AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 29, 2000

REGISTRATION NO. 333-

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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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VICOM, INCORPORATED

(Exact name of registration as specified in its charter)

|MINNESOTA                                                      |  | 4813                                                     |  | 41-1255001                          
|-------------------------------------------------------------- |  | -------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of
incorporation or organization) |  | (Primary Standard Industrial
Classification Code Number) |  | (I.R.S. Employer
Identification No.)

9449 SCIENCE CENTER DRIVE
NEW HOPE, MINNESOTA 55428
(763) 504-3000

(Address, including zip code, and telephone number, including
area code of registrant's principal executive offices)

STEVEN M. BELL
PRESIDENT
9449 SCIENCE CENTER DRIVE
NEW HOPE, MINNESOTA 55428
(763) 504-3000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

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COPIES TO:

MICHELE D. VAILLANCOURT, ESQ.
WINTHROP & WEINSTINE, P.A.
3000 DAIN RAUSCHER PLAZA
MINNEAPOLIS, MINNESOTA 55402
(612) 347-0700

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:As soon as practicable after this registration statement becomes effective.

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If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the
following box. /x/

If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective date registration statement for the same offering./ /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering./ /

If this is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering./ /

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box./ /

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CALCULATION OF REGISTRATION FEE

|                       
|-----------------------
|
|                       
|Subordinated Debentures
|                       

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the securities and
exchange commission is effective. This prospectus is not an offer to sell securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not
permitted.

(Subject to Completion)

PROSPECTUS
Issued            , 2000

$50,000,000

Vicom, Incorporated

7.25% One -Year
8.25% Two -Year
10.00% Five -Year
11.25% Ten -Year

Subordinated Debentures
Minimum Investment of $1,000

Vicom, Incorporated will offer the subordinated debentures covered by this prospectus from time to time. We will change the interest rates at
which subordinated debentures will be offered based on our financial needs and current market conditions. However, any such change will not affect the interest rate of any subordinated debentures
purchased prior to the effective date of the change. We will provide the interest rates at which subordinated debentures will be offered in supplements to this prospectus. You should read this
prospectus and the applicable prospectus supplement carefully before you invest in the debentures.

We
will pay you interest on the debentures, at the election of the initial purchaser of the debentures, quarterly, or at maturity.

At
our option, we may purchase any or all of the debentures at a purchase price equal to 100% of their total principal amount, plus accrued interest on a daily basis to the redemption
date.

The
debentures are subordinated in right of payment to all of Vicom's senior indebtedness.

We
are offering the subordinated debentures through our officers and employees without an underwriter and on a continuous basis with an expected termination date in 2020. However, we
have the right to terminate this offering at any time prior to that date. We do not have to sell any minimum amount of subordinated debentures to accept and deposit the proceeds of this offering.
There is no assurance that all or any portion of the debentures we are offering will be sold. It is unlikely that any trading market for the debentures will develop or, if developed, will be
sustained, or that the debentures may be resold at any price. We have the right to reject any subscription, in whole or in part.

Our
common stock is traded on the Over The Counter Bulletin Board (OTCBB) under the symbol "VICM." On            , 2000, the average of the high and low sales price of our
common stock as reported by the OTCBB was $      per share.

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See "Risk Factors" beginning on page 4 to read about certain factors you should consider before buying any of the
Debentures.

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The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

|             
|-------------
|
|             
|Per Debenture
|             
|Total        
|             

THE DATE OF THIS PROSPECTUS IS            .

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PROSPECTUS SUMMARY

This summary highlights selected information and does not contain all the information that is important to you. You should carefully
read this prospectus and the documents we have referred you to in "Where You Can Find More Information" on page 35 for information about Vicom and our financial statements. In this prospectus,
references to "Vicom," "we," "us" and "our" refer to Vicom, Incorporated and its subsidiaries.

Our Company

Vicom is the parent corporation of three wholly-owned subsidiaries, Corporate Technologies, USA, Inc. (CTU), MultiBand, Inc. (MultiBand), and
Vicom Midwest Telecommunications Systems, Inc. (VMTS). VMTS was not active as of June 30, 2000. Effective December 30, 1998, Vicom acquired the assets of the midwest region of
Enstar Networking Corporation, a data cabling and network company. In late 1999, to expand its range of computer product and service offerings, Vicom formed CTU to acquire the stock of
Ekman, Inc. Vicom incorporated MultiBand in February 1999 to provide voice, data and video services to residential multi-dwelling units (MDUs). MultiBand is in the start-up
phase.

Vicom
has provided clients with telecommunications products and services since its inception in 1975. As of June 30, 2000, we were providing telephone equipment and service to
more than 1,000 customers, with approximately 10,000 telephones in service. In addition, CTU provides computer products and services to approximately 3,500 customers. The telecommunications systems we
distribute are intended to provide customers with flexible, cost-effective alternatives as compared to systems available from major telephone companies, including those formerly comprising
the Bell System, and from other interconnected telephone companies.

Vicom
and CTU provide a full range of voice, data and video communications systems and service, system integration, training and related communication sales and support activities for
commercial, professional and institutional customers, most of which are located in Minnesota, North Dakota, South Dakota and Nebraska. Vicom purchases products and equipment from NEC
America, Inc., Cisco Systems, Inc., Nortell Networks Corp., ECI Telecommunications, Inc., and other manufacturers of communications and electronic products and equipment. We use
these products to design telecommunications systems to fit our customers' specific needs and demands.

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THE OFFERING

|Securities Offered         |  | We are offering up to $50,000,000 in principal amount of our subordinated debentures. The debentures are governed by an Indenture between Vicom and FirStar Bank Minnesota, National Association, the trustee for the
debentures ("Firstar Bank"). The debentures have maturities of one, two, five and ten years, and mature on the first day of the month immediately following the first, second, fifth and tenth anniversary of the date of issuance, respectively. See
"Description of DebenturesGeneral."                                           
|-------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Interest Rate and Payment  |  | Interest on each debenture will begin to accrue on the date we issue the debenture. We will pay interest quarterly or at maturity at the option of the debenture holder. Once issued, the
interest rate applicable to a debenture will not change prior to maturity. See "Description of DebenturesInterest."                                                                                                                                                                                                                                             
|Purchase at Vicom's Option |  | We may purchase the debentures at our option, in whole or in part, at any time prior to maturity, at a purchase price equal to 100% of the principal amount of the debentures, plus accrued
interest on a daily basis to the purchase date. See "Description of DebenturesPurchase at the Option of Vicom."                                                                                                                                                                                                                                               
|Upon Death                 |  | Under certain circumstances, we will repay up to $25,000 in aggregate principal amount of debentures at par upon the death of a debenture holder. See "Description of DebenturesPayment
by Vicom Upon Death."                                                                                                                                                                                                                                                                                                                                             
|Subordination              |  | The debentures are subordinated to all of our present and future senior indebtedness. The debentures are equal in right of payment to all other unsecured indebtedness of Vicom, unless such
indebtedness is specially subordinated to the debentures. There are no restrictions in the Indenture that would prevent us from incurring additional senior indebtedness or other indebtedness. As of June 30, 2000, Vicom had outstanding senior
indebtedness in the total amount of approximately $2,250,000. See "Description of DebenturesSubordination."
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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SUMMARY FINANCIAL DATA

|                                                      |  | Years Ended December 31, |            | Six Months Ended June 30, |  
|----------------------------------------------------- |  | ------------------------ | ---------- | ------------------------- | -
|
|
|Statement of Operations Data:                         |  |                          |            |                           |  
|Revenues                                              |  | $                        | 20,388,870 |                           | $
|Income (loss) from operations                         |  | $                        | (1,682,973 | )                         | $
|Net income (loss)                                     |  | $                        | (2,063,634 | )                         | $
|Ratio of earnings to fixed charges(1)                 |  |                          |           |                           |  
|Deficiency of earnings to fixed charges               |  | $                        | 1,822,434  |                           | $
|Earnings (loss) per sharebasic and diluted           |  | $                        | (0.55      | )                         | $
|Weighted average shares outstandingbasic and diluted |  |                          | 3,821,978  |                           |  

As of June 30, 2000Actual

As Adjusted(2)(unaudited)Balance Sheet Data:Cash

$
431,844

$
50,388,644Total assets

$
12,950,944

$
62,907,744Working capital

$
298,483

$
255,283Total liabilities

$
8,265,739

$
58,265,739Total stockholders' equity

$
4,685,205

$
4,685,205


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RISK FACTORS

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

Absence of Insurance and Guarantees

The debentures are not insured or guaranteed by any governmental agency or any public or private entity as are certificates of deposit or other accounts
offered by banks, savings and loan associations or credit unions. In these respects, the debentures are similar to the subordinated unsecured debt securities of other commercial entities, but they are
not like certificates of deposit or other similar accounts offered by banks and savings institutions. No entity or individual is guaranteeing payment of the debentures or is obligated to make payments
on the debentures, other than Vicom.

Limited Covenants; Absence of Sinking Fund

The debentures do not have the benefit of extensive covenants. The covenants in the Indenture are not designed to protect holders of the debentures if there is
a material adverse change in our financial condition or results of operations. These covenants do not place any restriction on our ability, among other things, to create or incur senior indebtedness
or other indebtedness or to pay dividends. The Indenture does not contain provisions that permit the holders of debentures to require that we repurchase or redeem the debentures if there is a
takeover, redemption, recapitalization or similar restructuring involving Vicom. In addition, the Indenture does not contain covenants specifically designed to protect holders of the debentures if
there is a highly leveraged transaction involving Vicom. The debentures will not have the benefit of sinking fund payments by Vicom.

No Market for the Debentures

The debentures will not be listed on a national securities exchange or authorized for quotation on The Nasdaq Stock Market. It is unlikely that any trading
market for the debentures will develop, or, if developed, will be sustained, or that the debentures may be resold at any price. In addition, the debentures may be issued in uneven amounts, which could
further restrict the ability to trade the debentures.

Net Losses

Vicom had net losses of $2,042,365 for the six months ended June 30, 2000, $2,063,634 for the fiscal year ended December 31, 1999 and $1,443,748
for the fiscal year ended December 31, 1998. Vicom may never be profitable.

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

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



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Dependence on Asset-Based Financing

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

Subordination of Debentures; No Limitation on Our Indebtedness

The debentures are subordinate and junior to any and all senior indebtedness of Vicom, as defined in the Indenture, and they rank equal in payment priority
with all other unsecured debt that is not expressly subordinated to the debentures. There are no restrictions in the Indenture regarding the amount of senior indebtedness or other indebtedness that we
may have, and the amount of that indebtedness may fluctuate. If there is a default on the senior indebtedness or a liquidation of Vicom, we would be obligated to pay all senior indebtedness before
paying any principal or interest on the debentures. As of June 30, 2000, Vicom had senior indebtedness of approximately $2,250,000.

The
senior indebtedness involves a debenture/loan agreement with Convergent Capital ("Convergent"). In March 2000, Vicom's subsidiary, Corporate Technologies, USA, Inc.
(CTU), entered into a $2,250,000 debenture/loan agreement with Convergent, requiring interest at prime + 4% (plus 6% if in default) and due on December 31, 2000. The loan proceeds
were used to pay off a previous CTU line of credit due March 31, 2000. Convergent, as additional consideration in the transaction, was given a warrant with a term of seven years to purchase
40,000 shares of Vicom's common stock at a price of $5.20 per share.

On
July 11, 2000, the Convergent agreement was amended to extend the due date to June 1, 2005. The terms of the amended agreement requires interest only payments for
36 months from July 11, 2000 and thereafter 22 equal monthly payments of principal and interest until the loan is paid in full. The amended agreement also requires interest at 14%
annually (16% annually if Vicom is in default). Convergent, as additional consideration for extending the loan, was issued a warrant with a term of seven years to purchase 110,000 shares of Vicom
common stock at a price of $4.18 per share.

Purchase of Debentures by Vicom

Vicom, at its option, may at any time purchase all or a portion of the outstanding debentures at any time prior to their maturity. If Vicom purchases fewer
than all of the outstanding debentures, Vicom will determine the debentures to be purchased based on interest rate or maturity. The debentures will be purchased at a purchase price equal to 100% of
the principal amount plus any accrued but unpaid interest.

No Firm Underwriting Commitment

We are offering the debentures through our officers and employees without a firm underwriting commitment. While Vicom intends to seek to sell $50,000,000 in
principal amount of debentures, Vicom is not establishing a minimum amount of proceeds that must be received from the sale of debentures in order to accept proceeds from debentures actually sold.
Accordingly, no assurance can be given as to the total principal amount of debentures that will be sold.

Deregulation

Several regulatory and judicial proceedings have recently concluded, are underway or may soon be commenced that address issues affecting operations and those
of our competitors, which may cause significant changes to our industry. We cannot predict the outcome of these developments, nor can we assure you that these changes will not have a material adverse
effect on us. Historically, Vicom has been a reseller of products and services, not a manufacturer or carrier requiring regulation of its activities.

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Pursuant to Minnesota statutes, our MultiBand activity is specifically exempt from the need to tariff our services in MDUs. However, the Telecommunications Act of 1996 provides for significant
deregulation of the telecommunications industry, including the local telecommunications and long-distance industries. This federal statute and the related regulations remain subject to
judicial review and additional rule-makings of the Federal Communications Commission, or FCC, making it difficult to predict what effect the legislation will have on us, our operations,
and our competitors.

Dependence on Strategic Alliance

Vicom has a distribution agreement with NEC, its main supplier of telecommunication products, which expires June 30, 2001. An interruption or
substantial modification of Vicom's distribution relationship with NEC could have a material adverse affect on Vicom's business, operating results and financial condition.

Attraction and Retention of Employees

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

Intellectual Property Rights

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

Variability of Quarterly Operating Results; Seasonality

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

Restrictions on Transferability

There currently is a very limited market for Vicom's common stock. An investor may thus be required to retain his or her investment in Vicom's common stock for
an indefinite period of time and may not be

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able to liquidate his or her investment in the event of an emergency or for any other reasons. Trading in the common stock currently is conducted in the Over The Counter Bulletin Board (OTCBB).
Because the common stock has historically traded at prices of less than $5.00 per share, it is subject to the provisions of Rule 15g-9 under the Securities Exchange Act of 1934, as
amended (the "Penny Stock Rules"), which impose additional sales practice requirements on broker-dealer trading such common stock. For transactions covered by the Penny Stock Rules, a broker-dealer
must make a special suitability determination for the purchasers and obtain the purchaser's written consent to the transaction prior to sale. Consequently, the Penny Stock Rule may adversely affect
the ability of broker-dealers and Vicom's shareholders to sell Vicom's common stock. Moreover, even if an exemption from registration or registration is available for the resale of any of the common
stock, there can be no assurance that there will be a market for the common stock.

Certain Anti-Takeover Effects

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

Control by Certain Shareholders

As of June 14, 2000, Vicom's four principal shareholders together owned 8,041,061 outstanding shares, options and warrants of Vicom, representing 67.9%
of all of such outstanding shares, options and warrants. Accordingly, such shareholders will be able to exercise significant control over Vicom's affairs including, but not limited to, the election of
directors and decisions regarding the debentures.

Year 2000 Compliance

Vicom's internal computer applications are all year 2000 compliant. Vicom sells computer and telephone products to customers pursuant to
non-exclusive agency or distribution relationships. While, as an agent, we cannot make representations regarding the year 2000 readiness of our suppliers, the actual year 2000 impact to
our base of customers was minimal and immaterial in the first quarter of 2000.

Use of Proceeds of Debentures

Vicom intends to use the proceeds from the sale of the debentures for working capital and other general corporate purposes, including investments in other
businesses. If our management does not effectively use such proceeds, Vicom could be adversely affected.

FORWARD-LOOKING STATEMENTS

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

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USE OF PROCEEDS

If we sell all of the debentures, we will receive proceeds estimated at $49,956,800 after payment of the offering expenses. We have agreed to pay all of the
expenses related to this offer.

We
expect to use the net proceeds from the sale of the debentures primarily for working capital and other general corporate purposes, including expenditures for sales and marketing
and fixed assets and inventory. No specific amount has been allocated to any particular purpose. Pending these uses, we intend to invest the net proceeds of this offering in investment grade,
interest-bearing securities.

There
is no minimum number or amount of debentures that we must sell to receive and use the proceeds from the sale of debentures, and there can be no assurance that all or any portion
of the debentures will be sold. Accordingly, the amount of debentures sold may be substantially less than the maximum offered hereby. If that is the case, the net proceeds from the sale of the
debentures will be used for the purposes set forth above.

PLAN OF DISTRIBUTION

We are offering up to $50,000,000 total principal amount of the debentures. We will offer the debentures through our officers and employees directly without an
underwriter or agent and on a continuous basis with an expected termination date in 2020. However, we have the right to terminate this offering of debentures at any time before that date.

In
compliance with Rule 3a4-1 of the Securities Exchange Act of 1934, our officers and employees will limit their participation in the offering of debentures to
preparing written communications or delivering written communications through the mail or other means that do not involve oral solicitation by the officer or employee, responding to inquiries of a
potential purchaser in a communication initiated by the potential purchaser, or performing ministerial and clerical work related to the offering. No underwriting discounts or commissions of any kind
will be paid to such officers or employees in connection with this offering. No minimum amount of the debentures must be sold in order for us to accept and deposit the proceeds of this offering.

The
debentures may be purchased only by means of the offer to purchase debentures contained in the form of a subscription agreement provided by Vicom. We will not accept an offer to
purchase debentures or negotiate checks delivered for payment on the sale of debentures unless the prospective purchaser has previously received this prospectus and any related prospectus supplement.
If Vicom receives a properly executed subscription agreement and payment for the purchase of debentures from any person who has previously received this prospectus but who has not received a current
prospectus supplement, we will not accept the subscription agreement or any payment for a debenture until five business days following the mailing of a confirmation of sale and a current prospectus
supplement to such prospective purchaser. During this five business day period, any prospective purchaser of debentures may revoke his or her offer, orally or in writing, and Vicom will promptly
return any checks or funds previously delivered to it. Once Vicom accepts an offer, however, orders to purchase debentures and the issuance of such certificates will be deemed to have occurred as of
the date of receipt by Vicom of a subscription agreement and payment. Vicom reserves the right to reject any offer to purchase debentures, in whole or in part.

Prospective
purchasers who have submitted subscription agreements and payment of the purchase price for debentures may revoke their offer by writing to Vicom at 9449 Science Center
Drive, New Hope, Minnesota 55428, Attention: Steve Bell, or by calling (763) 504-3000. Investors seeking information as to the current interest rates for the debentures may contact
Vicom at 763-504-3000 to receive a current quote as to such rates.

