agreement which terminated
on June 30, 2000.  Under the terms of his  agreement,  as amended,  Mr.  Vazquez
received  options to purchase  shares of the Company's  common stock.  Effective
December 1999, Mr. Vazquez and the Company agreed to an early termination of the
Agreement. Accordingly, Mr. Vazquez surrendered all options previously issued to
him and agreed to forego any stock or options to which he was entitled.

 STOCK OPTION PLANS

1989 Restricted Stock, Non-Qualified and Incentive Stock Option Plan

     On December 7, 1999, the 1989 restricted stock, non-qualified and incentive
stock option plan terminated in accordance with the provisions of the Plan.

 1996 Stock Option Plan

     On February  12, 1997,  the  shareholders  of the Company  adopted the 1996
Stock  Option  Plan.  This Plan  allows  the  Company to grant  incentive  stock
options, non-qualified stock options and stock appreciation rights (collectively
"options")  to purchase up to an aggregate of 100,000  shares of common stock to
employees,  including officers,  and to non-employees involved in the continuing
development  and  success of the  Company.  The terms of the  options  are to be
determined by the Board of  Directors.  Options will not have  expiration  dates
later  than ten years  from the date of grant  (five  years from the date of the
grant in the case of a 10% stockholder).  The option prices may not be less than
the fair market value of the common shares on the date of grant, except that any
option  granted to an  employee  holding 10% or more of the  outstanding  voting
securities of the Company must be for an option price not less than 110% of fair
market value. All the options under the Plan have been granted as of the date of
this report.

 1998 Stock Option Plan

     On December  30, 1998,  the  shareholders  of the Company  adopted the 1998
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. The Plan also  supplements  the
Company's 1996 Stock Option Plan.

     This  Plan  allows  the   Company  to  grant   incentive   stock   options,
non-qualified  stock  options  and  stock  appreciation   rights   (collectively
"options") to purchase up to an aggregate of 1,000,000 shares of common stock to
employees,  including officers,  and to non-employees involved in the continuing
development  and  success of the  Company.  The terms of the  options  are to be
determined by the Board of  Directors.  Options will not have  expiration  dates
later  than ten years  from the date of grant  (five  years from the date of the
grant in the case of a 10%  stockholder).  The  option  prices may be set at any
amount in the discretion of the Board's Compensation Committee.  All the options
under the Plan have been granted as of the date of this report.

 1999 Stock Option Plan

     On December  27, 1999,  the  shareholders  of the Company  adopted the 1999
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. The Plan also  supplements  the
Company's 1996 and 1998 Stock Option Plans.

     This  Plan  allows  the   Company  to  grant   incentive   stock   options,
non-qualified  stock  options  and  stock  appreciation   rights   (collectively
"options") to purchase up to an aggregate of 1,500,000 shares of common stock to
employees,  including officers,  and to non-employees involved in the continuing
development  and  success of the  Company.  The terms of the  options  are to be
determined by the Board of  Directors.  Options will not have  expiration  dates
later  than ten years  from the date of grant  (five  years from the date of the
grant in the case of a 10%  stockholder).  The  option  prices may be set at any
amount in the discretion of the Board's Compensation  Committee. No options have
been granted under the Plan. At December 31, 1999,  605,000 options were granted
under the Plan and 895,000 options remain unissued.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth,  as of March 22,  2000:  (i) the name and
address  of each  person  who owns of  record  or who is  known by the  Board of
Directors to be beneficial owner of more than five percent (5%) of the Company's
outstanding common stock, (ii) each of the Company's Directors, and (iii) all of
the Company's Executive Officers and Directors as a group.

                                      BENEFICIAL              PERCENT OF COMMON
 NAME AND ADDRESS                   OWNERSHIP (1)             STOCK OUTSTANDING

 Vlado Paul Hreljanovic             1,145,284                       15.3%
 111 Great Neck Road
 Suite 604
 Great Neck, NY 11021

 Harold A. Horowitz                   210,000                        2.8%
 111 Great Neck Road
 Suite 604
 Great Neck, NY 11021

 Marvin Rostolder                     205,000                        2.7%
 Hoffstat Lane
 Sands Point, Port Washington 11050

 Bluffdale Corporation               525,168                         7.3%
 c/o Harris Organization
 P.O. Box 0832-0858
 Panama City, Panama

 Officers and Directors as a
  group (5 Persons)                1,669,116                        22.3%

     (1) Includes  options of 220,000,  160,000,  190,000 and 25,000 to purchase
the  Company's  common  stock  for each of the  officers  and  directors  above,
respectively.

 ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company paid rent under one sublease 1999 and two subleases during 1998
to companies  affiliated  with the Chief Executive  Officer of the Company.  The
rents  paid and  terms  under  the  subleases  are the same as those  under  the
affiliate's  lease  agreements  with the  landlords.  Rent expense for the years
ended December 31, 1999 and 1998 was $72,400 and $77,000, respectively. In prior
years,  the Company  made  advances to or  received  advances  from one of these
affiliated companies for working capital requirements.  As a result, at December
31, 1999 and 1998,  the  balances  due from the  affiliates  were  approximately
$4,800 and $900,  respectively.  Amounts  payable under the remaining  leases in
2000 and subsequent years are set forth below:

                                    2000             -        $63,988
                                    2001             -        $66,014
                                    2002 and
                                    thereafter       -        $27,013

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated  with the Chief  Executive  Officer  of the  Company,  for a ten-year
license  period,  which expires on June 5, 2003. The Company is obligated to pay
such company producers' fees at the contract rate. Such payments will be charged
against earnings.  In 1999 and 1998, no payments were made to such company,  and
no revenue was recognized from such films.


     During 1999, the Company's Chief  Executive  Officer made loans directly to
the Company,  made  payments to  unaffiliated  parties on behalf of the Company,
incurred travel expenses while conducting business for the Company, and received
repayments of loans and  reimbursement of certain expenses during the year. With
regard to loans to the Company,  interest  accrues at 12% per annum. The Company
also  made  advances  to its  Chief  Executive  Officer  for  business  expenses
anticipated  to be incurred by him during 1999.  At December  31, 1999,  the net
balance  due from the  Chief  Executive  Officer  for all  activities  above was
$3,900.

     In 1999,  the Company's  President and Chief  Executive  Officer was issued
options to purchase  383,542 shares of the Company's  common stock with exercise
prices  ranging  from  $.48 to  $.68 as  additional  compensation  for  services
performed  in  1999,   including   options  for  140,000  shares  as  directors'
compensation.  Further,  the  Company  issued  options  for  250,000  shares  to
non-employee directors as directors' compensation.

