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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10-KSB/A
                                 Amendment No. 4


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

                      For Fiscal Year Ended: March 31, 2001
                        Commission File Number: 001-15043


           C-3D Digital, Inc. (formerly Chequemate International, Inc.)
                         ------------------------------
             (Exact name of registrant as specified in its charter)


                   Utah                                      76-0279816
      --------------------------------                  -------------------
       (State or other jurisdiction                      (I.R.S. Employer
     of incorporation or organization)                  Identification No.)


                 124 Point West Boulevard, St. Charles, MO 63301
            ---------------------------------------------------------
                    (Address of principal executive offices)


                                 (636) 724-1004
                           --------------------------
                           (Issuer's Telephone Number)


                                EXPLANATORY NOTE

On July 11, 2001, Chequemate International, Inc., a Utah corporation ("we" or
the Company), filed a Report on 10-KSB for the fiscal year ended March 31,
2001. On February 8, 2002, the Company filed Amendment No. 1 in order to
expand and clarify certain information contained in the Management's
Discussion and Analysis and in the notes to the financial statements. On
March 22, 2002, the Company filed Amendment No. 2 in order to further clarify
certain information contained in the Description of the Business and the
Management's Discussion and Analysis. The Company filed Amendment No. 3 in
order to restate its financial statements and clarify certain footnotes to
those financial statements. The Company is filing this Amendment No. 4 in order
to further clarify its financial statement, and certain footnotes to those
financial statements.  Unless otherwise explicitly stated, the information
contained in this Amendment No. 4 is current as of March 31, 2001.

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

     State issuer's revenues for its most recent fiscal year: $905,070

     Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B contained in this report and no disclosure will be
contained to the best of registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part 111 of this Form
10-KSB or any amendment to this Form 10-KSB: [ ]

     As of July 9, 2001 the aggregate market value of the voting stock held
by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity as
of a specified date within the past 60 days: $3,723,523.

     Chequemate International, Inc. had 19,420,750 Shares of Common Stock as
of March 31, 2001.

     Transitional Small Business Format: YES / /  NO /X/
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                                TABLE OF CONTENTS
<Table>
<S>                                                                                        <C>
PART I ..............................................................................       3

    ITEM 1 ..........................................................................       3
       Forward Looking Statements ...................................................       3
       Our History ..................................................................       3
       Our Business .................................................................       3
       Patents, Trademarks and Copyrights ...........................................       9
       Legislation and Regulation...................................................       10
       Employees ....................................................................      18

    ITEM 2 ..........................................................................      19
       Description of Property ......................................................      19

    ITEM 3 ..........................................................................      20
       Legal Proceedings ............................................................      20

    ITEM 4 ..........................................................................      20
       Submission of Matters to a Vote of Security Holders ..........................      20

PART II .............................................................................      21

    ITEM 5 ..........................................................................      21
       Market for Common Equity and Related Stockholder Matters .....................      21

    ITEM 6 ..........................................................................      22
       Management's Discussion and Analysis of Financial Condition and
       Results of Operations ........................................................      22

    ITEM 7 ..........................................................................      33
       Financial Statements .........................................................      33
       Independent Auditors Report ..................................................      35
       Consolidated Balance Sheets ..................................................      37
       Consolidated Statements of Operations ........................................      39
       Consolidated Statements of Stockholders' Equity (Deficit) ....................      41
       Consolidated Statements of Cash Flows ........................................      42
       Notes to Consolidated Financial Statements ...................................      43

    ITEM 8 ..........................................................................      68
       Changes in and Disagreements with Accountants on Accounting
       and Financial Disclosure .....................................................      68

PART III ............................................................................      68

    ITEM 9 ..........................................................................      68
       Directors, Executive Officers, Promoters and Control Persons;
       Compliance with Section 16(a) of the Exchange Act ............................      68
       Directors ....................................................................      68
       Business Experience ..........................................................      69
       Committees of the Board of Directors .........................................      70
       Executive Officers ...........................................................      70
       Business Experience ..........................................................      70

    ITEM 10 .........................................................................      71
       Executive Compensation .......................................................      71

    ITEM 11 .........................................................................      71
       Security Ownership of Certain Beneficial Holders .............................      71

    ITEM 12 .........................................................................      72
       Certain Related Transactions .................................................      72

    ITEM 13 .........................................................................      73
       Exhibits and Reports on form 8K ..............................................      73

           Exhibits Index ...........................................................      73

    SIGNATURES ......................................................................      74

           Exhibit 10.1 - SETTLEMENT AGREEMENT NATIONAL FINANCIAL COMMUNICATIONS ....
           EXHIBIT 10.2 - AMENDED SETTLEMENT AGREEMENT BH PRODUCTIONS ...............
           EXHIBIT 10.3 - PROMISSORY NOTE I-O DISPLAY SYSTEMS .......................
           EXHIBIT 10.4 - SETTLEMENT AGREEMENT PROGRAMMING SERVICES, INC ............
           EXHIBIT 10.5 - ACADEMY ENTERTAINMENT SETTLEMENT ..........................
           EXHIBIT 10.6 - RIGHT OF ENTRY AGREEMENT...................................
</Table>
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     PART I

ITEM 1

FORWARD LOOKING STATEMENTS

     This annual filing includes "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA
provides a "safe harbor" for such statements to encourage companies to provide
prospective information about themselves so long as such information is
identified as forward-looking and is accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in the information. All statements other
than statements of historical fact made in this report or incorporated by
reference are forward-looking. In particular, the statements herein regarding
the availability of adequate funding and progress in the development of its
various business segments are forward-looking statements. Forward-looking
statements represent management's current expectations and are inherently
uncertain. Investors are warned that the Company's actual results may differ
significantly from management's expectations and, therefore, from the results
discussed in such forward-looking statements.

DESCRIPTION OF BUSINESS

Our History

     Chequemate International, Inc. (the "Company" or "we") was incorporated
in Utah on September 1, 1994. We merged with our parent, Automated Compliance
& Training, Inc., a Utah corporation, on September 3, 1996, with the
wholly-owned subsidiary surviving the merger. As a result of the merger our
name was changed to Chequemate International, Inc. On March 22, 1999 we
acquired substantially all of the assets of Strata, Inc., a Utah corporation.
On July 8, 1999, we acquired substantially all of the assets of King Farms,
Inc., an Illinois corporation doing business as Hotel Movie Express. On
December 30, 2000, we acquired all of the equity interest in VisionComm,
Inc., a closely-held Delaware corporation. On July 31, 2001, we sold a 51%
interest in our equity to the shareholders of Another World, Inc. a
corporation organized under the laws of the Republic of Korea. On January 8,
2002 we changed our name from Chequemate International, Inc. to C-3D Digital
Inc.

Our Business

We divide our business activities among four divisions: (1) C-3D Digital, a
division that is developing three-dimensional, or 3D, technology for
converting two-dimensional, or 2D, video programming and similar video
entertainment, or content, to 3D content for film, television and computer
applications and will seek to generate revenue from the sale of these
conversion services; (2) VisionComm, Inc., a wholly owned subsidiary that
primarily derives revenue from the ownership, operation and management of
private cable systems in Texas, California, Michigan, Oklahoma and Missouri
and; (3) Hotel Movie Network, a division that derives revenue from
broadcasting entertainment and programming over hotel networks on a
pay-per-view or free-to-guest basis(where the hotel pays a flat monthly fee);
and (4) 3D.com, a wholly owned subsidiary that discontinued its Strata
division in November, 2000.

     In addition, until September 2000, we operated a 24-hour per day television
network known as C-3D TV. It was our intention to market this network to cable
operators across the U.S. as a premium channel that they in turn could offer
their subscribers. During the months of August and September of 2000, however,
we substantially shut down this operation. The costs of operations and marketing
of our television network operation were prohibitive.

C-3D Digital

     As of March 31, 2001 the Company was restructuring its operations in
southern California and negotiating with AnotherWorld, Inc. a Korean based
technology company to become the worldwide sales and marketing

                                       3
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partner of AnotherWorld's line of 3D products. The full line of products, how
they will be distributed and who our customer base will be are yet to be
determined at this time.

     Since 1997, through our wholly owned subsidiary, Chequemate Electronics,
Inc., we have focused on manufacturing and marketing breakthrough 3D imaging
technology that was acquired from Advanced Technology Group, LLC. In June 1997
an agreement was finalized by which Chequemate Electronics obtained the
exclusive worldwide license to the 3D technology developed by Advanced
Technology, which converted 2D content to stereoscopic 3D for use in consumer
devices such as set-top boxes (devices that adapt to standard television sets).
We are actively pursuing additional acquisition and/or strategic partnership
opportunities to expand its 3D imagery and conversion business.

     We believe that a substantial market opportunity exists for providers of 3D
content. We will continue to aggressively develop and market 3D products and
technology for the PC, gaming, cinema, TV, and various non-entertainment related
markets, including industrial, medical and military simulations. 3D graphics and
imagery technology continues to emerge as one of the significant new
developments in the overall media industry, particularly as different forms of
media have converged in recent years. Interactive 3D graphics are integral to
various computing and entertainment platforms such as workstations, consumer and
commercial desktop PCs, Internet appliances and home gaming consoles. 3D
graphics are also a powerful broadband medium that enables the communication and
visualization of information, whether it is in professional applications like
digital content creation and computer assisted design, or simply surfing the
Internet or playing games. The visually engaging and interactive nature of 3D
graphics responds to consumers' demands for a convincing simulation of reality
beyond what is possible with traditional 2D graphics. We expect that the
fundamental interactive capability and distributive nature of 3D graphics will
make it the primary broadband medium for a digitally connected world.

     Since our 3D products and services are still in their development stage, we
have no direct customers at this time. However, we expect our customers to be
entertainment consumers, commercial and industrial customers, and any enterprise
or individual that wishes to view 3D content or convert 2D content into 3D.

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Hotel Movie Network

     Hotel Movie Network provides pay-per-view and free-to-guest direct digital
television services to approximately 11,000 hotel rooms primarily located in
Arizona, California, Idaho, Nevada, New Mexico, Texas, Utah and Washington. We
provide, install, and maintain within a hotel the equipment that allows hotel
guests to access pay-per-view and free-to-guest direct digital television
services. The equipment we provide, install and maintain includes a terminal
unit in the hotel guest room (set top), a hand-held remote television control, a
local-area cable distribution network and a central point equipment rack. Hotel
Movie Network has contracts with many of Hollywood's major studios to provide
first and second window (hotel/airline and video store) movies. Movie
programming originates from the central system and is transmitted to individual
rooms over the hotel's a local-area cable distribution network. The system
computer controls the delivery of the guest pay interactive services and also
automatically records purchase transactions and billing data to the hotel's
accounting system, which automatically posts the charge to the guest's bill.
Hotel Movie Network earns revenue by charging installation and maintenance fees
to client hotels and by collecting a portion of the receipts generated by the
guest fees. Hotel Movie Network's customers are primarily hotel owners and
operators as well as the hotel guests who purchase pay-per-view content.

     The hotel video-on-demand industry is effectively dominated by two
primary competitors. On Command Corporation and LodgeNet Entertainment
jointly service over 1,500,000 mid-to-large property hotel rooms out of the
approximately 3,600,000 rooms in the domestic U.S. hotel market. High
production, installation, and operation costs are the primary challenges
faced by participants in this industry. Hotel Movie Network has so far
successfully serviced our market. The leading competitor in the small hotel
market, which serves approximately 300,000 rooms, provides primarily
scheduled movies, does not interface with the hotel's PMS system (billing
systems at the front desk) and is currently in bankruptcy. Our proposed
solution allows Hotel Movie Network to provide services far beyond the
capability of this competitor. We currently service approximately 10,000
rooms with the current capability to add an additional 10,000 to 15,000
rooms. At 20,000 total rooms would be beyond our breakeven volume and into
profitability.

                                       5
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     To meet the changing needs of hotels and hotel guests, Hotel Movie
Network has signed agreements with DirecTV and Dish Network, North America's
leading providers of high-power direct broadcast satellite television, to
provide service via satellite to our customers.

VisionComm, Inc.

     Located in St. Charles, Missouri and Detroit, Michigan, VisionComm, Inc.
was founded in 1995 for the purpose of providing telecommunications and cable
television services to residents of multiple dwelling units, hotels and
hospitals. We acquired VisionComm in December 2000. This acquisition gave us
additional revenue opportunities and at the same time advanced our core
business of media and entertainment distribution. VisionComm operates private
cable systems in Texas, Oklahoma, California and Michigan and manages two
franchise cable systems in Missouri with 2,800 residences and/or businesses
as subscribers. VisionComm has installed and operates 1,000 payphones in
various facilities in 18 states. Visioncomm earns revenue through cable
subscriber fees and payphone usage consisting of coin and non-coin calls. We
currently service approximately 10,000 rooms with the current capability to
add an additional 10,000 to 15,000 rooms. At 20,000 total rooms we would be
beyond our breakeven volume and into profitability. Visioncomm derives
revenue from multiple dwelling unit contracts, subscriptions for cable
service and from fees on owning and operating pay phones.

     Visioncomm operates through two divisions--the Cable Division and the
Payphone Division. The Cable Division, headquartered in Clinton Township,
Michigan, a suburb of Detroit, manages a nationwide network of contractors,
provides engineering and planning for new installations and customer service for
Visioncomm's cable subscribers, and oversees all other aspects of our cable
business. Subscriber billing and collection are handled at the St. Charles
office.

     Visioncomm delivers its cable services through a combination of both
private cable and franchise feeds. A private cable system servicing a multiple
dwelling unit physically operates in a fashion identical to that of a franchise
system, but on a relatively smaller scale. Visioncomm utilizes various design
architectures tailored to each property when determining the method of delivery
of its video product. For our cable business through Visioncomm, our customers
are both townships, with which we have and can further secure franchise
agreements, and the owners and/or managers of multiple dwelling units. Of
course, our cable customers are also the end subscribers who actually purchase
our cable content.

     Visioncomm is currently building out complexes that pass a total of 256
units in the Tulsa area and have an agreement to build out a total of 620
units in the New Orleans area for Sevo Miller, Inc.. We presently pass about
6,000 homes with 3,000 subscribers. These numbers change as we continue to
build out the systems we have under contract or franchise.

     Discussions have begun with a national private cable company regarding
their multiple dwelling unites in the St. Louis and Detroit regions. The St.
Louis market passes 5,769 doors and services approximately 2,616 subscribers and
the Detroit market passes 6,660 doors and services approximately 3,778
subscribers.

     Visioncomm has remained in contact with the court regarding the Optel

                                       6
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bankruptcy proceedings. Management of Visioncomm anticipates the opportunity
to bid for complexes in the Dallas Metroplex market along with Chicago,
Southern Florida, Atlanta and Indianapolis. We believe it could potentially
acquire up to 50,000 doors. These units have been partially taken by another
cable provider. However, several properties are still available through the
Optel bankruptcy. In addition, numerous opportunities are continuously being
brought to Visioncomm via personal contacts in the industry, networking,
REITs, brokers and current customers. We plan to carefully review each
opportunity to determine if it should be pursued to supplement our expansion
in our existing geographical markets, and to expand into new markets across
the United States.

     Visioncomm is currently in the process of establishing a franchise
presence in rural Northern Michigan. It is doing this through a combination
of acquisitions of existing providers and build-outs of recently acquired
new franchise agreements that need to be built. Under these agreements we
will begin construction by Spring 2002 and if we fail to meet this time frame
we will have to get an extension to keep the franchise in place. Visioncomm
has recently negotiated an asset purchase agreement with a small private
cable company that currently provides service to ten townships, passing a
total of 1,424 homes and currently servicing 605 subscribers. Visioncomm is
currently in the process of securing new franchise agreements with these
townships, providing for 15-year terms. Seven of the ten agreements with
townships have been obtained. It is presently anticipated that an asset
purchase agreement will be finalized when the remaining three agreements with
townships have been obtained. One of the central cable processing machines
that is part of the purchase will then be used to provide the signal for part
of the build out of the seven new franchises. Visioncomm has also recently
entered into a letter of intent with another provider This opportunity is now
being held by the bank and they would be motivated to find a new company. in
the same area, providing for the purchase of its system, which currently
provides service to 14 townships, passing a total of 5,110 homes and
currently servicing 2,135 subscribers.

     The following communities, all in the state of Michigan, are under
franchise agreements with VisionComm: Chester Township, Charlton Township,
Vienna Township, Weber Township, Yates Township, Elk Township, Sauble
Township. These franchise agreements were purchased from Phoenix
Communications. All assignments and transfers were obtained. These cable
systems need to be built out within the next 16 months per the franchise
agreements.

     Visioncomm's Payphone Division is also headquartered in St. Charles,

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Missouri. In 1995, Visioncomm entered into a ten-year contract with Nevada
Communications Corp. to provide payphone services to a large healthcare
organization's hospitals and healthcare facilities throughout the United
States on an exclusive basis. We are currently seeking to sell Visioncomm's
Payphone Division, allowing us to devote our full energy to growing the Cable
Division, which is more congruent with our current and pending products and
services. There can be no assurance, however, that we will be successful in
finding a suitable buyer, or, if a suitable prospective buyer is found, that
we will be able to negotiate acceptable terms.

     At the present time, cable television systems compete with other
communications and entertainment media, including off-air television broadcast
signals, which a viewer is able to receive directly using the viewer's own
television set and antenna. The extent to which a cable system competes with
over-the-air broadcasting depends upon the quality and quantity of the broadcast
signals available by direct antenna reception compared to the quality and
quantity of such signals and alternative services offered by a cable system. In
many areas, television signals which constitute a substantial part of basic
service can be received by viewers who use their own antennas. VCI's private
cable television services compete mostly with incumbent franchise cable
television systems servicing condominiums, apartment complexes and certain other
multiple unit residential developments, as well as wireless cable television
operators, other private cable television operators, DBS operators and stand
alone satellite service providers. The operators of these private systems, known
as satellite master antenna television ("SMATV") systems, often enter into
exclusive agreements with apartment building owners or homeowners' associations
which preclude franchised cable television operators from serving residents of
such private complexes. VCI continues as a matter of course to investigate new
sources of programming and technologies that may increase its range of services.
In the United States the MDU portion of the residential real estate market is
estimated to be 20 million rental units.

     The cable television industry as a whole competes with radio, television,
the Internet, and print media for advertising revenues. As the cable television
industry continues to develop programming designed specifically for distribution
by cable, advertising revenues may increase. Premium programming provided by
cable systems is subject to the same competitive factors which exist for other
programming discussed above. The continued profitability of premium services may
depend largely upon the continued availability of attractive programming at
competitive prices.

     With respect to our pay phone assets, we compete principally with the
services offered by the incumbent LEC serving that area. Incumbent LECs have
long-standing relationships with their customers, have the potential to
subsidize competitive services from monopoly service revenues, and benefit from
favorable state and federal regulations.

3D.COM, Inc.

     Our 3D.COM, Inc. division was formed in June 1999 with the acquisition of
the assets and technology previously owned by Strata, Inc., an early pioneer in
3D software. Incorporated in the state of Utah, this division is a wholly owned
subsidiary of us. This division is in its development stage and is currently not
generating any revenue. The plan surrounding the acquisition of Strata, Inc. was
to combine the assets and technology of Strata with our

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existing Web effort to distribute 3D content and tools both online and through
over-the-counter software. As part of its online strategy, we, through this
division, plan to launch an Internet 3D and virtual reality internet portal (a
focused internet destination).