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SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with our financial statements including the accompanying notes and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations". The data as of December 31, 1999 and 1998 and June 30, 2000, and for each of the three years in the period
ended December 31, 1999 and the six months ended June 30, 2000 and 1999 have been derived from our financial statements and accompanying notes contained in this prospectus. The Statement
of Operations Data for the years ended December 31, 1996 and 1995 and the Balance Sheet Data at December 31, 1997, 1996 and 1995 have been derived from our audited financial statements
which are not contained in this prospectus.

|                                             |  | Years Ended December 31, |            | Six Months Ended
June 30, |  
|-------------------------------------------- |  | ------------------------ | ---------- | ------------------------- | -
|
|
|
|Revenues                                     |  | $                        | 20,388,870 |                           | $
|Cost of products and services                |  | $                        | 16,247,898 |                           | $
|Gross profit                                 |  | $                        | 4,140,972  |                           | $
|% of revenues                                |  |                          | 20.3       | %                         |  
|Selling, general and administrative expenses |  | $                        | 5,823,945  |                           | $
|% of revenues                                |  |                          | 28.6       | %                         |  
|Income (loss) from operations                |  | $                        | (1,682,973 | )                         | $
|Other expense (income), net                  |  | $                        | 139,461    |                           | $
|Income (loss) before income
taxes            |  | $                        | (1,822,434 | )                         | $
|Income tax provision                         |  | $                        | 241,200    |                           | $
|Net income (loss)                            |  | $                        | (2,063,634 | )                         | $
|Earnings (loss) per sharebasic and diluted  |  | $                        | (0.55      | )                         | $
|Weighted average shares outstanding          |  |                          | 3,821,978  |                           |  

|                             |  | December 31, |            |  
|---------------------------- |  | ------------ | ---------- | -
|
|
|
|Working capital (deficiency) |  | $            | (2,882,907 | )
|Total assets                 |  | $            | 12,598,745 |  
|Long-term debt               |  | $            | 926,821    |  
|Stockholders' equity         |  | $            | 1,026,344  |  

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

Six Months Ended June 30, 2000 and June 30, 1999

Revenue

For the six month period ended June 30, 2000, revenues increased 100% to $18,405,878 as compared to $9,208,797 for the similar period last year again.
This increase in revenues is directly attributed to the Company's acquisition of Ekman, Inc. in late 1999.

Gross Profit

For the six month period ended June 30, 2000, the Company's gross margin increased 93% or $1,968,598 to $4,092,935 as compared to $2,124,337 for the
similar period last year. The gross margin increase is due to the aforementioned acquisition of Ekman, Inc. For the six month period ended June 30, 2000, as a percent of total revenues,
gross margin was 22.2% as compared to 23.1% for the similar period last year. The decrease in gross margin percentages is primarily due to increased sales year to date of personal computer
products,which sales have lesser gross margins than the Company's traditionally based telephone equipment sales.

Selling, General and Administrative Expenses

For the six month period, these expenses increased 147% to $5,652,315 as compared to $2,286,908 in the prior year period. For the six month period ended
June 30, 2000, selling, general and administrative
expenses were, as a percentage of revenues, 30.7% and 24.8% for the similar period a year ago. The increase in expenses is primarily related to increased payroll due to acquisitions and
start-up expenses for the Company's MultiBand, Inc. subsidiary.

Interest Expense

Interest expense was $313,151 for the six months ended June 30, 2000, and $84,783 for the similar period a year ago, reflecting an increased Company
debt load due to acquisition related debt and increased bank borrowings

Income Tax Provision

No provisions for income taxes are recorded due to net operating loss carryforwards available.

Net Income (Loss)

The six month period ended June 30, 2000, resulted in a net loss of $2,042,365 compared to a net loss of $288,054 for the similar period last year.

Years Ended December 31, 1999 and December 31, 1998

Revenue

Vicom revenues increased by $13,930,757 from $6,458,113 in fiscal 1998 to $20,388,870, an increase of 216%. This increase was caused by the acquisition of the
Midwest assets of Enstar Networking Corporation for twelve months and the purchase of Ekman, Inc. for two months leading to the creation of Corporate Technologies, USA, Inc.

From
January 1 to November 1, 1999, Vicom's revenues came from one segment, which included stand-alone and integrated voice, video, and data networking technology
products and services. With the acquisition of Ekman, Inc., Vicom added the segment, as of November 1, 1999, which sells computer

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technologies products and services. Voice, video and data networking revenues equaled $15,567,482 for the fiscal year ended December 31, 1999. Computer product revenues totaled $4,821,388 for
the fiscal year ended December 31, 1999.

Gross Profit

Gross profit represents revenue less the cost of products and services. Gross profit, as a percent of revenue, was 20.3% in 1999 versus 25.0% in 1998.
Decreased margins in 1999 reflect an increase in computer sales which have a lower margin than Vicom's traditional voice sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $2,984,083, or 105%, from $2,839,862 in fiscal 1998 to $5,823,945 in fiscal 1999. Again, the increase
in selling, general and administrative expenses is primarily attributable to increased revenues and staffing due to two acquisitions. Vicom, using the Black Scholes pricing models, expensed $6,000 in
1999 for the fair value at the date of grant of 566,050 warrants to purchase Vicom common stock issued to various investors at prices ranging from $0.75 to $3.00 per share.

Interest Expense

Interest expense increased by $81,794 (45%) from $180,434 in fiscal 1998 to $262,228 in fiscal 1999. This expense increase is due to increased borrowing under
a note and security agreement with Wells Fargo Business Credit dated June 1999 and due to notes payable to investors that were issued in October 1999.

Income Tax

The income tax provision in 1999, 1998, and 1997 reflects adjustments to the valuation allowance of net deferred tax assets resulting from net operating loss
carryforwards.

Net Losses

Vicom experienced net losses of $2,063,634 and $1,443,748 for the fiscal years ended December 31, 1999 and December 31, 1998, respectively.

Years Ended December 31, 1998 and December 31, 1997

Revenue

Revenue decreased approximately $181,000, or 3% to $6,458,113. Revenue from sales of telephone and voice mail systems (including installation) were $4,086,000
in 1998 versus $4,166,000 in 1997, a decrease of 2%. Included in the 1998 amounts is approximately $995,000 of revenues from the Minneapolis Public Schools project. Revenue from services were
$2,372,000 in 1998 versus $2,473,000 in 1997, a decrease of 4%. This overall decline in revenues is primarily attributable to lower sales of small key telephone systems due to Vicom's shift in focus
to larger PBX systems.

Gross Profit

Gross profit, as a percent of revenue, was 25.0% in 1998 versus 38.3% in 1997. Decreased margins in 1998 reflect $660,000 of inventory write-downs combined
with a higher volume of sales to schools and government agencies, which generally have lower gross profit margins.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased approximately $523,000, or 22.6%, to $2,840,000 in 1998 compared to $2,317,000 in 1997. Of this amount,
$340,000 reflects non-cash adjustments related to the write-down of certain assets. See Note 13 to the Consolidated Financial Statements. The remaining increase in
selling, general and administrative expenses is primarily due to the addition of sales and customer service personnel.

Other Expense

Other expense consists principally of interest expense on notes and installment obligations payable, net of finance income and interest income on notes
receivable. Other expense increased approximately $29,000, which primarily reflects reduced finance income charged between years along with higher interest expense due to additional borrowing on notes
payable.

Net Income (Loss)

Vicom had a net loss of $1,443,748 for the year ended December 31, 1998 and net income of $56,177 for the year ended December 31, 1997.

Liquidity and Capital Resources

Six Months Ended June 30, 2000

Available working capital for the six months ended June 30, 2000, increased over the similar period last year due to proceeds from issuance of stock and
exercise of outstanding warrants, which helped offset Vicom's net operating loss. Vicom experienced a significant decrease in accounts payable for the period ended June 30, 2000 versus last
year's period, primarily due to the aforementioned proceeds, which were used to reduce payables. Accounts receivables increased materially for the period ended June 30, 2000 compared to the
prior year period due to a doubling of revenues resulting from the acquisition of Ekman, Inc. in late 1999.

Inventories
year to date increased over last year's prior period inventories due to the aforementioned revenue increases. Net borrowings under credit agreements increased for the six
months ended June 30, 2000 compared to the prior year's period due to debenture financing with a lender, the proceeds of which were used to pay off a bank line of credit and for operations.

In
March 2000, Vicom's subsidiary, Corporate Technologies, USA, Inc. (CTU), entered into a $2,250,000 debenture/loan agreement with Convergent, calling for interest at
prime + 4% (plus 6% if in default) and due on December 31, 2000. The loan proceeds were used to pay off a previous CTU line of credit due March 31, 2000. Convergent, as
additional consideration in the transaction, was given a warrant with a term of seven years to purchase 40,000 shares of Vicom's common stock at a price of $5.20 per share.

On
July 11, 2000 the Convergent agreement was amended to extend the due date to June 1, 2005. The terms of the amended agreement call for interest only payments for
36 months from July 11, 2000 and thereafter 22 equal monthly payments of principal and interest until the loan is paid in full. The amended agreement also requires interest at 14%
annually (16% annually if Vicom is in default). Convergent, as additional consideration for extending the loan, was issued a warrant with a term of seven years to purchase 110,000 shares of Vicom
Common Stock at a price of $4.18 per share.

Vicom
in March 2000 sold 677,500 units to accredited investors for $2.25 per unit, each unit consisting of one share of common stock and a warrant to purchase a share of common
stock at an exercise price of $5.00 per share. Vicom raised gross proceeds of $1,524,375, less commissions and expenses paid to a selling agent of $198,169, for net proceeds of $1,326,206.

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In July 2000, Vicom offered for sale 225,000 units to accredited investors for $5.00 per unit, each unit consisting of one share of common stock and a warrant to purchase one
share of common stock at an exercise price of $8.75 per share. As of July 15, 2000, Vicom had raised gross proceeds in this offering of $445,000, less commissions and expenses paid to a selling
agent of $57,850, for net proceeds of $387,150. The selling agent, in connection with this offering, will be issued warrants to purchase a number of shares of Vicom common stock equaling 10% of the
number of units ultimately sold in the offering.

In
order to enhance liquidity in the second quarter ended June 30, 2000, Vicom issued 80,500 shares of 10% Class C Convertible Preferred Stock in the amount of $805,000
to three accredited investors. The Company also, in the quarter, issued a warrant dividend to all Vicom shareholders of record as of April 11, 2000, in which a warrant to purchase one share at
a exercise price of $8.75 was issued for each share outstanding. The Company intends to register those warrants in the third quarter to facilitate their exercise and raise additional capital.

Management
of Vicom believes that, for the near future, cash generated by sales of stock, exercise of warrants, and existing credit facilities, in aggregate, are adequate to meet the
anticipated liquidity and capital resource requirements of its business.

Capital Expenditures

The Company used $259,588 for capital expenditures during the six months ended June 30, 2000, as compared to $172,811 in the similar period last year.
These expenditures were primarily for equipment acquired for internal uses such as vehicles, office furniture, computer systems and demonstration systems.

Year Ended December 31, 1999

Working capital needs in 1999 were funded using the following resources:

In
June 1999, Vicom entered into a $2 million revolving credit agreement with Wells Fargo Business Credit, expiring in June 2000. Borrowings under this facility
are based on eligible accounts receivable
and inventory with interest at prime plus 1.75% (plus 3.0% if in default). The agreement contains certain restrictive covenants, including the maintenance of minimum net income levels and limitations
on capital expenditures. As of December 31, 1999, Vicom was not in compliance with its minimum net income level covenant. Due to this non-compliance, Vicom's agreement is still in
force but at the higher default rate of interest. Vicom is attempting to renegotiate this covenant. Vicom used approximately $554,000 of the proceeds from this facility to repay outstanding borrowings
under its previous term note and line of credit. As of December 31, 1999, Vicom had outstanding borrowings of $1,169,400 under this agreement.

Vicom's
subsidiary, CTU, had, as of December 31, 1999, $138,000 borrowings on a $2,000,000 line. This line was paid off by Convergent Capital in March 2000. In
March 2000, CTU entered into a $2,250,000 loan agreement with Convergent Capital, calling for interest at prime plus 4.0% (plus 6.0% if in default) and due on December 31, 2000. The loan
proceeds were used to pay off a previous line of credit due March 31, 2000. Convergent, as additional consideration in the transaction, was given a warrant with a term of seven years for
purchase of 40,000 shares of common stock of Vicom at a price of $5.20 per share.

Net
cash provided by operations was approximately $1,385,000 in 1999 versus cash used by operations of approximately $137,000 in 1998. The cash provided from operations in 1999 is due
primarily to improvements in operating cash flows related to the Ekman, Inc. acquisition. During 1999, Vicom spent approximately $631,000 in capital expenditures primarily related to its
computer system upgrade.

In
March 2000, Vicom raised net proceeds of $1,326,206 in a Regulation D offering. These proceeds were used for general working capital purposes.

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Year Ended December 31, 1998

The financial condition of Vicom as of December 31, 1998 was significantly impacted by the acquisition of the assets of the midwest region of Enstar
Networking Corporation ("ENC"). See Note 2 to the Consolidated Financial Statements. The purchase price included approximately $1.5 million of net tangible assets and $549,000 of
goodwill acquired. The consideration consisted of 1,350,000 shares of Vicom's common stock with an assigned value of $797,000, a $750,000 subordinated promissory note bearing annual interest at the
rate of 9%, a payable of $340,000 for purchase price adjustments and acquisition related costs of $148,000.

Net
cash used by operations was approximately $137,000 in 1998 versus cash provided by operations of approximately $94,000 in 1997. The cash flow deficits from operations in 1998,
excluding the $1 million of non-cash adjustments for the write-down of the carrying amounts of certain assets, are due primarily to the loss from operations in addition
to increases in revenues and inventories associated with various large school projects. These cash flow deficits resulted in an increase in accounts payable, which reflects higher average days'
payments to vendors.

In
May 1998, Vicom amended its bank loan agreement to provide a $500,000 term note at a prime rate plus 2.5% payable in monthly principal and interest installments of $10,846
with the balance due May 1, 2003, and a $100,000 line of credit at prime plus 2.5% due April 30, 1999 (subsequently extended to May 31, 1999). At December 31, 1998, Vicom
was not in compliance with certain financial covenants under this agreement. This indebtedness was repaid in June 1999.

In
December 1998, Vicom authorized 275,000 shares of 8% Class A Cumulative Convertible Preferred Stock and 60,000 shares of 10% Class B Cumulative Convertible
Preferred ("Class B Preferred"). The Class B Preferred was offered to certain notes payable holders at a conversion price of $10.00 per Class B Share. In December 1998,
approximately $350,000 of notes payable were converted into 35,050 shares of Class B Preferred Stock.

Vicom
has historically relied on borrowings from related parties and individuals to fund its operations. These borrowings are unsecured and bear interest at rates ranging from 9% to
15% per annum. Activity under these notes consisted of net cash repayments of approximately $17,000 in 1998 and net borrowings of approximately $189,000 in 1997. In July 1998, approximately
$25,000 of notes payable were converted into 50,000 shares of common stock.

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## 

BUSINESS

Vicom is a Minnesota corporation formed in September 1975. Vicom is the parent corporation of three wholly-owned subsidiaries, Corporate Technologies,
USA, Inc. (CTU), MultiBand, Inc. (MultiBand), and Vicom Midwest Telecommunications Systems, Inc. (VMTS). VMTS was not active as of January 1, 2000. Vicom completed an
initial public offering in June 1984. In November 1992, Vicom became a non-reporting company under the Securities Exchange Act of 1934.

Vicom
recently expanded its efforts to establish itself within the rapidly evolving telecommunications and computer industries. Effective December 31, 1998, Vicom acquired the
assets of the midwest region of Enstar Networking Corporation (ENC), a data cabling and networking company. In late 1999, in the context of a forward triangular merger, Vicom, to expand its range of
computer products and related services, purchased the stock of Ekman, Inc. d/b/a Corporate Technologies, and merged Ekman, Inc. into the newly formed surviving corporation, Corporate
Technologies, USA, Inc. (CTU). MultiBand, Inc. is in the start-up phase and was incorporated in February 2000.

Vicom
and CTU provide voice, data and video systems and services to business and government. MultiBand, Inc. provides voice, data and video services to MDUs.

Vicom
has provided clients with telephone communications products and services since its inception in 1975. As of June 30, 2000, Vicom was providing telephone equipment and
service to more than 1,000 customers, with approximately 10,000 telephones in service. In addition, CTU provides computer products and services to approximately 3,500 customers. Telecommunications
systems distributed by Vicom are intended to provide users with flexible, cost-effective alternatives as compared to systems available from major telephone companies, including those
formerly comprising the Bell System and from other interconnect telephone companies.

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

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

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

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

Vicom and Corporate Technologies, USA (CTU)

Vicom and CTU provide other technical and customer services as described hereafter.

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Pricing and Availability

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

Warranty and Returned Goods Policy

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

On Site and Depot Repair

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

Wide Area Network Connectivity

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

Technical Support for Networking

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

Training

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

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Consulting

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

Sales and Marketing

As of June 30, 2000, we had 37 sales and marketing personnel with expertise in telecommunications, computers and network services. Vicom has a
consultative approach to selling, in which the salesperson analyzes the customer's operations and then designs an application-oriented technical solution to make the customer more efficient and
profitable. Vicom uses several techniques to pursue new customer opportunities, including advertising, participation in trade shows, seminars and telemarketing.

Customers

Vicom provides its products and services to commercial, professional and government users within the states of Minnesota, North Dakota, South Dakota and
Nebraska. Vicom's customers are diverse and represent various industries such as financial services, hospitality, legal, manufacturing, and education. Vicom estimates it will receive approximately 15
to 20% of all revenues from educational institutions (local school districts, state colleges and universities) in the year 2000. In 1999, no one customer provided 10% or more of Vicom's total
revenues. In 1998, one customer, Minneapolis Public Schools, provided 15% of Vicom's revenues. In 1999, Ekman, Inc. (the predecessor company to CTU) received 23% and 10% of its revenues,
respectively, from two major customers, Great Plains Software and Meritcare Health Systems. In 1998, those two customers provided Ekman, Inc. with 7% and 26% of total revenues, respectively.

Customer Service

Vicom has eight full-time customer service personnel who assist in project management duties, post-sale communications (which include
site surveys), coordinated network services, and end-user training. Each key account is assigned its own individual customer service representative to ensure efficient implementation. The
customer service representative works closely with the sales representative and main technician assigned to the project to facilitate the utmost in customer satisfaction.

Back Office

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

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

Suppliers

As previously mentioned, Vicom purchases products and equipment from NEC, ECI, Cisco, Nortel, and other manufacturers of communications and computer products.
The telecommunication products are purchased directly from the manufacturers. The computer products are purchased both directly from the

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manufacturer and also indirectly from major wholesalers such as Pinacor, Ingram Micro and Tech Data Corporation.

In
1999, Tech Data supplied 34% and NEC supplied 18% of Vicom's total products purchased. In 1998, NEC supplied 60% and ECI supplied 19% of Vicom's total products purchased. In 1999,
Pinacor supplied 42% and Ingram Micro supplied 21% of Ekman Inc.'s (the predecessor to CTU) total products purchased. In 1998, Pinacor supplied 34%, Ingram Micro supplied 17%, and Synnex
supplied 11% of Ekman, Inc.'s total products purchased.

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

Vicom
has a distribution agreement with NEC, its main supplier of telecommunication products, which expires June 30, 2001. Vicom could replace NEC with an alternate supplier
fairly quickly, but with a less competitive product. However, Vicom's replacement of NEC could have a material adverse effect on Vicom's business, operating results and financial condition (see "Risk
Factors").

MultiBand

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



As
we develop and market this package, we will keep a marketing focus on two levels of customer for this product. The primary decision-makers are the property owners/managers. Their
concerns are focused on delivering their residents reliability, quality of service, short response times, minimized disruptions on the property, minimized alterations to the property and value added
services. Each of these concerns is addressed in our contracts with the property owner, which include annual reviews and ten to 20 year terms as service providers on the property. The secondary
customer is the end-user. We will provide the property with on-going marketing support for their leasing agents to deliver clear, concise and timely information on our
services. This will include simple sign up options that should maximize our penetration of the property.