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

 (a) Exhibits

 Exhibit  Description:

2.1  Agreement  and Plan of Merger  dated as of January  20,  1997  between  the
     Registrant and Juniper Group, Inc., a Nevada corporation (2)

3.1  Certificate of Incorporation of the Registrant, as amended (1)

3.2  Amendment to the  Certificate of  Incorporation  of the  Registrant,  filed
     March 7, 1997 (3)

3.3  Certificate   of   Incorporation   of  Juniper   Group,   Inc.,   a  Nevada
     corporation.(2)

3.4  By-Laws of the Registrant (1)

3.5  Amendment to the By-Laws of the Registrant  approved by the shareholders of
     the Registrant on February 12, 1997 (2)

3.6  By-Laws of Juniper Group, Inc., a Nevada corporation (2)

4.1  1998 Stock Option Plan (2)

4.2      1999 Stock Option Plan (4)

10.1 Amendment  to  Employment  Agreement  between the  Registrant  and Vlado P.
     Hreljanovic, dated February 11, 1998

10.3 Consulting Agreement between Juniper Medical Systems, Inc. and Jeffrey Mann
     dated June 6, 1998

10.4 Consulting  Agreement  between  Registrant and Global Financial Group, Inc.
     dated November 24, 1998

10.5 Employment  Agreement between PCI, Inc. and Richard O. Vazquez,  dated June
     7, 1996 (3)

10.6 Agreement  between  PartnerCare,  Inc. and Synergy Business  Services dated
     December 7, 1997

21.1 Subsidiaries

23.1 Consent of Independent Certified Public Accountants

27.1 Financial Data Schedule
 ____________________________

(1)  Incorporated by reference to the Company's annual report on Form 10-KSB for
     the fiscal year ended December 31, 1996

(2)  Incorporated  by reference to the Company's  Proxy Statement for its Annual
     Meeting held on December 30, 1998

(3)  Incorporated by reference to the Company's annual report on Form 10-KSB for
     the fiscal year ended December 31, 1997

(4)  Incorporated  by reference to the Company's  Proxy Statement for its Annual
     Meeting held on December 27, 1999

(b)  Reports on Form 8-K.
         NONE



                   BALANCE OF PAGE LEFT BLANK INTENTIONALLY







<PAGE>


                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS






                                                                      Page

Report of Independent Certified Public Accountants..................  F-2

Consolidated Balance Sheets as of December 31, 1999 and 1998........  F-3

Consolidated Statements of Income
for the two years ended December 31, 1999...........................  F-4

Consolidated Statements of Cash Flows
for the two years ended December 31, 1999...........................  F-5

Consolidated Statements of Shareholders'
Equity for the two years ended December 31, 1999....................  F-6

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





























                                       F-1



<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Shareholders
JUNIPER GROUP, INC.


     We have audited the  accompanying  consolidated  balance  sheets of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1999 and 1998, and the related
consolidated  statements of income, cash flows and shareholders' equity for each
of the  years  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the financial  position of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1999 and 1998, and the results
of their  operations  and their cash flows for each of the years then ended,  in
conformity with generally accepted accounting principles.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming the Company will continue as a going concern. As discussed in Note 8 to
the consolidated financial statements, the Company has suffered recurring losses
from operations which raises  substantial doubt about its ability to continue as
a going concern.  Management's  plans regarding those matters are also described
in Note 10. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



                           /s/GOLDSTEIN & GANZ, CPA's, P.C.







Great Neck, New York
March 29, 2000




                                       F-2


<PAGE>



                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEETS

                                                       December       December
                   ASSETS                              31, 1999       31, 1998

Current Assets
  Cash ...........................................   $    3,290     $   48,925
  Accounts receivable - trade (net of allowance)..      329,875        788,410
  Due from affiliates ............................           44          8,085
  Investment in NCI ..............................         -           152,879
  Prepaid expenses and other current assets ......      206,514        215,764
  Due from officer ...............................        3,857        101,755
Total current assets ....................               543,580      1,315,818
  Film licenses ..................................    2,887,267      2,939,960
  Property and equipment net of accumulated
    depreciation of $123,354 and $85,554,
    respectively .................................      110,462        141,677
  Investment in NetDIVE, Inc. ....................      200,000           -
  Goodwill........................................      409,886                -
  Other assets ...................................       82,620        167,540
                                                     $4,233,815    $ 4,564,995

       LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued expenses ..........   $  796,104    $ 1,023,541
  Notes payable - current ........................       52,910        168,725
  Due to producers - current .....................         -            47,178
  Due to shareholders ............................        7,000          7,000
Total current liabilities ........................      856,014      1,246,444
Notes payable - long term ........................      400,606        166,667
Due to producers - long term .....................       11,958         17,692
Total liabilities ................................    1,268,578       ,430,803
                                                      ---------      ---------
Shareholders' Equity
  12% Non-voting convertible redeemable
   preferred stock: $.10 par value, 875,000
   shares authorized, 42,747 and 233,900 shares
   issued and outstanding at December 31, 1999,
   and December 31, 1998: aggregate liquidation
   preference, $85,494 and $467,800 at December
   31, 1999 and December 31, 1998.................        4,275          23,390
  Common Stock - $.001 par value,75,000,000
   shares authorized, 6,741,618 and 3,072,204
   issued and outstanding at December 31, 1999
   and December 31, 1998, respectively ...........        6,742           3,072
  Capital contributions in excess of par:
   Attributed to preferred stock .................       38,109         208,523
   Attributed to common stock ....................   11,409,017       9,855,404
  Retained earnings (deficit) ....................   (8,492,906)     (6,956,197)
       Total shareholders' equity ................    2,965,237       3,134,192
                                                     ----------       ---------
                                                     $4,233,815     $ 4,564,995
                                                     ==========     ===========


                See Notes to Consolidated Financial Statements

                                       F-3
<PAGE>

                               JUNIPER GROUP, INC
                            AND SUBSIDIARY COMPANIES

                        CONSOLIDATED STATEMENTS OF INCOME





                                                 Year Ended December 31,
                                                  1999            1998
                                              ------------    ------------
Revenues:
     Healthcare ..........................   $    580,594     $  1,374,871
     Entertainment .......................        137,036           46,000
                                              ------------    ------------
                                                  717,630        1,420,871
                                              ------------    ------------

Operating Costs:
     Healthcare ..........................        113,148          136,095
     Entertainment .......................         57,475           17,795
Selling, general and administrative expenses    1,984,168        1,708,874
Settlement expense .......................           -             310,828
                                              ------------    ------------
                                                2,154,791        2,173,592
                                              ------------    ------------
Net (loss) before (loss) from
  from minority interest..................     (1,437,161)        (752,721)
(Loss) from minority interest.............        (99,548)        (193,141)
                                              -----------      -----------
Net (Loss) ...............................   $ (1,536,709)     $  (945,862)
                                              ============     ===========
Weighted average number of shares outstanding   4,883,783        1,500,511
                                              ============    ============
Net (loss) per common share ..............   $     (0.32)    $      (0.67)
                                              ============    ============

















                 See Notes to Consolidated Financial Statements


                                       F-4


<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     Year Ended December 31,
                                                       1999         1998
                                                     ---------    ---------
Operating Activities
Net loss ......................................... $(1,536,709)  $  (945,862)
Adjustments to reconcile net cash provided by
   operating activities:
 Amortization of film licenses ...................      52,693        14,601
 Settlement expense...............................        -          310,828
 Depreciation expense ............................      37,800        22,239
 Gain on sale of assets                                   -           (6,362)
 Expense from minority interest ..................      99,548       193,141
 Payment of officers' compensation with equity....      71,301       253,589
 Payment of various liabilities with equity ......     294,741       197,954
 Payment of directors' compensation with equity ..        -           17,625
 Payment of employees' compensation with equity ..      55,540        11,040