     In November 2000, we elected to discontinue the Strata division of 3D.Com.
The Strata assets were acquired in June of 1999 through a foreclosure proceeding
against Strata, Inc. initiated by its original creditors. Upon discontinuing the
Strata division, we leased the tangible and intangible Strata assets to a new
company controlled by three officers of 3D.Com, who were also the founders of
Strata, Inc. The lease agreement was for minimal consideration and served as a
mechanism for the planned future sale or spin off of the Strata assets as a
separate company. We expect to recover our investment in Strata through the sale
or spin off of the Strata assets.

     Since our 3D products and services are still in their development stage, we
have no direct customers at this time. However, we expect our customers to be
entertainment consumers, commercial and industrial customers, and any enterprise
or individual that wishes to view 3D content or convert 2D content into 3D.

Patents, Trademarks and Copyrights

     After our reorganization and appointment of new management in March
2001, we are conducting a comprehensive review to determine the status of
individual patents, trademarks and copyrights.

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Legislation and Regulation

Because of the operations of VisionComm, we are subject to the regulation of the
cable television industry. The cable television industry is regulated by the
Federal Communications Commission (FCC), the principal federal regulatory agency
with jurisdiction over cable television, some state governments and most local
governments. In addition, various legislative and regulatory proposals under
consideration from time to time by Congress and various federal agencies may
materially affect the cable television industry. The following is a summary of
federal laws and regulations affecting the growth and operation of the cable
television industry and a description of certain state and local laws.

Federal Regulation

The FCC has adopted regulations covering such areas as cross-ownership between
cable television systems and other communications businesses, carriage of
television broadcast programming, cable rates, consumer protection and customer
service, leased access, programmer access to cable television systems,
programming agreements, technical standards, consumer electronics equipment
compatibility, ownership of home wiring, program exclusivity, consumer education
and lockbox enforcement, origination cablecasting and sponsorship
identification, children's programming, signal leakage and frequency use,
maintenance of various records, and antenna structure notification, marking and
lighting. The FCC has the authority to enforce these regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the revocation of FCC
licenses needed to operate certain transmission facilities often used in
connection with cable operations. Following is a brief summary of certain of
these federal regulations.

Rate Regulation

The FCC's implementing regulations contain standards for the regulation of basic
service rates. Local franchising authorities and the FCC, respectively, are
empowered to order a reduction of existing rates which exceed the maximum
permitted level for basic services and associated equipment, and refunds can be
required. The FCC adopted a benchmark price cap system for measuring the
reasonableness of existing basic service rates. Alternatively, cable operators
have the opportunity to make cost-of-service showings which, in some cases, may
justify rates above the applicable benchmarks. The rules also

                                       10
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require that charges for cable-related equipment, converter boxes and remote
control devices, for example, and installation services be unbundled from the
provision of cable service and based upon actual costs plus a reasonable profit.
The regulations also provide that future rate increases may not exceed an
inflation-indexed amount, plus increases in certain costs beyond the cable
operator's control, such as taxes, franchise fees and increased programming
costs. Cost-based adjustments to these capped rates can also be made in the
event a cable television operator adds or deletes channels.

The 1984 Cable Act codified existing FCC preemption of rate regulation for
premium channels and optional non-basic programming. The 1984 Cable Act also
deregulated basic cable rates for cable television systems determined by the FCC
to be subject to effective competition. The 1992 Cable Act substantially changed
the previous statutory and FCC rate regulation standards. The 1992 Cable Act
replaced the FCC's old standard for determining effective competition, under
which most cable television systems were not subject to rate regulation, with a
statutory provision that resulted in nearly all cable television systems
becoming subject to rate regulation of basic service. The landmark, 1996
Telecommunications Act, which effectively governs most cable operations today,
expanded the definition of effective competition to cover situations where a
local telephone company or its affiliate, or any multichannel video provider
using telephone company facilities, offers comparable video service by any means
except direct broadcast satellite television systems. The satisfaction of this
test deregulates all rates.

For cable systems not subject to effective competition, the 1992 Cable Act
required the FCC to adopt a formula for franchising authorities to assure that
basic cable rates are reasonable; allowed the FCC to review rates for cable
programming service tiers, other than per-channel or per-program services, in
response to complaints filed by franchising authorities and/or cable customers;
prohibited cable television systems from requiring basic customers to purchase
service tiers above basic service in order to purchase premium services if the
system is technically capable of compliance; required the FCC to adopt
regulations to establish, on the basis of actual costs, the price for
installation of cable service, remote controls, converter boxes and additional
outlets; and allowed the FCC to impose restrictions on the retiering and
rearrangement of cable services under certain limited circumstances. The 1996
Act ended FCC regulation of cable programming service tier rates on March 31,
1999. The 1996 Act also relaxed existing uniform rate requirements by specifying
that such requirements do not apply where the operator faces effective
competition, and by exempting bulk discounts to multiple dwelling units,
although complaints about predatory pricing may be lodged with the FCC.

Lastly, there are regulations which require cable television systems to permit
customers to purchase video programming on a per channel or a per program basis
without the necessity of subscribing to any tier of service, other than the
basic service tier, unless the cable television system is technically incapable
of doing so. Generally, this exemption from compliance with the statute for
cable television systems that do not have such technical capability is available
until a cable television system obtains the capability, but not later than
December 2002.

Carriage of Broadcast Television Signals

The 1992 Cable Act contains signal carriage requirements which allow

                                       11
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commercial television broadcast stations that are "local" to a cable television
system, that is to say that the system is located in the station's designated
market area, to elect every three years whether to require the cable television
system to carry the station, subject to certain exceptions, or whether the cable
television system will have to negotiate for "retransmission consent" to carry
the station. The next election between must-carry and retransmission consent
will be October 1, 2002. A cable television system is generally required to
devote up to one-third of its activated channel capacity for the carriage of
local commercial television stations whether pursuant to mandatory carriage
requirements or the retransmission consent requirements of the 1992 Cable Act.

Channel Set-Asides

The 1984 Cable Act permits local franchising authorities to require cable
television operators to set aside certain television channels for public,
educational and governmental access programming. The 1984 Cable Act further
requires cable television systems with thirty-six or more activated channels to
designate a portion of their channel capacity for commercial leased access by
unaffiliated third parties to provide programming that may compete with services
offered by the cable television operator. The 1992 Cable Act requires leased
access rates to be set according to a formula determined by the FCC.

Ownership

The 1996 Act repealed the statutory ban against local exchange carriers
providing video programming directly to customers within their local exchange
telephone service areas. Consequently, the 1996 Act permits telephone companies
to compete directly with operations of cable television systems. Under the 1996
Act and FCC rules adopted to implement the 1996 Act, local exchange carriers may
provide video service as broadcasters, common carriers, or cable operators.

The 1996 Act generally prohibits local exchange carriers from purchasing any
ownership interest in a cable television system exceeding 10% located within the
local exchange carriers telephone service area, prohibits cable operators from
purchasing local exchange carriers whose service areas are located within the
cable operator's franchise area, and prohibits joint ventures between operators
of cable television systems and local exchange carriers operating in overlapping
markets. There are some statutory exceptions, including a rural exemption that
permits buyouts in which the purchased cable television system or local exchange
carrier serves a non-urban area with fewer than 35,000 inhabitants, and
exemptions for the purchase of small cable television systems located in
non-urban areas. Also, the FCC may grant waivers of the buyout provisions in
certain circumstances.

The 1996 Act makes several other changes to relax ownership restrictions and
regulations of cable television systems. The 1996 Act repeals the 1992 Cable
Act's three-year holding requirement pertaining to sales of cable television
systems. The statutory broadcast/cable cross-ownership restrictions imposed
under the 1984 Cable Act have been eliminated, although the FCC's regulations
prohibiting broadcast/cable common-ownership currently remain in effect. The
FCC's rules also generally prohibit cable operators from offering satellite
master antenna service separate from their franchised systems in the same
franchise area, unless the cable operator is subject to "effective

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competition" there.

The 1996 Act amends the definition of a "cable system" under the Communications
Act of 1934 (the "Communications Act") so that competitive providers of video
services will be regulated and franchised as "cable systems" only if they use
public rights-of-way. Thus, a broader class of entities providing video
programming may be exempt from regulation as cable television systems under the
Communications Act.

Pursuant to the 1992 Cable Act, the FCC has imposed limits on the number of
cable television systems which a single cable television operator can own. In
general, no cable television operator can have an attributable interest in cable
television systems which serve more than 30% of all multi-channel video
programming distributors nationwide. Attributable interests for these purposes
include voting interests of 5% or more, non-voting interests of 33% or more of
the total assets (debt plus equity), officerships, directorships and general
partnership interests.

The FCC has also adopted rules which limit the number of channels on a cable
television system which can be occupied by national video programming services
in which the entity which owns the cable television system has an attributable
interest. The limit is 40% of the first 75 activated channels. The U.S. Court of
Appeals for the District of Columbia Circuit recently overturned the 30%
multiple ownership and 40% programming interest rules on the ground that they
are an unsupported intrusion on cable operators' First Amendment rights. The
rulemaking decision was remanded to the FCC for further proceedings. The
constitutionality of the underlying statute had previously been sustained by the
same court. The FCC has yet to announce what action it will take on either of
these limitations.

The 1996 Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services, including cable television,
notwithstanding the Public Utilities Holding Company Act of 1935, as amended.
Electric utilities must establish separate subsidiaries known as "exempt
telecommunications companies" and must apply to the FCC for operating authority.
Due to their resources, electric utilities could be formidable competitors to
traditional cable television systems.

Access to Programming

The 1992 Cable Act imposed restrictions on the dealings between cable operators
and cable programmers. Of special significance from a competitive business
posture, the 1992 Cable Act precludes video programmers affiliated with cable
companies from favoring their affiliated cable operators over competitors and
requires such programmers to sell their programming to other multichannel video
distributors. This provision limits the ability of vertically integrated cable
programmers to offer exclusive programming arrangements to cable companies.
Certain of these restrictions are scheduled to expire in October 2002 unless the
FCC decides that they should be continued.

Privacy

The 1984 Cable Act imposes a number of restrictions on the manner in which cable
television operators can collect and disclose data about individual system
customers. The statute also requires that the system operator

                                       13
<Page>

periodically provide all customers with written information about its policies
regarding the collection and handling of data about customers, their privacy
rights under federal law and their enforcement rights. In the event that a cable
television operator was found to have violated the customer privacy provisions
of the 1984 Cable Act, it could be required to pay damages, attorneys' fees and
other costs. Under the 1992 Cable Act, the privacy requirements were
strengthened to require that cable television operators take such actions as are
necessary to prevent unauthorized access to personally identifiable information.

Franchise Transfers

The 1992 Cable Act requires franchising authorities to act on any franchise
transfer request within 120 days after receipt of all information required by
FCC regulations and by the franchising authority. Approval is deemed to be
granted if the franchising authority fails to act within such period.

Technical Requirements

The FCC has imposed technical standards applicable to all classes of channels
which carry downstream National Television System Committee video programming.
The FCC also has adopted additional standards applicable to cable television
systems using frequencies in the 108 to 137 MHz and 225 to 400 MHz bands in
order to prevent harmful interference with aeronautical navigation and safety
radio services and has also established limits on cable television system signal
leakage. Periodic testing by cable television operators for compliance with the
technical standards and signal leakage limits is required and an annual filing
of the results of these measurements is required. The 1992 Cable Act requires
the FCC to periodically update its technical standards to take into account
changes in technology. Under the 1996 Act, local franchising authorities may not
prohibit, condition or restrict a cable television system's use of any type of
customer equipment or transmission technology.

The FCC has adopted regulations to implement the requirements of the 1992 Cable
Act designed to improve the compatibility of cable television systems and
consumer electronics equipment. These regulations, among other things, generally
prohibit cable television operators from scrambling their basic service tier.
The 1996 Act directs the FCC to set only minimal standards to assure
compatibility between television sets, VCRs and cable television systems, and to
rely on the marketplace. Pursuant to the 1992 Cable Act, the FCC has adopted
rules to assure the competitive availability to consumers of customer premises
equipment, such as converters, used to access the services offered by cable
television systems and other multichannel video programming distributors.
Pursuant to those rules, consumers are given the right to attach compatible
equipment to the facilities of their multichannel video programming distributors
so long as the equipment does not harm the network, does not interfere with the
services purchased by other customers and is not used to receive unauthorized
services. As of July 1, 2000, multichannel video programming distributors, other
than operators of direct broadcast satellite television systems, are required to
separate security from non-security functions in the customer premises equipment
which they sell or lease to their customers and offer their customers the option
of using component security modules obtained from the multichannel video
programming distributors with set-top units purchased or leased from retail
outlets. As of January 1, 2005, multichannel video programming distributors will
be

                                       14
<Page>

prohibited from distributing new set-top equipment integrating both security and
non-security functions to their customers.

Pursuant to the 1992 Cable Act, the FCC has adopted rules implementing an
emergency alert system. The rules require all cable television systems to
provide an audio and video emergency alert system message on at least one
programmed channel and a video interruption and an audio alert message on all
programmed channels. The audio alert message is required to state which channel
is carrying the full audio and video emergency alert system message. The FCC
rules permit cable television systems either to provide a separate means of
alerting persons with hearing disabilities of emergency alert system messages,
such as a terminal that displays emergency alert system messages and activates
other alerting mechanisms or lights, or to provide audio and video emergency
alert system messages on all channels. Cable television systems with 10,000 or
more basic customers per headend were required to install emergency alert system
equipment capable of providing audio and video emergency alert system messages
on all programmed channels by December 31, 1998. Cable television systems with
5,000 or more but fewer than 10,000 basic customers per headend will have until
October 1, 2002 to comply with that requirement. Cable television systems with
fewer than 5,000 basic customers per headend will have a choice of providing
either a national level emergency alert system message on all programmed
channels or installing emergency alert system equipment capable of providing
audio alert messages on all programmed channels, a video interrupt on all
channels, and an audio and video emergency alert system message on one
programmed channel. This must be accomplished by October 1, 2002.

Inside Wiring; Customer Access

In a 1997 order, the FCC established rules that require an incumbent cable
operator upon expiration of a multiple dwelling unit service contract to sell,
abandon, or remove "home run" wiring that was installed by the cable operator in
a multiple dwelling unit building. These inside wiring rules are expected to
assist building owners in their attempts to replace existing cable operators
with new programming providers who are willing to pay the building owner a
higher fee, where such a fee is permissible. Additionally, the FCC has proposed
to restrict exclusive contracts between building owners and cable operators or
other multichannel video programming distributors. The FCC has also recently
issued an order preempting state, local and private restrictions on over-the-air
reception antennas placed on rental properties in areas where a tenant has
exclusive use of the property, such as balconies or patios. However, tenants may
not install such antennas on the common areas of multiple dwelling units, such
as on roofs. This new order may limit the extent to which multiple dwelling unit
owners may enforce certain aspects of multiple dwelling unit agreements which
otherwise would prohibit, for example, placement of direct broadcast satellite
television systems television receiving antennae in multiple dwelling unit
areas, such as apartment balconies or patios, under the exclusive occupancy of a
renter.

Pole Attachments

The FCC currently regulates the rates and conditions imposed by certain public
utilities for use of their poles unless state public service commissions are
able to demonstrate that they adequately regulate the rates, terms and
conditions of cable television pole attachments. A number of states and the
District of Columbia have certified to the FCC that they adequately

                                       15
<Page>

regulate the rates, terms and conditions for pole attachments. Several states in
which we operate have made such a certification. In the absence of state
regulation, the FCC administers such pole attachment and conduit use rates
through use of a formula which it has devised. Pursuant to the 1996 Act, the FCC
has adopted a new rate formula for any attaching party, including cable
television systems, which offers telecommunications services. This new formula
will result in higher attachment rates than at present, but they will apply only
to cable television systems which elect to offer telecommunications services.
Any increases pursuant to this new formula begin in 2001, and will be phased in
by equal increments over the five ensuing years.

Other FCC Matters

FCC regulation pursuant to the Communications Act also includes matters
regarding a cable television system's carriage of local sports programming;
restrictions on origination and cablecasting by cable television operators;
rules governing political broadcasts; equal employment opportunity; deletion of
syndicated programming; registration procedure and reporting requirements;
customer service; closed captioning; obscenity and indecency; program access and
exclusivity arrangements; and limitations on advertising contained in
nonbroadcast children's programming.

The FCC has recently issued a Notice of Inquiry covering a wide range of issues
relating to Interactive Television ("ITV"). Examples of ITV services are
interactive electronic program guides and access to a graphic interface that
provides supplementary information related to the video display. In the near
term, cable systems are likely to be the platform of choice for the distribution
of ITV services. The FCC has posed a series of questions including the
definition of ITV, the potential for discrimination by cable systems in favor of
affiliated ITV providers, enforcement mechanisms, and the proper regulatory
classification of ITV service.

Copyright Laws

Cable television systems are subject to federal copyright licensing covering
carriage of broadcast signals. In exchange for making semi-annual payments to a
federal copyright royalty pool and meeting certain other obligations, cable
television operators obtain a statutory license to retransmit broadcast signals.
The amount of this royalty payment varies, depending on the amount of system
revenues from certain sources, the number of distant signals carried, and the
location of the cable television system with respect to over-the-air television
stations. Any future adjustment to the copyright royalty rates will be done
through an arbitration process to be supervised by the U.S. Copyright Office.
Cable television operators are liable for interest on underpaid and unpaid
royalty fees, but are not entitled to collect interest on refunds received for
overpayment of copyright fees.

Various bills have been introduced into Congress over the past several years
that would eliminate or modify the cable television compulsory license. Without
the compulsory license, cable television operators would have to negotiate
rights from the copyright owners for all of the programming on the broadcast
stations carried by cable television systems. Such negotiated agreements would
likely increase the cost to cable television operators of carrying broadcast
signals. The 1992 Cable Act's retransmission consent provisions expressly
provide that retransmission consent agreements between

                                       16
<Page>

television broadcast stations and cable television operators do not obviate the
need for cable operators to obtain a copyright license for the programming
carried on each broadcaster's signal.

Copyrighted music performed in programming supplied to cable television systems
by pay cable networks, such as HBO, and basic cable networks, such as USA
Network, is licensed by the networks through private agreements with the
American Society of Composers and Publishers, generally known as ASCAP, and BMI,
Inc., the two major performing rights organizations in the United States. Both
the American Society of Composers and Publishers and BMI offer "through to the
viewer" licenses to the cable networks which cover the retransmission of the
cable networks' programming by cable television systems to their customers.
Licenses to perform copyrighted music by cable television systems themselves,
including on local origination channels, in advertisements inserted locally on
cable television networks, and in cross-promotional announcements, must be
obtained by the cable television operator from the American Society of Composers
and Publishers, BMI and/or SESAC, Inc.

State and Local Regulation

Cable television systems generally are operated pursuant to nonexclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. The terms and conditions of franchises vary materially
from jurisdiction to jurisdiction, and even from city to city within the same
state, historically ranging from reasonable to highly restrictive or burdensome.
Franchises generally contain provisions governing fees to be paid to the
franchising authority, length of the franchise term, renewal, sale or transfer
of the franchise, territory of the franchise, design and technical performance
of the system, use and occupancy of public streets and number and types of cable
television services provided. The terms and conditions of each franchise and the
laws and regulations under which it was granted directly affect the
profitability of the cable television system. The 1984 Cable Act places certain
limitations on a franchising authority's ability to control the operation of a
cable television system. The 1992 Cable Act prohibits exclusive franchises, and
allows franchising authorities to exercise greater control over the operation of
franchised cable television systems, especially in the area of customer service
and rate regulation. The 1992 Cable Act also allows franchising authorities to
operate their own multichannel video distribution system without having to
obtain a franchise and permits states or local franchising authorities to adopt
certain restrictions on the ownership of cable television systems. Moreover,
franchising authorities are immunized from monetary damage awards arising from
regulation of cable television systems or decisions made on franchise grants,
renewals, transfers and amendments. The 1996 Act prohibits a franchising
authority from either requiring or limiting a cable television operator's
provision of telecommunications services.