Multiband Industry Analysis

All statistics in this section were taken from the 1998 statistical abstract of the United States; communications and information technology section, authored
by the U.S. Census Bureau.

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Cable and Pay Television

The U.S. Census Bureau has reported that as of December 31, 1997, the last official year reported, there were more than 64,210,000 cable and pay TV
subscribers in the United States, with an average bill of $26.48 per month each. Vicom estimates, based on the aforementioned U.S. Census Bureau data, that this equates to annual cable and pay
television billing revenues of more than $20 billion. The U.S. Census Bureau has also estimated that consumer spending on cable and pay television for the year ended December 31, 1998
surpassed $31.8 billion. Projections compiled by the U.S. Census Bureau indicate that by 2001, consumer spending per person for cable and pay television will reach $196.62 or over
$55 billion annually.

Telephone

According to the U.S. Census Bureau, as of December 31, 1996, there were more than 104,000,000 residential access lines with an average monthly bill of
$19.58 or $24 billion. This accounted for 93.8% of American homes. In the same year, total toll service revenues for interstate long distance reached $82 billion.

Internet

According to the U.S. Census Bureau, the average annual spending per person in the United States in 2001 for Internet services is estimated to be $49.32. This
is based on a projected population of more than 280,000,000 people, which equates to approximately $13.8 billion.

Summary

When taken as a whole, and based on Vicom's interpretations of U.S. Census Bureau statistics, these services could generate over $170 billion annually
by the end of 2001. These statistics indicate stable growing markets with demand that is likely to deliver significant values to businesses that can obtain subscriber base of any meaningful size.

Strategy

For the near future, the services described below will be offered only in the state of Minnesota.



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



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

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AT&T Corp., MCI WorldCom Inc., and Sprint Corp. are our principal competitors in providing long distance telephone service. They offer new products
almost weekly. Our primary concern in this marketplace is to assure that we are competitive with the most recent advertised offerings in the "long distance wars." We will meet this challenge by
staying within a penny of the most current offering, while still maintaining a high gross margin on our product. We accomplish this through various carrier agency associations. We expect to generate a
high penetration in our long distance services amongst our local service subscribers because private property owners in the shared tenant environment (similar to a hotel environment) are not required
to offer multiple long distance carriers to their tenants.



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



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

We
are initially concentrating on middle to high-end rental complexes. We are also pursuing selected college campus apartment buildings and resort area condominiums. A
recent U.S. Census table indicates that there are more than 65,000 properties in the United States that fit this profile. Assuming an average of 100 units per complex, our focus is on a potential
subscriber base of 6,500,000. Although this niche represents less than 5% of the total subscriber base, its market value exceeds $32.5 billion.

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

Employees

As of June 30, 2000, Vicom employed eight full-time management employees. As of that same date, CTU had 148 full-time employees,
consisting of 37 in sales and marketing, 66 in technical positions, 8 in customer service, 20 in management and the balance in administration and finance.

Properties

Vicom and its subsidiaries lease principal offices located at 1700 42nd Street SW, Fargo, ND 58013 and 9449 Science Center Drive, New Hope,
Minnesota 55428. Vicom also leases a satellite office in Fargo consisting of approximately 3,800 square feet of space under a lease with a term that expires in July 2002.

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Vicom also has offices staffed with five or fewer employees in Sioux Falls, South Dakota, Omaha, Nebraska, and Bismarck, North Dakota We have no foreign operations. The main Fargo office lease expires
in 2001 and covers approximately 20,000 square feet. The Fargo base rent is $18,550 per month. The New Hope office lease expires in 2006 and covers approximately 47,000 square feet. The New Hope base
rent is $12,750 per month. Both the New Hope and main Fargo leases have provisions that call for the tenants to pay net operating expenses, including property taxes, related to the facilities. Both
offices have office, warehouse and training facilities.

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

Legal Proceedings

As of June 30, 2000, Vicom was not engaged in any material pending legal proceedings.

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## 

MANAGEMENT

Directors and Executive Directors

The following table sets forth the name, age and position of each person who serves as a director and/or executive officer of Vicom as of June 30, 2000.

|Name                |  | Age |  | Position                                       
|------------------- |  | --- |  | -----------------------------------------------
|Steven M. Bell      |  | 41  |  | President, Chief Financial Officer and Director
|Jonathan Dodge      |  | 49  |  | Director                                       
|David Ekman         |  | 39  |  | President, CTU and Director                    
|Peter Flynn         |  | 40  |  | Director                                       
|Marvin Frieman      |  | 68  |  | Chairman of the Board and Director             
|Paul Knapp          |  | 40  |  | Director                                       
|James L. Mandel     |  | 44  |  | Chief Executive Officer and Director           
|Pierce McNally      |  | 51  |  | Director                                       
|Mark Mekler         |  | 46  |  | Director                                       
|Manuel A. Villafana |  | 59  |  | Director                                       

Marvin Friemanwas Vice President and Sales Manager of Vicom since its inception in 1975 until October 1994. He was named Chief
Executive Officer of Vicom in November 1994 and served in that position until he became Chairman in October 1998. He has been a director since September 1983.

Steven Bellwas General Counsel and Vice President of Vicom from June 1985 through October 1994, at which time he became
Chief Financial Officer. He was named President in July 1997 and has served as a director since 1994. He is a graduate of William Mitchell College of Law.

Jonathan Dodgehas been the Senior Partner of the C.P.A. firm of Dodge & Fox since its inception in March 1997. He was a
partner in the C.P.A. firm of Misukanis and Dodge from 1992 to March 1997. He has served as a director of Vicom since 1997. Mr. Dodge is a member of both the AICPA and the Minnesota
Society of CPA's.

James Mandelhas been the Chief Executive Officer and a director of Vicom since October 1, 1998. He was co-founder
of Call 4 Wireless, LLC, a telecommunications company specializing in wireless communications, and he served as its Chairman and a member of the Board of Directors from December 1996 until
October 1998 and as its interim Chief Executive Officer from December 1996 until December 1997. From October 1991 to October 1996, he was Vice President of Systems
for Grand Casinos, Inc., where his duties included managing the design, development, installation and on-going maintenance of systems for the 2,000 room, $507 million
Stratosphere Hotel, Casino and Tower in Las Vegas. Mr. Mandel also managed the systems development of Grand Casino Mille Lacs in Onamia, Minnesota, Grand Casino Hinckley in Hinckley, Minnesota,
and six other casinos nationwide. He also serves on the board of Minnesota American, Inc. and is a trustee of the Boys and Girls Club of New Hope.

Pierce McNallyhas served as a director of Vicom since January 1999. He currently serves as Chairman, Secretary and Director of
Lockermate Corporation of Minnetonka, Minnesota, a company that provides locker systems to schools. He served as Minnesota American's Chairman of the Board, Chief Executive Officer and Secretary from
October 1994 until January 2000 when Minnesota American merged with CorVu Corporation. He practiced corporate law at Oppenheimer, Wolff & Donnelly, LLP from 1979 to 1985. He
served as Chairman and Director of Corporate Development of Nicollet Process Engineering, Inc. from May 1995 until April 1999, when he retired from the board.

22

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Mark K. Mekler,a registered representative, is a Regional Director of U.S. Bancorp Piper Jaffray responsible for overseeing branch
officers in Minnesota. He has 19 years' experience in the financial services industry. Mr. Mekler has served as a director of Vicom since January 1999. He is also a member of the
Board of Directors of the Business Education and Economics Foundation (BEEF).

Peter Flynnis currently President of Americable, Inc. and has held that position since June 1997. Since
March 1996, he also has served as Executive Vice President of CorStar, Inc. (formerly Enstar, Inc.), the parent company of Americable, Inc. Effective December 31,
1998, Vicom acquired the Midwest region of Enstar Networking Corporation. Prior to such time, Mr. Flynn also served as Executive Vice President, Chief Financial Officer and Secretary of North
Star Universal, Inc. Prior to joining NSU in 1989, Mr. Flynn was an Audit Manager with Arthur Andersen and Co. He has served as a director of Vicom since January 1999.
Mr. Flynn also serves on the boards of Corvel Corporation, Personal Genie, Inc. and the Minnesota Chapter of the March of Dimes.

Paul Knapphas been President and CEO of Space Center Ventures, Inc. since April 1998. He is Senior Vice President of
Space Center, Inc. From February 1993 to March 1998, he was Vice President and Director of Operations for Space Center Ventures, Inc. He has served as a director of Vicom
since February 2000. Mr. Knapp also serves on the Board of Directors for Devnet, LLC, Atrix International, Inc., Viamedics and Square Roots.

David Ekmanis President of Corporate Technologies, USA, Inc. He has served as a director of Vicom since December 1999.
Mr. Ekman has worked continuously in the computer business since 1981, initially as a franchisee of Computerland, a personal computer dealer, and subsequently from 1996 to December 1999
as President of Ekman, Inc., a value-added computer reseller and the predecessor company to Corporate Technologies, USA, Inc.

Manuel A. Villafanacurrently serves as Chairman and Chief Executive Officer of ATS Medical, which he has headed since 1987. From 1983
to 1987, Mr. Villafana was Chairman of GV Medical, Inc. From 1976 to 1982, he served as president and Chairman of St. Jude Medical, Inc., where he co-developed the St.
Jude heart valve. He has served as a director of Vicom since April 2000.

Board of Directors and Board Committees

Effective June 30, 2000, Vicom has adopted a policy of paying its outside (non-management) board members a fee of $500.00 for each board
meeting attended.

In
1999, Vicom had an audit committee consisting of Jon Dodge and Peter Flynn and a compensation committee consisting of Pierce McNally and Mark K. Mekler.

Our
audit committee:



Our
compensation committee:



23

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Executive Compensation

The following table sets forth all cash compensation paid by Vicom or accrued during each of Vicom's last three fiscal years to our Chief Executive Officer and
to the other two executive officers whose total annual salary and bonus paid or accrued during fiscal year 1999 exceeded $100,000 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

|                                        |  |                |  |                         |   |             |  |             |  | Long Term Compensation |  |                
|--------------------------------------- |  | -------------- |  | ----------------------- | - | ----------- |  | ----------- |  | ---------------------- |  | ---------------
|
|
|
|
|James L. Mandel
Chief Executive Officer |  | 1999
1998
1997 |  | 133,117
36,114
-0-      | * | -0-
-0-
-0- |  | -0-
-0-
-0- |  | -0-
-0-
-0-            |  | -0-
225,000
-0-
|Steven Bell
President                   |  | 1999
1998
1997 |  | 108,392
101,076
102,337 |   | -0-
-0-
-0- |  | -0-
-0-
-0- |  | -0-
-0-
-0-            |  | -0-
-0-
87,500 
|Marvin Frieman
Chairman of the Board    |  | 1999
1998
1997 |  | 98,582
103,095
101,269  |   | -0-
-0-
-0- |  | -0-
-0-
-0- |  | -0-
-0-
-0-            |  | -0-
-0-
87,500 

---

Options Grants During 1999

The following table provides information regarding stock options granted during 1999 to the Named Executive Officers.

|Name            |  | Number of
Shares
Underlying
Options Granted |  | Percent of Total
Options Granted to
Employees in
Fiscal Year |  | Exercise or
Base Price
Per Share |  | Expiration
Date
|--------------- |  | ------------------------------------------- |  | ------------------------------------------------------------ |  | -------------------------------- |  | ---------------
|James L. Mandel |  | -0-                                         |  | -0-                                                          |  |                                 |  |               
|Steven M. Bell  |  | -0-                                         |  | -0-                                                          |  |                                 |  |               
|Marvin Frieman  |  | -0-                                         |  | -0-                                                          |  |                                 |  |               

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Options Exercised During 1999 and Year-End Option Values

The following table provides information as to options exercised by the Named Executive Officers during 1999 and the number and value of options at
December 31, 1999.

|                |  |     |  |     |  |                    |  | Value of Unexercised
In-The-Money Options
at December 31, 1999(1)
|--------------- |  | --- |  | --- |  | ------------------ |  | -----------------------------------------------------------------
|
|
|
|
|James L. Mandel |  | -0- |  | -0- |  | $75,000 / $150,000 |  | $225,000 / $510,000                                              
|Steven M. Bell  |  | -0- |  | -0- |  | $58,333 / $29,167  |  | $184,582 / $92,241                                               
|Marvin Frieman  |  | -0- |  | -0- |  | $58,333 / $29,167  |  | $184,582 / $92,241                                               

---

Employment Agreements

Vicom has employment agreements with Mr. Marvin Frieman, Chairman of the Board, and Mr. Steven Bell, President, for the term beginning
October 1996 and expiring October 2001. Messrs. Frieman's and Bell's compensation is not directly tied to Vicom's performance. Their agreements call for special compensation
payable to each of them in an amount equal to two and one-half times his annual salary upon his termination if other than for cause and a change in control in Vicom. The agreements state
that annual base salary for each of Messrs. Frieman and Bell will be $95,000 per year. This base salary is set and subject to approval by Vicom's entire Board of Directors. Thus, the
aforementioned lump sum compensation could equal $237,500 for Mr. Frieman if such special compensation is triggered. Other key provisions of the contracts include an agreement by
Mr. Frieman and Mr. Bell to keep confidential information secret both during and after employment by Vicom and covenants not to compete with Vicom for one year from the date of
termination of employment. A change in control in the agreements is defined as the acquisition by any corporation or group of more than 20% of the outstanding shares of voting stock of Vicom coupled
with or followed by the election as Directors of Vicom of persons who were not directors at the time of such acquisition, if such persons shall become a majority of the Board of Directors of Vicom.

Vicom
maintains key man life insurance policies in the amount of $1,000,000 each on the lives of Messrs. Bell and Frieman. Vicom is the beneficiary of these policies and has
adopted a plan to pay 50% of all life insurance proceeds to the spouse or surviving children of each such officer.

Vicom
also has a three-year employment agreement, from October 1998 to September 2001, with James L. Mandel, Chief Executive Officer, the terms of which
involve an annual base salary of $132,000 and a stock option of 225,000 shares at $0.60 cents per share, vested over a three-year period. Mr. Mandel's job responsibilities involve
developing company business plans, developing expansion and growth opportunities and directing other executive officers. Other key positions of the employment agreement include an agreement by
Mr. Mandel to keep confidential information secret, both during and after employment by Vicom, and covenants not to compete with Vicom for one year from the date of termination of employment.

Vicom
has a three-year employment agreement, from December 1999 to November 2002, with David Ekman as President of CTU. The terms of the agreement include an
annual salary of $110,000 per year. Mr. Ekman also has a warrant to purchase 100,000 shares of Vicom common stock at a price of $2.00 per share and a stock option for 150,000 shares, vested
over a three-year period at a price of $2.00 per share. Mr. Ekman's job responsibilities involve direct supervision of CTU's daily operations. Other key provisions of the employment
agreement include an agreement by Mr. Ekman to keep confidential information

25

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secret, both during and after employment by Vicom, and covenants not to compete with Vicom for one year from the date of termination of employment.

1999 Stock Compensation Plan and 1997 Stock Option Plan

On December 31, 1998, Vicom adopted the 1999 Stock Compensation Plan, which permits the issuance of restricted stock and stock options to key employees
and agents. All outstanding incentive stock options granted under the prior 1997 Stock Option Plan were allowed to continue. The Plans reserve a total of 1,500,000 shares of common stock for issuance
through restricted stock and incentive stock option awards and provide that the term of each award be determined by the Board of Directors.

The
purpose of the Plans is to promote the interest of Vicom and its shareholders by providing employees of Vicom with an opportunity to be given a proprietary interest in Vicom, and
thereby develop a stronger incentive to contribute to Vicom's continued success and growth. Awards pursuant to the 1999 Stock Compensation Plan may be in the form of either a restricted stock grant,
which includes a three-year vesting period, or stock options.

The
exercise price of the options granted under the Plans is required to be not less than the fair market value of the common stock on the date of the grant, and in the case of any
shareholder owning 10% or more of the common stock to whom an incentive stock option has been granted under the Plans, the exercise price thereof is required to be not less thank 110% of the fair
market value of the common stock on the date the option is granted. Options are not transferable. An optionee, or his or her personal representative, may exercise his or her option for a period of
ninety (90) days following termination of employment, disability, or death. The term of each option, which is fixed by Vicom's Board of Directors, may not exceed 10 years from the date
the option is granted, or five years in the case of incentive stock options granted to shareholders. The Plans limit the annual aggregate fair market value of stock granted to $100,000 ($600,000 prior
to December 31, 1998), plus unused carryovers. Options may be exercisable in whole or in installments as determined by the Board. The Board may cancel an option of an employee who has
terminated for cause or takes employment with a competitor.

Vicom
may award restricted common shares to selected employees. Recipients are not required to provide any consideration other than services. Company share awards are subject to
certain restrictions on transfer, and all or part of the shares awarded may be subject to forfeiture upon the occurrence of certain events, including employment termination. The fair market value of
shares awarded is generally amortized over three years, which is the vesting term of the awards. At December 31, 1999, 228,609 shares net of forfeitures were awarded. At December 31,
1999 and 1998, unvested (issued but not outstanding) restricted shares awarded were 199,939 and 106,759, respectively.

Employee Benefit Plans

Vicom has 401(k) profit sharing plans covering substantially all full-time employees. Employee contributions are limited to the maximum amount
allowable by the Internal Revenue Code of 1986, as amended. Vicom made no significant discretionary contributions in years 1999, 1998 and 1997.

CERTAIN TRANSACTIONS

Vicom leases its facilities in New Hope, Minnesota from Marbell Realty, a limited liability corporation owned in equal shares by Steven Bell and Marvin
Frieman, who are executive officers and directors of Vicom, pursuant to a lease expiring in 2006. Total facilities rent expense paid under said lease was approximately $136,533 in 1999. Vicom believes
that the rental amounts being paid under the lease are equal to or less than Vicom would be paying to another landlord. See "BusinessProperties."

26

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Vicom leases its space in Fargo, North Dakota from David Ekman, who is an Executive Officer of CTU and a director of Vicom, pursuant to a lease expiring in 2001. Rent paid in November
and December 1999 totaled $45,000. See "BusinessProperties."

In
December 1999, James Mandel and Pierce McNally, who are directors of Vicom, and Enstar, Inc., who is a Vicom shareholder, guaranteed a note payable by Vicom to David
Ekman in the amount of $1,250,000 pursuant to the purchase of Ekman, Inc. They were given warrants to purchase Vicom's stock at $2.00 per share in exchange for the guarantee. Vicom issued
warrants to purchase 50,000 shares to Enstar, Inc. and warrants to purchase 25,000 shares to each of Messrs. Mandel and McNally.

Interest
expense paid by Vicom to related parties was approximately $142,000 in 1999, $47,000 in 1998 and $38,000 in 1997. Related parties include Vicom's Chairman, Chief Executive
Officer, President, and the President's mother.

In
April 2000, Vicom made loans to the following directors in the following amounts: David Ekman ($200,000), James Mandel ($132,000), Paul Knapp ($68,750) and Pierce McNally
($57,500). All of these
loans are evidenced by promissory notes which provide that the loans are due on October 15, 2001 and bear interest at the annual rate of 8%. All loans were incurred for the purpose of
purchasing Vicom common stock and are collateralized by the director/borrower granting Vicom a security interest in said stock. These loans are presented as subscriptions receivable in the
stockholders' equity section of the Vicom financial statements.

27

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## 

PRINCIPAL SHAREHOLDERS

The following table provides information as of June 14, 2000 concerning the beneficial ownership of Vicom's common stock by (i) each director of
Vicom, (ii) the Named Executive Officers, (iii) the persons known by Vicom to own more than 5% of Vicom's outstanding common stock, and (iv) all directors and executive officers
as a group. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares of common stock owned by them.