Changes in assets and liabilities:
 Accounts receivable .............................     458,535      (459,930)
 Prepaid expenses and other current assets .......       9,250         8,667
 Other assets ....................................       1,587          (690)
 Due to/from officers and shareholders ...........      97,898       (42,705)
 Due from affiliates .............................       8,041         7,485
 Accounts payable and accrued expenses ...........    (227,437)       60,403
                                                      ---------   ----------
 Net cash (used for) operating activities ........    (577,212)     (357,977)
                                                      ---------   ----------
Investing activities:
 Purchase of equipment ...........................      (6,585)      (96,479)
                                                      ---------   ----------
Net cash provided from (used for) investing
 activities .......................................     (6,585)      (96,479)
                                                      ---------   ----------
Financing activities:
 Investment in NCI and NetDIVE......................  (400,305)        --
 Reduction in borrowings ...........................  (217,702)    (253,414)
 Proceeds from borrowings .......................... 1,153,981      810,000
 Payments to and on behalf of producers ............   (20,312)     (22,122)
 Proceeds from exercise of options .................    22,500     (211,270)
 Proceeds from private placements ..................      --        150,000
                                                     ---------    ---------
 Net cash provided from (used for)
   financing activities ............................   538,162      473,194
                                                      ---------   ---------
 Net increase (decrease ) in cash ..................   (45,635)      18,738
 Cash at beginning of period .......................    48,925       30,187
                                                      ---------   ---------
 Cash at end of period ............................. $   3,290   $   48,925
                                                      ========    =========


                 See Notes to Consolidated Financial Statements
                                       F-5

<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY



<TABLE>
                           Preferred Stock                            Common Stock
                      ---------------------------                ----------------------------
                                          Capital                           Capital
                                       Contributions                     Contributions        Retained
                      Par Value           in excess         Par Value      in excess          Earnings
                       at $.10              of par          at $.001        of par            (Deficit)               Total
                     -------------    ------------------  ------------- ----------------   --------------       ----------------
<CAPTION>
<S>                   <C>                <C>                   <C>          <C>                <C>                 <C>

Balance
December 31, 1997     23,590             210,303               760          7,971,979          (6,010,335)         2,196,297

Proceeds from private
  placements            -                   -                   91            149,909               -                150,000
Shares issued as
payment for various
  expenses              -                   -                  416            332,287               -                332,703
Shares issued as compensation
  to officer            -                   -                  245            253,344               -                253,589
Shares issued as compensation
  to employees          -                   -                   23             11,017               -                 11,040
Shares issued to members
 of the Board
 of Directors           -                   -                   47             17,578               -                 17,625
Shares issued to convert debt
  to equity             -                   -                1,490          1,117,310               -              1,118,800
Preferred stock
  conversion          (200)              (1,780)                -               1,980               -                   -
Net loss for the year
 ended
December 31, 1998       -                   -                   -                -              (945,862)           (945,862)
                     _______          _________             _______          __________        _________          __________
Balance,
December 31, 1998    $23,390           $208,523            $ 3,072         $9,855,404       $ (6,956,197)         $3,134,192

----------------
Proceeds from private
  placements            -                   -                   -                -                  -                   -
Shares issued as
 payment for
 various expenses       -                   -                  820            293,921               -                294,741
Shares issued as
 compensation
  to employees          -                   -                  105             55,435               -                 55,540
Shares issued as compensation
  to officers           -                   -                  467             70,834               -                 71,301
Shares issued to producers as
 payment for debt       -                   -                   66             32,534               -                 32,600
Shares issued from exercise of
  stock options         -                   -                  428             22,072               -                 22,500
Shares issued in private
  placements            -                   -                1,219            733,603               -                734,822
Shares issued as payment for
 acquisition of NCI     -                   -                  250            156,000               -                156,250
Tender offer of preferred
 stock in exchange for
 common stock        (19,115)             (170,414)            315            189,214               -                  -
Net loss for the year ended
  December 31, 1999     -                   -                   -                -              (1,536,709)       (1,536,709)
                     _______             _________          _______       ___________            _________        __________
Balance
December 31, 1999  $    4,275         $     38,109       $    6,742       $11,409,017          $(8,492,906)      $ 2,965,237
                   ==========         ============       ==========       ===========          ===========       ===========

</TABLE>



                 See Notes to Consolidated Financial Statements

                                       F-6

<PAGE>


                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - Summary of Significant Accounting Policies

  Description of Business

     Juniper Group, Inc.'s (the "Company")  principal businesses are composed of
two (2) segments, healthcare and entertainment.

     Healthcare:  The healthcare  operations are conducted  through three wholly
owned subsidiaries of Juniper Medical Systems, Inc. ("JMSI"),  which is a wholly
owned subsidiary of the Company:

(a)  PartnerCare,  Inc.  ("PCI") is a managed care revenue  enhancement  company
     providing   various  types  of  services  such  as:  Managed  Care  Revenue
     Enhancement,   and  Comprehensive   Pricing  Reviews,   to  newly  evolving
     integrated  hospital markets,  and Write-off  Review,  appeals of any third
     party rejections denials of accounts.

(b)  Juniper Healthcare  Containment Systems, Inc.  ("Containment") is a company
     which develops and provides full service healthcare  networks for insurance
     companies and managed care markets in the Northeast U.S.

(c)  Nuclear Cardiac Imaging,  Inc.("NCI"),  a New Jersey corporation.  NCI is a
     company newly formed in 1998  developing the business of providing  cardiac
     Spect  Imaging to  cardiologists  at their  offices  without  charge to the
     physician.  NCI  charges  the  insurance  carrier or managed  care  company
     directly.

     Entertainment:  The entertainment  segment is conducted principally through
Juniper  Pictures,  Inc.  ("Pictures"),  a wholly  owned  subsidiary  of Juniper
Entertainment,  Inc.  ("JEI"),  a wholly owned subsidiary of the Company,  which
engages in the acquisition,  exploitation and distribution of rights to films to
the various media (i.e.,  Internet,  home video,  pay-per view, pay  television,
cable television,  networks and independent  syndicated  television stations) in
the domestic and foreign marketplace.

  Principles of Consolidation

     The  consolidated   financial   statements  include  the  accounts  of  all
subsidiaries.   Intercompany  profits,   transactions  and  balances  have  been
eliminated in consolidation.

  Use of Estimates in the Preparation of Financial Statements

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.



                                       F-7
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 1 - Summary of Significant Accounting Policies (Continued)

  Financial Instruments

     The  estimated  fair values of accounts  receivable,  accounts  payable and
accrued expenses approximate their carrying values because of the short maturity
of these instruments. The Company's debt (i.e. Due to Producers,  Creditor Notes
and other obligations) does not have a ready market.  These debt instruments are
shown on a discounted  basis (see Notes 6 & 7) using market rates  applicable at
the effective  date. If such debt were  discounted  based on current rates,  the
fair value of this debt would not be materially  different  than their  carrying
value.

  Concentration of Credit Risk

     Financial instruments, which potentially subject the Company to significant
concentrations of credit risk are principally trade accounts receivable.

     Concentrations of credit risk with respect to trade accounts  receivable is
significantly  limited  as a result  of the  Company's  deriving  a  substantial
portion of its revenue from virtually all the major  insurance  companies in the
United States.  Although the Company has few hospitals as customers,  the payors
of the claims  generated by PCI's  operations are insurance  companies which pay
the cost of healthcare.  Accordingly, the Company does not foresee a credit risk
associated with these receivables,  since repayment is primarily  dependent upon
the financial stability of the largest insurance companies in the United States.