Various proposals have been introduced at the state and local levels with regard
to the regulation of cable television systems, and a number of states have
adopted legislation subjecting cable television systems to the jurisdiction of
centralized state governmental agencies, some of which impose regulation of a
character similar to that of a public utility. The foregoing describes all
material present and proposed federal, state and local regulations and
legislation relating to the cable television industry. Other existing federal
regulations, copyright licensing and, in many jurisdictions, state and local
franchise requirements, currently are the subject of a

                                       17
<Page>

variety of judicial proceedings, legislative hearings and administrative and
legislative proposals which could change, in varying degrees, the manner in
which cable television systems operate. Neither the outcome of these proceedings
nor their impact upon the cable television industry or CMI can be predicted at
this time.

Local Telecommunications Services

The 1996 Act provides that no state or local laws or regulations may prohibit or
have the effect of prohibiting any entity from providing any interstate or
intrastate telecommunications service. States are authorized, however, to impose
"competitively neutral" requirements regarding universal service, public
service, public safety and welfare, service quality and consumer protection.
State and local governments also retain their authority to manage the public
rights-of-way and may require reasonable, competitively neutral compensation for
management of the public rights-of-way when cable operators provide
telecommunications service. We may in the future allow our cable infrastructure
to be used for the provision of local telecommunications services to residential
and business consumers. Local telecommunications service is subject to
regulation by state utility commissions. Use of local telecommunications
facilities to originate and terminate long distance services, a service commonly
referred to as "exchange access," is subject to regulation both by the FCC and
by state utility commissions. As a provider of local exchange service, we would
be subject to the requirements imposed upon local exchange carriers by the 1996
Act. These include requirements governing resale, telephone number portability,
dialing parity, access to rights-of-way and reciprocal compensation. Our ability
to successfully offer local telecommunications service will be dependent, in
part, on the opening of local telephone networks by incumbent local telephone
companies as required of them by the 1996 Act. In January 1999, the United
States Supreme Court reversed and vacated in part an earlier decision of a
federal court of appeals striking down portions of the FCC's 1996 rules
governing local telecommunications competition. The Supreme Court held that the
FCC has authority under the Communications Act to establish rules to govern the
pricing of facilities and services provided by incumbent local exchange carriers
("ILECS") to open their local networks to competition. However, in July 2000,
the U.S. Court of Appeals for the Eighth Circuit vacated several FCC rules
concerning interconnection and pricing of ILEC network elements, including a
rule that mandates that ILECs set prices for unbundled network elements at the
lowest cost network configuration, and another rule that would have required the
ILECs to bundle combinations of network elements at the competing carrier's
request. The U.S. Supreme Court decided to review this decision (consolidated
with four other lower court challenges to the FCC's interconnection rules) in
its next session, which commences in October 2001. How these questions are
resolved will impact our ability to provide local telecommunications service in
competition with incumbent local exchange telephone companies.

Employees

As of June 29, 2001, we and our subsidiaries had 18 full time employees, and 4
consultants.

                                       18
<Page>

ITEM 2.

DESCRIPTION OF PROPERTY

     The Company occupies leased office space at: 1030 S. Mesa Drive $3000.00
per month 4000 sqf. (10 Year lease started March 2000) Lease 951 Old Country
Road Suite 195 Belmont, CA $1100.00 per month 900 sqf. (Month to Month) Lease
5018 Bristol Industrial Way #202 Buford, GA $2200.00 per month 3000 sqf
(Lease ends July 31 2001) Leases: St. Charles, Missouri Office, 9600 square
feet, $5750.00 per month, Four years remaining on lease. Detroit, Michigan
Office, 1800 square feet, $2935.00 per month, 18 months remaining on lease.
Grand Prairie, Texas Office, 900 square feet, $842.00 per month, 2 months
remaining on lease.

                                       19
<Page>

ITEM 3.

LEGAL PROCEEDINGS

     On November 14, 2000, the Company and its Chief Executive Officer, J.
Michael Heil ("Heil"), were named as defendants in a complaint filed by
Trimark Pictures, Inc. ("Trimark"), in the Superior Court for the State of
California, County of Los Angeles (TRIMARK PICTURES, INC. V. CHEQUEMATE
INTERNATIONAL, INC., D/B/A C-3D DIGITAL, INC., J. MICHAEL HEIL, ET AL.; Case
No. SC063992) (the "Trimark complaint"). The Trimark complaint alleges that
the Company and Heil breached the terms of a contract between the Company and
Trimark dated February 8, 2000 (the "Trimark contract"), by failing to
register a total of 100,000 shares of the Company's restricted common stock
issued to Trimark pursuant to the terms of the Trimark contract. Under the
terms of the Trimark contract, the Company issued to Trimark a total of
100,000 shares of restricted common stock (the "Trimark shares"), and agreed
to immediately undertake the registration of the Trimark shares, in exchange
for the license to the Company of up to fifty (50) pictures from Trimark's
library for digitalization by the Company. The Trimark complaint also asserts
a claim for fraud against the Company and Heil, alleging that, prior to
execution of the Trimark contract, the Company and Heil made false promises
and representations to Trimark concerning the Trimark shares, for the purpose
of inducing Trimark into entering into the Trimark contract. Trimark claims
substantial damages arising from the alleged breach of contract and
misrepresentations, in the amount of $1,650,000. We are currently engaged in
settlement discussions with Trimark and we have reached a settlement in
general terms and are awaiting proper documentation resolving the entire
matter. In the event these discussions are not successful, the Company and
Heil intend to vigorously defend this case, raising a number of defenses,
including, among other things, issues regarding the consideration received
from Trimark; and the actual damages actually suffered by Trimark because of
the alleged breach of contract.

     During the period ending March 31, 2001 we were engaged in restructuring
and in focusing on consolidation. In the process of consolidation a number of
employees and contractors were released and we are currently engaged with
settlement negotiations with many of these employees and contractors. In the
event these discussions and negotiations are not successful, we may be faced
with additional legal repercussions from these individuals.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ending March 31, 2001.

                                       20
<Page>

     PART II

ITEM 5

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The stock of the Company is traded on the American Stock Exchange under
the symbol DDD. The listing on the American Stock Exchange took place on June
9, 1999. Prior to that date, the Company's stock had been traded on the OTC
Bulletin Board under the symbol CQMT of the NASD Stock Market, Inc. As of
June 25, 2001, there are approximately 900 shareholders of record of the
Company. As of June 25, 2001, the Company had issued and outstanding shares
of 25,680,581. The stock of the Company, as of June 25, 2001, closed at $0.19.

     The NASD Stock Market, Inc. provided the fiscal year 1999 quotations for
the Company's stock. The referenced quotations reflect inter-dealer prices
without dealer mark-up, markdown or commissions and may not represent actual
transactions. These prices have been adjusted to reflect the reverse split of
the Company's common stock declared to be effective February 2, 2000.

Yahoo! provided the fiscal year 2000 quotations for the Company's stock.


<Table>
<Caption>
FISCAL YEAR                        HIGH CLOSING PRICE     LOW CLOSING PRICE
------------------------------     ------------------     -----------------
<S>                                <C>                    <C>
2000-1st Quarter (4/99-6/99)             13.50                   7.00
2000-2nd Quarter (7/99-9/99)             13.25                   6.25
2000-3rd Quarter (10/99-12/99)           12.50                   4.00
2000-4th Quarter (1/00-3/00)             18.44                   7.25
2001-1st Quarter (4/00-6/00)              8.87                   3.12
2001-2nd Quarter (7/00-9/00)              3.93                   1.00
2001-3rd Quarter (10/00-12/00)            1.19                   0.25
2001-4th Quarter (1/01-3/01)              0.81                   0.15
</Table>

     The Company has paid no dividends on common stock during its two most
recent fiscal years, and has no present intention to pay dividends in fiscal
year 2001.

     During the final quarter of fiscal year ended March 31, 2001, the
Company issued shares of restricted common stock to a number of individuals
described below. Each of the following issuances of securities was made
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

     On January 4, 2001, we issued 2,500,000 shares of our common stock to
the shareholders of VisionComm. Under the terms of the VisionComm stock
purchase agreement, we acquired all of the issued and outstanding shares of
common stock of VisionComm, in exchange for issuing 2,500,000 shares of our
common stock to the VisionComm Shareholders, subject to a repricing
adjustment, and the issuance to the VisionComm Shareholders of promissory
notes in the aggregate principal amount of $2,800,000.

     On February 13, 2001, according to a settlement agreement, we issued
320,000 shares of our common stock to Dutchess Advisors, Ltd. in
consideration of Dutchess waiving any claim resulting from our failure to
timely file a registration statement to cover shares issued to Dutchess in
December 21, 1999. On the date of the agreement, the closing price of our
common stock on the American Stock Exchange was $.21 per share. The Dutchess
amendment contains a repricing provision. If on the date which is five
business days following the date of effectiveness of our registration
statement covering the Dutchess shares, the average closing bid price of our
common stock, as reported by the American Stock Exchange, for the five days
preceding the repricing date, is less than $1.00 per share, we are required
to issue to Dutchess that number of restricted shares of common stock
necessary for Dutchess to receive a total value of $200,000 in our common
stock. The amendment limits the total number of shares issuable to Dutchess
to 700,000 shares.

     On February 13, 2001, according to a settlement agreement, we issued
100,000 shares of our common stock to Eagle Plaza, L.C., a Utah limited
liability company, and Ronald Litz, as payment of a $50,000 balance due to
Eagle Plaza. On January 20, 2001, the date of the settlement agreement, the
closing price of our common stock on the American Stock Exchange was $0.50
per share.

     On January 16, 2001,we issued 25,000 shares to Fernando Gomez in partial
payment of claims totaling $90,000 for contracted services, employment and
other expenses. On the date of the settlement agreement, our common stock
traded on the American Stock Exchange at a daily average of $.17 per share.
On January 16, 2001, the closing price of our common stock on the American
Stock Exchange was $0.50 per share.

     On January 9, 2001, the Company issued 50,000 shares of its common stock
to R. Gordon Jones in consideration for services rendered. On January 9,
2001, the closing price of our common stock on the American Stock Exchange
was $0.29 per share.

     On February 13, 2001, we settled a lawsuit brought by the Rocky Mountain
Employee Benefits, Inc. under an office lease agreement dated April 1, 1996.
Pursuant to the settlement, we issued a total of 295,567 shares of our common
stock in satisfaction of any claims under the lease. The settlement contains
a repricing provision, for the purpose of ensuring a total value of $118,226
to be paid to Rocky Mountain. If, on the date which is five business days
following the date of effectiveness of our registration statement covering
the Rocky Mountain shares, the average closing bid price for our common
stock, as reported by the American Stock Exchange, for the five preceding
days is less than $.40 per share, we are required to issue to Rocky Mountain
that number of additional shares of common stock necessary for Rocky Mountain
to receive a total value of $118,226.99. In no event shall Rocky Mountain
receive most than 400,000 shares.

     On February 13, 2001, we issued 840,000 shares of our common stock to
United Business Services, Inc., a Nevada corporation. On March 31, 2000, we
entered into an asset purchase agreement with United Business Services, Inc.
under which we acquired from United Business all of the tangible and
intangible assets relating to United Business's Video-On-Call Terminal and
Video-On-Call Credit-Card-Swipe services. Our agreement with United Business
provided for a purchase price of $1,000,000, payable with $60,000 upon
signing of the UBS Agreement, with the balance payable shares of our common
stock. In August 2000, under the terms of a letter amendment to our agreement
with United Business, we issued a total of 640,000 shares of restricted
common stock to United Business. The letter amendment required us to file a
registration statement on Form S-3, including a total of 200,000 shares of
common stock issued to United Business in the transaction, on or before
September 23, 2000. However, because of financial and operating difficulties,
we were unable to file the registration statement. On January 5, 2001, we
entered into a second amendment with United Business under which we agreed to
issue to United Business an additional 840,000 shares of restricted common
stock in consideration of United Business agreeing to waive and release us
from any claim resulting from our failure to timely file the registration
statement. On the date of the second amendment, the closing price of our
common stock on the American Stock Exchange was $0.31 per share.

     On February 13, 2001, we issued 121,850 shares of our common stock to
Scott Applegate in consideration of Applegate's agreement to waive and
release us from any claim resulting from our failure to timely file a
registration statement for shares we issued to Applegate in payment for
Applegate assigning to us all of Applegate's interests in a lease of certain
cable television rights. If, on the date which is five business days
following the date of effectiveness of our registration statement covering
the Applegate shares, the closing price of our common stock, as reported by
the American Stock Exchange, for the five preceding days is less than $1.00
per share, we are required to issue to Applegate that number shares of common
stock necessary for Applegate to receive a total value of $183,000.

     On January 16, 2001, we issued to Chandos Mahon 210,556 shares of our
common stock in consideration for services valued at $72,500 provided by him
to the Company. The shares issued to Mahon were issued pursuant to a plan
approved by our board of directors to compensate our officers and employees
for unpaid services, cash advances and cash contributions to us, through the
issuance of shares of our restricted common stock.

     On January 29, 2001, we issued 983,136 shares of common stock to J.
Michael Heil. 525,714 shares were issued in consideration for $92,000 in
services and 457,422 shares were issued for $160,098 in expenses and cash
advances by Mr. Heil to the Company.

     On January 16, 2001, the Company issued 37,500 shares of its common
stock to Doug Stanley in consideration for services rendered. On January 16,
2001, the closing price of the Company's common stock on the American Stock
Exchange was $0.27 per share.

     On January 16, 2001, the Company issued 125,000 shares of its common
stock to Donny Thompson in consideration for services rendered. On January
16, 2001, the closing price of the Company's common stock on the American
Stock Exchange was $0.27 per share.

                                       21
<Page>

ITEM 6

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

OVERVIEW

     The Company divides its business activities among four divisions: (1)
C-3D Digital, a division that is developing three-dimensional, or 3D,
technology for converting two-dimensional, or 2D, video programming and
similar video entertainment, or content, to 3D content for film, television
and computer applications and will seek to generate revenue from the sale of
these conversion services; (2) VisionComm, Inc., a wholly owned subsidiary
that derives revenue from the ownership, operation and management of private
cable systems in Texas, California, Michigan, Oklahoma and Missouri; (3)
Hotel Movie Network, a division that derives revenue from broadcasting
entertainment and programming over hotel networks on a pay-per-view or
free-to-guest basis(where the hotel pays a flat monthly fee); and (4) 3D.com,
a wholly owned subsidiary that discontinued its Strata division in November,
2000.

     Hotel Movie Network accounted for $775,265, or approximately 86%, of our
revenues as reported on our Consolidated Statement of Operations for the year
ended March 31, 2001. The remaining approximately 14% of our revenues were
generated by miscellaneous consulting and similar services rendered by C-3D
Digital. Revenues of $362,446 from the Strata division of 3D.Com were included
only in footnote disclosure under Discontinued Operations for the year ended
March 31, 2001, and were recorded as part of our net Loss from Discontinued
Operations. For the year ended December 31, 2000, VisionComm, Inc., had revenues
of $3,580,705, which we did not include in our March 31, 2001 Consolidated
Statement of Operations.

     The hotel pay-per-view segment currently generates monthly revenue of
approximately $65,000. We intend to use this business as an internal test market
by providing 3D entertainment to hotel guests. We have adapted our 3D technology
to operate through the hotel pay-per-view system and are seeking additional
hotel properties in which to operate our hotel pay-per-view operations and
conduct market testing. During the next 12 months we expect Hotel Movie Network
to account for approximately one-third of our revenue and VisionComm to account
for approximately two-thirds of our revenue.

     As travelers become more dependent on Internet connectivity, the trend will
be for hotels to provide this service to their guests. HMN will be developing
its systems to accommodate broadband connectivity and therefore will be able to
generate additional revenues from sources beyond the entertainment spectrum. We
expect this will have little or no impact on our operations during the fiscal
year ended March 31, 2002 and will gradually increase in fiscal year ended March
31, 2003 and beyond.

     Our auditors have issued a going concern opinion regarding our audited
consolidated financial statements as of March 31, 2001. We continue to be
dependent on investment capital to fund our operations. We hope to significantly
reduce our debt by negotiating stock settlements with our creditors in
satisfaction of outstanding obligations. In addition, we expect to raise

                                       22
<Page>

approximately $3,500,000 in working capital upon completion of the sale of
approximately 43,125,565 shares of common stock to Another World, Inc. and other
investors pursuant to a private placement. We have also established an equity
line of credit with Paladin Trading Company Limited whereby we have the right to
require them to purchase shares of our common stock upon demand. However, we do
not intend to make any draws on the line of credit through June 30, 2001 and as
of the date of this filing we have not made any draws. We believe revenues from
the expansion of our VisionComm, Inc. subsidiary and our Hotel Movie Network
division, combined with the issuance and sale of additional shares in us, will
provide sufficient resources for operations.

ACQUISITION

     In December 2000, we purchased 100% of VisionComm, Inc., a St. Louis,
Missouri based cable television and pay-telephone company. VisionComm, Inc.
operates on a calendar year end. Accordingly, none of the results of
operations of VisionComm were included in our Consolidated Statements of
Operations as of March 31, 2001. There were no significant transactions or
distorting trends during the 92 days between the acquisition of VisionComm,
Inc. on December 30, 2000 and our fiscal year end of March 31, 2001. The
balance sheet of VisionComm is included in our Consolidated Balance Sheet as
of March 31, 2001.

     The purchase of VisionComm resulted in our assumption of $5,335,881 in
goodwill and a net increase in our fixed assets of $1,080,473. We will evaluate
the recoverability of our goodwill on at least an annual basis.

DISCONTINUED OPERATIONS

     In November 2000, we elected to discontinue the Strata division of 3D.Com.
Accordingly the operations of that division are excluded from our operating
results. The Strata assets were acquired in June of 1999 through a foreclosure
proceeding against Strata, Inc., initiated by the original creditors of Strata,
of which we acquired a priority interest. Upon discontinuing the Strata
division, we leased the tangible and intangible Strata assets to a new company
controlled by three officers of 3D.Com, who were also the founders of Strata,
Inc. The lease agreement was for minimal consideration and served as a mechanism
for the planned future sale or spin off of the Strata assets as a separate
company. We expect to recover our investment in Strata through the sale or spin
off of the Strata assets.

RESULTS OF OPERATIONS

FISCAL YEAR MARCH 31, 2001 COMPARED TO MARCH 31, 2000 (AS RESTATED FOR
DISCONTINUED OPERATIONS).

     REVENUES: Our revenues for the years ended March 31, 2001 and 2000 have
been restated to reflect that the Strata division of 3D.Com has been
discontinued. Strata's annual sales of $362,446 in the year ended March 31, 2001
and $268,478 in the year ended March 31, 2000 have been removed from the
consolidated results as have the related operating expenses.