Amount and Nature
of Beneficial OwnershipName and Address of
of Beneficial Owner

Shares

Percentage(1)Americable, Inc.
7450 Flying Cloud Drive
Eden Prairie, MN 55344

2,800,000
(3)
31.3
%Steven Bell
9449 Science Center Drive
New Hope, MN 55428

1,071,347
(4)
13.2
%David Ekman
1402 42nd Street SW
Fargo, ND 58103

3,200,000
(5)
34.9
%Marvin Frieman
9449 Science Center Drive
New Hope, MN 55428

969,714
(6)
12.0
%James L. Mandel
9449 Science Center Drive
New Hope, MN 55428

280,800
(7)
3.6
%Pierce McNally
14853 DeVeau Place
Minnetonka, MN 55345

108,272
(8)
*Paul Knapp
2501 Cleveland Avenue North
Roseville, MN 55113-2717

101,300
(9)
*Jonathan Dodge
715 Florida Avenue SouthSuite 402
Golden Valley, MN 55426

0

0Mark Mekler
800 Nicollet Mall
Minneapolis, MN 55402

0

0Peter Flynn
7450 Flying Cloud Drive
Eden Prairie, MN 55344

0

0Manuel A. Villafana
3905 Annapolis LaneSuite 105
Plymouth, MN 55447

0

0All Directors and executive officers as a group (ten persons)

5,731,433
(10)
54.7
%


---

28

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29

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## 

DESCRIPTION OF DEBENTURES

The debentures will be issued under an Indenture dated as of August, 2000 between Vicom and FirStar Bank, as trustee ("Trustee"). The Indenture has been filed
as an exhibit to the Registration Statement of which this prospectus is a part, and a copy is available for inspection at the principal executive offices of the Trustee. The following discussion
summarizes certain parts of the Indenture and is subject to and qualified in its entirety by reference to all of the provisions of the Indenture, including the definitions therein of certain terms.
Whenever particular provisions of or terms defined in the Indenture are referred to in this prospectus, such provisions or defined terms are incorporated herein by reference. Section and article
references appearing below are to the Indenture.

General

The debentures will be unsecured obligations of Vicom and will rank equally as to payment priority with other outstanding unsecured debt of Vicom with the
exception of senior indebtedness. See "Provisions Relating to DebenturesSubordination." There is no sinking fund or similar provision for payment of the debentures at
maturity. We will pay maturing debentures from our general funds or from the sale of new debentures.

We
may change interest rates on debentures from time to time based on market conditions and our financial requirements, but no such change will affect the interest rate on any
debentures purchased before the effective date of such change. (Section 2.02)(b)). The interest rate applicable to the debentures will be the rate set forth in this prospectus or in a
prospectus supplement, if any, in effect as of the date of the issuance of such debenture. (Section 2.02(b)). The debentures will mature on the first day of the month immediately following the
first, second, fifth and tenth anniversary of their respective dates of issue, unless previously redeemed at Vicom's option.

The
debentures will be issued only in registered form, without coupons, in any amount of $1,000 or more. (Section 2.02(c)).

Of
the $50,000,000 of debentures offered pursuant to this prospectus, unless and until such time as Vicom's common stock is quoted on The Nasdaq National Market, at the end of each
calendar quarter of Vicom, not more than 25% of the principal amount of the debentures outstanding will have a ten year maturity and not more than 35% of the principal amount of the debentures
outstanding will have a five year maturity. There can be no assurance that our common stock will ever be quoted on The Nasdaq National Market.

Provisions Relating to Debentures

Subordination

The payment of principal and interest on the debentures will be subordinated and subject to the prior payment in full of all senior indebtedness.
(Section 10.01). Upon (i) the maturity of such senior indebtedness, including by lapse of time, acceleration or otherwise, (ii) the happening of an event of default with respect
to any senior indebtedness permitting the holders thereof to accelerate the maturity thereof, or (iii) any distribution of our assets upon our dissolution, winding up, liquidation or
reorganization, the holders of such senior indebtedness will be entitled to receive payment in full before the holders of the debentures are entitled to receive any payment. (Article 10).

Under
the Indenture, "senior indebtedness" means all of our indebtedness (other than the debentures), whether outstanding on the date of execution of the Indenture or thereafter
created, incurred, assumed, or guaranteed by Vicom (and all renewals, extensions or refundings thereof). Senior indebtedness does not include debt issued under an instrument that provides that such
indebtedness is not senior or superior in right of payment to the debentures. Senior indebtedness under the Indenture also includes the $2,250,000 debenture/loan agreement between CTU and Convergent.
(Section 10.02). "Indebtedness"

30

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means any indebtedness, contingent or otherwise, in respect of borrowed money, or evidenced by bonds, notes, debentures or similar instruments or letters of credit, or representing the balance
deferred and unpaid of the purchase price of any property or interest therein, except any such balance that constitutes a trade payable. (Section 10.02).

The
Indenture does not limit the amount of additional indebtedness, including senior indebtedness, which Vicom or any of our subsidiaries can create, incur, assume or guarantee. As a
result of these subordination provisions, holders of the debentures may recover less than holders of senior indebtedness of Vicom. As of June 30, 2000, Vicom had outstanding senior indebtedness
in the total amount of approximately $2,250,000.

The
senior indebtedness involves a debenture/loan agreement with Convergent. In March 2000, Vicom's subsidiary, Corporate Technologies, USA, Inc. (CTU), entered into a
$2,250,000 debenture/loan agreement with Convergent, requiring interest at prime + 4% (plus 6% if in default) and due on December 31, 2000. The loan proceeds were used to pay off
a previous CTU line of credit due March 31, 2000. Convergent, as additional consideration in the transaction, was given a warrant with a term of seven years to purchase 40,000 shares of Vicom's
common stock at a price of $5.20 per share.

On
July 11, 2000 the Convergent agreement was amended to extend the due date to June 1, 2005. The terms of the amended agreement requires interest only payments for
36 months from July 11, 2000 and thereafter 22 equal monthly payments of principal and interest until the loan is paid in full. The amended agreement also requires interest at 14%
annually (16% annually if Vicom is in default). Convergent, as additional consideration for extending the loan, was issued a warrant with a term of seven years to purchase 110,000 shares of Vicom
common stock at a price of $4.18 per share.

The
debentures to be sold in this offering rank equally with each other as to payment rights. We may sell, and we are allowed under the Indenture to sell, additional subordinated
debentures ranking equally with the debentures being offered hereby.

Interest

Interest on each debenture will accrue from the date of issuance. We will pay interest on the debentures, at the election of the initial purchaser, quarterly,
or at maturity. If we are to pay interest at maturity only, it will be compounded quarterly.

The
election by the purchaser at the time of the purchase for payment of interest at maturity may be changed only once to provide for the payment of interest either quarterly or
monthly. Accrued and unpaid interest as of the effective date of the change will be added to the principal amount of the debenture, and simple interest will be paid thereafter on the new principal
amount. To change the payment option, a holder of a debenture must: (a) furnish Vicom with a written notice of such election;
(b) forward the actual certificate evidencing the debenture to Vicom for notation of current value and change in interest payment; and (c) provide such additional documentation and other
materials as Vicom deems necessary.

Interest Accrual Date

Interest on the debentures accrues from the date of issuance, which is deemed to be the date Vicom receives a properly executed Subscription Agreement and
appropriate funds, but only if they are received before 3:00 p.m. on a business day. If Vicom receives such funds on a nonbusiness day or after 3:00 p.m. on a business day, then the date
of issuance will be deemed to be the next business day. For this purpose, Vicom's business days will be deemed to be Monday through Friday, except for Minnesota legal holidays. (Sections 1.01 and
2.02(b)).

31

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Taxes

The following discussion is based on provisions of the Internal Revenue Code of 1986, as amended, applicable regulations thereunder, judicial authority and
current administrative rulings, all of which may be retroactively subject to change. Each prospective purchaser of debentures should consult his or her own tax advisor. Interest on the debentures is
taxable to the holder as it accrues, including interest on debentures which is payable only at maturity. As a consequence, a holder of a debenture who elects payment of interest at maturity is
required to recognize the interest income on such debenture as it accrues even though payment of such interest is deferred until maturity. Under the Code, Vicom must report the interest earned on
debentures with respect to each holder to the Internal Revenue Service. No portion of interest will be withheld for holders who provide Vicom with a taxpayer identification number on Forms
W-8 or W-9, except on accounts held by foreign business entities. With respect to those investors who do not provide Vicom with a taxpayer identification number on Forms
W-8 or W-9, Vicom will withhold 31% of any interest paid. It is Vicom's policy that no sale will be made to anyone refusing to provide a taxpayer identification number on Forms
W-8 or W-9.

Additional Interest

In addition to the interest rates payable as set forth above, Vicom may make such additional payments of interest, premiums or other benefits on such of the
debentures, in such amounts, in such form, on such terms and at such times as shall be determined from time to time by Vicom. (Section 2.02(b)). Such additional interest payments may be
modified or discontinued at any time. (Section 2.02(b)). For example, such additional interest payments may be limited to new investors, or to current investors increasing or renewing their
investments in Vicom debentures. Also, such additional interest payments may be limited to current or new investors residing in a particular geographic area.

Purchase at the Option of Vicom

Vicom may, at its option, redeem any or all of the debentures on at least 30 days notice to each holder of debentures to be redeemed at his or her
registered address at a price equal to 100% of the principal amount of the debentures, plus accrued interest on a daily basis to the redemption date. (Section 3.04). Vicom may select debentures
for redemption based on interest rate or maturity. (Section 3.03). If Vicom redeems less than all of a series or class of debentures selected for redemption by Vicom, the debentures will be
chosen for redemption by the Trustee as provided in the Indenture, generally pro rata or by lot. (Section 3.03). On and after the redemption date, interest ceases to accrue on debentures or
portions of them called for redemption. (Article 3).

Payment by Vicom Upon Death; Offers by Vicom to Repurchase Debentures

A maximum principal amount of $50,000 in one or more debentures may be redeemed at the election of the estate of the original owner (if such person was still
the holder) following such person's death, as established to the satisfaction of Vicom. (Section 3.08(a)). The redemption price will be equal to 100% of the principal amount of the debenture,
plus interest accrued and not previously paid, to the date of redemption. (Section 3.08(a)). If two or more persons are joint record owners of a debenture, the election to redeem will not apply
until all record owners are deceased, except that, if the joint owners are husband and wife, the election may be made after the death of either spouse. (Section 3.08(d)). Except as described
above, debenture holders have no right to require redemption of amounts under the debenture. Any offer to repurchase debentures made by Vicom at the holders' option will be made in compliance with any
applicable tender offer rules under the Securities Exchange Act of 1934, as amended, including Rule 14e-1 thereunder (Article 3).

32

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Modification of Indenture

The Indenture may be modified by Vicom and the Trustee at any time or times with the consent of the holders of not less than a majority in principal amount of
the debentures that are then outstanding. However, Vicom and the Trustee may not modify the Indenture to affect the terms of payment of, the principal of, or any interest on any debenture without the
consent of the holder thereof, or to reduce the percentage of debenture holders whose consent to modification is required. (Section 9.02). Without action by the debenture holders, Vicom and the
Trustee may amend the Indenture or enter into supplemental indentures allowing for uncertificated debentures, clarifying any ambiguity or correcting any defect or inconsistency in the Indenture,
making any change to the Indenture that does not adversely affect the legal rights of the debenture holders, or increasing the aggregate principal amount of debentures to be issued under the
Indenture. (Article 9).

Place, Method and Time of Payment

Principal and interest on the debentures will be payable at Vicom's principal executive office, as it may established from time to time, or at such other place
as Vicom may designate for that purpose; provided, however, that payments may be made at Vicom's option by check or draft mailed to the person entitled thereto at his or her address appearing in the
register which Vicom maintains for that purpose. (Section 2.06). Any payment of principal or interest which shall is due on a nonbusiness day will be payable by Vicom on the next business day
immediately following such nonbusiness day. (Section 11.07).

Events of Default

An event of default is defined in the Indenture as being a default in payment of principal on the debentures which has not been cured; a default for
30 days in payment of any installment of interest on the debentures; acceleration of maturity of any senior indebtedness in an amount exceeding $2,250,000 under the terms of the instrument
under which such senior indebtedness is or may be outstanding, if such acceleration is not annulled within 30 days after written notice; or certain events of bankruptcy, insolvency or
reorganization or default in the performance or beach of any covenant or warranty of Vicom in the Indenture and continuance of such default in performance or breach for a period of 60 days
after notice of such default ahs been received by Vicom from the Trustee or from the holders of at least 25% in principal amount of the outstanding debentures. (Section 6.01). Vicom is required
to file annually with the Trustee an officer's certificate that certifies as to the absence of certain defaults
under the terms of the Indenture. (Section 4.03). The Indenture provides that the holders of a majority of the aggregate principal amount of the debentures at the time outstanding may, on
behalf of all holders, waive any past default or event of default except in payment of principal or interest on the debentures. (Section 6.04).

Subject
to the provisions of the Indenture relating to the duties of the Trustee, if an event of default occurs and is continuing, the Trustee is under no obligation to exercise any
of its rights or powers under the Indenture at the request, order or direction of any debenture holders unless such debenture holders shall have offered to the Trustee reasonable indemnity.
(Section 6.06(3)). Subject to such provisions for the indemnification of the Trustee, the holders of a majority in principal amount of the debentures at the time outstanding have the right to
direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any power conferred on the Trustee. (Section 6.05). The Indenture contains
certain limitations on the right of an individual debenture holder to institute legal proceedings in the event of Vicom's default. (Section 6.06).

Satisfaction and Discharge of Indenture

The Indenture may be discharged upon the payment of all debentures outstanding thereunder or upon deposit in trust of funds sufficient therefor, plus
compliance with certain formal procedures. (Article 8).

33

---

Reports

Vicom plans to publish annual reports containing audited financial statements and quarterly reports containing unaudited financial information for the first
three quarters of each fiscal year. Copies of such reports will be sent to any debenture holder upon written request.

Service Charges

Vicom reserves the right to assess service charges for issuing debentures to replace lost or stolen debentures, changing the registration of a debenture when
such change is occasioned by a change in
name of the holder, issuing a replacement interest payment check, or a transferring (whether by operation of law or otherwise) of the debenture by the holder to another holder. (Sections 2.05, 2.07
and 2.08).

Any
holder who requests the replacement of any interest payment check 10 days or less from issue date accepts any bank charges, including stop payment order charges. The
charges amount will be subtracted from the replacement interest payment check.

Transfer and Exchange

A holder may transfer or exchange debentures in accordance with the Indenture. Vicom, as registrar under the Indenture, may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Vicom is not required to transfer or exchange any
debentures selected for redemption. (Section 2.07). Also, Vicom is not required to transfer or exchange any debenture for a period of 15 business days before the maturity of such debentures.
(Section 2.07).

Concerning the Trustee

The Indenture contains certain limitations on the right of the Trustee, should it become a creditor of Vicom, to obtain payment of claims in certain cases, or
to realize on certain property with respect to any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest
(as defined) and if any of the Indenture securities are in default, it must eliminate such conflict or resign.

The
holders of a majority in principal amount of the then outstanding debentures issued under the Indenture will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee with respect to the debentures. (Section 6.05). The Indenture provides that if an event of default occurs, and it is not cured, the
Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his or her own affairs. (Section 7.01(a)). Subject to such provisions,
the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any of the holders of the debentures issued thereunder unless they shall have
offered to the Trustee security and indemnity satisfactory to it. (Section 7.01(e)).

VALIDITY OF DEBENTURES

The validity of the debentures being offered by this prospectus will be passed upon for us by Winthrop & Weinstine, P.A., Minneapolis, Minnesota.

EXPERTS

Financial statements of Vicom included in this prospectus for the years ended December 31, 1999, 1998 and 1997 have been audited by Lurie, Besikof,
Lapidus & Co., LLP, independent certified public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of such firm as experts
in giving said report.

34

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WHERE YOU CAN FIND MORE INFORMATION

We will be filing annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission under File
No. 0-13529. You may read and copy any document in our public files at the SEC's offices at:



and



Please
call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from
the SEC's website at http://www.sec.gov, through the SEC's electronic data gathering analysis and retrieval system, EDGAR. Our common stock is traded on the OTCBB under the symbol "VICM." Information
about us is also available from the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

This
prospectus is part of a registration statement that we filed with the SEC. You should rely only on the information provided in this prospectus or any supplement. We have not
authorized anyone else to provide you with different information. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the
front of that document.

35

---

---

---

You should rely on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in
this prospectus. The selling shareholders are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of the prospectus or of any sale of the common stock.