  Film Licenses

     Film  costs are  stated  at the lower of  estimated  net  realizable  value
determined on an individual film basis, or cost, net of amortization. Film costs
represent  the  acquisition  of film  rights  for  cash and  guaranteed  minimum
payments.  Producers retain a participation in the profits from the sale of film
rights, however, producer's share of profits is earned only after payment to the
producer  exceeds the guaranteed  minimum,  where minimum  guarantees  exist. In
these instances, the Company records as participation expense an amount equal to
the producer's  share of the profits.  The Company incurs expenses in connection
with its film licenses, and in accordance with license agreements, charges these
expenses  against the liability to producers.  Accordingly,  these  expenses are
treated as payments under the film license agreements.

     When the Company is  obligated to make  guaranteed  minimum  payments  over
periods  greater than one year,  all long term  payments are  reflected at their
present value.  Accordingly,  in such case, original acquisition costs represent
the sum of the  current  amounts  due and the  present  value of the  long  term
payments.






                                       F-8
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 1 - Summary of Significant Accounting Policies (Continued)

Film Licenses (Continued)

     The Company maintains  distribution  rights to eight films for which it has
no financial  obligations unless and until the rights are sold to third parties.
The value of such  distribution  rights has not been  reflected  in the  balance
sheet.  The Company was able to acquire  these film  rights  without  guaranteed
minimum financial  commitments as a result of its ability to place such films in
various markets.

Amortization of Intangibles

  Film Licenses

     Amortization of film licenses is calculated under the film forecast method.
Accordingly,  licenses are amortized in the proportion  that revenue  recognized
for the period bears to the estimated  future revenue to be received.  Estimated
future  revenue  is  reviewed  annually  and  amortization  rates  are  adjusted
accordingly.

  Goodwill

     Goodwill represents the excess of the purchase price over the fair value of
acquired  companies  and is being  amortized on a straight line basis over forty
years.  The Company  assesses  long-lived  assets for impairment under Financial
Accounting  Standards Board's (FASB) Statement of Financial Accounting Standards
(SFAS) No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets to be
Disposed Of." Under those rules,  goodwill  associated with assets required in a
purchase business combination is included in impairment  evaluations when events
or circumstances exist that indicate the carrying amount of those assets may not
be recoverable. No reduction of goodwill for impairment was necessary in 1999.

  Property and Equipment

     Property and equipment  including assets under capital leases are stated at
cost.  Depreciation  is  computed  generally  on the  straight-line  method  for
financial reporting purposes over their estimated useful lives.

  Recognition of Revenue from License Agreements

     Revenue from  licensing  agreements is recognized  when the license  period
begins and the licensee and the Company become  contractually  obligated under a
noncancellable  agreement.  All revenue recognition for license agreements is in
compliance with the Statement of Financial Accounting Standards No.53.

 Operating Costs

     Operating  costs include costs directly  associated  with earning  revenue.
PCI's  operating  costs  include  salary  or fees  and  travel  expenses  of the
individuals performing the services,  and sales commissions.  Pictures operating
costs include film amortization and producer's royalties.


                                       F-9
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 1 - Summary of Significant Accounting Policies (Continued)

  Recapitalization

     On May 18, 1998, the Board of Directors authorized a reverse stock split of
the Company's common shares at the rate of one share for each fifty  outstanding
shares. All amounts from prior periods have been restated after giving effect to
this fifty to one reverse split.

     On March 16, 1999, the Company issued a tender offer to the stockholders of
its preferred stock to redeem all the 233,900 outstanding shares in exchange for
475,777  shares of the Company's  common stock.  On May 10, 1999,  the offer was
concluded  and 191,153  shares of preferred  stock were redeemed in exchange for
315,403 shares of common stock.

 Net Income Per Common Share

     The  provisions of SFAS No. 128  "Earnings  per Share," which  requires the
presentation  of both net  income  per  common  share and net  income per common
share-assuming dilution preclude the inclusion of any potential common shares in
the  computation of any diluted  per-share  amounts when a loss from  continuing
operations exists. Accordingly, net income per common share-assuming dilution is
not presented.

Reclassifications

     Certain  amounts in the 1998  financial  statements  were  reclassified  to
conform to the 1999 presentation.

NOTE 2 - Accounts Receivable

     The Company estimates an allowance for doubtful  accounts,  which allowance
amounted to  approximately  $306,000 and $436,000 at December 31, 1999 and 1998,
respectively.

     During the past three years, a significant portion of PCI's revenue was the
result of work  performed  for New York  Hospital  ("NYH")  in  connection  with
identifying and collecting  claims which may have been incorrectly  underpaid in
violation of New York State law. PCI did identify  approximately $1.6 million of
such  underpayments and with the consent of, and on behalf of NYH, organized the
appropriate legal actions in an effort to effectuate collection.  Based upon the
Company's  successful results with other hospitals having smaller claims for the
same violation of New York law, the Company expected the NYH legal actions to be
collectible.

     In late  December  1999,  NYH notified the Company that it no longer sought
collection  of the  underpayments  and that the legal  actions  the  Company had
commenced on their behalf were to be discontinued.

     Accordingly, the receivables recorded by PCI in connection with this matter
were written-off,  resulting in PCI's bad debt expense for 1999 of approximately
$600,000. Presently, the Company is evaluating its position in this matter.


                                      F-10
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 3 - Investment in NetDIVE, Inc.

     During 1999, in an effort to expand its interests  into the Internet and in
e-commerce technology, the Company negotiated with an investment banker and with
NetDIVE,  Inc.  whereby the investment  banker agreed to raise  sufficient funds
from the sale of the  Company's  common  stock to provide the  Company  with the
capital  needed to purchase a 33% interest in NetDIVE,  Inc., a privately  owned
company specializing in collaborative communications on the Internet.

     In the early stages of this acquisition, the Company borrowed $300,000 (see
Note 6) which was used to provide  $200,000 for the initial  purchase of NetDIVE
stock (equal to approximately 1.8% of NetDIVE),  and to provide the Company with
$100,000  of  working  capital.  The  investment  banker was unable to raise the
required  capital in a timely  fashion and,  accordingly,  NetDIVE  attempted to
renegotiate the terms of the Company's investment.


NOTE 4 - Accounts Payable and Accrued Expenses

     At December  31,  1999 and 1998,  accounts  payable  and  accrued  expenses
consisted  primarily  of legal  fees of  $328,000  and  $360,000,  respectively,
commissions of $44,000 and $56,000,  respectively, and payroll taxes of $183,000
and  $342,000,  respectively.  Other  accruals  relate to  selling,  general and
administrative expenses incurred in the normal course of business.

NOTE 5 - Film Licenses

     At December  31, 1999 and 1998 film  licenses  amounted to  $2,887,267  and
$2,939,959, respectively. These reflect the Company's original acquisition price
less accumulated  amortization for the distribution  rights to 77 film licenses.
Such  amortization  amounted to $371,831  and  $319,139 at December 31, 1999 and
1998, respectively.

     The  Company has  directed  predominantly  all its time and efforts  toward
building the  healthcare  segment of the business.  Since early 1995, due to the
limited  availability  of capital,  personnel and resources,  the volume of film
sales activity was significantly  diminished.  Although the Company's  resources
and capital  remain  limited,  the Company has begun  directing  efforts  toward
reestablishing a foothold in the film industry. Revenues grew in 1999 to 137,036
from  $46,000 in 1998.  Growth in  revenues  from the sale of film  licenses  is
expected to continue in 2000.