     Our total sales for the year ended March 31, 2001 were $905,070 compared to
$491,779 for the year ended March 31, 2000, an increase of approximately 84%.
Hotel Movie Network accounted for $775,265, or approximately 86%, of our
revenues as reported on our Consolidated Statement of Operations for the year
ended March 31, 2001. The remaining approximately 14%

                                       23
<Page>

of our revenues were generated by miscellaneous consulting and similar services
rendered by C-3D Digital. Revenues of $362,446 from the Strata division of
3D.Com were included only in footnote disclosure under Discontinued Operations
for the year ended March 31, 2001, and were recorded as part of our net Loss
from Discontinued Operations. For the year ended December 31, 2000, VisionComm,
Inc., had revenues of $3,580,705, which we did not include in our March 31, 2001
Consolidated Statement of Operations. We continue to seek out additional hotels
in which to deploy our inventory of equipment, including video cassette players
and content, and increase our revenue.

     COST OF SALES: Cost of Goods Sold increased significantly from $229,315 for
the year ended March 31, 2000 to $525,841 for the year ended March 31, 2001,
corresponding to an increase of approximately 229%. This increase is due
primarily to a write-down of the book value of approximately $339,000 of 3D
shutter glasses from I-O Display from our C-3D Digital division.

     While revenues increased, gross margin as a percentage of sales decreased
due to the increase in cost of goods sold as discussed above. For the year ended
March 31, 2001, we realized gross margins of $379,229 or approximately 42% of
total revenues, compared to $262,464 or approximately 53% of total revenues for
the year ended March 31, 2000.

     EXPENSES: During the year ended March 31, 2001, general and administrative
expenses increased by $10,402,239 to a total of $15,266,450. This represents an
increase of approximately 314% over the corresponding expenses of $4,864,211
during the prior year. This increase resulted primarily from the issuance of
shares and options in consideration for services rendered of $5,175,600, as
compensation of options based on the Black Scholes method of valuation of
$3,974,631 and in settlement of various liabilities of $1,671,296. The shares
and options were valued at their estimated fair value and resulted in an expense
of $10,821,527.

     Amortization and depreciation expenses were $1,748,763 and $392,128,
respectively, for the year ended March 31, 2001, increases of approximately 66%
and 33%, respectively, compared to the corresponding results of $1,053,376 and
$295,431, respectively, for the year ended March 31, 2000.

     OTHER INCOME (EXPENSE): Total other expenses increased by $180,168 from
$75,213 for the year ended March 31, 2000 to $263,381 for the year ended March
31, 2001, an increase of approximately 250%. This increase was principally
attributable to an increase of $159,765 for interest expenses due to an increase
in our interest bearing debt

     NET INCOME (LOSS): Net loss for the year ended March 31, 2001 was
$17,335,928, a decrease of approximately 12.1% over the net loss of $19,723,781
experienced in the year ended March 31, 2000. Our operations varied widely from
fiscal year ended March 31, 2000 to fiscal year ended March 31, 2001 and
therefore there is no simple answer for the fluctuations in revenues and
expenses. While our net loss decreased $2,387,853, our loss from discontinued
operations decreased $12,683,916 from the year ended March 31, 2000 to the year
ended March 31, 2001 and this was offset by an increase in General and
Administrative expense of $10,402,239 from the year ended March 31, 2000 to the
year ended March 31, 2001. On a going forward basis, we expect our operations to
stabilize over the next twelve months while we

                                       24
<Page>

reorganize our company. The trend will be for expenses to significantly decrease
over the prior year. However, we believe it will still be at least eighteen
months from the fiscal year ended March 31, 2001 before any of our quarterly
financial results show a significant increase in revenue.

     CURRENT ASSETS

     Current assets increased from $1,064,765 as of March 31, 2000 to $1,366,637
as of March 31, 2001, an increase of $301,872, or approximately 28%. The
increase is the result of our purchase of VisionComm, Inc. and the inclusion of
that entity's net accounts receivable of $521,622 in our current assets.

<Table>
<Caption>
                                              March 31, 2001     March 31, 2000
                                              --------------     --------------
<S>                                           <C>                <C>
Cash                                            $   20,328         $   49,815
Accounts receivable - net of allowances
of $231,217 and $422,096                           615,337            213,268
in 2001 and 2000, respectively
Employee advances                                   11,700                 --
Inventory                                          698,379            727,512
Prepaid expenses                                    20,893             74,170
                                                ----------         ----------
Total Current Assets                            $1,366,637         $1,064,765
                                                ==========         ==========
</Table>

     Those of our accounts receivable that are not attributable to VisionComm
are primarily due from small to mid-size hotels in which our Hotel Movie Network
provides its services on either a pay-per view basis, where the hotel charges
and collects fees from guests for content viewed, or on a free-to-guest basis,
where the hotel pays us a fee for the services provided. The accounts receivable
are net of an allowance of $231,217 for doubtful accounts. We believe the net
amount shown is fully collectable.

<Table>
<Caption>
                                  March 31, 2001   March 31, 2000
                                  --------------   --------------
<S>                               <C>              <C>
Accounts Receivable, net
         Hotel Movie Network         $ 93,715         $213,268
         VisionComm, Inc.             521,622
                                     --------         --------
Total Account Receivable             $615,337         $213,268
                                     ========         ========
</Table>

                                       25
<Page>

     Hotel Movie Network's inventory consists of (1) equipment for the
distribution of content over television and (2) recorded content that is stored
in hotels to support the pay-per-view and free-to-guest services and on hand
inventory that is kept in our warehouse and is ready for deployment.
VisionComm's inventory consists primarily of receivers, cable boxes, cable and
connectors that are used to connect additional units at new and existing
properties to our network and are generally required to support the provision of
VisionComm's cable television and pay telephone services.

<Table>
<Caption>
                                  March 31, 2001   March 31, 2000
                                  --------------   --------------
<S>                               <C>              <C>
Inventory
         Hotel Movie Network         $620,637         $727,512
         VisionComm, Inc.              77,742
                                     --------         --------
Total Inventory                      $698,379         $727,512
                                     ========         ========
</Table>

PROPERTY AND EQUIPMENT

<Table>
<Caption>
                                                  Accumulated                           Net Book Value
                                         Cost              Depreciation            2001                 2000
                                      -----------          ------------        -----------         -----------
<S>                                   <C>                  <C>                 <C>                 <C>
Office furniture and fixtures         $   148,815          $    57,078         $    91,737         $   126,894
Machinery and equipment                   982,263              449,000             533,263             949,013
Hotel pay-per view equipment              470,313              211,641             258,672             352,734
Telephone and fixtures                  2,157,608              831,820           1,325,788                  --
Leasehold improvements                     21,049                1,188              19,861                  --
Net assets of discontinued
operations                                                                                            (279,793)
                                      -----------          -----------         -----------         -----------
Total                                 $ 3,780,048          $ 1,550,727         $ 2,229,321         $ 1,148,848
                                      ===========          ===========         ===========         ===========
</Table>

     Our Net Book Value increased from $1,148,848 as of March 31, 2000 to
$2,229,321 as of March 31, 2001, an increase of approximately 94%. This increase
is principally due to our purchases of equipment and other personal property, to
the VisionComm acquisition and the effects of an increase in accumulated
depreciation as of March 31, 2001 of $392,128.

     Other Assets

                                       26
<Page>

     Total other assets increased from $2,746,539 as of March 31, 2000 to
$9,123,631 as of March 31, 2001, an increase of approximately 232%. This
increase is due primarily to an addition of $5,335,881 in Goodwill to our
consolidated balance sheet as a result of our acquisition of VisionComm, Inc.

<Table>
<Caption>
                                                March 31, 2001     March 31, 2000
                                                --------------     -------------
<S>                                             <C>                <C>
Goodwill                                           5,335,881                 --
Notes receivable                                      35,178             50,000
Movie production costs and product rights          3,664,586          2,649,380
Refundable Deposits                                    3,986             47,159
Investments                                           84,000                 --
                                                  ----------         ----------
Total Other Assets                                $9,123,631         $2,746,539
                                                  ==========         ==========
</Table>

     In June 2001, the Financial Accounting Standards Board (FASB) adopted
Statement of Financial Accounting Standards SFAS No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 generally applies to any business combination occurring after June 30,
2001, and certain transition provisions that affect accounting for business
combinations prior to June 30, 2001 are effective as of the date SFAS No. 142 is
applied in its entirety, which will be April 1, 2001 for us. SFAS No. 142 is
effective, generally, in fiscal years beginning after December 15, 2001, and
will be applied to our fiscal year ending March 31, 2002.

                                       27
<Page>

MOVIE PRODUCTION AND PRODUCT RIGHTS

                                 NET BOOK VALUE

<Table>
<Caption>
                             TERM           COST         AMORTIZATION        2001           2000
                           ---------      ----------     ------------     ----------      ----------
<S>                        <C>            <C>            <C>              <C>             <C>
Product rights             4-5 years      $3,094,045      $2,132,143      $  961,902      $2,390,351
Contract/movie rights      2-5 years         294,537         294,537              --         259,059
Production cost              5 years       2,725,725         990,906       1,734,819              --
Cable production           10 years        1,326,386         358,521         967,865              --
                                           ----------      ----------      ----------      ----------
                                          $7,440,693      $3,776,107      $3,664,586      $2,649,380
                                          ==========      ==========      ==========      ==========
</Table>

     Product Rights consisted of the Company's 3D technologies for activities
such as converting 2D content to 3D content, the ability to film with special 3D
cameras and rights to certain content that can be converted to 3D for
distribution through television broadcasting, videocassette recordings, and
digital video discs, or DVDs. Product rights have been capitalized and amortized
over five years using a straight line method. Total amortization expense for the
years ended March 31, 2001 and 2000 amounted to $1,748,763 and $1,053,376,
respectively.

     We amortize intangible assets with determinate lives over their estimated
useful lives, with the useful lives reassessed periodically, and will assess
those intangible assets for impairment in accordance with the provisions of SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." Goodwill is also assessed for impairment on an
interim basis when events and circumstances warrant. In addition, we will
evaluate the recoverability of our goodwill on at least an annual basis. In
future reporting periods, we will assess whether an impairment loss should be
recognized and measured by comparing the fair value of the "reporting unit" to
the carrying value as reported on our books and records, including goodwill. If
the carrying value exceeds fair value, we will compare the implied fair value of
the goodwill to the carrying value of the goodwill. If the carrying value of the
goodwill exceeds the implied fair value, then we will reduce the goodwill to the
corresponding implied fair value.

CURRENT LIABILITIES

     Total current liabilities decreased from $7,188,759 as of March 31, 2000 to
$5,616,895 as of March 31, 2001, a decrease of $1,571,864, or approximately 22%.
This reduction is due primarily to a reduction in short-term obligations of
$1,972,502 as a result of the issuance of common stock to various individuals
and companies in consideration for services rendered during the year ended March
31, 2000 and the accrual of a corresponding amount as a liability pending the
board of directors' approval of the stock issuance. From March 31, 2000 to March
31, 2001, accrued expenses increased $1,318,300. This increase was due mainly to
an increase in accrued salaries and payroll to directors and officers who were
working without being fully

                                       28
<Page>

paid their salaries. We plan on reducing these accruals by issuing stock in lieu
of cash in satisfaction of all or part of each component of our liability, with
the agreement of the respective parties to whom the liabilities are owed. These
increases were offset by a net reduction in the current portion of our long-term
debt of $1,349,565, resulting from a reduction of $3,050,000 of debt achieved
through the issuance of common stock directly to 12 individual companies
collectively managed by Capital Asset, Ltd., but offset by other long-term debt
becoming current during the year.

<Table>
<Caption>
                                         March 31, 2001     March 31, 2000
                                         --------------     --------------
<S>                                      <C>                <C>
Accounts payable                           $1,418,541         $1,089,974
Short-term obligations                             --          1,972,502
Accrued expenses                            1,694,691            376,391
Income tax payable                                500                500
Accrued interest payable                      133,176            123,605
Current portion long-term debt              2,276,222          3,625,787
Deferred Income                                93,765                 --
                                           ----------         ----------
         Total Current Liabilities         $5,616,895         $7,188,759
                                           ==========         ==========
</Table>

LONG-TERM LIABILITIES

     During the year ended March 31, 2001, we increased the long-term portion of
our long-term debt to $6,397,141. We did not have any long-term debt on March
31, 2000. This increase was due mainly to the acquisition of VisionComm, Inc.,
in connection with which we issued a promissory note to the former shareholders
of VisionComm, Inc. for the principal amount of $2,800,000 (which was
subsequently converted to 10,300,000 common shares during quarter ended December
31, 2001) and assumed VisionComm's existing long-term debt of $4,341,236. Total
current and long-term debt due to the VisionComm debt at March 31, 2001 was
$7,141,236.

STOCKHOLDERS' EQUITY (DEFICIT)

     Our stockholder's equity increased during the year ended March 31, 2001 by
$2,934,160 due to the investment of new capital in our company in excess of that
year's loss. During the year ended March 31, 2001, we incurred a loss of
$17,335,928 and we have incurred losses from our inception through March 31,
2001 of $56,466,195. We do not have an established source of revenue sufficient
to cover operating costs and, accordingly, there is substantial doubt about our
ability to continue as a going concern.

                                       29
<Page>

     During the year ended March 31, 2001 we raised $20,270,766 of capital by
issuing 13,904,523 additional shares of our common stock as follows: 6,078,798
shares for services rendered; 3,833,743 shares for debt conversion; 2,500,000
shares for the acquisition of VisionComm Inc.; 788,732 shares issued for cash;
and 703,250 shares issued for assets.

     On March 15, 2001, the Company entered into a Master Agreement, as amended
and restated. This agreement was modified and restated on June 13, 2001. The
agreement contemplates a private placement to raise up to $3,500,000 in return
for the issuance of approximately 38,504,275 shares to Another World, Inc. and
other investors, a number of shares corresponding to an equity interest in the
Company on a fully diluted basis of approximately 51%. The holders of these
newly-issued shares will have registration rights customary in such issuances,
which rights are set forth in the Registration Rights Agreements included as
Schedule 5.13 to the Master Agreement filed by us with the Securities and
Exchange Commission on June 14, 2001 as Exhibit 99(a) to the Proxy Statement
filed on that date.

     Under the Master Agreement, at a later date the Company can acquire control
of Another World and its assets, including stereoscopic technologies, provided
our shareholders and those of Another World approve the transaction. We have not
entered into any formal negotiations with Another World or discussed specific
terms of this potential acquisition but have agreed that the acquisition will be
consummated through the issuance of the Company's common stock in exchange for
the in-kind assets of Another World, based on an independent valuation of
Another World. Another World has engaged Samil-PricewaterhouseCoopers to perform
that independent valuation.

<Table>
<Caption>
                                                            March 31, 2001        March 31, 2000
                                                            --------------        --------------
<S>                                                          C>                   <C>
Common stock, $0.0001 par value, 500,000,000 shares
   authorized, authorized, 20,686,292 and 6,781,669
   shares outstanding at 2001 and 2000, respectively         $      2,068          $        678
Capital in excess of par                                       57,169,680            36,900,982
Accumulated deficit                                           (56,466,195)          (39,130,267)
                                                             ------------          ------------
         Total Stockholders' Equity (Deficit)                $    705,553          $ (2,228,607)
                                                             ============          ============
</Table>

LIQUIDITY AND CAPITAL RESOURCES

     We currently have a net negative working capital of $4,250,258 due mainly
to accrued expenses of $1,694,691 and the current portion of long-term debt of
$2,276,222. In an effort to reduce both of these items, we plan to begin
settlement negotiations with applicable creditors and seek their agreement to
reduce accrued expenses and current long-term debt in consideration for the
issuance to those creditors of shares of our common stock.

                                       30
<Page>

     From March 31, 2000 to March 31, 2001, we increased our long-term
liabilities by $6,397,141 due to the acquisition of VisionComm, Inc. through our
assumption of $4,341,236 of that entity's debt and a promissory note in the
principal amount of $2,800,000 that is payable to the former shareholders of
VisionComm, Inc. We plan to negotiate an agreement whereby we would issue common
stock in consideration for the forgiveness of the $2,800,000 payable pursuant to
that promissory note.

     We are in negotiations with the shareholders of AnotherWorld, Inc., a
Korean-based, 3D technology company, to issue our common stock to those
shareholders for approximately $3,500,000. This external infusion of cash will
enable us to reduce our current accounts payable and accrued liabilities and
develop a sales and marketing team to market AnotherWorld, Inc.'s 3D products.
We have also established an external equity line of credit with Paladin Tradin
Company Limited but do not intend to make and have not made any draws thereon.
We do not have any other arrangements or agreements that will provide us with
additional funding on either an internal or external basis.

     We will need additional funds to fully implement our business plan and to
retire all our outstanding current and long-term debts. We expect to fund our
capital requirements through existing resources, a sale of shares to the
shareholders of Another World, Inc and other investors, credit facilities,
vendor financing, equity lines of funding, and other forms of financing as
appropriate. However, other than as discussed above, we do not have any specific
commitments for any other sources of funds. Our ability to generate cash to meet
our future needs will depend generally on our future results of operations and
the continued availability of external financing.

     We have not made any commitments for capital expenditures nor do we expect
to make any commitments for capital expenditures in the next twelve months. We
do expect to make small expenditures for normal acquisitions such as desks,
computers and other office furniture, but have not made any commitments for
those acquisitions at this time.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board (FASB) adopted
Statement of Financial Accounting Standards SFAS No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 is effective as to any business combination occurring after June 30,
2001 and certain transition provisions that affect accounting for business
combinations prior to June 30, 2001 are effective as of the date SFAS No. 142 is
applied in its entirety, which will be April 1, 2001 for the Company. SFAS No.
142 is effective, generally, in fiscal years beginning after December 15, 2001,
and will be applied to the fiscal year ending March 31, 2002 for the Company.

     SFAS No. 141 provides standards for accounting for business combinations.
Among other things, it requires that only the purchase method of accounting be
used and that certain intangible assets acquired in a business combination (i.e.
those that result from contractual or other legal rights or are separable) be
recorded as an asset apart from goodwill. The transition provisions require that
an assessment be made of previous business combinations and, if appropriate,
reclassifications be made to or from goodwill to adjust the recording of
intangible

                                       31
<Page>

assets such that the criteria for recording intangible assets apart from
goodwill is applied to the previous business combinations.

     SFAS No. 142 provides, among other things, that goodwill and intangible
assets with indeterminate lives shall not be amortized. Goodwill shall be
assigned to a reporting unit and annually assessed for impairment. Intangible
assets with determinate lives shall be amortized over their estimated useful
lives, with the useful lives reassessed continuously, and shall be assessed for
impairment under the provisions of SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." Goodwill is
also assessed for impairment on an interim basis when events and circumstances
warrant. Upon adoption of SFAS No. 142, the Company will assess whether an
impairment loss should be recognized and measured by comparing the fair value of
the "reporting unit" to the carrying value, including goodwill. If the carrying
value exceeds fair value, the Company will compare the implied fair value of the
goodwill" (as defined in SFAS No. 142) to the carrying amount of the goodwill.
If the carrying amount of the goodwill exceeds the implied fair value, then the
goodwill will be adjusted to the implied fair value.

     While the Company has not completed the process of determining the effect
of these new accounting pronouncements on its consolidated financial statements,
the Company currently expects that there will be no reclassification in
connection with the transition provisions of SFAS No. 141. Accordingly, the
Company expects that, after implementation of SFAS No. 142, all intangible
assets will be amortizable and the goodwill will not be amortizable.

                                       32
<Page>

                         CHEQUEMATE INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                            (DBA C-3D Digital, Inc.)