---

TABLE OF CONTENTS

|                                                                                      |  | Page
|------------------------------------------------------------------------------------- |  | ----
|Prospectus Summary                                                                    |  | 1   
|Risk Factors                                                                          |  | 4   
|Forward-Looking Statements                                                            |  | 7   
|Use of Proceeds                                                                       |  | 8   
|Plan of Distribution                                                                  |  | 8   
|Selected Financial Data                                                               |  | 9   
|Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 10  
|Business                                                                              |  | 15  
|Management                                                                            |  | 22  
|Certain Transactions                                                                  |  | 26  
|Principal Shareholders                                                                |  | 28  
|Description of Debentures                                                             |  | 30  
|Validity of Debentures                                                                |  | 34  
|Experts                                                                               |  | 34  
|Where You Can Find More Information                                                   |  | 35  
|Index to Financial Statements                                                         |  | F-1 

$50,000,000

Vicom, Incorporated

7.25% One -Year
8.25% Two -Year
10.00% Five -Year
11.25% Ten -Year

Subordinated Debentures
Minimum Investment of $1,000

---

PROSPECTUS

---

, 2000

---

---

---

## 

Index to Financial Statements

|                                                                                                                                                                                                                                                                                                                                |                                                    | Page(s)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | -------
|Vicom, Inc. and SubsidiariesConsolidated Balance Sheets as of December 31, 1999 and 1998 and June 30, 2000, and Consolidated Statements of Operations, Consolidated Stockholders' Equity and
Consolidated Cash Flows for the Years Ended December 31, 1999, 1998 and 1997, and for the Six Months Ended June 30, 2000 and 1999 |                                                    |        
|INDEPENDENT AUDITOR'S REPORT                                                                                                                                                                                                                                                                                                    |                                                    | F-2    
|FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                            |                                                    |        
|                                                                                                                                                                                                                                                                                                                                | Consolidated balance sheets                        |        
|                                                                                                                                                                                                                                                                                                                                | Consolidated statements of operations              |        
|                                                                                                                                                                                                                                                                                                                                | Consolidated statements of stockholders' equity    |        
|                                                                                                                                                                                                                                                                                                                                | Consolidated statements of cash flows              |        
|                                                                                                                                                                                                                                                                                                                                | Notes to consolidated financial statements         |        
|Ekman, Inc.Balance Sheets as of June 30, 1999 and 1998, and Statements of Income and Retained Earnings and of Cash Flows for the Years Ended June 30, 1999, 1998 and 1997                                                                                                                                                      |                                                    |        
|INDEPENDENT AUDITOR'S REPORT                                                                                                                                                                                                                                                                                                    |                                                    | F-23   
|FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                            |                                                    |        
|                                                                                                                                                                                                                                                                                                                                | Balance sheets                                     |        
|                                                                                                                                                                                                                                                                                                                                | Statements of income and retained earnings         |        
|                                                                                                                                                                                                                                                                                                                                | Statements of cash flows                           |        
|                                                                                                                                                                                                                                                                                                                                | Notes to financial statements                      |        
|Enstar Networking MidwestStatements of Operating Unit Assets and Liabilities, Operations, Equity, and Cash Flows as of and for the  Year Ended December 31, 1998                                                                                                                                                               |                                                    |        
|REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                                                                                                                                                                                                                                                                              |                                                    | F-33   
|FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                            |                                                    |        
|                                                                                                                                                                                                                                                                                                                                | STATEMENT OF OPERATING UNIT ASSETS AND LIABILITIES |        
|                                                                                                                                                                                                                                                                                                                                | STATEMENT OF OPERATING UNIT OPERATIONS             |        
|                                                                                                                                                                                                                                                                                                                                | STATEMENT OF OPERATING UNIT EQUITY                 |        
|                                                                                                                                                                                                                                                                                                                                | STATEMENT OF OPERATING UNIT CASH FLOWS             |        
|                                                                                                                                                                                                                                                                                                                                | NOTES TO FINANCIAL STATEMENTS                      |        

F-1

---

## 

INDEPENDENT AUDITOR'S REPORT

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

We
have audited the accompanying consolidated balance sheets of Vicom, Incorporated and Subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1999. 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 consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

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



Minneapolis,
Minnesota
February 23, 2000, except for Note 15,
  as to which the date is April 3, 2000

F-2

---

VICOM, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                          |                                                                                                                                       | December 31,                                                                                              |            | June 30,   |           
|----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ---------- | ---------- | ----------
|
|
|ASSETS                                    |                                                                                                                                       |                                                                                                           |            |           
|CURRENT ASSETS                            |                                                                                                                                       |                                                                                                           |            |            |           
|                                          | Cash                                                                                                                                  |                                                                                                           | $          | 204,365    |           
|                                          | Accounts receivable, net of allowance of $140,000, $115,000, and 54,500                                                               |                                                                                                           |            | 5,369,221  |           
|                                          | Inventories, net of allowance of $330,000, $910,000, and 330,000                                                                      |                                                                                                           |            | 1,801,596  |           
|                                          | Costs and estimated earnings in excess of billings                                                                                    |                                                                                                           |            | 232,725    |           
|                                          | Other                                                                                                                                 |                                                                                                           |            | 154,766    |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       | TOTAL CURRENT ASSETS                                                                                      |            |            | 7,762,673 
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|PROPERTY AND EQUIPMENT                    |                                                                                                                                       |                                                                                                           | 1,324,080  |            |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|NONCURRENT ASSETS                         |                                                                                                                                       |                                                                                                           |            |            |           
|                                          | Goodwill, net of accumulated amortization of $101,604, $-0-, and $269,139                                                             |                                                                                                           |            | 3,249,111  |           
|                                          | Deferred income taxes                                                                                                                 |                                                                                                           |            |           |           
|                                          | Other                                                                                                                                 |                                                                                                           |            | 262,881    |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       |                                                                                                           | 3,511,992  |            |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       | $                                                                                                         | 12,598,745 |            | $         
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|LIABILITIES AND STOCKHOLDERS' EQUITY      |                                                                                                                                       |                                                                                                           |            |           
|CURRENT LIABILITIES                       |                                                                                                                                       |                                                                                                           |            |            |           
|                                          | Checks issued in excess of deposits                                                                                                   |                                                                                                           | $          | 126,297    |           
|                                          | Notes and installment obligations payablecurrent maturities                                                                          |                                                                                                           |            | 4,246,433  |           
|                                          | Accounts payable                                                                                                                      |                                                                                                           |            | 4,503,451  |           
|                                          | Other liabilities                                                                                                                     |                                                                                                           |            | 977,513    |           
|                                          | Due to ENStar, Inc.                                                                                                                   |                                                                                                           |            | 207,170    |           
|                                          | Deferred service obligations and revenue                                                                                              |                                                                                                           |            | 584,716    |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       | TOTAL CURRENT LIABILITIES                                                                                 |            |            | 10,645,580
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|NOTES AND INSTALLMENT OBLIGATIONS PAYABLE |                                                                                                                                       |                                                                                                           | 926,821    |            |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|COMMITMENTS AND CONTINGENCIES             |                                                                                                                                       |                                                                                                           |           |            |           
|STOCKHOLDERS' EQUITY                      |                                                                                                                                       |                                                                                                           |            |            |           
|                                          | Preferred stock, liquidation preference of $10.50 per share:                                                                          |                                                                                                           |            |            |           
|                                          |                                                                                                                                       | 8% Class A cumulative convertibleno par value, (issued and outstanding2,550, -0-, and -0- shares)       |            |            | 23,638    
|                                          |                                                                                                                                       | 10% Class B cumulative convertibleno par value (issued and outstanding37,550, 35,050 and 22,836 shares) |            |            | 359,893   
|                                          |                                                                                                                                       | 10% Class C cumulative convertibleno par value (issued and outstanding -0-, -0-, and80,500 shares)      |            |            |          
|                                          | Common stockno par value (issued 4,984,845, 3,612,995, and 7,822,208 shares; outstanding 4,784,906, 3,506,236, and 7,622,269 shares) |                                                                                                           |            | 4,551,745  |           
|                                          | Subscriptions receivable                                                                                                              |                                                                                                           |            |           |           
|                                          | Options and warrants                                                                                                                  |                                                                                                           |            | 217,028    |           
|                                          | Unamortized compensation                                                                                                              |                                                                                                           |            | (258,659   | )         
|                                          | Accumulated deficit                                                                                                                   |                                                                                                           |            | (3,867,301 | )         
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       |                                                                                                           | 1,026,344  |            |           
|                                          |                                                                                                                                       |                                                                                                           |            |            |           
|                                          |                                                                                                                                       | $                                                                                                         | 12,598,745 |            | $         
|                                          |                                                                                                                                       |                                                                                                           |            |            |           

See notes to consolidated financial statements.

F-3

---

VICOM, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                      |                                     | Years Ended December 31, |            | Six Months Ended June 30, |  
|----------------------------------------------------- | ----------------------------------- | ------------------------ | ---------- | ------------------------- | -
|
|
|REVENUES                                              |                                     | $                        | 20,388,870 |                           | $
|                                                      |                                     |                          |            |                           |  
|COSTS AND EXPENSES                                    |                                     |                          |            |                           |  
|                                                      | Cost of products and services       |                          |            | 16,247,898                |  
|                                                      | Selling, general and administrative |                          |            | 5,823,945                 |  
|                                                      |                                     |                          |            |                           |  
|                                                      |                                     |                          | 22,071,843 |                           |  
|                                                      |                                     |                          |            |                           |  
|INCOME (LOSS) FROM OPERATIONS                         |                                     |                          | (1,682,973 | )                         |  
|                                                      |                                     |                          |            |                           |  
|OTHER INCOME (EXPENSE)                                |                                     |                          |            |                           |  
|                                                      | Interest expense                    |                          |            | (262,228                  | )
|                                                      | Miscellaneous                       |                          |            | 122,767                   |  
|                                                      |                                     |                          |            |                           |  
|                                                      |                                     |                          | (139,461   | )                         |  
|                                                      |                                     |                          |            |                           |  
|INCOME (LOSS) BEFORE INCOME TAXES                     |                                     |                          | (1,822,434 | )                         |  
|INCOME TAX PROVISION                                  |                                     |                          | 241,200    |                           |  
|                                                      |                                     |                          |            |                           |  
|NET INCOME (LOSS)                                     |                                     | $                        | (2,063,634 | )                         | $
|                                                      |                                     |                          |            |                           |  
|EARNINGS (LOSS) PER SHAREBASIC AND DILUTED           |                                     | $                        | (.55       | )                         | $
|                                                      |                                     |                          |            |                           |  
|WEIGHTED AVERAGE SHARES OUTSTANDINGBASIC AND DILUTED |                                     |                          | 3,821,978  |                           |  
|                                                      |                                     |                          |            |                           |  

See
notes to consolidated financial statements.

F-4

---

VICOM, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

|                                   |                                                   | Cumulative Convertible
Preferred Stock |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|---------------------------------- | ------------------------------------------------- | -------------------------------------- | ------ | - | ------ | ------- | ------ | ------ | - | ------- | ------- | ------ | ------ | - | ------- | ------- | ---------
|
|
|
|
|BALANCE, DECEMBER 31, 1996         |                                                   |                                       |        | $ |       |         |       |        | $ |        |         |       |        | $ |        |         | 2,081,236
|                                   | Issuance of stock                                 |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Net income                                        |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   |                                                   |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|BALANCE, DECEMBER 31, 1997         |                                                   |                                       |        |   |       |         |       |        |   |        |         |       |        |   |        |         | 2,106,236
|                                   | Conversion of notes payable, net of costs         |                                        |       |   |        |        |        | 35,050 |   |         | 336,718 |        |       |   |         |        |          
|                                   | Warrants issued with preferred stock              |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Restricted stock issued                           |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Acquisition of ENC (Note 2)                       |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Net loss                                          |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   |                                                   |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|BALANCE, DECEMBER 31, 1998         |                                                   |                                       |        |   |       |         | 35,050 |        | $ | 336,718 |         |       |        |   |        |         | 3,612,995
|                                   | Sale of stock                                     |                                        | 2,550  |   |        | 23,638  |        | 2,500  |   |         | 23,175  |        |       |   |         |        |          
|                                   | Warrants issued:                                  |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|                                   |                                                   | Preferred stock                        |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   |                                                   | Notes                                  |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   | Restricted stock:                                 |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|                                   |                                                   | Issued                                 |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   |                                                   | Forfeited                              |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   |                                                   | Amortization expense                   |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   | Acquisition of Ekman (Note 2):                    |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|                                   |                                                   | Stock                                  |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   |                                                   | Options and warrants                   |        |  |        |         |       |        |  |         |         |       |        |  |         |         |         
|                                   | Preferred dividends                               |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Net loss                                          |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   |                                                   |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|BALANCE, DECEMBER 31, 1999         |                                                   | 2,550                                  |        |   | 23,638 |         | 37,550 |        |   | 359,893 |         |       |        |   |        |         | 4,984,845
|                                   | Sale of stock, net of issuance costs (unaudited)  |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Conversion of preferred stock (unaudited)         |                                        | (2,550 | ) |        | (23,638 | )      | (9,000 | ) |         | (83,884 | )      |       |   |         |        |          
|                                   | Redemption of preferred stock (unaudited)         |                                        |       |   |        |        |        | (5,714 | ) |         | (57,140 | )      |       |   |         |        |          
|                                   | Conversion of notes payable (unaudited)           |                                        |       |   |        |        |        |       |   |         |        |        | 80,500 |   |         | 805,000 |          
|                                   | Restricted stock amortization expense (unaudited) |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Warrant dividend (unaudited)                      |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Preferred dividends (unaudited)                   |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   | Net loss (unaudited)                              |                                        |       |   |        |        |        |       |   |         |        |        |       |   |         |        |          
|                                   |                                                   |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          
|BALANCE, JUNE 30, 2000 (unaudited) |                                                   |                                       |        | $ |       |         | 22,836 |        | $ | 218,869 |         | 80,500 |        | $ | 805,000 |         | 7,622,269
|                                   |                                                   |                                        |        |   |        |         |        |        |   |         |         |        |        |   |         |         |          

See notes to consolidated financial statement

F-5

---

VICOM, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                     |                                                                                                                                     | Years Ended December 31,                     |                                          | Six Months Ended June 30,                        |        
|-------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------- | ------------------------------------------------ | -------
|
|
|OPERATING ACTIVITIES |                                                                                                                                     |                                              |                                          |                                                  |        
|                     | Net income (loss)                                                                                                                   |                                              | $                                        | (2,063,634                                       | )      
|                     | Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities, net of business acquisition effect: |                                              |                                          |                                                  |        
|                     |                                                                                                                                     | Depreciation                                 |                                          |                                                  | 408,796
|                     |                                                                                                                                     | Amortization                                 |                                          |                                                  | 145,136
|                     |                                                                                                                                     | Deferred income taxes                        |                                          |                                                  | 249,200
|                     |                                                                                                                                     | Changes in operating assets and liabilities: |                                          |                                                  |        
|                     |                                                                                                                                     |                                              | Accounts receivable                      |                                                  |        
|                     |                                                                                                                                     |                                              | Inventories                              |                                                  |        
|                     |                                                                                                                                     |                                              | Costs, estimated earnings, and billings  |                                                  |        
|                     |                                                                                                                                     |                                              | Other assets                             |                                                  |        
|                     |                                                                                                                                     |                                              | Accounts payable and other liabilities   |                                                  |        
|                     |                                                                                                                                     |                                              | Deferred service obligations and revenue |                                                  |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|                     |                                                                                                                                     |                                              |                                          | Net cash provided (used) by operating activities |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|INVESTING ACTIVITIES |                                                                                                                                     |                                              |                                          |                                                  |        
|                     | Purchase of business, net of $64,072 cash received                                                                                  |                                              |                                          | (435,928                                         | )      
|                     | Purchases of property and equipment                                                                                                 |                                              |                                          | (631,166                                         | )      
|                     | Proceeds from sales of property and
equipment                                                                                       |                                              |                                          |                                                 |        
|                     | Collections on notes receivable                                                                                                     |                                              |                                          | 29,383                                           |        
|                     | Issuance of notes receivable                                                                                                        |                                              |                                          | (30,000                                          | )      
|                     | Other                                                                                                                               |                                              |                                          | (30,000                                          | )      
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|                     |                                                                                                                                     |                                              |                                          | Net cash provided (used) by investing activities |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|FINANCING ACTIVITIES |                                                                                                                                     |                                              |                                          |                                                  |        
|                     | Increase (decrease) in checks issued in excess of deposits                                                                          |                                              |                                          | (416,734                                         | )      
|                     | Net borrowings (payments) under credit arrangements                                                                                 |                                              |                                          | (2,600                                           | )      
|                     | Proceeds from notes payable                                                                                                         |                                              |                                          | 1,170,600                                        |        
|                     | Principal payments on notes and installment obligations                                                                             |                                              |                                          | (847,242                                         | )      
|                     | Proceeds from issuance of stock and warrants                                                                                        |                                              |                                          | 50,500                                           |        
|                     | Stock issuance costs                                                                                                                |                                              |                                          |                                                 |        
|                     | Dividends                                                                                                                           |                                              |                                          | (37,969                                          | )      
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|                     |                                                                                                                                     |                                              |                                          | Net cash provided (used) by financing activities |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|INCREASE IN CASH     |                                                                                                                                     |                                              | 204,365                                  |                                                  |        
|CASH                 |                                                                                                                                     |                                              |                                          |                                                  |        
|                     | Beginning of period                                                                                                                 |                                              |                                          |                                                 |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        
|                     | End of period                                                                                                                       |                                              | $                                        | 204,365                                          |        
|                     |                                                                                                                                     |                                              |                                          |                                                  |        

See notes to consolidated financial statements.

F-6

---

VICOM, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Summary of Significant Accounting Policies

Organization

Vicom, Incorporated and Subsidiaries (the Company) sells integrated voice, video, data networking and computer technologies products and services. The Company
sells its products and services primarily to businesses and states and municipalities in the Midwest region of the United States.

Principles of Consolidation

The consolidated financial statements include the accounts of Vicom, Incorporated (Vicom) and its wholly-owned subsidiaries, Vicom Midwest Telecommunication
Systems, Inc. and Corporate Technologies, USA, Inc. All significant intercompany accounts and transactions are eliminated.

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions
that may affect the reported amounts and disclosures in the financial statements and accompanying notes. Actual results could differ from these estimates. Significant management estimates relate to
the amortization periods for goodwill, the allowances for doubtful accounts and inventory obsolescence, the valuation of deferred income tax assets, and quarterly inventory valuations.

Inventories

Inventories, consisting principally of purchased telecommunication, networking and computer equipment and parts, are stated at the lower of cost or market.
Cost is determined using an average cost method for telecommunication and networking equipment and the first-in, first-out (FIFO) method for computer equipment. Nonmonetary
exchanges of inventory items with third parties are recorded at net book value of the items exchanged with no gains or losses recognized.

Property and Equipment

Equipment and leasehold improvements are stated at cost. Equipment is depreciated principally by the straight-line method over three to eight
years, the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the life of the improvement or the term of the respective lease.

Goodwill

Goodwill represents the excess of acquisition prices over the fair value of net assets acquired and is amortized by the straight-line method over
ten years. The Company evaluates goodwill annually for impairment by comparing the net carrying values to the undiscounted future cash flows of the related assets.

Revenues and Cost Recognition

The Company earns revenues from three sources: 1) Video and computer technology products which are sold but not installed, 2) Voice, video, and
data networking technology products which are sold and installed, and 3) Service revenues related to technology products which are sold and both installed and not installed.

F-7

---

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

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

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

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

Fair Value of Financial Instruments

The carrying amounts of financial instruments consisting of cash, accounts receivables, notes receivable, checks issued in excess of deposits, notes and
installment obligations payable to nonrelated parties, and accounts payable approximate their fair values. It is not practical to determine the fair value of the related party notes payable due to the
related party nature of the transactions.

Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and trade accounts and notes receivables. The Company
restricts cash and investments to financial institutions with high credit standing. Credit risk on trade receivables, although concentrated in one geographic region, is minimized as a result of the
large and diverse nature of the Company's customer base.

Accounting for Stock-Based Compensation

The Company accounts for employee stock options under Accounting Principles Board Opinion (APB) No. 25,Accounting for Stock
Issued to Employees,and provides the pro forma disclosures required by Statement of Financial Accounting Standards (SFAS) No. 123,Accounting
For Stock-Based Compensation.Options and warrants to nonemployees are recorded as required by SFAS No. 123.

Earnings (Loss) Per Share

Earnings (loss) per sharebasic is determined by dividing net income (loss) less the preferred stock dividends by the weighted average common
shares outstanding. Net income (loss) per common share

F-8

---

diluted is computed by dividing net income (loss) less the preferred stock dividends by the weighted average common shares outstanding and the common share equivalents (stock options, stock warrants,
convertible preferred shares, and issued but not outstanding restricted stock). Common share equivalents are not included in the computations as their effects were antidilutive.

A
reconciliation of net income (loss) to earnings (loss) for computing earnings (loss) per share is as follows:

Years Ended December 31,1999

1998

1997Net income (loss)

$
(2,063,634
)
$
(1,443,748
)
$
56,177Preferred stock dividends


(37,969
)




Earnings (loss) for computing earnings (loss) per share

$
(2,101,603
)
$
(1,443,748
)
$
56,177


Reclassifications

Certain reclassifications were made to the 1998 and 1997 financial statements to make them comparable with 1999. The reclassifications did not effect
previously reported net income (loss), stockholders' equity or net cash flows.

Recent Accounting Pronouncement

In June 1998, the Financial Accounting Standard Board issued Statement on Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities, effective for years beginning
after June 15, 2000. The statement establishes accounting and reporting standards for derivative instruments and hedging activities. Management believes this pronouncement will not
significantly effect its financial statements.