     Initially,  the  Company is  promoting  its film  library  in the  Internet
markets as well as domestic  television  markets.  Secondarily,  it will utilize
representatives to attend film festivals and penetrate foreign markets,  subject
to the Company capital resources.







                                      F-11
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 5 - Film Licenses (Continued)

     Based upon the  Company's  estimates  of future  revenue as of December 31,
1999,  approximately 25% of the amortized film licenses will be amortized during
the three years ended  December 31, 2002.  Management  expects that greater than
60% of the film  licenses  applicable  to related  television  and films will be
amortized by 2004.

     The Company's  policy is to amortize film licenses  under the film forecast
method.  Depending  upon the  Company's  success in marketing  and achieving its
sales forecast,  it is reasonably  possible that the Company's  estimate that it
will  recover the carrying  amount of its film  library from future  operations,
will change in the near term. As a result of this potential change, the carrying
amount of the film library may be reduced materially in the near term.


NOTE 6 - Notes Payable

     The  composition  of Notes  Payable at December 31, 1999 and 1998,  was as
follows:

                                                       1999           1998
                                                       ----           ----
Demand Note bearing interest at varying rates
  of up to 2% per month                             $  6,354        $ 58,387

6% Convertible Secured Promissory Note
  maturing in January, 2001                          300,000            -

Settlement agreements and arbitration awards
  maturing at April 2001                             147,162         207,236

12% Convertible Secured Promissory Notes
  maturing on June 30, 1999 (see Note 8)                -             68,700

Capital equipment loans maturing January 1999
  bearing interest at varying rates to 9.0%             -              1,069
                                                    --------        --------
                                                     453,516         335,392

Less current portion ............................     52,910         168,725
Long term portion ...............................   $400,606        $166,667
                                                    ========        ========

NOTE 7 - Producer's Minimum Guarantees and Participations

     Obligations  incurred in connection  with the acquisition of film licenses,
including  minimum  guarantees  and  producer's  participations  were $11,958 at
December 31, 1999. During 1999, the Company reduced its obligations to producers
by $53,000.





                                      F-12
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 7 - Producer's Minimum Guarantees and Participations (Continued)

     The  following  schedule  summarizes  the  maturities  of the  balances  at
December 31, 1998:
                             2000            $    -
                             2001               5,784
                             2002                   8
                             2003               6,166
                                             --------
                                             $ 11,958
                                             ========

NOTE 8 - Shareholders' Equity

     Throughout  1999 and 1998, the Company issued common stock through  various
private  placements and the exercise of options.  The prices at which the shares
were  negotiated  and sold varied,  depending upon the bid and ask prices of the
Company's  common stock quoted on the NASDAQ stock  exchange.  In the aggregate,
the Company  received  $757,322 for  1,538,719  shares,  and $150,000 for 90,775
shares of common stock in 1999 and 1998, respectively.

     In connection with payments to creditors for notes payable and indebtedness
to producers (including for the acquisition of films), the Company issued 65,625
and  1,490,096  shares,  valued  at  $32,600  and  $118,800,  in 1999 and  1998,
respectively.  In connection with payables for operating activities, the Company
issued 819,631 shares, valued at $294,741, and 416,241 shares valued at $332,704
in 1999 and 1998,  respectively.  During 1998, as  compensation  to its Board of
Directors, the Company issued 47,000 shares of common stock, valued at $17,625.

     Also, in 1999 and 1998, the Company issued 104,585 shares and 23,000 shares
to employees as compensation, valued at $55,540 and $11,040, respectively.

     All shares issued in 1999 and 1998,  were not registered and, as such, were
restricted shares under the Securities Act of 1933, as amended.

     Net (loss) per common share for 1999 and 1998 has been computed by dividing
net (loss),  after preferred stock dividend  requirements of $10,259 in 1999 and
$56,136 in 1998, by the weighted  average  number of common  shares  outstanding
throughout the year of 4,883,783 and 1,500,511, respectively.

  Options Granted

     In  January  1994,  in  connection  with  an  amendment  to the  Employment
Agreement for the  President and Chief  Executive  Officer,  the Company  issued
options to purchase  5,000 shares of common  stock at $20.35 per share,  110% of
the market value at the effective  date (see Note 9). The options are for a term
of five years. At December 31, 1999, none of the options had been exercised.  In
January 2000, all the options expired.




                                      F-13
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 8 - Shareholders' Equity (Continued)

 Options Granted (Continued)

     On November  24,  1998,  the Company  issued to the members of the Board of
Directors and officers of the Company, options to purchase 445,000 shares of the
Company's  common  stock for $.375 per share.  The term of the  options are five
years. As of December 31, 1999,  110,000 remain  unexercised.  Additionally,  on
November 24, 1998, the Company issued options to purchase  180,000 shares of the
Company's common stock to three consultants  (60,000 to each) for $.48 per share
for services performed for the Company.  The term of the options are five years.
As of December 31, 1999,  60,000 remain  unexercised.  Further,  on November 24,
1998, the Company  issued to the Chairman of the Board and President  options to
purchase  189,880  shares of the  Company's  common stock for $.375 per share in
recognition  of his success in raising  funds for the Company  during 1998.  The
term of these options are five years.  At December 31, 1999, none of the options
were outstanding.

     On May 17,  1999,  the Company  issued  options to  purchase  shares of the
Company's common stock as follows: 240,000 to the Board of Directors;  41,667 to
the  President  of the Company and 25,000 to an employee of the  Company.  These
options issued in recognition of the services  provided to the Company,  have an
exercise price of $.48 and a five year term through May 17, 2004. As of December
31, 1999, 155,000 options remain unexercised.

     Additionally  on May 17, 1999,  the Company  issued  41,667  options to the
Company's  President  in  recognition  of  his  successful  efforts  in  raising
additional  capital for the Company.  The options had an exercise  price of $.48
and were all exercised during 1999.

     On June 23,  1999,  the  Company  issued  21,875  options to the  Company's
President in  recognition of having raised  additional  capital for the Company.
The shares had an exercise  price of $.48 with a five year term through June 22,
2004. As of December 31, 1999, none of the options were outstanding.

     On December 30, 1999, the Company issued options to purchase  shares of the
Company's common stock as follows:  120,000 to consultants for services provided
to the  Company,  100,000  to the Board of  Directors  in  recognition  of their
efforts and  230,000 to the  President  of the  Company,  and a board  member in
recognition of their efforts in connection with the acquisition of the Company's
interest in NetDIVE, Inc.

Convertible Preferred Stock

     The Company's  12%  non-voting  convertible  Preferred  Stock  entitles the
holder  to  dividends  equivalent  to a  rate  of 12%  of  the  Preferred  Stock
liquidation  preference of $2.00 per annum (or $.24 per annum) per share payable
quarterly on March 1, June 1, September 1, December 1 in cash or common stock of
the Company having an equivalent fair market value,  thereafter.  Further,  each
share of the  Preferred  Stock is  convertible  at the holder's  option into 0.4
shares of Common Stock.



                                      F-14
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 8 - Shareholders' Equity (Continued)

Convertible Preferred Stock (Continued)

     On March 16, 1999,  the Company made a  self-tender  for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12%  Preferred") for 475,777 shares of the Company's common stock. As a result,
191,153  shares of  preferred  stock were  redeemed  for  315,403  shares of the
Company's common stock.

     At  December  31,  1999,   42,747  shares  of  the  Preferred   Stock  were
outstanding.   Pending  effectiveness  of  a  post-effective  amendment  to  the
Company's  registration  statement,  the  outstanding  Preferred Stock cannot be
converted.