                        CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 2001 AND 2000


                                       33
<Page>

                                 C O N T E N T S

<Table>
<S>                                                                        <C>
Independent Auditors' Reports ............................................. 35

Consolidated Balance Sheets ............................................... 37

Consolidated Statements of Operations ..................................... 39

Consolidated Statements of Stockholders' Equity (Deficit).................. 41

Consolidated Statements of Cash Flows ..................................... 42

Notes to Consolidated Financial Statements ................................ 43
</Table>

                                       34
<Page>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Chequemate International, Inc. and Subsidiaries
(dba C-3D Digital, Inc.)
St. Charles, Missouri

We have audited the accompanying consolidated balance sheets of Chequemate
International, Inc. and Subsidiaries (dba C-3D Digital, Inc.) as of March 31,
2001 and 2000 and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the years ended March 31,
2001, 2000 and 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
did not audit the financial statements of VisionComm, Inc., a consolidated
subsidiary, which statements reflect total assets and revenue constituting
21% and 0%, respectively in March 31, 2001, of the related consolidated
totals. Those statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts
included for VisionComm, Inc., is based solely on the report of the other
auditors.

We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the
audits 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 and the
report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Chequemate
International, Inc. and Subsidiaries (dba C-3D Digital, Inc.) as of March 31,
2001 and 2000 and the consolidated results of their operations and their cash
flows for the years ended March 31, 2001, 2000 and 1999 in conformity with
generally accepted accounting principles in the United States.

The accompanying financial statements have been prepared assuming that
Chequemate International, Inc. and Subsidiaries (dba C-3D Digital, Inc.) will
continue as a going concern. As discussed in Note 12 to the consolidated
financial statements, certain conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans
concerning these matters are also discussed in Note 12. The consolidated
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

As discussed in Note 21 to the consolidated financial statements, certain
errors were discovered regarding the carrying value of certain assets from
discontinued operations which resulted in the overstatement of assets and
equity as well as overstating the net loss for the year ended March 31, 2001
and understating the net loss for the year ended March 31, 2000.

/s/ HJ & Associates, LLC
------------------------
Salt Lake City, Utah
July 3, 2001, except Note 21 which is April 18, 2002

                                       35
<Page>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors
VisionComm, Inc.

We have audited the accompanying balance sheets of VisionComm, Inc. (a Delaware
corporation and wholly owned subsidiary of Chequemate International, Inc. dba
C3-D Digital) as of December 31, 2000 and 1999, and the related statements of
operations, stockholders' deficit and cash flows for the years then ended. 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 U.S. 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 VisionComm, Inc. as of December
31, 2000 and 1999, and the results of its operations and its cash flows for the
years then ended in conformity with U.S. generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency, which raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Kerber, Eck & Braeckel LLP
------------------------------
St. Louis, Missouri
May 25, 2001

                                       36
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                            (dba C-3D Digital, Inc.)
                           Consolidated Balance Sheets

                                     ASSETS

<Table>
<Caption>
                                                                          March 31,
                                                            ------------------------------------
                                                                  2001               2000
                                                            ----------------    ----------------
                                                               (Restated)          (Restated)
<S>                                                         <C>                 <C>

CURRENT ASSETS

  Cash                                                      $         20,328    $         49,815
  Accounts receivable - net of allowances of $231,217
   and $422,096 in 2001 and 2000, respectively                       615,337             213,268
  Employee advances                                                   11,700                   -
  Inventory (Note 2)                                                 698,379             727,512
  Prepaid expenses                                                    20,893              74,170
                                                            ----------------    ----------------

     Total Current Assets                                          1,366,637           1,064,765
                                                            ----------------    ----------------

PROPERTY AND EQUIPMENT (Note 3)                                    2,229,321           1,148,848
                                                            ----------------    ----------------

OTHER ASSETS

  Goodwill (Note 20)                                               5,335,881                   -
  Notes receivable                                                    35,178              50,000
  Movie production cost and product rights (net)                   3,664,586           2,649,380
  Refundable deposits                                                  3,986              47,159
  Investments                                                         84,000                   -
                                                            ----------------    ----------------

     Total Other Assets                                            9,123,631           2,746,539
                                                            ----------------    ----------------

     TOTAL ASSETS                                           $     12,719,589    $      4,960,152
                                                            ================    ================
</Table>

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

                                        37
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                            (dba C-3D Digital, Inc.)
                     Consolidated Balance Sheets (Continued)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<Table>
<Caption>
                                                                      March 31,
                                                         ------------------------------------
                                                               2001               2000
                                                         ----------------    ----------------
                                                               (Restated)          (Restated)
<S>                                                         <C>                 <C>

CURRENT LIABILITIES

  Accounts payable                                       $      1,418,541    $      1,089,974
  Short-term obligations (Note 19)                                      -           1,972,502
  Accrued expenses                                              1,694,691             376,391
  Income tax payable (Note 16)                                        500                 500
  Accrued interest payable                                        133,176             123,605
  Current portion long-term debt (Note 6)                       2,276,222           3,625,787
  Deferred income                                                  93,765                   -
                                                         ----------------    ----------------

     Total Current Liabilities                                  5,616,895           7,188,759
                                                         ----------------    ----------------

LONG-TERM LIABILITIES

  Long-term debt - related party (Note 5)                       1,187,919                   -
  Long-term debt (Note 6)                                       5,209,222                   -
                                                         ----------------    ----------------

     Total Long-Term Liabilities                                6,397,141                   -
                                                         ----------------    ----------------

     Total Liabilities                                         12,014,036           7,188,759
                                                         ----------------    ----------------

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS' EQUITY (DEFICIT)

  Common stock, $0.0001 par value, 500,000,000 shares
   authorized, 20,686,192 and 6,781,669 shares
   outstanding at 2001 and 2000, respectively                       2,068                 678
  Capital in excess of par                                     57,169,680          36,900,982
  Accumulated deficit                                         (56,466,195)        (39,130,267)
                                                         ----------------    ----------------

     Total Stockholders' Equity (Deficit)                         705,553          (2,228,607)
                                                         ----------------    ----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                         $     12,719,589    $      4,960,152
                                                         ================    ================
</Table>

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

                                        38
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                            (dba C-3D Digital, Inc.)
                      Consolidated Statements of Operations

<Table>
<Caption>
                                                            For the Years Ended March 31,
                                              --------------------------------------------------------
                                                    2001                2000                1999
                                              ----------------    ----------------    ----------------
                                                 (Restated)          (Restated)
<S>                                           <C>                 <C>                 <C>

REVENUES

  Sales - products                            $        905,070    $        491,779    $        682,760
                                              ----------------    ----------------    ----------------

COST OF SALES

  Product, supplies and materials (Note 2)             525,841             229,315             631,132
                                              ----------------    ----------------    ----------------

GROSS MARGIN                                           379,229             262,464              51,628
                                              ----------------    ----------------    ----------------

EXPENSES

  Bad debt expense                                      58,987               46,180             53,820
  Selling expenses                                     224,661              416,047            851,339
  General and administrative                        15,266,450            4,864,211          3,074,839
                                              ----------------    -----------------   ----------------

     Total Expenses                                 15,550,098            5,326,438          3,979,998
                                              ----------------    -----------------   ----------------

OPERATING LOSS                                     (15,170,869)          (5,063,974)        (3,928,370)
                                              ----------------    -----------------   ----------------

OTHER INCOME (EXPENSE)

  Gain on forgiveness of debt                                -               29,375                  -
  Interest income                                       14,442               13,470             11,265
  Interest expense                                    (277,823)            (118,058)           (93,779)
  Gain (loss) on sale of equipment                           -                    -           (160,836)
                                              ----------------    -----------------   ----------------

     Total Other Income (Expense)                     (263,381)             (75,213)          (243,350)
                                              ----------------    -----------------   ----------------

LOSS BEFORE INCOME TAXES                           (15,434,250)          (5,139,187)        (4,171,720)

INCOME TAX PROVISION (Note 16)                             500                  500                500
                                              ----------------    -----------------   ----------------

NET LOSS FROM OPERATIONS                           (15,434,750)          (5,138,687)        (4,171,220)

DISCONTINUED OPERATIONS                             (1,901,178)         (14,585,094)           (40,859)
                                              ----------------    -----------------   ----------------

NET LOSS                                      $    (17,335,928)   $     (19,723,781)  $     (4,212,079)
                                              ================    =================   ================
</Table>

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

                                        39
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                             (dba C-3D Digital, Inc.)
                      Consolidated Statements of Operations

<Table>
<Caption>
                                                  For the Years Ended March 31,
                                    --------------------------------------------------------
                                           2001                2000                1999
                                    -----------------   -----------------   -----------------
                                        (Restated)          (Restated)
                                    <C>                 <C>                 <C>

BASIC LOSS PER SHARE

   Continued operations             $          (1.31)   $          (0.85)   $          (0.93)
   Discontinued operations                     (0.16)              (2.40)              (0.01)
                                    -----------------   -----------------    ----------------

                                    $          (1.47)   $          (3.25)   $          (0.94)
                                    =================   =================   =================

FULLY DILUTED LOSS PER SHARE

   Continuing operations            $          (1.31)   $          (0.85)   $          (0.93)
   Discontinued operations                     (0.16)              (2.48)              (0.01)
                                    -----------------   -----------------   -----------------

                                    $          (1.47)   $          (3.25)   $          (0.94)
                                    =================   =================   =================

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                       11,659,403           6,064,075           4,496,046
                                    =================   =================   =================
</Table>

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

                                       40
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                            (dba C-3D Digital, Inc.)
            Consolidated Statements of Stockholders' Equity (Deficit)
                For the Years Ended March 31, 2001, 2000 and 1999

<Table>
<Caption>
                                                                                                             Total
                                           Total                         Capital                          Stockholders'
                                          Shares        Common          in Excess       Accumulated          Equity
                                          Issued        Stock            of Par           Deficit           (Deficit)
                                        ----------  --------------   --------------  ----------------    ---------------
<S>                                     <C>         <C>              <C>             <C>                 <C>
Balance, March 31, 1998                  3,522,162  $          352   $   18,984,810  $    (15,193,407)   $     3,791,755

Shares issued through
 stock offering                          1,521,358             152        3,771,382                 -          3,771,534
Shares issued for assets                   145,833              15        1,532,985                 -          1,533,000
Shares issued for cash                      92,950               9            3,709                 -              3,718
Correction of an error                      12,500               1                4                 -                  5
Shares issued in exchange
 for services                              273,703              27           43,420                 -             43,447
Shares issued for debt                      21,156               2          126,808                 -            126,810
Net loss                                         -               -                -        (4,213,079)        (4,213,079)
                                        ----------  --------------   -------------- -----------------    ---------------

Balance, March 31, 1999                  5,589,662             558       24,463,118       (19,406,486)         5,057,190

Conversion of debt to stock                646,113              64        3,768,546                 -          3,768,610
Stock for services                         415,846              42        3,678,699                 -          3,678,741
Stock for cash                              87,501               9            3,491                 -              3,500
Options for services                         6,250               1           59,374                 -             59,375
Stock for secured interest                   5,000               1           80,357                 -             80,358
Stock for assets                            31,250               3          320,310                 -            320,313
Issuance of options/warrants
  below market value                             -               -        4,527,087                 -          4,527,087
Old certificate/new rounding                    47               -                -                 -                  -
Net loss                                         -               -                -       (19,723,781)       (19,723,781)
                                        ----------  --------------   --------------  ----------------    ---------------

Balance, March 31, 2000                  6,781,669             678       36,900,982       (39,130,267)        (2,228,607)
(Restated)

Shares issued for assets                   703,250              70        1,826,055                 -          1,826,125
Shares issued for cash                     788,732              79        2,799,921                 -          2,800,000
Shares issued for services               6,078,798             608        6,240,780                 -          6,241,388
Shares issued for debt
 conversion                              3,833,743             383        4,039,553                 -          4,039,936
Issuance of shares / options
 below market value                              -               -        4,580,139                 -          4,580,139
Shares issued for subsidiary             2,500,000             250          782,250                 -            782,500
Net loss                                         -               -                -       (17,335,928)       (17,335,928)
                                        ----------  --------------   --------------  ----------------    ---------------

Balance, March 31, 2001                 20,686,192  $        2,068   $   57,169,680  $    (56,466,195)   $       705,553
(Restated)                              ==========  ==============   ==============  ================    ===============

</Table>

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

                                       41
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                             (dba C-3D Digital, Inc.)
                      Consolidated Statements of Cash Flows

<Table>
<Caption>
                                                                           For the Years Ended March 31,
                                                              -------------------------------------------------------
                                                                     2001             2000                1999
                                                              ----------------  -----------------     ---------------
                                                                 (Restated)        (Restated)
<S>                                                           <C>                 <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss                                                    $    (17,572,016) $     (18,735,469)    $    (4,213,079)
  Adjustments to reconcile net loss to net cash used by
    operating activities:
   Amortization                                                        785,622          1,053,376             314,873
   Depreciation                                                        171,900            295,431              79,599
   Loss on sale of assets                                                    -                  -             160,836
   Bad debt expense                                                     58,987            368,276              53,820
   Forgiveness of debt                                                       -            (29,375)                  -
   (Impairment) Recovery of discontinued assets                       (236,088)           988,312                   -
   Common stock and options issued for services rendered             8,967,025          8,345,561             448,547
   (Increase) decrease in:
    Accounts receivable                                               (461,056)          (383,622)           (227,437)
    Prepaid expenses                                                    53,277            124,179            (187,090)
    Inventory                                                           29,133          2,388,251             275,246
    Note receivable                                                     14,822             60,000            (530,530)
    Refundable deposits                                                 43,173            (31,455)             (7,651)
    Investment                                                               -              3,000                   -
   Employee advances                                                   (11,700)                -                    -
  Increase (decrease) in:
   Accounts payable                                                    328,567            193,566            (730,202)
   Accrued interest payable                                              9,571              3,871              53,831
   Deferred income                                                      93,765                  -             (54,724)
   Short-term obligations                                                    -          1,972,502                   -
   Accrued expenses                                                  3,829,351            337,719              (4,667)
                                                              ----------------     --------------     ---------------

     NET CASH USED BY OPERATING ACTIVITIES                          (3,659,579)        (4,034,189)         (4,568,628)
                                                              ----------------     --------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES

  Purchase or development of intangibles                                     -           (230,807)           (128,021)
  Equipment purchases                                                 (502,268)          (908,440)           (198,736)
                                                              ----------------    ---------------     ---------------
     NET CASH USED BY INVESTING ACTIVITIES                            (502,268)        (1,139,247)           (326,757)
                                                              ----------------    ---------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Issuance of common stock                                           1,612,081              3,500           3,502,167
  Issuance of notes payable                                          1,419,360          3,550,000           3,043,409
  Issuance of common stock - related party                           1,187,919                  -                   -
  Payments made on notes payable                                       (87,000)           (62,448)           (138,832)
                                                              ----------------     ----------------   ---------------

   --NET CASH PROVIDED BY FINANCING ACTIVITIES                $      4,132,360     $    3,491,052     $     6,406,744
                                                              ----------------     ----------------   ---------------

   NET INCREASE (DECREASE) IN CASH                            $        (29,487)    $   (1,682,384)    $     1,511,359

   CASH AT BEGINNING OF YEAR                                            49,815          1,732,199             220,840
                                                              ----------------     ----------------   ---------------

   CASH AT END OF YEAR                                        $         20,328     $       49,815     $     1,732,199
                                                              ================     ================   ===============
</Table>

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

                                       42
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                             (dba C-3D Digital, Inc.)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The Company's accounting policies reflect practices of the Centric
         graphical software applications, hotel pay-per-view provides hotels
         customers with visual recreational services, the cable television
         channel provides 3D viewing for subscribers and the hardware units
         sells the units required for viewing 3D movies and videos and conform
         to generally accepted accounting principles. The following policies are
         considered to be significant:

         PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
         Company and its subsidiaries 3D.COM and VisionComm, Inc. All
         significant intercompany accounts and transactions have been
         eliminated.

         REVENUE RECOGNITION

         Revenue is recognized on an accrual basis upon deliver of the software
         or product, or as customers view pay-per-view items. Revenue consists
         of software sales, product sales, license fees, and monthly hotel
         pay-per-view fees.

         PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost with depreciation and
         amortization computed on the straight line method. Property and
         equipment are depreciated over the following estimated useful lives:

<Table>
<Caption>
                                                              Years
                                                          -------------
<S>                                                            <C>
                     Office furniture                          5-7
                     Machinery and equipment                   5-7
</Table>

         MOVIE PRODUCTION COST AND PRODUCT RIGHTS

<Table>
<Caption>
                                                                                   Net Book Value
                                                                            ------------------------------
                                   Term        Cost         Amortization          2001            2000
                              ------------- -------------   ------------    --------------  --------------
<S>                               <C>       <C>             <C>             <C>             <C>
         Product rights           4-5 years $   3,094,045   $  2,132,143    $      961,902  $    2,390,351
         Contract/movie
          rights                  2-5 years       294,537        294,537                 -         259,029
         Production cost            5 years     2,725,725        990,906         1,734,819               -
         Cable production          10 years     1,326,386        358,521           967,865               -
                                            -------------   ------------    --------------  --------------

                                            $   7,440,693   $  3,776,107    $    3,664,586  $    2,649,380
                                            =============   ============    ==============  ==============
</Table>

         Product rights have been capitalized and amortized over five years
         using a straight line method. The total amortization expense for the
         years ended March 31, 2001, 2000 and 1999 amounted to $1,748,763,
         $1,053,376, and $314,873, respectively.

         The Company reviews the recoverability of intangibles whenever events
         or changes in circumstances indicate that the carrying amount of an
         asset may not be recoverable. Several factors are used to evaluate
         intangibles. Including, but not limited to, management's plans for
         future operations, recent operating results and projected, undiscounted
         cash flows.

                                       43
<Page>

         BASIC LOSS PER SHARE

         Basic loss per share is calculated using a weighted average for common
         stock.

<Table>
<Caption>
                                                            For the Years Ended March 31,
                                                  --------------------------------------------------------
                                                         2001                2000                1999
                                                  ----------------    ----------------    ----------------
<S>                                               <C>                 <C>                 <C>
         Numerator:
               Net (loss) from operations         $    (15,434,750)   $     (5,138,687)   $     (4,171,220)
               Discontinued operations            $     (2,137,266)   $    (13,596,782)   $        (40,859)

         Denominator (weighted average
               number of shares outstanding)            11,659,403           6,064,075           4,496,046

         Basic (loss) per share

               Continued operations               $          (1.31)   $          (0.85)   $          (0.93)
               Discontinued operations            $          (0.18)   $          (2.24)   $          (0.01)
                                                  ----------------    -----------------   ----------------

                                                  $          (1.49)   $          (3.09)   $          (0.94)
                                                  =================   ================    ================
</Table>

         CASH FLOWS

         For purposes of reporting cash flows, cash and cash equivalents include
         cash on hand and cash on deposit with banks.

         INCOME TAXES

         The Company's tax basis is the same as the Company's financial
         statement basis. The Company has net operating loss carryforwards of
         approximately $32,000,000 available to offset future federal and state
         income tax through 2021. The Company has not recorded a tax benefit
         attributable to the carryforwards because realization of such has been
         offset by a valuation allowance for the same amount.

         PRODUCTION COSTS

         The Company classifies the costs of planning, designing and
         establishing the technological feasibility of computer software product
         as software development costs and charges those costs to expense when
         incurred. Costs incurred for duplicating computer software from product
         masters, documentation and training materials and packaging costs are
         capitalized as inventory and charged to cost of sales when revenue is
         recognized. Costs of maintenance and customer support are charged to
         expense when costs are incurred.

                                       44
<Page>

         ADVERTISING

         The Company follows the policy of charging the costs of advertising to
         expense as incurred.