F-9

---

2. Business Acquisitions

Effective November 1, 1999, Vicom purchased the common stock of Ekman, Inc. (Ekman) from its sole stockholder and merged it into a new
subsidiary, Corporate Technologies, USA, Inc. The purchase price was allocated to assets and liabilities acquired as follows:

Cash

$
64,072Accounts receivable


4,047,221Inventories


1,184,311Property and equipment


442,509Other assets


93,196Checks issued in excess of deposits


(335,812
)Notes and installment obligations payable


(1,326,666
)Accounts payable


(2,080,426
)Other liabilities


(322,822
)Service obligations


(79,697
)Net tangible assets acquired


1,685,886Goodwill


2,801,614Total purchase price

$
4,487,500


The
consideration consisted of $500,000 in cash, $1,750,000 in 10% promissory notes, 1,250,000 common shares of Vicom with an assigned value of $2,137,500, and 150,000 stock options
valued at $60,000
and 100,000 warrants valued at $40,000. The value of common shares was based on an independent third party appraisal. Stock options and warrants were valued in accordance with the Black-Scholes
Option-Pricing Model (Note 7)

Effective
December 31, 1998, Vicom purchased the assets of the midwest region of Enstar Networking Corporation (ENC) from its parent company ENStar Inc. (ENStar). The
purchase price was allocated to assets and liabilities acquired as follows:

Accounts receivable:Billed

$
1,191,639Unbilled


239,130Inventories


114,932Property and equipment


103,031Other assets


91,953Service obligations


(179,289
)Billings in excess of costs


(74,997
)Net tangible assets acquired


1,486,399Goodwill


549,101Total purchase price

$
2,035,500


The
consideration consisted of 1,350,000 common shares of Vicom with an assigned value of $797,312, a $750,000 subordinated 9% promissory note, a payable of $340,188 for purchase
price adjustments, and acquisition related costs of $148,000. The value of common shares was based on the average stock market sales prices immediately prior to the acquisition.

F-10

---

Both acquisitions were accounted for by the purchase method of accounting for business combinations. Accordingly, the operating results of Ekman and ENC were included in the
consolidated financial statements since the date of acquisition. The Company's unaudited pro forma results assuming both acquisitions occurred on January 1, 1998 are as follows:

Years Ended December 31,1999

1998Revenues

$
44,941,776

$
44,312,204Net loss


(2,295,869
)

(1,665,769
)Loss per sharebasic and diluted


(.48
)

(.35
)


These
unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually occurred
had the combinations been in effect on January 1, 1998, or of future results of operations.

3. Property and Equipment

Property and equipment are as follows:

December 31,June 30,
20001999

1998(unaudited)Cost:Leasehold improvements

$
94,197

$
72,950

$
102,478Equipmentowned


2,237,141


1,199,781


3,106,677Equipment under capital leases


364,860


337,947


442,1222,696,198


1,610,678


3,651,277Less accumulated depreciation:Leasehold improvements


49,943


36,306


58,977Equipmentowned


1,076,345


708,907


1,994,727Equipment under capital leases


245,830


218,109


331,6631,372,118


963,322


2,385,367$
1,324,080

$
647,356

$
1,265,910


F-11

---

4. Other Assets

Other assets are as follows:

December 31,June 30,
20001999

1998(unaudited)Current:Notes receivablecurrent maturities

$
59,254

$
34,823

$
67,999Prepaid expenses and other


95,512


69,617


206,365$
154,766

$
104,440

$
274,364Noncurrent:Notes receivable, less current maturities

$
71,051

$
94,865

$
40,390Prepaid expenses and other


191,830


18,904


154,989$
262,881

$
113,769

$
195,380


5. Other Liabilities

Other liabilities are as follows:

December 31,June 30,
20001999

1998(unaudited)Payroll related

$
641,059

$
115,333

$
641,808Billings in excess of cost and estimated earnings


9,231


74,997


21,974Acquisition costs





148,000


Other


327,223


73,594


348,286$
977,513

$
411,924

$
1,012,068


F-12

---

6. Notes and Installment Obligations Payable

Notes and installment obligations payable are as follows:

December 31,June 30,
20001999

1998(unaudited)Line of credit notes

$
1,307,400

$
100,000

$
Debenture payable








2,250,000Notes payable to related parties, interest at 9.0% to 15.0%, due December 1999 through December 2000, unsecured. Notes totaling $187,100 are past due.


2,037,100


228,311


781,000Notes payable to individuals, interest at 10.0% to 12.0%, due through December 1999, unsecured. These notes are past due.


887,545


98,033


58,000Subordinated note payable to ENStar, interest at 9.0%, due December 2003 or in the event of certain equity offerings or transactions, unsecured.


750,000


750,000


368,500Capital lease obligations, monthly installments including interest at 4.8% to 27.2% through 2003.


191,209


209,247


259,314Note payable to bank, retired in 1999.





454,034


5,173,254


1,839,625


3,716,914Less current maturities


4,246,433


1,013,135


3,560,770$
926,821

$
826,490

$
156,144


Future
maturities at December 31, 1999, are as follows:

Year

Amount2000

$
4,246,4332001


103,4602002


67,5072003


755,854$
5,173,254


The
Company borrowed at December 31, 1999, under the following lines of credit arrangements with two separate financial institutions:



F-13

---



The
lines are collateralized by substantially all Company assets and certain stockholder/officer guarantees, and subject to certain financial covenants. The prime rate at
December 31, 1999 and 1998, was 8.50% and 7.75%, respectively, and at June 30, 2000, was 9.50% (unaudited).

Interest
expense to related parties for the years ended December 31, 1999, 1998, and 1997 was approximately $142,000, $47,000, and $38,000, respectively and for the six months
ended June 30, 2000 and 1999 was approximately $105,000 (unaudited) and $48,000(unaudited), respectively.

The
maximum amounts borrowed under the lines were approximately $2,105,000, $590,000, and $498,000 for the years ended December 31, 1999, 1998, and 1997, respectively; average
borrowings were $656,000, $573,000, and $458,000, respectively; and the weighted average borrowings interest rates were 11.97%, 10.92%, and 12.11%, respectively.

In
March 2000, the Company entered into a $2,250,000 debenture agreement with a new financial institution, interest at prime plus 4% (plus 6.0% if in default) and due on
December 31, 2000. The debenture proceeds were used to pay off a previous line of credit due March 31, 2000 (unaudited).

7. Stockholders' Equity

Capital Stock Authorized

The articles of incorporation authorize the Company to issue 50,000,000 shares of no par capital stock. Authorization to individual classes of stock are by
Board of Directors resolution. The Board authorized 275,000 shares of Class A Preferred stock, 60,000 shares of Class B Preferred stock and 250,000 shares of Class C Preferred
stock at June 30, 2000 (unaudited).

Preferred Stock

Dividends on Class A Preferred are cumulative and payable quarterly at 8% per annum. Dividends on Class B and Class C Preferred are
cumulative and payable monthly at 10% per annum. The Class B and Class C Preferred was offered to certain note payable holders at a conversion of $10.00 per Class B and
Class C Preferred share. The Class A, Class B and Class C Preferred are nonvoting. Issuance of a share of Class A and Class B Preferred stock gives the holder
a five-year warrant to purchase one share of common stock at $3.00 per share, subject to adjustment. The Class C Preferred shares have no attached warrants. The Company can redeem
the Class A and Class Preferred stock at $10.50 per share and can redeem the Class C Preferred stock at $10.00 per share whenever the common stock price exceeds certain defined criteria.
Upon the Company's call for redemption, the holders of the Class A and Class B Preferred stock called for redemption will have the option to convert each preferred share into five shares
of common stock. Upon the company's call for redemption the holders of the Class C Preferred stock called for redemption will have the option to convert each Preferred stock into two shares of
common stock. Holders of Preferred stock cannot require the Company to redeem their shares.

Stock Compensation Plans

On December 31, 1998, the Company adopted the 1999 Stock Compensation Plan, which permits the issuance of restricted stock and stock options to key
employees and agents. All outstanding incentive stock options granted under the prior 1997 Stock Options Plan continue. The Plans reserved 1,500,000 shares of common stock for issuance through
restricted stock and incentive stock option awards and provides that the term of each award be determined by the Board of Directors. Under the Plans, the exercise price of

F-14

---

incentive stock options may not be less than the fair market value of the stock on the award date, and the options are exercisable for a period not to exceed ten years from award date.

Restricted Stock

The Company awards restricted common shares to selected employees. Recipients are not required to provide any consideration other than services. Company share
awards are subject to certain restrictions on transfer, and all or part of the shares awarded may be subject to forfeiture upon the occurrence of certain events, including employment termination. The
fair market value of shares awarded is generally amortized over three years, the vesting term of the awards. Restricted shares awarded, net of forfeitures, totaled 228,609 through December 31,
1999. At December 31, 1999 and 1998, unvested (issued but not outstanding) restricted shares were 199,939 and 106,759, respectively. Compensation expense recorded in 1999 in connection with the
amortization of the award cost was $37,532.

Stock Options

Stock option activity is as follows:

|                         |           | Options |         | Weighted-Average Exercise Price
|------------------------ | --------- | ------- | ------- | -------------------------------
|
|OUTSTANDING, January 1   |           | 690,500 |         | 244,500                        
|                         | Granted   |         | 341,841 |                                
|                         | Forfeited |         | (33,750 | )                              
|                         |           |         |         |                                
|OUTSTANDING, December 31 |           | 998,591 |         | 690,500                        
|                         |           |         |         |                                

The
weighted average grant-date fair value of options granted during the years ended December 31, 1999, 1998, and 1997 was $.38, $.18, and $.24, respectively. All
options were issued for exercise prices greater than or equal to grant date market values.

Options
outstanding and exercisable as of December 31, 1999, are as follows:

ExercisableWeighted-Average
OutstandingWeighted-
Average
Exercise
PriceRange of Exercise Prices

Options

Exercise Price

Remaining Contractual Life-Years

Options$.50 to $1.03

656,750

$
.64

3.2

656,750

$
.64$1.50 to $2.08

341,841


1.95

2.7

17,000


2.00$.50 to $2.08

998,591


1.09

3.0

673,750


.68


F-15

---

If the Company recognized stock option compensation expense based on grant date fair value consistent with the method prescribed by SFAS No. 123, net income (loss) would be
approximately as follows:

Years Ended December 31,1999

1998

1997Net income (loss)

$
(2,124,000
)
$
(1,485,000
)
$
12,000Earnings (loss) per sharebasic and diluted


(.56
)

(.70
)

.01


The
fair value of stock options is the estimated present value at grant date using the Black-Scholes Option-Pricing Model with the following weighted average assumptions:

Years Ended December 31,1999

1998

1997Risk-free interest rate

5.45
%
5.39
%
6.09
%Expected life

5 years

5 years

5 yearsExpected volatility

20
%
24
%
18
%Expected dividend rate

0
%
0
%
0
%


Stock Warrants

Stock warrant activity is as follows:

|                         |         | Warrants |         | Weighted-Average Exercise Price
|------------------------ | ------- | -------- | ------- | -------------------------------
|
|OUTSTANDING, January 1   |         | 270,050  |         | 235,000                        
|                         | Granted |          | 566,050 |                                
|                         |         |          |         |                                
|OUTSTANDING, December 31 |         | 836,100  |         | 270,050                        
|                         |         |          |         |                                

The
weighted average grant-date fair value of warrants granted during the years ended December 31, 1999, 1998, and 1997 was $.28, $.02, and $.24, respectively. All
warrants were issued for exercise prices greater than or equal to the award date market values.

All
warrants outstanding at December 31, 1999, are exercisable and have a weighted-average contractual life of approximately 4.5 years.

The
Company can call 501,100 of the warrants outstanding at December 31, 1999, whenever the Company's common stock priced exceeds certain criteria. In the event of a call, the
Company may redeem the unexercised warrants for $.01 each.

F-16

---

Stock warrants were awarded for:

Years Ended December 31,1999

1998

1997Debt issuance and guarantees

461,000



135,000Ekman acquisition

100,000



Preferred stock

5,050

35,050

566,050

35,050

135,000


The
1999 and 1998 warrants were recorded at fair value. The 1997 warrants were nominal in amount and the effects were not recorded in the financial statements.

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

Years Ended December 31,1999

1998

1997Risk free interest rate

5.88
%
4.34
%
6.61
%Expected life

5 years

5 years

5 yearsExpected volatility

20
%
24
%
10
%Expected dividend rate

0
%
0
%
0
%


8. Income Taxes

The income tax provision is as follows:

Years Ended December 31,

Six Months Ended June 30,1999

1998

1997

2000

1999(Unaudited)

(Unaudited)Current

$
(8,000
)
$


$


$


$
Deferred


249,200


50,000


28,000





$
241,200

$
50,000

$
28,000

$


$



F-17

---

Components of net deferred income tax assets are as follows:

December 31,June 30,
20001999

1998(unaudited)Deferred income tax assets:Net operating loss carryforwards

$
4,329,600

$
3,102,000

$
5,145,600Nondeductible allowances


326,800


567,200


326,8004,656,400


3,669,200


5,472,400Less valuation allowance


4,524,900


3,352,500


5,340,900131,500


316,700


131,500Deferred income tax liabilitiesdepreciation


131,500


67,500


131,500Net deferred income tax assets

$


$
249,200

$



Income
tax computed at the U.S. federal statutory rate reconciled to the effective tax rate is as follows:

Years Ended December 31,1999

1998

1997Statutory tax rate (benefit)

(34.0
)%
(34.0
)%
34.0
%Change in valuation allowance

64.3

36.2

(.7
)Net operating loss not recognized

(20.0
)
(2.4
)
Other

2.9

3.8

Effective tax rate

13.2
%
3.6
%
33.3
%


The
valuation allowance increased by $1,172,400 and $505,700 in the years ended December 31, 1999 and 1998, respectively, and by $816,000 (unaudited) for the six months ended
June 30, 2000, primarily from the Company's inability to utilize its net operating loss carryforwards. The valuation allowance decreased by $233,000 in the year ended December 31, 1997,
primarily because of lapsed net operating loss carryforwards.

F-18

---

The Company has the following net operating loss carryforwards at December 31, 1999, for federal income tax purposes:

Year of Expiration

Net Operating
Loss Carryforwards2000

$
871,0002001


307,0002002


3,152,0002004


1,050,0002005


599,0002007


501,0002008


59,0002009


22,0002011


595,0002012


25,0002018


1,122,0002019


2,521,000$
10,824,000


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

State
income tax effects are not material and therefore not separately shown.

9. Employee Benefit Plans

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

10. Commitments

Operating Leases

Facilities are leased under related party operating leases, expiring through 2006. In addition to basic monthly rents of approximately $37,000, the Company
pays building maintenance costs and real estate taxes and assessments. In addition, the Company leases vehicles under operating leases from an entity owned by a relative of a stockholder/officer and
various equipment under other leases.

F-19

---

10. Commitments

Future minimum rent commitments at December 31, 1999, are as follows:

Year

Amount2000

$
440,0002001


234,0002002


191,0002003


153,0002004


153,000Thereafter


255,000$
1,426,000


Rent
expense for the years ended December 31, 1999, 1998, and 1997 was approximately $261,000, $202,000, and $165,000, respectively, of which $190,000, $138,000 and $113,000,
respectively, was with related parties. Rent expense for the six months ended June 30, 2000 and 1999, was approximately $226,000 (unaudited) and 97,000 (unaudited), respectively, of which
approximately $178,000 (unaudited) and 62,000 (unaudited), respectively, was with related parties.

Employment Agreements

The Company has employment agreements with various officers expiring through 2002. Some of the agreements include renewal options and incentives.

Approximate
future minimum payments at December 31, 1999, are as follows:

Year

Amount2000

$
425,0002001


345,0002002


110,000$
880,000


F-20

---

11. Supplementary Disclosures of Cash Flow Information

|                                              |                                                      | Years Ended December 31, |         | Six Months Ended June 30,
|--------------------------------------------- | ---------------------------------------------------- | ------------------------ | ------- | -------------------------
|
|
|Cash paid for interest                        |                                                      | $                        | 214,730 |                          
|Noncash investing and financing transactions: |                                                      |                          |         |                          
|                                              | Acquisition of Ekman and ENC                         |                          |         | 3,987,500                
|                                              | Warrants issued with notes                           |                          |         | 112,640                  
|                                              | Capitalized lease equipment purchases                |                          |         | 11,845                   
|                                              | Notes payable converted to stock and warrants issued |                          |         |                         
|                                              | Subscriptions receivable on common stock             |                          |         |                         
|                                              | Warrant dividends                                    |                          |         |                         
|                                              | Refinancing of debt                                  |                          |         |                         
|                                              | Conversion of preferred to common stock              |                          |         |                         

12. Significant Customers and Suppliers

One customer represented approximately 15% of revenues in the year ended December 31, 1998. Two customers represented approximately 25% (13% and 12%)
(unaudited) of revenues for the six months ended June 30, 2000.

The
Company purchased materials from major suppliers approximately as follows:

SupplierA

B

C

D1999

34
%
18
%
7
%
1
%1998



60

19

151997



42

5

7


During
the six months ended June 30, 2000, two vendors represented approximately 25% and 16% (unaudited) of cost of products and services.

F-21

---

13. Financial Statement Adjustments

During the year ended December 31, 1998, the Company recorded approximately $1,000,000 of noncash adjustments in connection with the writedown of the
carrying amounts of certain assets as follows:

Expense Included WithinCost of
Products
Sold

Operating
Expenses

TotalInventory obsolescence

$
660,000

$


$
660,000Accounts and notes receivable





240,000


240,000Prepaid expenses and other





100,000


100,000$
660,000

$
340,000

$
1,000,000


The
effect of these adjustments in 1998 was to increase the loss per common share by $.47.

14. Business Segments

Prior to November 1, 1999, the Company operated as one segment, which included integrated voice, video, and data networking technology products and
services. With the acquisition of Ekman, the Company added the segment which sells computer technology products and services.

Segment
disclosures for the year ended December 31, 1999, are as follows:

Voice,
Video,
and Data
Networking

Computer

TotalRevenues

$
15,567,482

$
4,821,388

$
20,388,870Loss from operations


(1,642,919
)

(40,054
)

(1,682,973
)Depreciation and amortization


471,990


81,942


553,932Identifiable assets


5,753,985


6,844,760


12,598,745Capital expenditures


515,524


127,487


643,011


15. Subsequent Event

On April 3, 2000, the Company received approval from a new financial institution to replace the $2,000,000 line of credit, expiring June 17,
2000, with a $5,000,000 line, expiring March 31, 2003. Interest is at the prime rate plus 1.5%. Advances under the line are limited to eligible accounts receivable and
equipment additions. The line is collateralized by substantially all Company assets, requires subordination of certain related party debt, and is subject to certain financial covenants. Final terms of
the loan agreement may differ from the above.

F-22

---

## 

INDEPENDENT AUDITOR'S REPORT

Board
of Directors
Vicom, Inc.
New Hope, Minnesota

We
have audited the accompanying balance sheets of EKMAN, INC., d/b/a CORPORATE TECHNOLOGIES, as of June 30, 1999 and 1998, and the related statements of income and
retained earnings and of cash flows for each of the three years in the period ended June 30, 1999. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audits.

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

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of EKMAN, INC. as of June 30, 1999 and 1998,
and the results of its operations and its cash flows for each of the three years in the period ended June 30, 1999, in conformity with generally accepted accounting principles.