     The 12% Preferred presently entitle the holder to convert to 0.04 shares of
common stock, par value $.001, of the Company, and the accrued dividend,  before
conversion,  of 12% per annum, payable, when declared by the Board of Directors,
in cash or stock at the Company's option, per share of 12% Preferred.  The total
cash value of the  arrearage  of unpaid  dividends  as of  December  31, 1999 is
$89,769.

 Warrants

     On May 1, 1998, the Company's Class B Warrants expired.

     On May 31, 1995, the Company entered into an investment  banking  agreement
for a five year  period.  In  consideration,  the  Company  issued  warrants  to
purchase  11,350  shares of the Company's  common stock at an exercise  price of
$6.75 per share.  The warrants are  exercisable  for five years,  commencing  at
various dates from May 31, 1996 to May 31, 2001.

     At December 31, 1999, all warrants were outstanding. In connection with the
investment  banking  agreement  and  the  services  provided  to  complete  that
agreement, the Company issued to a consultant, warrants to purchase 1,135 shares
of the  Company's  common stock at an exercise  price of $6.75 per share.  These
warrants are  exercisable  for five years,  commencing at various dates from May
31, 1996 to May 31, 2001. At December 31, 1999, all warrants were outstanding.

     On November 24,  1998,  the Company  entered  into a  consulting  agreement
whereby the consultant will perform corporate finance,  provide due diligence on
mergers  and  acquisition  candidates,   and  assist  the  Company  on  internal
structuring and the placement of new debt and equity issues.  In  consideration,
the Company granted  warrants to purchase 300,000 shares of the Company's common
stock at $.05 per share.  The warrants became  available 50% immediately and 50%
after 90 days from the date of the agreement. The term of the warrants are three
years. At December 31, 1999, all the warrants had been exercised.





                                      F-15


<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 8 - Shareholders' Equity (Continued)

 Warrants (Continued)

     On  October  5, 1999,  the  Company  entered  into an  investment  advisory
agreement  whereby the  investment  advisor  will provide  introductions  to the
financial community,  assist in raising capital,  provide merger and acquisition
candidates,  provide other  advisory  services.  In  consideration,  the Company
granted  warrants to purchase  250,000  shares of the Company's  common stock at
$4.00 per share.  The term of the  warrants are five years and expire on October
14, 2004. At December 31, 1999, none of the warrants were exercised.

 Convertible Debt

     During July and August of 1997,  the Company issued a series of 12% Secured
Convertible Promissory Notes which, in the aggregate,  amounted to $100,000 (see
Note 6). The notes are secured by the Company's  Film  Licenses,  as well as the
personal guarantee, as to payment, of the President and Chief Executive Officer.
During  1998,  $31,300 of the Notes were paid.  At December 31, 1998 the Company
had loans remaining of $68,700. During 1999, the remaining loans were paid.

NOTE 9 - Related Parties

     The Company paid rent under one  sub-lease  during 1999 and two  sub-leases
during 1998 to companies  affiliated with the Chief Executive Officer. The rents
paid and terms under the subleases  were  substantially  the same as those under
the affiliate's lease agreements with the landlords.  Rent expense for the years
ended  December  31,  1999,  and 1998 was  approximately  $72,400  and  $77,000,
respectively  (see Note 10). In prior  years,  the Company  made  advances to or
received  advances from the affiliates for working  capital  requirements.  As a
result,  at December 31, 1999, the balances from one affiliate was approximately
$4,400 and the balance due from the second affiliate was approximately $4,800.

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated with the Chief Executive Officer for a ten year license period, which
expires  on June  5,  2003.  The  Company  is  obligated  to pay the  affiliated
producers fees at the contract rate when revenue is recognized  from the sale of
the films. Such payments will be charged against earnings.  In 1999 and 1998, no
payments were made to the affiliate, and no revenue was recognized.

     The  Company  owns  distribution  rights to two films  which were  acquired
through  a company  affiliated  with the Chief  Executive  Officer,  that is the
exclusive  agent for the producers.  This  exclusive  agent is 100% owned by the
principal  shareholder of the Company, but receives no compensation for the sale
of the licensing rights. Additionally,  after recoupment of original acquisition
costs, the principal  shareholder has a 5% interest as a producer in the revenue
received by unaffiliated  entities. The Company has received no revenue relating
to these films during 1999 and 1998.



                                      F-16
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 9 - Related Parties (Continued)

     Throughout 1999, the Company's principal shareholder and officer made loans
to, and  payments  on behalf of, the  Company  and  received  payments  from the
Company  from time to time.  The  largest  net  balance due from the officer was
$143,000. The net outstanding balance due from the officer at December 31, 1999,
was $3,900.

     As part of salary, bonuses and other compensation,  the Company's President
and Chief  Executive  Officer (see Note 8), was issued  467,267 shares of common
stock,  valued at $71,301.  Additionally,  during 1999, the Company's  President
received  options  for  383,542  shares at prices from $0.48 to $0.68 per share.
These  options were issued for  services as a Board of Directors  member and for
additional efforts on behalf of the Company. Further, the Company issued options
for 250,000 shares to other non-employee directors.

 NOTE 10 - Commitments and Contingencies

 Leases

     The Company  leased its New York office  facilities  under a sublease.  The
Florida  office lease was paid on a month to month basis through  September 1998
at which time it was  closed.  The New York lease  expires in May 2002 (see Note
9). Future minimum annual base rental commitments as of December 31, 1998 are as
follows:

                         2000     $ 63,988
                         2001       66,014
                         2002       27,013
                                   --------
                                  $157,015
                                  ========

 License Agreements

     In some  instances,  film licensors have retained an interest in the future
sale of  distribution  rights owned by the Company above the guaranteed  minimum
payments.  Accordingly,  the Company may become obligated for additional license
fees as sales occur in the future.

 Employment Agreements

     Mr. Hreljanovic has an Employment  Agreement with the Company which expires
on April 30, 2005,  and that provides for his  employment as President and Chief
Executive  Officer at an annual salary  adjusted  annually for the CPI Index and
for the reimbursement of certain expenses and insurance.  Based on the foregoing
formula,  Mr.   Hreljanovic's   salary  in  1999  was  approximately   $178,000.
Additionally, the employment agreement provides that Mr. Hreljanovic may receive
shares of the Company's common stock as consideration  for raising funds for the
Company.




                                      F-17
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 10 - Commitments and Contingencies (Continued)

 Employment Agreements

     Due to a working capital  deficit,  the Company is unable to pay the entire
salary in cash to Mr. Hreljanovic pursuant to his employment  agreement.  In the
best interests of the Company,  in lieu of cash, Mr.  Hreljanovic  has agreed to
accept and the Board of  Directors  has  approved  the issuance of shares of the
Company's common stock as payment for up to 40% of his unpaid salary during 1999
and 1998.  During 1999,  the Company  issued  190,136 shares of stock in lieu of
cash payments for Mr.  Hreljanovic's  salary.  Additionally,  the Company issued
options for 383,542 shares of stock to Mr.  Hreljanovic as compensation  for his
services as a member of the Board of Directors,  and for other efforts on behalf
of the Company (see Note 8). The Company  issued  187,636 shares of common stock
to Mr.  Hreljanovic in 1998 to liquidate the amount owed to him for his 1998 and
1997 salary and 57,641  shares of common stock as  additional  compensation  for
achieving certain performance benchmarks for obtaining new hospital contracts.