                                       45
<Page>

         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 period. Actual results could differ
         from those estimates.

         CHANGE IN ACCOUNTING PRINCIPLES

         The Company has adopted the provisions of FASB Statement No. 138
         "Accounting for Certain Derivative Instruments and Hedging Activities,
         (an amendment of FASB Statement No. 133.)" Because the Company had
         adopted the provisions of FASB Statement No. 133, prior to June 15,
         2000, this statement is effective for all fiscal quarters beginning
         after June 15, 2000. The adoption of this principle had no material
         effect on the Company's consolidated financial statements.

         During June 2000, the Financial Accounting Standards Board issued FASB
         Statement No. 139 "Rescission of FASB Statement No. 53 and amendments
         to FASB Statements No. 63, 89, and 121". This statement is effective
         for financial statements for fiscal years beginning after December 15,
         2000. This statement rescinds FASB Statement No. 53 and provides that
         those that were previously subject to the requirements of FASB
         Statement No. 53 shall follow the guidance in AICPA Statement of
         Position 00-2 "Accounting by Producers or Distributors of Films". The
         Statement also amends FASB Statement No. 63, 89, and 121.

         During July 2000, the American Institute of Certified Public
         Accountants issued AICPA Statement of Position No. 00-2 "Accounting by
         Producers or Distributors of Films" (SOP 00-2). SOP 00-2 is effective
         for fiscal years beginning after December 15, 2000 with the initial
         impact of adoption being reported as the cumulative effect of an
         accounting change. SOP 00-2 applies to all types of films and to all
         producers and distributors owning or holding rights to distribute or
         exploit them and specifically addresses revenue recognition, costs and
         expenses and required disclosures.

         Currently, the Company holds rights to a library of films for which it
         has incurred production costs to modify viewing over its cable
         television network in three-dimension (3-D) and for use in the hotel
         pay-per-view segment. The Company will adopt the provisions of SFAS 139
         and SOP 00-2 in fiscal year 2002.

                                      46
<Page>

         The Company has adopted the provisions of FASB Statement No. 140
         "Accounting for Transfers and Servicing of Financial Assets and
         Extinguishments of Liabilities (a replacement of FASB Statement No.
         125.)" This statement provides accounting and reporting standard for
         transfers and servicing of financial assets and extinguishments of
         liabilities. Those standards are based on consistent application of a
         financial-components approach that focuses on control. Under that
         approach, the transfer of financial assets, the Company recognized the
         financial and servicing assets it controls and the liabilities it has
         incurred, derecognizes financial assets when control has been
         surrendered, and derecognizes liabilities when extinguished.

         This statement provides consistent standards for distinguishing
         transfers of financial assets that are sales from transfers that are
         secured borrowings. This statement is effective for transfers and
         servicing of financial assets and extinguishments of liabilities
         occurring after March 31, 2001. This statement is effective for
         recognition and reclassification of collateral and for disclosures
         relating to securitization transactions and collateral for fiscal years
         ending after December 15, 2000. The adoption of this principle had no
         material effect on the Company's consolidated financial statements.

                                       47
<Page>

         The Company has adopted the provisions of FIN 44 "Accounting for
         Certain Transactions Involving Stock Compensation (an interpretation of
         APB Opinion No. 25.)" This interpretation is effective July 1, 2000.
         FIN 44 clarifies the application of Opinion No. 25 for only certain
         issues. It does not address any issues related to the application of
         the fair value method in Statement No. 123. Among other issues, FIN 44
         clarifies the definition of employee for purposes of applying Opinion
         25, the criteria for determining whether a plan qualifies as a
         noncompensatory plan, the accounting consequence of various
         modifications to the terms of a previously fixed stock option or award,
         and accounting for an exchange of stock compensation awards in a
         business combination. The adoption of this principle had no material
         effect on the Company's consolidated financial statements.

         PRIOR PERIOD RECLASSIFICATION

         Certain 2000 and 1999 balances have been reclassified to conform to the
         presentation of the 2001 consolidated financial statements.

         LONG-LIVED ASSETS

         In accordance with SFAS No. 121 "Accounting for the Impairment of
         Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
         long-lived assets, including goodwill associated with other long-lived
         assets, are evaluated for impairment whenever events or changes in
         circumstances indicate that the carrying amount of an asset may not be
         recoverable. Goodwill acquired as part of business combinations is also
         evaluated continuously per ABP No. 17, "Intangible Assets", for the
         need for adjustments to useful life and reductions in unamortized
         costs. Any changes in estimated useful life are recorded prospectively
         and any impairment

                                       48
<Page>

         adjustments are recorded as expense in the period the impairment
         occurs. The amount of any impairment considered necessary would be
         determined by comparing the book value of the net assets in the
         applicable line of business to fair value using methods such as the
         present-value of estimated future cash flows, sale value or other
         valuation methodologies available at the time, depending on the stage
         of development of the line of business and the Company's intentions at
         the time an impairment adjustment were considered necessary.

         STOCK OPTIONS AND WARRANTS

         The Company accounts for all stock based compensation plans and
         warrants in accordance with FASB Statement 123 "Accounting for Stock
         Based Compensation" (SFAS 123). SFAS 123 establishes financial
         accounting and reporting standards for stock-based employee
         compensation plans. As such, compensation cost is measured at the grant
         date based on the value of the award using the Black-Scholes pricing
         model and is recognized over the service period, usually the vesting
         period.

         VALUATION OF OPTIONS AND WARRANTS

         The valuation of options and warrants granted to unrelated parties for
         services are measured as of the earlier (1) the date at which a
         commitment for performance by the counterparty to earn the equity
         instrument is reached or (2) the date the counterparty's performance is
         complete.

                                       49
<Page>

         Pursuant to the requirements of EITF 96-18, the options and warrants
         will continue to be revalued in situations where they are granted prior
         to the completion of the performance. All outstanding options and
         warrants as of March 31, 2001 were measured at the date at which a
         commitment for performance was reached.

                                       50
<Page>

NOTE 2 - INVENTORY

<Table>
<Caption>
                                                           March 31,
                                               ---------------------------------
                                                      2001               2000
                                               ----------------       ----------
<S>                                            <C>                <C>
                    Finished goods             $        698,379   $      727,512
                    WIP                                       -                -
                    Raw materials                             -                -
                                               ----------------   --------------

                                               $        698,379   $      727,512
                                               ================   ==============
</Table>

         The Company inventories are stated at the lower of cost or market,
         using the first-in, first-out (FIFO) method. Inventories consist mainly
         of components related to the 3-D electronic devices product and
         pay-per-view operations. During the year ended March 31, 2000, the
         Company recognized approximately $2.5 million in markdown of inventory
         attributable to a decision to restructure an activity. The amount is
         recorded in cost of sales.

NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment as of March 31, 2001 and 2000 are detailed in
         the following summary:

<Table>
<Caption>
                                                               Accumulated           Net Book Value
                                                 Cost          Depreciation         2001        2000
                                            ----------------   ------------     -----------  -------------
<S>                                         <C>                <C>              <C>          <C>
         Office furniture & fixtures        $        148,815   $     57,078     $    91,737  $     126,894
         Machinery & equipment                       982,263        449,000         533,263        949,013
         Hotel pay-per-view equip.                   470,313        211,641         258,672        352,734
         Telephone & fixtures                      2,157,608        831,820       1,325,788              -
         Leasehold improvements                       21,049          1,188          19,861              -
         Net assets of discontinued
         Operations                                        -              -               -       (279,793)
                                            ----------------   ------------     -----------   ------------

           Total                            $      3,780,048   $  1,550,727     $ 2,229,321  $   1,148,848
                                            ================   ============     ===========   ============
</Table>

         Depreciation expense is computed principally on the straight line
         method in amounts sufficient to write off the cost of depreciable
         assets over their estimated useful lives. Depreciation expense for the
         years ended March 31, 2001, 2000 and 1999 amounted to $392,128,
         $205,471 and $79,599, respectively.

NOTE 4 - STOCKHOLDERS' EQUITY

         The Company is authorized to issue 500,000,000 shares of common stock,
         par value $.0001. As of March 31, 2001, the Company has issued
         20,686,192 shares of common stock. On February 2, 2000, the Company
         authorized a 1:4 reverse stock split. The consolidated financial
         statements have been retroactively restated to reflect the reverse
         stock split.

                                       51
<Page>

NOTE 5 - RELATED PARTIES

         Notes payable to related parties as of March 31, 2001 and 2000 are
         detailed in the following summary:

<Table>
<Caption>
                                                                      2001           2000
                                                                --------------  -------------
<S>                                                             <C>             <C>
         Note payable to CEO; with an interest rate of
         10.4%; unsecured; accrued interest of
         $79,943 is due on demand.                              $            -  $     140,000
                                                                --------------  -------------

         Balance Forward                                        $            -  $     140,000
                                                                --------------  -------------
         Convertible notes payable to officers and
         directors in connection with the acquisition
         of VisionComm, with an interest rate of 8%
         convertible at anytime prior to April 30, 2002
         at the option of the note holder at a price of
         $3.50 per share or at the option of the Company
</Table>

                                       52
<Page>

<Table>
<S>                                                             <C>             <C>
         if shares of the Company's common stock are
         trading at a price greater than $7.00 per share
         for a period of sixty (60) trading days, accrued
         interest of $24,022, due April 30, 2002, unsecured          1,187,919              -
                                                                --------------  -------------
             Total related party notes payable                       1,187,919        140,000

             Less: current portion                                           -       (140,000)
                                                                --------------  -------------
             Long-term portion                                  $    1,187,919   $          -
                                                                ==============  =============

             Maturities of the related party notes payable are as follows:

                                   Period ending March 31,                2002  $   1,187,919
                                                                          2003              -
                                                                                -------------

                                          Total                                 $   1,187,919
                                                                                =============
</Table>

NOTE 6 - LONG-TERM DEBT

         Notes payable as of March 31, 2001 and 2000 are detailed in the
         following summary:

<Table>
<Caption>
                                                                      2001           2000
                                                                --------------  -------------
<S>                                                             <C>             <C>
         Note payable to a company; due in monthly
         installments of $3,244 which includes
         interest at 8%; due on demand, unsecured               $       49,287  $      48,287
                                                                --------------  -------------

         Balance Forward                                        $       49,287  $      48,287
                                                                --------------  -------------
</Table>

                                       53
<Page>

<Table>
<Caption>
                                                                    2001           2000
                                                                 -----------    ----------
<S>                                                              <C>            <C>
         Convertible notes payable to various individuals
         in connection with the acquisition of
         VisionComm with an interest rate of 8%
         convertible at anytime prior to April 30, 2002
         at the option of the note holder at a price of
         $3.50 per share or at the option of the
         Company if shares of the Company's common
</Table>

                                       54
<Page>

<Table>
<S>                                                              <C>            <C>
         stock are trading at a price greater than $7.00
         per share for a period of sixty (60) trading days,
         accrued interest of $32,600 due April 30, 2002,
         unsecured                                                 1,612,081             -

         Notes payable to a Company with monthly
         payments ranging from $450 to $17,931
         and quarterly payments up to $42,099, with
         interest rates ranging from 12% to 14%,
         with maturities at various dates through
         January 2007. The notes are secured by
         equipment                                                 3,081,235             -

         Notes payable to a Company, unsecured,
         payable in monthly installments of $423
         including interest at 12.5% through
         November 2003                                                12,365             -

         Note payable to a Company, unsecured,
         payable in weekly installments of $1,521,
         including interest at 12% through October 2001               63,570             -

         Notes payable to a Company, unsecured,
         payable in monthly installments of $2,260
         including interest at 9% through November
         1, 2005                                                     211,906
                                                                 -----------    ----------

         Balance Forward                                         $ 5,030,444    $   48,287
                                                                 -----------    ----------

         Balance Forward                                         $ 5,030,444    $   48,287

         Note payable to a Company, unsecured,
          payable in monthly installments of interest
          only, calculated at 9% annually, through the
          due date of the principal balance at April 30,
          2002                                                     1,260,000             -
</Table>

                                       55
<Page>

<Table>
<Caption>
                                                                   2001           2000
                                                              --------------   -----------
<S>                                                           <C>              <C>
         Notes payable to a former stockholders with
          monthly payments of interest only at 10% to
          10.5% annually, through the due date of the
          principal balances at July 2001, unsecured                 356,000             -

         Promissory notes to various companies;
          April 1, 2001, which includes interest at 12%,
          secured by tangible and intangible assets,
          unsecured                                                        -     3,050,000

         Note payable to an individual, due December
          20, 2001, with interest at 8%, unsecured                   300,000             -

         Notes payable to various entities, due on
          demand, interest at 8%, unsecured                          139,000             -

         Note payable to a Company; due on demand,
          interest at 10% due monthly, secured by
          equipment and inventory                                    400,000       440,000

         Note payable to a Company; unsecured, due on
          demand, includes interest at 10%                                 -        87,500
                                                              --------------   -----------

          Total long-term debt                                     7,485,444     3,625,787

                             Less: current portion                (2,276,222)   (3,625,787)
                                                              --------------   -----------

                             Long-term portion                $    5,209,222   $         -
                                                              ==============   ===========
</Table>

         Maturities of long-term debt are summarized below:

<Table>
<S>                                                                        <C>
                Period ending March 31,     2002                           $    2,276,222
                                            2003                                3,781,371
                                            2004                                  466,176
                                            2005                                  359,120
                                            2006 and thereafter                   602,555
                                                                           --------------
                                                  Total                    $    7,485,444
                                                                           ==============
</Table>

                                       56
<Page>

         As part of the consideration for the acquisition of VisionComm, Inc.
         (see Note 20), the Company issued $1,612,081 notes payable and
         $1,187,919 notes payable to related parties (the Notes). The Notes bear
         interest at a rate of 8% per annum and are due and payable in full on
         or before April 30, 2002. The Notes are convertible at any time on or
         before the due date, in whole or in part, into shares of common stock
         of the Company, at a price of $3.50 per share. In addition, the Company
         has the right to convert all principal and accrued interest under the
         Notes into common stock of the Company at any time prior to April 30,
         2002, if the Company's common stock is trading at a price of $7.00 or
         greater for any period of sixty (60) trading days. In accordance with
         APB 14, Accounting for Convertible Debt and Debt Issued with Stock
         Purchase Warrants, no amount has been attributed to the conversion
         feature of the Notes as they were issued at a price significantly above
         the fair market value of the Company's common stock on the date of
         issue, or $0.31 per share, and the conversion price does not decrease.

NOTE 7 - LEASES

         At March 31, 2001, the Company is liable under the terms of
         non-cancelable leases for the following minimum lease commitments:

<Table>
<Caption>
                                                                  Operating
                                                                   Leases
                                                              -------------
<S>                                                           <C>
         Period ended March 31,
                2002                                          $     105,000
                2003                                                107,400
                2004                                                107,400
                2005                                                109,800
                2006                                                 75,300
                later years                                         129,600
                                                              -------------

         Total minimum lease payments                         $     634,500
                                                              =============
</Table>

         Rental expense for the years ended March 31, 2001, 2000 and 1999
         amounted to $421,098, $135,860 and $135,580, respectively.

                                       57
<Page>

NOTE 8 - CASH FLOW AND NON CASH INVESTING AND FINANCING ACTIVITIES

         CASH FLOW INFORMATION

<Table>
<Caption>
                                                                 MARCH 31,
                                             ---------------------------------------------
                                                  2001           2000            1999
                                             -------------   -------------   -------------
<S>                                          <C>             <C>             <C>
         Interest paid                       $     268,352   $       2,134   $      34,535

         Income taxes paid                   $         500   $         500   $         500
</Table>

                                       58
<Page>

         NON-CASH INVESTING AND FINANCING ACTIVITIES

         For the years ending March 31, 2001, 2000 and 1999, the Company
         incurred the following non-cash investing and financing activities.

<Table>
<Caption>
                                                                       March 31,
                                                    ------------------------------------------------
                                                        2001            2000             1999
                                                    ---------------  --------------   --------------
<S>                                                 <C>              <C>              <C>
         Capital lease obligations incurred         $             -  $            -   $       29,895
         Issuance of stock and options for
          services rendered                         $    10,821,527  $    8,345,561   $      448,547
         Issuance of stock for assets               $     1,826,125  $      510,313   $    1,533,000
         Increase in debt for assets                $             -  $            -   $      440,000
         Issuance of stock for debt                 $     4,039,936  $    3,768,610   $            -
         Issuance of stock for subsidiary           $       782,500  $            -   $            -
         Acquisition of subsidiary:
                 Assets acquired                    $     3,054,524
                 Liabilities assumed                     (4,807,905)
                 Goodwill                                 5,335,881
                                                    ---------------
                 Purchase price                           3,582,500
                 Payment with 2,500,000 shares
                  of common stock                           782,500
                 Note payable                             2,800,000
                                                    ---------------
                 Cash used for acquisition          $             -
                                                    ===============
</Table>

NOTE 9 - FINANCIAL INSTRUMENTS

         CONCENTRATIONS OF CREDIT RISK

         Financial instruments which potentially subject the Company to
         concentrations of credit risk consist principally of trade receivables.
         The Company provides credit to its customers in the normal course of
         business. However, the Company performs ongoing credit evaluations of
         its customers and maintains allowances for potential credit losses. The
         Company places its temporary cash with high quality financial
         institutions. At times such cash accounts may be in excess of the FDIC
         insurance limit.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

          The Company is a defendant in one pending litigation. On November 14,
          2000, the Company and its Chief Executive Officer, J. Michael Heil
          (Heil), were named as defendants in a complaint filed by Trimark
          Pictures, Inc. (Trimark). The Trimark complaint alleges that the
          Company and Heil breached the terms of a contract between the Company
          and Trimark dated February 8, 2000, by failing to register a total of
          100,000 shares of the Company's restricted common stock issued to
          Trimark. Trimark claims substantial damages arising from the alleged
          breach of contract and misrepresentations, in the amount of
          $1,650,000.

          The Company is currently engaged in settlement discussions with
          Trimark and have reached a settlement in general terms and are
          awaiting proper documentation resolving the entire matter. In the
          event these discussions are not successful, the Company and Heil
          intend to vigorously defend this case, raising a

                                       59
<Page>

         number of defenses, including, among other things, issues regarding the
         consideration received from Trimark; and the actual damages actually
         suffered by Trimark because of the alleged breach of contract.

                                       60
<Page>

          In December 2001, the Company entered into five employment agreements
          with certain key personnel. The agreements provided compensation
          arrangements including non-qualified stock options to acquire common
          stock of the Company. The term of the agreements were for thirty-six
          months.

NOTE 11 - ACQUISITIONS

          In August 2000, the Company purchased several film libraries to
          supplement the 3-D TV operations. The film libraries were purchased to
          be converted to a 3-D format. The Company issued 703,250 shares of its
          common stock valued at $1,826,125 for the film libraries which are
          included in its film production costs.

NOTE 12 - GOING CONCERN

          The Company's consolidated financial statements are prepared using
          generally accepted accounting principles applicable to a going concern
          which contemplates the realization of assets and liquidation of
          liabilities in the normal course of business. The Company has incurred
          losses from its inception through March 31, 2001. The Company does not
          have an established source of revenues sufficient to cover its
          operating costs and, accordingly, there is substantial doubt about its
          ability to continue as a going concern.

          In order to develop an established source of revenues, and achieve a
          profitable level of operations, the Company will need additional
          capital resources. Management has formulated a plan to raise
          additional funding though stock issuances and increase in debt. In
          addition, the Company's projected revenues from the establishment of
          its VisionComm subsidiary, the expansion of its cable and hotel
          activities, and the completion of its pending private placement with
          Another World, would provide sufficient capital for operations.
          However, management cannot provide any assurances that the Company
          will be successful in accomplishing any if its plans.