Minneapolis,
Minnesota
February 16, 2000

F-23

---

EKMAN, INC. d/b/a CORPORATE TECHNOLOGIES

BALANCE SHEETS

June 30, 1999 and 1998

|                                          |                                                                                            | 1999                 |                           | 1998     
|----------------------------------------- | ------------------------------------------------------------------------------------------ | -------------------- | ------------------------- | ---------
|
|ASSETS                                   
|CURRENT ASSETS                            |                                                                                            |                      |                           |          
|                                          | Cash                                                                                       |                      | $                         | 17,648   
|                                          | Accounts receivable, net of allowance of $30,000 and $45,000                               |                      |                           | 4,687,375
|                                          | Inventories, net of allowance of $65,000 and $60,000                                       |                      |                           | 774,620  
|                                          | Deferred taxes                                                                             |                      |                           | 81,000   
|                                          | Other                                                                                      |                      |                           | 39,686   
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            | TOTAL CURRENT ASSETS |                           |          
|                                          |                                                                                            |                      |                           |          
|PROPERTY AND EQUIPMENT                    |                                                                                            |                      | 390,458                   |          
|                                          |                                                                                            |                      |                           |          
|NONCURRENT ASSETS                         |                                                                                            |                      |                           |          
|                                          | Deferred taxes                                                                             |                      |                           | 12,000   
|                                          | Other                                                                                      |                      |                           | 113,299  
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            |                      | 125,299                   |          
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            | $                    | 6,116,086                 |          
|                                          |                                                                                            |                      |                           |          
|LIABILITIES AND STOCKHOLDER'S EQUITY     
|CURRENT LIABILITIES                       |                                                                                            |                      |                           |          
|                                          | Checks issued in excess of deposits                                                        |                      | $                         | 250,341  
|                                          | Bank line of credit borrowings                                                             |                      |                           | 1,800,000
|                                          | Current maturities of long-term debt                                                       |                      |                           | 27,660   
|                                          | Accounts payable                                                                           |                      |                           | 1,709,463
|                                          | Accrued liabilities                                                                        |                      |                           | 399,147  
|                                          | Deferred revenues                                                                          |                      |                           | 67,454   
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            |                      | TOTAL CURRENT LIABILITIES |          
|                                          |                                                                                            |                      |                           |          
|LONG-TERM DEBT, net of current maturities |                                                                                            |                      | 64,364                    |          
|                                          |                                                                                            |                      |                           |          
|COMMITMENTS AND CONTINGENCIES             |                                                                                            |                      |                          |          
|STOCKHOLDER'S EQUITY                      |                                                                                            |                      |                           |          
|                                          | Common stock, $1 par value, 50,000 shares authorized, 22,500 shares issued and outstanding |                      |                           | 22,500   
|                                          | Retained earnings                                                                          |                      |                           | 1,775,157
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            |                      | 1,797,657                 |          
|                                          |                                                                                            |                      |                           |          
|                                          |                                                                                            | $                    | 6,116,086                 |          
|                                          |                                                                                            |                      |                           |          

See
notes to financial statements.

F-24

---

EKMAN, INC. d/b/a CORPORATE TECHNOLOGIES

STATEMENTS OF INCOME AND RETAINED EARNINGS

Years Ended June 30, 1999, 1998 and 1997

|                           |                            | 1999 |            | 1998      |   | 1997       |          
|-------------------------- | -------------------------- | ---- | ---------- | --------- | - | ---------- | ---------
|
|REVENUES                   |                            | $    | 28,787,476 |           | $ | 23,649,767 |          
|COST OF GOODS SOLD         |                            |      | 23,717,177 |           |   | 18,433,549 |          
|                           |                            |      |            |           |   |            |          
|GROSS MARGIN               |                            |      | 5,070,299  |           |   | 5,216,218  |          
|                           |                            |      |            |           |   |            |          
|OPERATING EXPENSES         |                            |      |            |           |   |            |          
|                           | Selling                    |      |            | 3,861,124 |   |            | 3,667,171
|                           | General and administrative |      |            | 568,101   |   |            | 527,878  
|                           | Occupancy                  |      |            | 321,864   |   |            | 299,198  
|                           |                            |      |            |           |   |            |          
|                           |                            |      | 4,751,089  |           |   | 4,494,247  |          
|                           |                            |      |            |           |   |            |          
|OPERATING INCOME           |                            |      | 319,210    |           |   | 721,971    |          
|                           |                            |      |            |           |   |            |          
|OTHER INCOME (EXPENSE)     |                            |      |            |           |   |            |          
|                           | Interest expense           |      |            | (55,440   | ) |            | (52,348  
|                           | Miscellaneous              |      |            | 10,168    |   |            | 38,870   
|                           |                            |      |            |           |   |            |          
|                           |                            |      |            | (45,272   | ) |            | (13,478  
|                           |                            |      |            |           |   |            |          
|INCOME BEFORE INCOME TAXES |                            |      | 273,938    |           |   | 708,493    |          
|INCOME TAXES               |                            |      | 106,000    |           |   | 281,500    |          
|                           |                            |      |            |           |   |            |          
|NET INCOME                 |                            |      | 167,938    |           |   | 426,993    |          
|RETAINED EARNINGS          |                            |      |            |           |   |            |          
|                           | Beginning of year          |      |            | 1,607,219 |   |            | 1,180,226
|                           |                            |      |            |           |   |            |          
|                           | End of year                |      | $          | 1,775,157 |   | $          | 1,607,219
|                           |                            |      |            |           |   |            |          

See
notes to financial statements.

F-25

---

EKMAN, INC. d/b/a CORPORATE TECHNOLOGIES

STATEMENTS OF CASH FLOWS

Years Ended June 30, 1999, 1998 and 1997

|                                                                        |                                                            | 1999                                                                                     |                                              | 1998                                             |         | 1997    |           
|----------------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------ | ------- | ------- | ----------
|
|OPERATING ACTIVITIES                                                    |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Net income                                                 |                                                                                          | $                                            | 167,938                                          |         | $       | 426,993   
|                                                                        |                                                            | Adjustments to reconcile net income to net cash provided (used) by operating activities: |                                              |                                                  |         |         |           
|                                                                        |                                                            |                                                                                          | Depreciation                                 |                                                  |         | 217,860 |           
|                                                                        |                                                            |                                                                                          | Deferred taxes                               |                                                  |         | (3,000  | )         
|                                                                        |                                                            |                                                                                          | Changes in operating assets and liabilities: |                                                  |         |         |           
|                                                                        |                                                            |                                                                                          |                                              | Accounts receivable                              |         |         | (2,177,778
|                                                                        |                                                            |                                                                                          |                                              | Inventories                                      |         |         | (10,317   
|                                                                        |                                                            |                                                                                          |                                              | Other assets                                     |         |         | (102,902  
|                                                                        |                                                            |                                                                                          |                                              | Accounts payable                                 |         |         | 173,420   
|                                                                        |                                                            |                                                                                          |                                              | Accrued liabilities                              |         |         | (132,731  
|                                                                        |                                                            |                                                                                          |                                              | Deferred revenues                                |         |         | (18,820   
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        |                                                            |                                                                                          |                                              | Net cash provided (used) by operating activities |         |         | (1,886,330
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|INVESTING ACTIVITY                                                      |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Purchases of property and equipment                        |                                                                                          |                                              | (187,403                                         | )       |         | (192,573  
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|FINANCING ACTIVITIES                                                    |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Increase (decrease) in checks issued in excess of deposits |                                                                                          |                                              | 250,341                                          |         |         | (25,948   
|                                                                        | Bank line of credit borrowings (repayments)                |                                                                                          |                                              | 1,800,000                                        |         |         | (726,000  
|                                                                        | Payments on long-term debt                                 |                                                                                          |                                              | (69,431                                          | )       |         | (117,320  
|                                                                        | Proceeds from long-term debt                               |                                                                                          |                                              |                                                 |         |         | 16,400    
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        |                                                            |                                                                                          |                                              | Net cash provided (used) by financing activities |         |         | 1,980,910 
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|INCREASE (DECREASE) IN CASH                                             |                                                            |                                                                                          | (92,823                                      | )                                                |         | 108,993 |           
|CASH                                                                    |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Beginning of year                                          |                                                                                          |                                              | 110,471                                          |         |         | 1,478     
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | End of year                                                |                                                                                          | $                                            | 17,648                                           |         | $       | 110,471   
|                                                                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                        |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Cash paid for:                                             |                                                                                          |                                              |                                                  |         |         |           
|                                                                        |                                                            | Interest                                                                                 |                                              | $                                                | 55,440  |         | $         
|                                                                        |                                                            | Income taxes                                                                             |                                              |                                                  | 327,828 |         |           
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING TRANSACTIONS |                                                            |                                                                                          |                                              |                                                  |         |         |           
|                                                                        | Property and equipment purchased with long-term debt       |                                                                                          | $                                            | 27,440                                           |         | $       | 78,277    
|                                                                        | Retirement of prior bank line of credit borrowings         |                                                                                          |                                              | 614,000                                          |         |         |          

See
notes to financial statements.

F-26

---

NOTES TO FINANCIAL STATEMENTS

EKMAN, INC. D/B/A CORPORATE TECHNOLOGIES

1. Summary of Significant Accounting Policies

Nature of Business

The Company sells computer products and services from its Fargo, North Dakota facilities to customers located primarily in the Upper Midwest of the United
States.

Use of Estimates

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

Financial Instruments

The carrying values of cash, accounts receivable, line of credit borrowings, accounts payable, and other financial instruments approximate their fair values
principally because of their short-term nature. The fair value of long-term debt does not differ significantly from its fair value.

Inventories

Inventories, consisting primarily of items for resale, are valued at the lower of cost, determined on the first-in, first-out (FIFO)
method, or market. The Company provides an allowance for obsolescence. Obsolescence charges to operations were insignificant for all years presented.

Property and Equipment

Property and equipment is valued at cost less accumulated depreciation. Depreciation is computed using straight line and accelerated methods over estimated
useful lives as follows:

Asset

Useful LifeMachinery and equipment

3 - 7 yearsFurniture and fixtures

5 - 7 yearsVehicles

5 years


Revenue Recognition

Revenues from sales of products and services are recognized at delivery. Revenues from extended service contracts are reported as deferred revenues and
amortized on the straight line method over the terms of the contracts.

Warranty Costs

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

Credit Risk

Significant concentrations of credit risk exist in cash, which is held by a limited number of financial institutions, and accounts receivable which, although
due from numerous entities, are concentrated in one geographic region.

F-27

---

2. Line of Credit

The Company has a $2,000,000 bank line of credit, expiring November 30, 1999 (subsequently extended to March 31, 2000). A prior line of credit
with another bank was retired. Borrowings against the new
line are at the prime rate (7.75% at June 30, 1999), collateralized by substantially all Company assets, and subject to certain financial covenants. The loan is guaranteed by the President of
the Company.

For
1999, 1998, and 1997 the maximum amounts borrowed under the lines were $1,931,000, $1,245,000, and $1,094,000, respectively; average borrowings were $652,000, $418,000, and
$540,000, respectively; and the weighted average borrowings interest rates were 6.96%, 7.92%, and 9.06%, respectively.

3. Balance Sheet Components

Certain balance sheet components are as follows:

1999

1998Property and equipment:Machinery and equipment

$
724,011

$
727,349Furniture and fixtures


303,896


281,879Vehicles


149,187


129,5781,177,094


1,138,806Less accumulated depreciation


786,636


745,331$
390,458

$
393,475Accrued liabilities:Salaries, wages, and commissions

$
280,457

$
231,514Income taxes





185,336Other


118,690


115,028$
399,147

$
531,878


4. Long-Term Debt

Long-term debt consists of the following:

1999

1998Capital lease obligations (Note 7)

$
84,595

$
78,493Bank note at the prime rate plus 1%, payable in minimum quarterly principal payments of $497 plus interest to March 2006, unsecured


7,429


11,549Bank notes, retired in 1999





43,97392,024


134,015Less current maturities


27,660


64,902$
64,364

$
69,113


F-28

---

Future maturities are as follows:

Year Ending June 30,

Amount2000

$
27,6602001


46,0502002


7,8492003


10,465$
92,024


5. Section 401(k) Retirement Savings Plan

The Company has a Section 401(k) Retirement Savings Plan covering substantially all full-time employees. Eligible employees are able to make
salary deferral contributions to the plan up to Internal Revenue Service Code limitations. The Company makes discretionary contributions, which were $16,737, $6,111, and $0 for 1999, 1998, and 1997,
respectively.

6. Income Taxes

Deferred income taxes consist of the following:

1999

1998Current

Non-current

Current

Non-currentDeferred tax assets:Property and equipment

$


$
15,000

$


$
7,000Asset allowances


38,000





42,000


Accrued vacation pay


24,000





17,000


Deferred service contract revenue


13,000





22,000


Other


6,000





7,000


81,000


15,000


88,000


7,000Deferred tax liabilitiesother





(3,000
)




(5,000
)Net deferred tax assets

$
81,000

$
12,000

$
88,000

$
2,000


The
income tax provision consists of the following:

1999

1998

1997Current

$
109,000

$
281,000

$
97,000Deferred


(3,000
)

500


(15,500
)$
106,000

$
281,500

$
81,500


State
tax effects are insignificant and not separately disclosed.

F-29

---

A reconciliation of income taxes computed at the U.S. Federal statutory rate to the effective tax rate is as follows:

1999

1998

1997Statutory rate

34.0
%
34.0
%
34.0
%State rate, net of federal benefit

5.3

5.3

5.3Other

(.6
)
.4

(3.7
)Effective rate

38.7
%
39.7
%
35.6
%


7. Leases

Capital Leases

Property and equipment includes certain vehicles under capital leases as follows:

1999

1998Cost

$
105,718

$
78,277Less accumulated amortization


46,816


15,895$
58,902

$
62,382


Amortization
expense on the capital lease property is included in depreciation expense and was $30,921, $15,895, and $0 for 1999, 1998, and 1997, respectively.

The
capital leases have effective interest rates of 9.5% and require monthly payments.

Future
minimum lease payments are as follows:

Year Ending June 30,

Amount2000

$
32,6102001


48,3892002


7,0222003


9,411Total minimum lease payments


97,432Less amount representing interest


12,837Present value of net minimum lease payments

$
84,595


Operating Leases

The Company leases facilities from its stockholder through January 2001 for minimum monthly rents of $18,550 plus property taxes and assessments and
operating expenses. The Company also leases various equipment under other leases. Rent expense was $235,189, $223,857, and $208,745 for 1999, 1998, and 1997, respectively.

F-30

---

Future approximate minimum lease payments are as follows:

Year Ending June 30,

Amount2000

$
240,0002001


142,000$
382,000


8. Self-Funded Employee Health and Dental Plan

The Company has a self-funding/stop-loss agreement with a major insurance carrier for employee health and dental coverage. The Company
self funds employee benefits to the stop-loss point, beyond which the insurance carrier provides coverage. The agreement provides two stop-loss pointsan individual
point of $20,000 and an aggregate point of 120% of expected annual claims. At October 1, 1999, the aggregate stop-loss point was approximately $175,000.

9. Related Party Transaction

The Company had sales of $159,087, $119,477, and $169,765 for 1999, 1998, and 1997, respectively, to other entities in which its stockholder is also an owner.
The Company had accounts receivable of $75,896 and $54,618 from these companies at June 30, 1999 and 1998, respectively.

10. Significant Customers and Vendors

Customers

Approximate percentage of revenues from major customers are as follows:

Customer

1999

1998

1997A

23
%
7
%
3
%B

10

26

4C

9

2

10


Vendors

Approximate percentage of purchases from major vendors are as follows:

Vendor

1999

1998

1997A

42
%
34
%
1
%B

21

17

12C



11

45


11. Restatement of Prior Financial Statements

The accompanying financial statements for 1999, 1998, and 1997, previously unaudited, were restated to adjust for previously unrecorded accounts receivable
allowance, inventories allowance, capital leases,

F-31

---

deferred income taxes and other items. The cumulative effects of these adjustments (net of income taxes) on beginning retained earnings are as follows:

1999

1998

1997As previously reported

$
1,638,331

$
1,240,145

$
1,078,150Adjustments:Accounts receivable allowance, net of taxes of $18,000, $16,000, and $12,000


(27,000
)

(24,000
)

(18,000
)Inventories allowance, net of taxes of $24,000, $26,000, and $18,000


(36,000
)

(39,000
)

(27,000
)Capital leases, net of taxes of $6,445


(9,667
)




Deferred taxes and other


41,555


3,081


(425
)(31,112
)

(59,919
)

(45,425
)As restated

$
1,607,219

$
1,180,226

$
1,032,725


These
adjustments increased (decreased) income before income taxes by $413, ($16,029), and ($29,660) and net income by $3,418, $28,807, and ($14,494) for 1999, 1998, and 1997,
respectively.

Certain
reclassifications were also made to the 1999, 1998, and 1997 financial statements to make them comparable with the current presentation.

12. Subsequent Event

Effective November 1, 1999, Vicom, Incorporated acquired all outstanding shares of the Company and changed the Company's name to Corporate Technologies,
USA, Inc

F-32

---

## 

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To
the Board of Directors
ENStar Inc.

We
have audited the accompanying statement of operating unit assets and liabilities of Enstar Networking Midwest (an operating unit of Enstar Networking Corporation, a wholly owned
subsidiary of ENStar Inc.) as of December 31, 1998 and the related statements of operating unit operations, operating unit equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Operating unit's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with auditing standards generally accepted in the United States. 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 audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the operating unit assets and liabilities of Enstar Networking Midwest as of
December 31, 1998 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.



Minneapolis,
Minnesota
March 10, 2000

F-33

---

FINANCIAL STATEMENTS

Enstar Networking Midwest
(An operating unit of Enstar Networking Corporation)

STATEMENT OF OPERATING UNIT ASSETS AND LIABILITIES

December 31, 1998

|ASSETS                               
|-------------------------------------
|CURRENT ASSETS                       
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|PROPERTY AND EQUIPMENTAT COST       
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|LIABILITIES AND OPERATING UNIT EQUITY
|CURRENT LIABILITIES                  
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|COMMITMENTS AND CONTINGENCIES        
|OPERATING UNIT EQUITY                
|                                     
|                                     
|                                     

The
accompanying notes are an integral part of these financial statements.

F-34

---

Enstar Networking Midwest
(An operating unit of Enstar Networking Corporation)

STATEMENT OF OPERATING UNIT OPERATIONS

Year ended December 31, 1998

|Revenues                                     |                | $ | 10,471,926 |          
|-------------------------------------------- | -------------- | - | ---------- | ---------
|Operating and product costs                  |                |   | 9,006,849  |          
|                                             |                |   |           
|                                             | Gross profit   |   |            | 1,465,077
|Selling, general and administrative expenses |                |   | 1,737,189  |          
|                                             |                |   |           
|                                             | Operating loss |   |            | (272,112 
|Income taxes                                 |                |   |           |          
|                                             |                |   |           
|NET LOSS                                     |                | $ | (272,112   | )        
|                                             |                |   |            |          

The
accompanying notes are an integral part of these financial statements.

F-35

---

Enstar Networking Midwest
(An operating unit of Enstar Networking Corporation)

STATEMENT OF OPERATING UNIT EQUITY

Year ended December 31, 1998

|                             |                     | Operating unit equity |        
|---------------------------- | ------------------- | --------------------- | -------
|Balance at January 1, 1998   |                     | $                     | 433,286
|                             | Contributed capital |                       |        
|                             | Net loss            |                       |        
|                             |                     |                       |        
|Balance at December 31, 1998 |                     | $                     | 686,437
|                             |                     |                       |        

The
accompanying notes are an integral part of these financial statements.