     Under the terms of this employment  agreement,  the Chief Executive Officer
of the Company is entitled  to receive a cash bonus when the  Company's  pre-tax
profit exceeds $100,000.

     Additionally,  if the  employment  agreement is  terminated  by the Company
after a change in control (as defined by the agreement), the officer is entitled
to a lump sum cash payment equal to approximately three times his base salary.

     Mr.  Vazquez,  former  President of PCI, had an employment  agreement which
terminated on June 30, 2000. Under the terms of his agreement,  as amended,  Mr.
Vazquez  received  options to purchase  shares of the  Company's  common  stock.
Effective  December  1999,  Mr.  Vazquez  and the  Company  agreed  to an  early
termination of the Agreement (see Note 10). Accordingly, Mr. Vazquez surrendered
all options  previously  issued to him and agreed to forego any stock or options
to which he was entitled.

Preemptive Rights

     Shareholders  of a New  York  corporation  have  preemptive  rights  unless
otherwise provided in the certificate of incorporation or bylaws. Until February
12, 1997, the Company's  Certificate of Incorporation did not limit or eliminate
the Shareholders' preemptive rights.

     The Company has issued  shares on a number of  occasions  without  offering
preemptive  rights  to  existing  Shareholders  or  procuring  waivers  of their
preemptive  rights.  No Shareholder has alleged any damage resulting to him as a
result of the sale of shares of common  stock by the  Company  without  offering
preemptive  rights.  The amount of damages incurred by Shareholders by reason of
failure to offer preemptive rights, if any, is not ascertainable with any degree
of accuracy.  Management  believes  that if any such claims were  asserted,  the
Company may have valid defenses.


                                      F-18
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 10 - Commitments and Contingencies (Continued)

 Litigation

     On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action  against the Company,  alleging that the Company has successor  liability
for a  judgment  entered  in March  of 1993 by the  Plaintiffs  against  Juniper
Releasing, Inc. ("Releasing"), a company affiliated with the Company's CEO. This
matter was settled in April 1998 for a payment of  $310,000  which is being paid
out over four years  ending  April 20,  2001.  The payment was secured by 93,320
shares of the Company's common stock (see Note 6).

Going Concern

As shown in the accompanying financial statements, the Company's:

*    Revenue decreased  sharply to $718,000 in 1999, from $1,421,000 in 1998;
*    Net loss was  ($1,537,000)  in 1999,  and  ($946,000)  in 1998;
*    Working  capital  was negative ($312,000) at December  31,  1999 and was
     $69,000 at December 31, 1998.

     The fact that the Company continued to sustain losses in 1999; has negative
working capital at December 31, 1999; and still requires  additional  sources of
outside cash to sustain  operations;  continues to create  uncertainty about the
Company's ability to continue as a going concern.

     Management  of the Company has  developed a plan to reduce its  liabilities
and improve cash flow through  expanding  operations,  including moving into the
Internet and e-commerce marketplace, and raising additional funds either through
the  issuance  of debt or equity.  The  ability of the  Company to continue as a
going concern is dependent upon the Company's  ability to raise additional funds
either  through the issuance of debt or the sale of additional  common stock and
the success of Management's plan to expand operations.  The Company  anticipates
that it will  be able to  raise  the  necessary  funds  it may  require  for the
remainder of 2000 through public or private sales of  securities.  The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

NOTE 11 - Incentive Compensation Plans

1996 Stock Option Plan

     On February 12 , 1997,  the  shareholders  of the Company  adopted the 1996
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and  Incentive  Stock  Option Plan.  This Plan,  which allows the
Company to grant incentive stock options,  non-qualified stock options and stock
appreciation rights (collectively "options"), to employees,  including officers,
and to non-employees  involved in the continuing  development and success of the
Company,  authorizes the grant of 100,000 shares of common stock. The terms of
the options are to be  determined  by the Board of  Directors.



                                      F-19

<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 11 - Incentive Compensation Plans (Continued)

1996 Stock Option Plan (Continued)

     Options will not have  expiration  dates later than ten years from the date
of  grant  (five  years  from  the  date  of  the  grant  in the  case  of a 10%
Stockholder).  The Option  Prices may not be less than the fair market  value of
the common  shares on the date of grant,  except  that any option  granted to an
employee holding 10% or more of the outstanding voting securities of the Company
must be for an option price not less than 110% of fair market value. At December
31, 1999, all options under the Plan had been granted.

1998 Stock Option Plan

     On December  30, 1998,  the  shareholders  of the Company  adopted the 1998
Stock Option Plan.

     This  Plan  allows  the   Company  to  grant   incentive   stock   options,
non-qualified  stock  options  and  stock  appreciation   rights   (collectively
"options") to purchase up to an aggregate of 1,000,000 shares of common stock to
employees,  including officers,  and to non-employees involved in the continuing
development  and  success of the  Company.  The terms of the  options  are to be
determined by the Board of  Directors.  Options will not have  expiration  dates
later  than ten years  from the date of grant  (five  years from the date of the
grant in the case of a 10%  stockholder).  The  option  prices may be set at any
amount in the discretion of the Board's Compensation  Committee. At December 31,
1999, all options under the Plan had been granted.

1999 Stock Option Plan

     On December  27, 1999,  the  shareholders  of the Company  adopted the 1999
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. The Plan also  supplements  the
Company's 1996 and 1998 Stock Option Plans.

     This  Plan  allows  the   Company  to  grant   incentive   stock   options,
non-qualified  stock  options  and  stock  appreciation   rights   (collectively
"options") to purchase up to an aggregate of 1,500,000 shares of common stock to
employees,  including officers,  and to non-employees involved in the continuing
development  and  success of the  Company.  The terms of the  options  are to be
determined by the Board of  Directors.  Options will not have  expiration  dates
later  than ten years  from the date of grant  (five  years from the date of the
grant in the case of a 10%  stockholder).  The  option  prices may be set at any
amount in the discretion of the Board's Compensation  Committee. No options have
been granted  under the Plan.  At December 31,  1999,  605,000  options had been
granted and 895,000 remain unissued.







                                      F-20
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 11 - Incentive Compensation Plans (Continued)

Statement of Financial Accounting Standards No. 123

     At December 31, 1998, the Company had one  stock-based  compensation  plan,
which is described  above.  The Company  applies APB Opinion 25,  Accounting for
Stock Issued to Employees,  and related  Interpretations  in accounting  for its
plan. Accordingly,  no compensation cost has been recognized for its fixed stock
option plan or for options issued to non-employees for services  performed.  Had
compensation  costs for these options been determined,  based on the fair market
value at the grant  dates  consistent  with the  method of FASB  Statement  123,
Accounting for Stock-Based Compensation, the Company's net income (loss) and net
income  (loss) per common share would have been reduced to the pro forma amounts
indicated below:

                                                       1999             1998

Net income (loss) ................  As reported    $(1,536,709)     $  (945,862)
                                    Pro forma      $(2,280,618)     $(1,285,075)

Net income (loss) per common share  As reported    $     (0.32)    $      (0.67)
                                    Pro forma      $     (0.47)    $      (0.89)


NOTE 12 - Income Taxes

     For the years ended  December 31, 1999 and 1998,  no provision was made for
Federal and state income taxes due to the losses  incurred during these periods.
As a result of losses  incurred  through  December 31, 1999, the Company has net
operating loss carryforwards of approximately  $6,942,000.  These  carryforwards
expire as follows:

                         2006           $  490,000
                         2007            1,451,000
                         2008              165,000
                         2009              717,000
                         2010              231,000
                         2011              568,000
                         2012            1,107,000
                         2016              956,000
                         2017            1,257,000
                                        $6,942,000


     In accordance with Financial Accounting Standards Board Statement No. 109
"Accounting  for Income Taxes",  the Company  recognized  deferred tax assets of
$2,846,000,  at December  31, 1999.  The Company is dependent on future  taxable
income to realize  deferred tax assets.  Due to the uncertainty  regarding their
utilization  in the  future,  the  Company  has  recorded  a  related  valuation
allowance of  $2,846,000.  Deferred  tax assets at December  31, 1999  primarily
reflect the tax effect of net operating loss carryforwards.