          The ability of the Company to continue as a going concern is dependent
          upon its ability to successfully accomplish the plan described in the
          preceding paragraph and eventually attain profitable operations. The
          accompanying financial statements do not include any adjustments that
          might be necessary if the Company is unable to continue as a going
          concern.

NOTE 13 - STOCK OPTIONS AND WARRANTS

          Prior to fiscal year 2000, the Company accounted for stock options in
          accordance with APB 25 "Accounting for Stock Issued to Employees".
          During fiscal year 2000, the Company adopted FASB Statement 123
          "Accounting for Stock Based Compensation". The fair value of each
          grant is estimated at the grant date using the Black-Scholes
          option-pricing model.

          STOCK OPTIONS

          Effective May 17, 1995, the stockholders approved a 1994 Incentive
          Stock Option Plan granting to key employees options to purchase
          Company common stock over a ten year period, at the fair market value
          at time of grant. The aggregate number of common shares of the Company
          which may be granted under the plan is 800,000 shares. The plan
          expires on March 23, 2004.

                                       61
<Page>

          To retain, attract and compensate key individuals, the Company during
          the fiscal year granted several stock options to various individuals.
          These options are convertible into approximately 2,233,000 shares and
          range from $0.04 to $28.00 per post-split share. In addition, the
          Company granted options for services performed at $8.00 per post-split
          share.

          In December 2000, the Company granted an officer and director options
          to acquire 600,000 shares of common stock from $0.04 to $2.00. In May
          2000, the Company granted options to former employees to acquire
          184,500 shares of common stock at $0.04 per share.

          A summary of the status of options at March 31, 1999, 2000 and 2001
          and changes during the years ended on those dates is as follows:

<Table>
<Caption>
                                                         2001                        2000                          1999
                                             ---------------------------  ---------------------------   ----------------------------
                                                               Weighted                    Weighted                     Weighted
                                                               Average                     Average                       Average
                                                               Exercise                    Exercise                      Exercise
                                                 Shares         Price       Shares          Price          Shares         Price
                                             --------------  -----------  ------------  -------------   ------------  --------------
<S>                                          <C>             <C>          <C>           <C>             <C>           <C>
          Outstanding, beginning of year          2,429,203  $     11.04       201,987  $        0.04        517,890            1.74
              Granted                               784,522         0.71     2,314,717          12.85         16,000
              Canceled                             (799,037)      (19.00)            -              -        (63,200)          14.00
              Exercised                            (600,000)       (0.04)      (87,501)          0.04       (268,703)           0.04
                                             --------------  -----------  ------------  -------------   ------------  --------------
          Outstanding, end of year                1,814,688  $      8.21     2,429,203  $       11.04        201,987  $         0.04
                                             --------------  -----------  ------------  -------------   ------------  --------------
          Exercisable, end of year                  237,500  $      1.27     2,429,203  $       11.04        201,987  $         0.04
                                             --------------  -----------  ------------  -------------   ------------  --------------
          Weighted average fair value of
           options and warrants granted
           during the year                                   $       .71                $       12.85                 $        0.04
                                                             ===========                =============                 ==============
</Table>

          STOCK OPTIONS (CONTINUED)

<Table>
<Caption>
                                                                             Outstanding                       Exercisable
                                                              ----------------------------------------   ---------------------------
                                                                              Weighted
                                                                              Average       Weighted                      Weighted
                                                               Number        Remaining      Average       Number          Average
                                            Range of          Outstanding    Contractual    Exercise      Exercisable     Exercise
                                        Exercise Prices       At 9/30/01        Life         Price        At 9/30/01       Price
                                     ----------------------   -----------  ------------  -------------   ------------  -------------
<S>                                                             <C>                <C>   <C>                  <C>      <C>
                                        $   0.04 - 0.04           495,938          5.04  $         .04         37,500  $         .04
                                             .50 - 2.00           500,000          9.75           1.07        200,000           1.50
                                            6.00 - 8.00           258,750          3.50           7.66              -              -
                                          12.00 - 16.00           205,000          3.73          13.20              -              -
                                          24.00 - 28.00           355,000          3.75          26.28              -              -
                                                              -----------  ------------  -------------   ------------  -------------

                                        $  0.04 - 28.00         1,814,688          5.15  $        9.65        237,500  $         .77
                                                              ===========  ============  =============   ============  =============
</Table>

                                       62
<Page>

          The following weighted-average assumptions for grants in fiscal years
          2000 and 2001, respectively: dividend rate of 0% for all years; price
          volatility of 111.69% and 116.40%; risk free interest rates of 4.9%
          and 6.0%; and, expected lives of 2.5 years in 2000 and 3, 3.6, 5 and
          10 years in 2001.

          WARRANTS

          The convertible debentures entered into by the Company carry warrants
          allowing the debtor to acquire stock. The convertible debentures of
          $750,000 are in $250,000 incremental units and carry warrants equal to
          24,753 shares per unit. The convertible debentures of $2,000,000 are
          in $250,000 increments and carry warrants equal to 8,475 shares per
          unit.

          As part of the VisionComm, Inc. acquisition, the Company issued
          warrants to the sellers to purchase 2,800,000 shares of common stock
          at $1.00 per share. The warrants are immediately exercisable and
          expire in April 2002. The following assumptions were used: risk-free
          interest rate of 5%, 16 month expected life, 114% expected volatility,
          and no expected dividends. The valuation of warrants granted to
          unrelated parties for services were measured as of the date of the
          completion of the business combination, or December 30, 2000.

          The Company recognized compensation cost of $0, $4,527,087 and
          $3,974,631 associated with the issuance of options and warrants for
          the years ended March 31, 1999, 2000 and 2001, respectively.

NOTE 14 - DISCONTINUED OPERATIONS

          The Company purchased from a financing institution the secured
          interest on a line of credit against Strata, Inc. (Strata). The
          Company continued to advance credit to Strata and as of March 31, 1999
          have recorded a note receivable of $465,530. Also, on March 31, 1999,
          the Company obtained the secure interests of several other promissory
          notes held by several investors against Strata by exchanging stock for
          the notes. The Company exchanged 333,333 shares, at $3.00 per share,
          of common stock for the notes. The above notes hold a secured interest
          in the tangible assets, accounts receivable, intellectual property and
          other assets of Strata. These assets are associated with centric
          graphical software applications. In June 1999, the Company foreclosed
          upon Strata and acquired the collateralized assets of Strata. The
          Company recorded these assets under APB 16 and recognized fixed assets
          of approximately $364,000 and an intangible of approximately $834,000.

          In November of 2000, the Company entered into several agreements with
          a Utah corporation to allow the corporation to use the Strata assets
          until an agreement could be reached regarding selling the assets or
          combining them with the corporation's assets and merging them into a
          separate entity with the Company obtaining an ownership in the new
          entity. Subsequent to year-end, the Company is still pursuing
          resolving this issue with the Utah corporation.

                                       63
<Page>

          During the fiscal year, the Company ceased operation of its cable
          channel and 3-D Strata unit segments. The following is a summary of
          the loss from discontinued operations resulting from the elimination
          of these operations. The financial statements have been retroactively
          restated to reflect this event. No tax benefit has been attributed to
          the discontinued operations.

<Table>
<Caption>
                                                                  3-D (STRATA)
                                              -------------------------------------------------
                                                                   March 31,
                                              -------------------------------------------------
                                                    2001             2000            1999
                                              ---------------   --------------  ---------------
<S>                                           <C>               <C>             <C>
          NET SALES                           $       362,446   $      268,478  $       570,886
                                              ---------------   --------------  ---------------

          OPERATING EXPENSES
           Operating cost                           1,598,640        2,775,907          571,241
           Impairment/Recovery of assets             (236,088)         988,312                -
           Depreciation and amortization              236,821           46,469           40,504
                                              ---------------   --------------  ---------------

             Total Operating Expenses               1,599,373        3,810,688         (611,745)
                                              ---------------   --------------  ----------------

          LOSS BEFORE INCOME TAXES                 (1,236,927)      (3,542,210)         (40,859)
                                              ---------------   --------------  ---------------

          INCOME TAXES                                      -                -                -
                                              ---------------   --------------  ---------------

          LOSS FROM DISCONTINUED
          OPERATIONS                          $    (1,236,927)  $   (3,542,210) $       (40,859)
                                              ===============   ==============  ===============
</Table>

<Table>
<Caption>
                                                                 Cable Channel
                                              -------------------------------------------------
                                                                   March 31,
                                              -------------------------------------------------
                                                    2001             2000            1999
                                              ---------------   --------------  ---------------
<S>                                           <C>               <C>             <C>
          NET SALES                           $             -   $            -  $             -
                                              ---------------   --------------  ---------------

          OPERATING EXPENSES
           Operating cost                             664,251       10,608,647                -
           Depreciation and amortization                    -          434,237                -
                                              ---------------   --------------  ---------------

             Total Operating Expenses                 664,251       11,042,884                 -
                                              ---------------   --------------  ----------------

          LOSS BEFORE INCOME TAXES                   (664,251)     (11,042,884)               -
                                              ---------------   --------------  ---------------

          INCOME TAXES                                      -                -                -
                                              ---------------   --------------  ---------------

          LOSS FROM DISCONTINUED
          OPERATIONS                          $      (664,251)  $  (11,042,884)               -
                                              ===============   ==============  ===============
</Table>

NOTE 15 - RELATED PARTY TRANSACTIONS

          The Company pays certain officers and directors royalties from the
          revenue of book sales. In addition, the Company pays a major
          shareholder royalties on active users of the Chequemate product. The
          total amount owing to these individuals as of March 31, 2001 and 2000
          was $-0- and $-0-, respectively.

          The Company has several notes payable to certain members of the Board
          of Directors (see Note 5).

          The Company has no additional related-party transactions for the
          past two years.

NOTE 16 - PROVISION FOR INCOME TAXES

          The provision for income taxes for the years ended March 31, 2001 and
          2000 consists of the following:

<Table>
<Caption>
                                             Current              Deferred                 Total
                                       ------------------    -----------------     -----------------
<S>                                    <C>                   <C>                   <C>

          Year ended March 31, 2001
            U.S. Federal               $               -     $               -     $               -
            State and local                           500                    -                   500
                                       ------------------    -------------------   -----------------

                                       $              500    $               -     $             500
                                       ==================    =================     =================

          Year ended March 31, 2000
            U.S. Federal               $                -    $               -     $               -
            State and local                           500                    -                   500
                                       ------------------    -----------------     -----------------

                                       $              500    $               -     $             500
                                       ==================    =================     =================
</Table>

                                       64
<Page>

          Income tax expense was $500 for each of the years ended March 31,
          2001, 2000 and 1999, respectively, and differed from the amounts
          computed by applying the combined U.S. Federal and Utah State income
          tax rate of 38 percent to loss from operations before provision for
          income taxes and extraordinary item as a result of the following:

<Table>
<Caption>
                                                                             2001                  2000
                                                                     -----------------     -----------------
<S>                                                                  <C>                   <C>

          Computed expected benefit                                  $      (6,624,000)    $      (7,215,000)
          State tax payable                                                        500                   500
          Increase (reduction) in income taxes resulting from:
             Change in valuation allowance for deferred
              tax assets                                                     3,745,274             4,778,892
             Non-deductible expenses                                         2,878,726             2,436,108
                                                                     -----------------     -----------------

               Income Tax Provision                                  $             500     $             500
                                                                     =================     =================
</Table>

          The tax effects of temporary differences that give rise to significant
          portions of the deferred tax assets at March 31, 2001 and 2000 are
          presented below:

<Table>
<S>                                                                  <C>                   <C>
          Deferred tax assets:
            Net operating loss carryforwards
              Total deferred tax assets                              $      16,617,048     $      12,871,774
              Less valuation allowance                                     (16,617,048)          (12,871,774)
                                                                     -----------------     -----------------

              Net Deferred Tax Assets                                $               -     $               -
                                                                     =================     =================
</Table>

NOTE 17 - SUBSEQUENT EVENTS

          On March 15, 2001, the Company entered into a Master agreement as
          amended and restated, and then modified and restated on June 13, 2001,
          which contemplates a private placement to raise up to $3.5 million in
          return for the issuance of approximately 43,125,565 shares to the new
          investors, constituting a 51% equity interest in the Company on a
          fully diluted basis. These newly-issued shares will have registration
          rights customary in such issuances as set forth in the Registration
          Rights Agreements attached to the Proxy Statement filed on June 14,
          2001 in Exhibit 99(a) as Schedule 1.3 to the Master Agreement. Under
          the Master Agreement, the Company can acquire control of Another World
          and its assets at a later date (the "Acquisition") so that the Company
          can benefit from its stereoscopic technologies provided the
          shareholders of the Company and Another World approve the transaction.
          The Company has not entered into any formal negotiations or discussed
          specific terms of this potential acquisition but have agreed that the
          acquisition will be consummated through the issuance of the Company's
          common stock in exchange for the in-kind assets of Another World. The
          Acquisition will be based on an independent valuation of Another
          World. Another World has engaged Samil-PricewaterhouseCoopers to
          perform such independent valuation.

                                       65
<Page>

NOTE 18 - SEGMENT INFORMATION

          The Company's reportable segments are strategic business units that
          offer different products and services. They are managed separately
          because each business requires different technology and marketing
          strategies.

          The accounting policies applied to determine the segment information
          are the same as those described in the summary of significant
          accounting policies.

          Financial information with respect to the reportable segments follows:

<Table>
<Caption>
                                                                            2001
                                            ---------------------------------------------------------------
                                              Centric       Hotel Pay-      Cable
                                             Graphical      Per-Vie        Channel   3-D Units     Total
                                            -------------  ------------- ---------- ----------- -----------
<S>                                           <C>             <C>                <C>        <C> <C>
          Revenue from external customer         129,805        775,265          -          -      905,070
          Depreciation and amortization        1,111,171      1,029,720          -          -    2,140,891
          Operating cost                      12,970,170      1,090,211          -          -   14,060,381
          Segment loss                        13,951,536      1,344,666          -          -   15,296,202
</Table>

<Table>
<Caption>
                                                                            2000
                                            ---------------------------------------------------------------
                                              Centric       Hotel Pay-      Cable
                                             Graphical      Per-Vie        Channel   3-D Units    Total
                                            -------------  ------------- ---------- ----------- -----------
<S>                                         <C>            <C>           <C>        <C>         <C>
          Revenue from external customer       2,154,164        411,367           -     268,478   2,834,009
          Depreciation and amortization          435,510        432,591     434,237      46,469   1,348,807
          Operating cost                       3,810,486      3,117,803  10,608,647   2,775,907  20,312,843
          Segment loss                         2,091,832      3,139,027  11,042,884   2,553,898  18,827,641
</Table>

<Table>
<Caption>
                                                                            1999
                                            ---------------------------------------------------------------
                                              Centric       Hotel Pay-      Cable
                                             Graphical      Per-Vie        Channel   3-D Units    Total
                                            -------------  ------------- ---------- ----------- -----------
<S>                                         <C>            <C>           <C>        <C>         <C>
          Revenue from external customer         111,874              -          -     570,886     682,760
          Depreciation and amortization           39,095              -          -      40,504      79,599
          Operating cost                       4,274,999              -          -     571,241   4,846,240
          Segment loss                         4,202,220              -          -      40,859   4,243,079
</Table>

                                       66
<Page>

NOTE 19 - SHORT TERM OBLIGATIONS

          The Company entered into various agreements and commitments for
          services to be rendered to the Company. These obligation were paid in
          common stock of the Company after approval by the Board of Directors.
          During the year ended March 31, 2001, the Board approved some of the
          agreements and the stock was then issued. The Company recorded the
          obligations as a liability pending the issuance of the stock.

NOTE 20 - BUSINESS COMBINATION

          On December 30, 2000, the Company acquired all of the outstanding
          shares of VisionComm, Inc. (VCI), a telecommunication and cable
          television provider to multiple dwelling units. The total acquisition
          cost was $7,800,000 which consisted of the issuance of 2,500,000
          shares of common stock and a note for $2,800,000. The excess of the
          total acquisition cost over the fair value of the net assets acquired
          of $5,335,881 is being amortized over 5 years by the straight-line
          method.

          The acquisition has been accounted for as a purchase and results of
          operations of VisionComm, Inc., since the date of acquisition have not
          been included in the consolidated financial statements as of March 31,
          2001 as VCI reports on a December 31, year end and will be included in
          the consolidated financial statements as of March 31, 2002.

          Also, the Company will consolidate all future results of operations
          based on the entities fiscal year ends as follows: consolidating
          quarterly results of operations of the Company for the period ending
          June 30, with those of VCI for the period ending March 31; September
          30, with those of VCI for the period ending June 30; and, December 31,
          with those of VCI for the period ending September 30.

          Unaudited pro forma consolidated results of operations for the years
          ended March 31, 2001 and 2000 as though VisionComm had been acquired
          as of April 1, 1999 follow:

<Table>
<Caption>
                                              2001               2000
                                     -----------------    ----------------
<S>                                  <C>                  <C>
          Sales                      $       3,580,705    $      5,764,558)
          Net loss                         (18,471,947)        (19,730,923)
          Loss per share                         (1.58)              (3.25)
</Table>

NOTE 21 - CORRECTIONS OF CERTAIN ERRORS

          The following is a reconciliation of the March 31, 2001 and 2000
          consolidated financial statements as originally reported to the
          restated March 31, 2001 and 2000 financial statements:

<Table>
<Caption>
                                                March 31, 2001                                    March 31, 2000
                                  As Reported     As Adjusted      Difference      As Reported      As Adjusted       Difference
                                 -------------   -------------   -------------    -------------    -------------    -------------
          <S>                    <C>             <C>             <C>              <C>              <C>              <C>
          Assets                 $  13,471,813   $  12,719,589   $    (752,224)   $   5,948,464    $   4,960,152    $    (988,312)
          Liabilities            $  12,014,036   $  12,014,036   $           -    $   7,188,759    $   7,188,759    $           -
          Stockholders' Equity   $   1,457,777   $     705,553   $    (752,224)   $  (1,240,295)   $  (2,228,607)   $    (988,312)
          Net Loss               $  17,572,016   $  17,335,928   $     236,088    $ (18,735,469)   $ (19,723,781)   $    (988,312)
          Loss per Share         $       (1.49)  $       (1.47)  $        0.02    $       (3.09)   $       (3.25)   $       (0.16)

</Table>

          Differences represent the impairment and recovery of net assets of
          discontinued operations by the Company during the years ended
          March 31, 2001 and 2000.

          The remaining assets of 3-D (Strata) are comprised of office
          equipment and machinery and intangible related to the 3D process,
          these assets have been impaired see Note 14. There are no remaining
          assets of the cable channel segment.

                                       67
<Page>

ITEM 8

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

In fiscal year ending March 31, 2001 there were no changes in or
disagreements with accountant and financial disclosure.

     PART III

ITEM 9

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

Based solely upon our review of forms 3, 4 and 5, and amendments thereto
furnished to us during fiscal year ending March 31, 2001, the following
individual were found to be delinquent in complying with Section 16(a) of the
exchange act.

Bob Warfield
John Bartholomew

For each of these persons, we have been unable to determine the exact number
of late reports, the exact number of transactions that were not reported on a
timely basis and the exact number of failures to file the required item per
Section 16(a) of the exchange act.