F-36

---

Enstar Networking Midwest
(An operating unit of Enstar Networking Corporation)

STATEMENT OF OPERATING UNIT CASH FLOWS

Year ended December 31, 1998

|Cash flows from operating activities |                                                                            |                                              |                                                                             |                                          
|------------------------------------ | -------------------------------------------------------------------------- | -------------------------------------------- | --------------------------------------------------------------------------- | -----------------------------------------
|                                     | Net loss                                                                   |                                              | $                                                                           | (272,112                                 
|                                     | Adjustments to reconcile net loss to net cash used in operating activities |                                              |                                                                             |                                          
|                                     |                                                                            | Depreciation                                 |                                                                             |                                          
|                                     |                                                                            | Changes in operating assets and liabilities: |                                                                             |                                          
|                                     |                                                                            |                                              | Accounts receivable                                                         |                                          
|                                     |                                                                            |                                              | Inventories                                                                 |                                          
|                                     |                                                                            |                                              | Costs and estimated earnings in excess of billings on uncompleted contracts |                                          
|                                     |                                                                            |                                              | Accounts payable                                                            |                                          
|                                     |                                                                            |                                              | Accrued liabilities                                                         |                                          
|                                     |                                                                            |                                              | Billings in excess of costs and estimated earnings on uncompleted contracts |                                          
|                                     |                                                                            |                                              | Deferred revenue and prepaid expenses                                       |                                          
|                                     |                                                                            |                                              |                                                                            
|                                     |                                                                            |                                              |                                                                             | Net cash used in operating activities    
|                                     |                                                                            |                                              |                                                                            
|Cash flows from investing activities |                                                                            |                                              |                                                                             |                                          
|                                     | Capital expenditures                                                       |                                              |                                                                             | (170,297                                 
|                                     |                                                                            |                                              |                                                                            
|                                     |                                                                            |                                              |                                                                             | Net cash used in investing activities    
|                                     |                                                                            |                                              |                                                                            
|Cash flows from financing activities |                                                                            |                                              |                                                                             |                                          
|                                     | Contributed capital                                                        |                                              |                                                                             | 525,263                                  
|                                     |                                                                            |                                              |                                                                            
|                                     |                                                                            |                                              |                                                                             | Net cash provided by financing activities
|                                     |                                                                            |                                              |                                                                            
|                                     |                                                                            |                                              |                                                                             | NET DECREASE IN CASH                     
|Cash at beginning of year            |                                                                            |                                              | 3,074                                                                       |                                          
|                                     |                                                                            |                                              |                                                                            
|Cash at end of year                  |                                                                            | $                                            |                                                                            |                                          
|                                     |                                                                            |                                              |                                                                             |                                          

The
accompanying notes are an integral part of these financial statements.

F-37

---

Enstar Networking Midwest
(An operating unit of Enstar Networking Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1998

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Enstar Networking Midwest (the "Operating unit"), is an operating unit of Enstar Networking Corporation, a wholly-owned subsidiary of ENStar Inc. The
Operating unit is a security integrator providing solutions to design, manage and secure corporate network infrastructures, with sales predominantly throughout the upper midwestern United States. On
December 31, 1998, the Operating unit was sold to Vicom, Incorporated ("Vicom").

Basis of Presentation

The accompanying financial statements include the specifically identifiable net assets and liabilities and results of operations as if the Operating unit was a
stand-alone entity at December 31, 1998 and for the period presented. The financial statements include an allocation of certain general and administrative costs (i.e., rent, insurance, etc.)
incurred by ENStar Inc. in the management of the Operating unit. Management believes these allocations are reasonable and present the operations of the Operating unit as though it was operated
on a stand-alone basis.

A
summary of the Operating unit's significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:

Accounts Receivable

The Operating unit grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support
amounts due. Management performs on-going credit evaluations of customers. The Operating unit maintains allowances for potential credit losses which when realized have been within
management's expectations.

Inventories

Inventories consist of finished goods and are stated at the lower of average cost (determined by the first-in, first-out method) or
market.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their
estimated useful lives under the straight-line method. The useful lives are estimated at three to five years.

Revenue and Cost Recognition

Revenues from contracts are recognized on the percentage-of-completion method in the ratio that costs incurred bear to total estimated
costs. Contract costs include all direct material, labor, subcontracted and equipment costs and those indirect costs related to contract performance. General and administrative expenses are charged to
operations as incurred.

Adjustments
to estimates of contract revenues, costs or percentage of work completed on fixed-price contracts are sometimes required as work progresses and as more information is
obtained. Provisions for estimated losses on uncompleted contracts are made in the year such losses are determined.

F-38

---

The asset "costs and estimated earnings in excess of billings on uncompleted contracts" represents revenues recognized in excess of amounts billed. Such revenues are expected to be
billed and collected within one year. The liability "billings in excess of costs and estimated earnings on uncompleted contracts" represents billings in excess of revenues recognized.

Deferred Revenue

Deferred revenue is generated by prepayments on maintenance contracts. Revenues from maintenance contracts are recognized ratably over the term of the
contract.

Use of Estimates

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

Fair values of Financial Instruments

Due to their short-term nature, the carrying value of current financial assets and liabilities approximates their fair values.

NOTE BINCOME TAXES

The Operating unit was included in the consolidated income tax returns of ENStar Inc. for the period presented. Deferred income taxes arise from
temporary differences between financial and tax reporting for property and equipment and for net operating losses. No tax benefit has been recorded in the period presented due to the additional
valuation allowance recorded against the net deferred tax asset generated in the period.

NOTE CCONTRIBUTED CAPITAL

During 1998, Enstar Inc. made advances to the Operating unit to fund the operating losses and capital additions incurred during the period. These
advances were considered contributed capital in the preparation of the Operating unit financial statements.

NOTE DEMPLOYEE BENEFIT PLAN

Employee's of the Operating unit are eligible to participate in the Enstar Inc. defined contribution pension plan for full-time employees
who have at least one year of continuous employment with the Operating unit. Under the terms of the plan, the Operating unit matches 50% of the first 6% of each participants eligible compensation.
Contributions by the Operating unit to this plan were approximately $41,000 for the year ended December 31, 1998.

F-39

---

## 

PART II       INFORMATION NOT REQUIRED IN PROSPECTUS

Other Expenses of Issuance and Distribution.

The following table sets forth expenses and costs payable by the Registrant expected to be incurred in connection with the issuance and distribution of the
securities described in this registration statement. All amounts are estimated except for the Securities and Exchange Commission's registration fee.

AmountRegistration fee under Securities Act

$
13,200Legal fees and expenses


8,000Accounting fees and expenses


10,000Printing expenses


7,000Trustee fees


5,000Miscellaneous expensesTotal

$
43,200


Indemnification of Directors and Officers

Section 302A.521 of the Minnesota Statutes empowers a Minnesota corporation to indemnify its officers and directors and certain other persons to the
extent and under the circumstances set forth therein.

Article VII
of the Registrant's Articles of Incorporation eliminates the liability of directors of the Registrant to the Registrant or its shareholders for monetary damages for
breach of fiduciary duty except for any breach of a director's duty of loyalty to the Registrant or its shareholders, for acts or omissions not in good faith or that involve intentional misconduct or
a knowing violation of law, under Sections 302A.559 of the Minnesota Statutes (relating to illegal distributions) or Section 80A.23 of the Minnesota Statutes (relating to securities law
violations), for any transaction from which the director derived an improper personal benefit; or for any act or omission occurring prior to May 22, 1987, which is the date that this provision
in the Registrant's Articles became effective.

The
above discussion of Section 302A.521 and of the Registrant's Articles of Incorporation is not intended to be exhaustive and is respectively qualified in its entirety by
such statute and the Articles of Incorporation. The Registrant has insurance in the amount of $3,000,000 per occurrence insuring its directors and officers and those of its subsidiaries against
certain liabilities they may incur in their capacity as directors and officers.

Recent Sales of Unregistered Securities

During the last three years, the Registrant has issued the following securities that were not registered under the Securities Act. The securities were offered
and sold by us in reliance upon the exemptions provided under Section 4(2) of the Securities Act relating to sales not involving any public offering, and/or Rule 506 of
Regulation D under the Securities Act. Unless otherwise stated, the sales were made without the use of a selling agent. The certificates representing the securities sold bear a restrictive
legend that prohibits transfer without registration or an applicable exemption. All purchasers signed agreements stating that they were purchasing for investment purposes only and which contain
restrictions on the transfer of the securities sold.

II-1

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II-2

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Item 16. Exhibits and Financial Statement Schedules.

The following documents are filed as exhibits to this registration statement:

|Exhibit No. |  | Description                                                                                                                                                                                                          
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Asset Purchase Agreement and related documents with Enstar Networking Corporation dated December 31, 1998(1)                                                                                                         
|2.2         |  | Agreement and Plan of Merger with Ekman, Inc. dated December 29, 1999(1)                                                                                                                                             
|3.1         |  | Amended and Restated Articles of Incorporation of Vicom, Inc.(1)                                                                                                                                                     
|3.2         |  | Restated Bylaws of Vicom, Incorporated(1)                                                                                                                                                                            
|3.3         |  | Articles of Incorporation of Corporate Technologies, USA, Inc.(1)                                                                                                                                                    
|3.4         |  | Bylaws of Corporate Technologies, USA, Inc.(1)                                                                                                                                                                       
|4.1         |  | Certificate of Designation of the Relative Rights, Restrictions and Preferences of 8% Class A Cumulative Convertible Preferred Stock and 10% Class B Cumulative Convertible Preferred Stock dated December 9,
1998(1)
|4.2         |  | Form of Warrant Agreement(1)                                                                                                                                                                                         
|4.3         |  | Warrant Agreement with James Mandel dated December 29, 1999(1)                                                                                                                                                       
|4.4         |  | Warrant Agreement with Marvin Frieman dated December 29, 1999(1)                                                                                                                                                     
|4.5         |  | Warrant Agreement with Pierce McNally dated December 29, 1999(1)                                                                                                                                                     
|4.6         |  | Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)                                                                                                                                                       
|4.7         |  | Warrant Agreement with David Ekman dated December 29, 1999(1)                                                                                                                                                        
|4.8         |  | Certificate of Designation of the Relative Rights, Restrictions and Preferences of 10% Class C Cumulative Convertible Stock(2)                                                                                       
|4.9         |  | Form of Indenture relating to debentures                                                                                                                                                                             
|5.1         |  | Opinion of Winthrop & Weinstine, P.A.(3)                                                                                                                                                                             
|10.1        |  | Vicom Lease with Marbell Realty dated June 20, 1996(1)                                                                                                                                                               
|10.2        |  | Employment Agreement with Marvin Frieman dated October 1, 1996(1)                                                                                                                                                    
|10.3        |  | Employment Agreement with Steven Bell dated October 1, 1996(1)                                                                                                                                                       
|10.4        |  | Employment Agreement with James Mandel dated August 14, 1998(1)                                                                                                                                                      
|10.5        |  | Vicom Associate Agreement with NEC America, Inc. dated June 1999(1)                                                                                                                                                  
|10.6        |  | Loan Agreement with Wells Fargo dated June 17, 1999(1)                                                                                                                                                               
|10.7        |  | Employment Agreement with David Ekman dated December 29, 1999(1)                                                                                                                                                     
|10.8        |  | Debenture Loan Agreement with Convergent Capital dated March 9, 2000(1)                                                                                                                                              
|10.9        |  | Corporate Technologies, USA, Inc. lease with David Ekman dated January 19, 2000(1)                                                                                                                                   
|10.10       |  | Amendment dated July 11, 2000 to debenture loan agreement with Convergent Capital dated March 9, 2000.(2)                                                                                                            
|12.1        |  | Computation of ratio of earnings to fixed charges                                                                                                                                                                    
|21.1        |  | List of subsidiaries of the registrant(1)                                                                                                                                                                            

II-3

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|23.1 |  | Consent of Lurie, Besikof, Lapidus & Co., LLP                                                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------------
|23.2 |  | Consent of Winthrop & Weinstine, P.A. (included in Exhibit 5.1)(3)                                                          
|24.1 |  | Power of Attorney (included on signature page of this registration statement)                                               
|25.1 |  | Statement of Eligibility of FirStar Bank Minnesota, National Association, to serve as trustee with respect to the debentures

---

Item 17. Undertakings.

The undersigned registrant hereby undertakes:



The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual reports pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

---

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The
undersigned registrant hereby undertakes that:



The
undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act of 1939, as amended, in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) thereof.

II-5

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## 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New Hope, State of Minnesota, on August 29, 2000.

| |  | VICOM, INCORPORATED
| |  | -------------------
| |  | By                 

The
undersigned directors and officers of Vicom, Incorporated hereby constitute and appoint Steven M. Bell and James L. Mandel and each of them with full power to act
without the other and with full power of substitution and resubstitution, our true and lawful attorneys-in-fact with full power to execute in our name and behalf in the
capacities indicated below this Registration Statement on Form S-1 and any and all amendments thereto, including post-effective amendments to this Registration
Statement, and to sign any and all additional registration statements relating to the same offering of securities as this Registration Statement that are filed pursuant to Rule 462(b) of the
Securities Act of 1933, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and hereby ratify and confirm that all
such attorneys-in-fact, or any of them, or their substitutes shall lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this
registration statement has been signed by the following persons on August 29, 2000 in the capacities indicated.

|Name                              |  | Title                                                                                       
|--------------------------------- |  | --------------------------------------------------------------------------------------------
|                                  |  |                                                                                             
|/s/STEVEN M. BELLSteven M. Bell   |  | President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)
|/s/JAMES L. MANDELJames L. Mandel |  | Chief Executive Officer and Director (Principal Executive Officer)                          
|/s/MARVIN FRIEMANMarvin Frieman   |  | Chairman and Director                                                                       
|/s/JONATHAN DODGEJonathan Dodge   |  | Director                                                                                    
|/s/DAVID EKMANDavid Ekman         |  | Director                                                                                    
|                                  |  |                                                                                             

II-6

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|/s/PAUL KNAPPPaul Knapp                   |  | Director
|----------------------------------------- |  | --------
|/s/PIERCE MCNALLYPierce McNally           |  | Director
|/s/MARK MEKLERMark Mekler                 |  | Director
|/s/MANUEL A. VILLAFANAManuel A. Villafana |  | Director
|                                          |  |         

II-7

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Schedule II

VICOM, INCORPORATED AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998 and 1997

|Column A                                                   |      | Column B |   | Column C |  | Column D |         | Column E
|---------------------------------------------------------- | ---- | -------- | - | -------- |  | -------- | ------- | --------
|
|ALLOWANCE DEDUCTED FROM ASSET TO WHICH IT APPLIES          |      |          |   |          |  |          |         |         
|Allowance for doubtful accounts
accounts receivable:      |      |          |   |          |  |          |         |         
|                                                           | 1999 |          | $ | 115,000  |  | $        | 165,000 |         
|                                                           | 1998 |          |   | 40,000   |  |          | 125,000 |         
|                                                           | 1997 |          |   | 115,000  |  |          | 20,493  |         
|Allowance for inventory obsolescence:                      |      |          |   |          |  |          |         |         
|                                                           | 1999 |          |   | 910,000  |  |          |        |         
|                                                           | 1998 |          |   | 250,000  |  |          | 660,000 |         
|                                                           | 1997 |          |   | 260,000  |  |          |        |         
|Notes receivable:                                          |      |          |   |          |  |          |         |         
|                                                           | 1999 |          |   | 115,000  |  |          |        |         
|                                                           | 1998 |          |   |         |  |          | 115,000 |         
|                                                           | 1997 |          |   |         |  |          |        |         
|Allowance for doubtful utilization of prepaid advertising: |      |          |   |          |  |          |         |         
|                                                           | 1999 |          |   | 392,000  |  |          |        |         
|                                                           | 1998 |          |   | 292,000  |  |          | 100,000 |         
|                                                           | 1997 |          |   | 292,000  |  |          |        |         

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## 

INDEX TO EXHIBITS

|Exhibit No. |  | Description                                                                                                                                                                                                          
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Asset Purchase Agreement and related documents with Enstar Networking Corporation dated December 31, 1998(1)                                                                                                         
|2.2         |  | Agreement and Plan of Merger with Ekman, Inc. dated December 29, 1999(1)                                                                                                                                             
|3.1         |  | Amended and Restated Articles of Incorporation of Vicom, Inc.(1)                                                                                                                                                     
|3.2         |  | Restated Bylaws of Vicom, Incorporated(1)                                                                                                                                                                            
|3.3         |  | Articles of Incorporation of Corporate Technologies, USA, Inc.(1)                                                                                                                                                    
|3.4         |  | Bylaws of Corporate Technologies, USA, Inc.(1)                                                                                                                                                                       
|4.1         |  | Certificate of Designation of the Relative Rights, Restrictions and Preferences of 8% Class A Cumulative Convertible Preferred Stock and 10% Class B Cumulative Convertible Preferred Stock dated December 9,
1998(1)
|4.2         |  | Form of Warrant Agreement(1)                                                                                                                                                                                         
|4.3         |  | Warrant Agreement with James Mandel dated December 29, 1999(1)                                                                                                                                                       
|4.4         |  | Warrant Agreement with Marvin Frieman dated December 29, 1999(1)                                                                                                                                                     
|4.5         |  | Warrant Agreement with Pierce McNally dated December 29, 1999(1)                                                                                                                                                     
|4.6         |  | Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)                                                                                                                                                       
|4.7         |  | Warrant Agreement with David Ekman dated December 29, 1999(1)                                                                                                                                                        
|4.8         |  | Certificate of Designation of the Relative Rights, Restrictions and Preferences of 10% Class C Cumulative Convertible Stock(2)                                                                                       
|4.9         |  | Form of Indenture relating to debentures                                                                                                                                                                             
|5.1         |  | Opinion of Winthrop & Weinstine, P.A.(3)                                                                                                                                                                             
|10.1        |  | Vicom Lease with Marbell Realty dated June 20, 1996(1)                                                                                                                                                               
|10.2        |  | Employment Agreement with Marvin Frieman dated October 1, 1996(1)                                                                                                                                                    
|10.3        |  | Employment Agreement with Steven Bell dated October 1, 1996(1)                                                                                                                                                       
|10.4        |  | Employment Agreement with James Mandel dated August 14, 1998(1)                                                                                                                                                      
|10.5        |  | Vicom Associate Agreement with NEC America, Inc. dated June 1999(1)                                                                                                                                                  
|10.6        |  | Loan Agreement with Wells Fargo dated June 17, 1999(1)                                                                                                                                                               
|10.7        |  | Employment Agreement with David Ekman dated December 29, 1999(1)                                                                                                                                                     
|10.8        |  | Debenture Loan Agreement with Convergent Capital dated March 9, 2000(1)                                                                                                                                              
|10.9        |  | Corporate Technologies, USA, Inc. lease with David Ekman dated January 19, 2000(1)                                                                                                                                   
|10.10       |  | Amendment dated July 11, 2000 to debenture loan agreement with Convergent Capital dated March 9, 2000(2)                                                                                                             
|12.1        |  | Computation of ratio of earnings to fixed charges                                                                                                                                                                    
|21.1        |  | List of subsidiaries of the registrant(1)                                                                                                                                                                            
|23.1        |  | Consent of Lurie, Besikof, Lapidus & Co., LLP                                                                                                                                                                        
|23.2        |  | Consent of Winthrop & Weinstine, P.A. (included in Exhibit 5.1)(3)                                                                                                                                                   
|24.1        |  | Power of Attorney (included on signature page of this registration statement)                                                                                                                                        
|25.1        |  | Statement of Eligibility of FirStar Bank Minnesota, National Association, to serve as trustee with respect to the debentures                                                                                         

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