                                      F-21
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 13 - Acquisition of Nuclear Cardiac Imaging, Inc.

     On June 23, 1999, the Company  completed its  acquisition of 51% of Nuclear
Cardiac Imaging, Inc. ("NCI"), a New York Corporation. The acquisition, recorded
under  the  purchase  method  of  accounting,   included  the  purchase  of  the
outstanding  shares  of  common  stock in  exchange  for  250,000  shares of the
Company's  common  stock valued at  $156,000.  A portion of the  purchase  price
(including the 49% interest  previously owned by the Company) has been allocated
to assets  acquired and  liabilities  assessed,  based on estimated  fair market
value at the date of acquisition,  while the balance of $409,886 was recorded as
goodwill and is being amortized over forty years on a straight-line basis.

NOTE 14 - Business Segment Information

     The  operations  of the  Company are divided  into two  business  segments:
healthcare - consisting of managed care revenue  enhancement and healthcare cost
containment  services;  and  entertainment  - consisting of the  acquisition and
distribution  of rights to films.  The Company  markets its managed care revenue
enhancement services throughout the United States; and films are available to be
marketed throughout the world.

Financial information by business segment is as follows:

                                1999           1998
                                ----           ----
Revenue:
      Healthcare ........   $   580,594    $ 1,374,871
      Entertainment .....       137,036         46,000
                            -----------    -----------
                            $   717,630   $  1,420,871
                            ===========    ===========

                                 1999           1998
                                 ----           ----
 Operating Income (Loss):
      Healthcare ........   $  (749,663)  $     99,998
      Entertainment......       (15,783)       (93,930)
      Corporate .........      (771,263)      (951,930)
                            -----------    -----------
                            $(1,536,709)  $   (945,862)
                            ===========    ===========

Identifiable Assets:
     Healthcare .........   $ 3,069,067   $    674,416
     Entertainment ......      (464,671)     3,130,078
     Corporate ..........     8,137,360        760,501
                             ----------     ----------
                            $ 4,603,621   $  4,564,995
                             ==========     ==========



                                      F-22
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 14 - Business Segment Information (Continued)


Depreciation:
     Healthcare .........   $    33,853   $     16,036
     Corporate ..........         3,947          6,203
                             ----------     ----------
                            $    37,800   $     22,239
                             ==========     ==========

    Capital Expenditures:
     Healthcare .........   $      -      $     96,479
     Corporate ..........         6,584           -
                             ----------     ----------
                            $     6,584    $    96,479
                             ==========     ==========


NOTE 15 - Quarterly Results of Operations (Unaudited)

     Below is a summary of the quarterly  results of operations for each quarter
of 1999 and 1998:

1999                    First         Second          Third         Fourth

Revenue ............$  153,929    $   141,097    $   288,180    $   134,423
Gross profit .......   122,043        107,259        259,031         58,495
                       -------        -------        -------        -------
Net income (loss) ..$ (270,695)   $  (286,375)   $  (304,786)   $  (674,877)
                       =======         ======        =======        =======
Net income (loss)
per common share....$    (0.09)   $     (0.16)   $     (0.20)   $     (0.32)
                         =====          =====          =====          =====

1998                   First         Second          Third         Fourth

Revenue ............$  208,435    $   294,144    $   493,342    $   424,950
Gross profit .......   186,661        257,167        431,912        391,242
                       -------        -------        -------
-------
Net income (loss) ..  (233,603)   $  (484,459)   $   (31,768)   $  (196,032)
                       =======       ========       ========       ========
Net income (loss)
per common share ...$     (.26)   $      (.47)   $      (.03)   $      (.09)
                           ====           ====           ====           ====


NOTE 16 - Supplemental Cash Flow Information

     Cash  paid for  interest  totaled  $12,393  and  $24,985  in 1999 and 1998,
respectively.


                                      F-23
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 16 - Supplemental Cash Flow Information (Continued)

     During 1999, the following  transactions occurred which did not require the
use of cash but instead were paid by the issuance of the Company's common stock;
payments to producers amounting to $32,600;  officer's  compensation of $71,301;
employee  compensation  of  $55,540;  payment of  corporate  debt  amounting  to
$734,822; certain corporate expenses amounting to $294,741.

     During 1998, the following  transactions occurred which did not require the
use of cash,  but  instead  were paid by the  issuance of the  Company's  common
stock:  payments to producers  amounting to $112,500;  officers  compensation of
$253,589; directors compensation of $17,625; payment of corporate debt amounting
to $1,006,300;  certain corporate expenses  amounting to $332,703;  and employee
compensation amounting to $11,040.

NOTE 17 - Major Customers

     In  1999  and  1998,   New  York  Hospital   accounted  for  20%  and  51%,
respectively,  of the total revenue of the Company.  No other customer accounted
for greater than 10% of the Company's total revenue in 1998. In 1999, Maimonides
Hospital and NY Downtown  Hospital  accounted for 17% and 12% of total  revenue,
respectively.  Additionally,  JPI sold film  rights  to  Eyeblast,  Inc.,  which
accounted for 17% of total revenue.

NOTE 18 - Subsequent Events

     From January 1, 2000 to March 22, 2000,  the Company  issued 449,000 shares
of common stock in connection with the conversion of convertible debentures, the
payment of debt and the exercise of options.  The debentures,  which were issued
and  converted  during  the first  quarter of 2000  provided  the  Company  with
$178,000.

     On March 21, 2000, the Company filed a  registration  statement on Form S-8
to register 1,500,000 options (and the underlying stock) to be granted under the
Company's 1999 Stock Option Plan and to register 100,000 shares of the Company's
common  stock  issuable  upon  exercise of options  granted to a  consultant  in
consideration of services rendered.



                                      F-25


<PAGE>












                                   SIGNATURES

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


Date: March 30, 2000                        JUNIPER GROUP, INC.



                                            By: /s/ Vlado Paul Hreljanovic
                                                --------------------------
                                                  Vlado Paul Hreljanovic
                                                  President and
                                                  Chief Executive Officer


     In accordance  with the  Securities  Exchange Act of 1934,  this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.


Signatures                             Titles                       Date


By:/s/ Vlado Paul Hreljanovic      Chairman of the Board,
   --------------------------      President, Chief Executive
   Vlado Paul Hreljanovic          Officer (Principal Executive
                                   and Financial Officer)       March 30, 2000


By: /s/ Harold A. Horowitz          Director                    March 30, 2000
   -----------------------
   Harold A. Horowitz


By:/s/Marvin Rostolder              Director                    March 30, 2000
   -------------------
      Marvin Rostolder




                                      F-26