DIRECTORS

<Table>
<Caption>
                                                 FIRST        SHARES OF COMMON       PERCENTAGE OF
NAME AND PRINCIPAL OCCUPATION                    BECAME A     STOCK                  COMMON STOCK
OR EMPLOYMENT                            AGE     DIRECTOR     BENEFICIALLY OWNED     OUTSTANDING
-----------------------------            ---     ----------   ------------------     -------------
<S>                                      <C>     <C>          <C>                    <C>
William J. Brinkmeier                     51     Feb., 2001      1,185,414              4.62%
Vice-President, Chequemate
International, Inc.

Thomas Nix                                53     Feb., 2001        428,315              1.67%
Vice-President, Chequemate,
International, Inc.

Robert E. Warfield                        61     1995              250,000              0.97%
Partner in the real estate
company of Moore Warfield & Glick

Andre Peterson                            48     1998              250,885 (1)          0.98%
VP of Marketing and Chief Marketing
Officer of Cogito Incorporated

John Bartholomew                          42     1998              259,060 (2)          1.01%
General Manager of the Kaizen Group

Daniel Thompson                           50     1999              125,000 (3)          0.05%

J. Michael Heil *                         46     1998            1,105,000 (3)          4.31%
* Mr Heil resigned as CEO 3/1/01
</Table>

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

(1) This amount includes 30,000 shares available under unexercised options.

(2) This amount includes 34,285 shares available under unexercised options.

(3)  This amount consists of shares available under unexercised options.

                                       68
<Page>

BUSINESS EXPERIENCE

     William J. Brinkmeier. Director. Mr. Brinkmeier is one of the Founders,
President and the Chairman of the Board of VisionComm, Inc. VisionComm, Inc.
was formed by Mr. Brinkmeier, Mr. Rojeski, Mr. Nix and Mr. Wilk in 1995 with
the mission of becoming a leading provider of cable and telecommunication
services to multi-family developments hospitals and hotels. Mr. Brinkmeier is
the former President of Payphones of America, Inc., a nationwide provider of
pay telephone service. Mr. Brinkmeier and Mr. Rojeski founded Payphones of
America, Inc. in 1989. From 1989 to 1996, Payphones of America, Inc.
increased its' installed base to over 3300 payphones. In 1996, Mr. Brinkmeier
and his partner sold Payphones of America, Inc. to the largest private
provider of pay telephones in the United States.

     Thomas A. Nix. Director and Chairman of the Board. Mr. Nix is the
Executive Vice President - Cable Division. In this capacity, Mr. Nix is
responsible for all of the Cable Division's sales and marketing activities.
Mr. Nix has involved in the private cable industry for over sixteen years.
Mr. Nix was a co-founder of Datavision in 1982. Datavision was one of the
first publicly held companies to provide security systems for multi-dwelling
units. Mr.Nix and his sales team secured contracts for over 150,000 units. In
1985, Mr. Nix founded Data Cablevision, which was one of the first providers
of private cable television equipment and services in the United States. As
President of Data Cablevision, Mr. Nix secured private cable contracts for in
excess of 22,000 passings. In addition, he secured contracts to provide
pay-per-view and free to guest cable services to over 16,000 hotel rooms.
From 1988 to 1995, Mr. Nix provided consulting, advisory and brokerage
services to the private cable industry. In addition, Mr. Nix has acquired and
operated private cable systems throughout the United States.

     Robert E. Warfield. Director. Mr. Warfield has a BS Degree in Economics
from Western Maryland College. He has an extensive background in real estate
and regional sales management with the Weyerhaeuser Corporation. Mr. Warfield
first became licensed in real estate in 1962, and in 1975 started Warfield
Real Estate. He has been in the real estate and development business in Ocean
City, Maryland since 1971. For the past 18 years Mr. Warfield has been
President of Moore, Warfield and Glick, Inc., with real estate sales over
$100 million and rentals of $12 million. Additionally, since 1988, Mr.
Warfield has been a regional owner of Help-U-Sell Real Estate in Virginia,
Maryland, Washington D.C. and Delaware. Mr. Warfield currently serves on the
Board of Directors of Atlantic General Hospital and Ocean City Golf and Yacht
Club. He has also served as a director of Second National Service Corp., and
Salisbury School.

     Andre Peterson. Director. Mr. Peterson is an alumnus of Brigham Young
University, where he majored in Business Management. He is currently the Vice
President of Marketing and Chief Marketing Officer for Cogito Incorporated, a
software technology development company. He was the VP of Marketing and a
Partner of The Kaizen Group, a marketing and development group for start-up
software from 1996 to 1998. He served as the President of Enhanced Simulation
Marketing from 1994 through 1996, marketing a newly patented motion simulator
for the entertainment industry. He was the VP of Marketing for WordPerfect
Corporation and Novell

Corporation from 1983 to 1994. Mr. Peterson was responsible for all aspects
of sales and marketing for WordPerfect, taking sales from one million in
1983, to over seven hundred million in 1994. Prior to working for
WordPerfect, Mr. Peterson was a member of the White House Staff for four
years.

     John V. Bartholomew. Director. Mr. Bartholomew has a BS degree in
Computer Science from Brigham Young University. He has extensive experience
in the application of technology in computers and complex systems. He has
been involved in the management of technology sales and marketing for more
than a decade with such companies as WordPerfect and Novell. He is the
General Manager of The Kaizen Group, a consulting organization for technology
companies with such customers as Microsoft, NetVision, PowerQuest, LogicalNet
and Cogito, a knowledge based software solutions provider.

     Daniel R. Thompson. Director. Since January of 1984, Mr. Thompson has
served as president of Creative Entertainment Services, a multifaceted
entertainment agency specializing in product placement, promotional
advertising, closed captioning sponsorships, program sponsorships and
distribution. He also serves as an officer of Creative Television Marketing
of Los Angeles, California and as a director of Creative Promotional
Marketing of Boston, Massachusetts.

     J. Michael Heil. CEO. Mr. Heil has over 17 years experience in the
satellite and television business. Mr. Heil was formerly president of Skylink
America, Inc. and Satellite Cinema, successfully launching five digital video
pay-per-view networks. During his tenure in these businesses, he developed
the business to $20 million in annual revenue and over 150,000 subscribers.
He was

                                       69
<Page>

the Director of Operations for Comsat Video Enterprises, and Chairman and CEO
of Television Entertainment Network, Inc., a Canadian hotel pay-per-view
company.

COMMITTEES OF THE BOARD OF DIRECTORS

     Robert E. Warfield serves as the sole voting member of the Compensation
Committee of the board of directors. Andre Peterson serves as the Chairman of
the Audit Committee, with John Bartholomew as a member. The Compensation
Committee has been charged with the responsibility of evaluating and
establishing compensation for the management of the Company and the grant of
corporate stock options. The Audit Committee has been charged with the
responsibility of communicating with the auditors of the Company, and
evaluating the accounting controls, functions and systems of the Company.

EXECUTIVE OFFICERS

     The following table outlines the executive officers of the Company.


<Table>
<Caption>
NAME                                  AGE     POSITION HELD      CURRENT TERM OF OFFICE AND PERIOD OF SERVICE
----                                  ---     -------------      --------------------------------------------
<S>                                   <C>     <C>                <C>
J. Michael Heil *                      45     CEO                September 1998 to 3/1/01
* Mr. Heil resigned as CEO 3/1/01

D. Alan Hunter *                       46     Secretary          February 2000 to 10/6/00
* Mr. Hunter resigned as Secretary 10/6/00

Chandos Mahon                          43     President/CEO      March 2001 to present

William J. Brinkmeier                  51     Vice-President     December 2000 to present

Thomas A. Nix                          53     Vice-President     December 2000 to present

Lawrence J. Wilk                       49     Vice-President     December 2000 to present

Frank Friedlein, Jr.                   50     Controller         December 2000 to present
</Table>

BUSINESS EXPERIENCE

     Chandos Mahon. President & CEO. Mr. Mahon, born June of 1958, the son of
successful film producer and director Barry Mahon, has over twenty (20) years
of experience in the television, film and telecommunications industries. From
approximately 1997 to 1999, he was the President, Chief Executive Officer,
and principal shareholder, of Programming Services, Inc., a closely-held
corporation founded by Mr. Mahon, which was engaged in satellite programming
and satellite telecommunications. From approximately 1993 to 1998, Mr. Mahon
served as the Executive Vice President and general manager of Network One
(N1), a 24 hour cable and broadcast network. Mr. Mahon was responsible for
creation, implementation and management of the entire business plan. Prior to
joining N1, Mr. Mahon worked in various executive roles with CBS Productions,
Columbia Pictures Television and Imagine Films, where he supervised features
and television production both nationally and internationally. Mr. Mahon has
over 20 major production credits to his name. Mr. Mahon provides his
management expertise to all areas of the C-3D plan, including, management,
operations, finance, sales and marketing.

     William J. Brinkmeier. Vice-President. (See business experience above)

     Thomas A. Nix. Vice-President. (See business experience above)

     Lawrence J. Wilk. Vice-President. Mr. Wilk is the Vice President of
VisionComm's cable operations. In this capacity, Mr. Wilk is responsible for
all aspects of VisionComm's cable operations. Mr. Wilk has been involved in
the private cable industry for over sixteen years. Among his many
accomplishments, Mr. Wilk participated in the engineering and implementation
of the first digital compression technology utilized in connection with
Viacom's and Scientific Atlanta's network groups. From 1990 to 1995, Mr. Wilk
was Vice President of Engineering at United Satellite / America, Inc. At USA,
Mr. Wilk implemented a variety of operational restructuring programs
encompassing engineering, maintenance and personnel requirements for the
company's 31 cable systems located throughout the United States. Mr. Wilk
increased revenue to USA through a variety of methods including construction
upgrades, renegotiating existing contractor agreements and utilization of
spare parts inventory. From 1993 to 1995, Mr. Wilk was director of
Engineering for Telecable Communications Corp., a privately held company
providing cable services to the hospitality industry.

     Frank Friedlein, Jr. Controller. Mr. Friedlein joined VisionComm in July
1998 as its' V.P. / Chief Financial Officer. In this capacity Mr. Friedlein
is responsible for all accounting, budgeting, bank relations and M.I.S.
activities. From 1993 to 1998 Mr. Friedlein was employed by the Vernon L.
Goedecke Companies Group. In 1998 Mr. Friedlein was Vice-President / CFO of
the parent Company Vernon L. Goedecke. 1996 to 1997 Mr. Friedlein was
Vice-President / Controller

                                       70
<Page>

of New Buffalo Corporation an importer of consumer (Do it Yourself) hand
tools. 1993 to 1996 Mr. Friedlein was Manager of Operation for Spirit of St.
Louis Software Company. Mr. Friedlein is a graduate of St. Louis University
with a degree in accounting.

ITEM 10

EXECUTIVE COMPENSATION

     The table set forth below contains information about the remuneration
received and accrued during fiscal years 2000 and 2001 from the Company and
its subsidiaries by the Chief Executive Officer and each of the most highly
compensated executive officers of the Company.

<Table>
<Caption>
                                                                                          SECURITIES
NAME AND PRINCIPAL                                                   RESTRICTED STOCK     UNDERLYING
POSITION              FISCAL YEAR     SALARY ($)       BONUS ($)         AWARD(S)          OPTIONS
------------------    -----------     ----------       ---------     ----------------     ----------
<S>                   <C>             <C>              <C>           <C>                  <C>
J. Michael Heil          2001         $169,400         $     0           $      0          $      0
CEO and Chairman         2000         $184,800         $     0           $      0          $      0
                         1999         $100,000         $ 6,299           $      0          $      0

D. Alan Hunter           2001         $ 56,500         $      0          $      0          $      0
Secretary                2000         $ 84,000         $      0          $      0          $      0
                         1999         $      0         $      0          $      0          $      0

Chandos Mahon            2001         $      0         $      0          $125,000          $600,000
CEO & President          2000         $      0         $      0          $      0          $      0

William J Brinkmeier     2001         $      0         $      0          $ 33,336          $      0
Vice-President           2000         $      0         $      0          $      0          $      0

Thomas A. Nix            2001         $      0         $      0          $ 33,336          $      0
Vice-President           2000         $      0         $      0          $      0          $      0

Lawrence J. Wilk         2001         $      0         $      0          $ 33,336          $      0
Vice-President           2000         $      0         $      0          $      0          $      0

Frank Friedlein, Jr.     2001         $      0         $      0          $ 30,000          $      0
Controller               2000         $      0         $      0          $      0          $      0
</Table>

The following chart shows the stock options that were granted to executive
officers of the Company during the last completed fiscal year.

<Table>
<Caption>
                          TOTAL       PERCENTAGE OF TOTAL       TOTAL      EXERCISE
NAME/POSITION            OPTIONS     GRANTED TO EMPLOYEES      OPTIONS       PRICE       EXPIRATION
POSITION                 GRANTED       IN FISCAL YEAR           VESTED     ($/SHARE)        DATE
-------------            -------     --------------------      -------     ---------     ----------
<S>                      <C>         <C>                       <C>         <C>           <C>
Chandos Mahon - CEO
  Total                  600,000              100%

Detail
12/01/00                 100,000                                100,000      $0.04       12/31/10
12/01/00                 100,000                                      0      $0.50       12/31/10
12/01/00                 100,000                                      0      $0.50       12/31/10
12/01/00                 100,000                                      0      $0.50       12/31/10
12/01/00                  50,000                                      0      $1.00       12/31/10
12/01/00                  50,000                                      0      $1.00       12/31/10
12/01/00                  50,000                                      0      $2.00       12/31/10
12/01/00                  50,000                                      0      $2.00       12/31/10
</Table>

The following table reflects the number of unexercised options that are
exercisable and unexercisable at the end of fiscal year 2001.

<Table>
<Caption>
                                                          NO. OF SECURITIES
                           SHARES                            UNDERLYING               VALUE OF UNEXERCISED IN-
                          ACQUIRED        VALUE          UNEXERCISED OPTIONS          THE-MONEY OPTIONS AT
                         ON EXERCISE    REALIZED            AT FY-END (#)                 FY-END ($)
NAME                         (#)           ($)         EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
---------------          -----------    --------       -----------------------      --------------------------
<S>                      <C>            <C>            <C>                          <C>
J. Michael Heil             125,000     $166,875           150,000 / 0                  $0 / $0
D. Alan Hunter               25,000     $ 33,375                 0 / 0                  $0 / $0
Chandos Mahon               100,000     $ 22,000                 0 / 500,000            $0 / $0
</Table>


ITEM 11

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS

The following table sets forth as of June 8, 2001 certain information
regarding

                                       71
<Page>

the beneficial ownership of the Common Stock of the Company by (a) each
person who is known to the Company to be the beneficial owner of more than 5%
of the outstanding shares of Common Stock, (b) each director of the Company
and the executive officers of the Company and (c) all directors and executive
officers of the Company as a group. Unless otherwise indicated, each
beneficial owner possesses sole voting and dispositive power with respect to
the shares listed in this table.

<Table>
<Caption>
                                    AMOUNT AND NATURE OF    PERCENTAGE OF
NAME                                BENEFICIAL OWNERSHIP        CLASS
---------------------------         --------------------    -------------
<S>                                 <C>                     <C>
William J. Brinkmeier II(1)               1,185,414             4.62%
Michael J. Heil(2)                        1,105,000             4.31%
Chandos Mahon(3)                            660,857             2.58%
Thomas A. Nix(4)                            428,315             1.67%
Lawrence J. Wilk(5)                         383,066             1.49%


Frank Friedlein, Jr(6)                      297,996             1.16%
John V. Bartholomew(7)                      259,060             1.01%
Andre H. Peterson(8)                        250,885             0.98%
Robert E. Warfield(9)                       250,000             0.97%
Daniel Thompson(10)                         125,000             0.05%
Alan Hunter(11)                              25,300             1.01%
Total                                     4,970,893             18.85%
</Table>


(1)  Mr. Brinkmeier is a director of the Company. His address is 124 Point
West Blvd., St. Charles, MO 63301.

(2)  Mr. Heil is a director of the Company. His address is 124 Ferry Street
SW, Albany, OR 97321.

(3)  Mr. Mahon is CEO and President of the Company. His beneficial ownership
interest includes 100,000 shares underlying options. His address is: 10336
Variel Ave., Chatsworth, CA 91311.

(4)  Mr. Nix, is a director of the Company and is Chairman of the Board of
Directors. His address is 36380 Garfield Rd So. 7, Clinton Twp, MI, 48035

(5)  Mr. Wilk is an officer of the Company. His address is 36380 Garfield Rd
So. 7, Clinton Twp, MI, 48035.

(6)  Mr. Friedlein is the Controller of the Company. His address is 124 Point
West Blvd., St. Charles, MO 63301.

(7)  Mr. Bartholomew is a director of the Company. His beneficial ownership
interest includes 10,000 shares underlying options. His address is 291 E. 950
South, Orem, Utah, 84058.

(8)  Mr. Peterson is a director of the Company. His beneficial ownership
interest includes 6250 shares underlying options. His address is 2091 East
950 South, Orem, Utah, 84058.

(9)  Mr. Warfield is a director of the Company. His address is 5700 Coastal
Highway, Ocean City, MD 21842.

(10) Mr. Thompson is a director of the Company. His beneficial ownership
interest includes 125,000 shares underlying options. His address is 31636
Blue Meadow Lane, Westlake Village, CA 91361

(11) Mr. Hunter was Secretary of the Company from February 3, 2000 to October
6, 2000. His address is 17221 Palisades Circle, Pacific Palisades, CA 90272.

ITEM 12

CERTAIN RELATED TRANSACTIONS

In November of 2000, the former chairman of the Company entered into a Lease
and License Agreement with Corastar, Inc., a Nevada corporation ("Corastar")
on behalf of the Company, giving Corastar the right to market the Company's 3
dimensional graphic software and the related trade mark "Strata" known as the
Strata Asset. Ken Bringhurst is the President of 3D.COM, Inc., a division of
Chequemate International, Inc. (3D.COM), Gary Bringhurst is a Vice President
of 3D.COM and Dennis Derrick is a Vice President of 3D.COM and collectively
are substantial owners of Corastar. The Company is investigating the
execution of the subject agreement to determine if it has been properly
approved by the Company and whether there is conflict of interest involved.
Therefore, the Company cannot attest to the validity of the subject agreement
at present. The Company and Corastar are currently negotiating an arrangement
regarding the Strata assets. However we cannot guarantee whether the
negotiation will be successful.

The Company has no other related transactions to report for the past two years.

                                       72
<Page>

ITEM 13

EXHIBITS AND REPORTS ON FORM 8K

EXHIBITS INDEX

<Table>
<Caption>
EXHIBIT NO.                   DESCRIPTION
-----------                   -----------
<S>            <C>
   3.1         Restated Articles of Incorporation. Incorporated by reference
               from Form 8-A (Film No. 99636119) filed by the Company with the
               Commission on May 27, 1999.

   3.2         By-Laws. Incorporated by reference from Form 8-A (Film No.
               99636119) filed by the Company with the Commission on May 27,
               1999.

   4           Specimen Common Stock Certificate. Incorporated by reference from
               Form 8-A (Film No. 99636119) filed by the Company with the
               Commission on May 27, 1999.

  10.1         SETTLEMENT AGREEMENT NATIONAL FINANCIAL*

  10.2         AMENDED SETTLEMENT AGREEMENT BH PRODUCTIONS*

  10.3         PROMISSORY NOTE I-O DISPLAY SYSTEMS*

  10.4         SETTLEMENT AGREEMENT PROGRAMMING SERVICES, INC.*

  10.5         ACADEMY ENTERTAINMENT SETTLEMENT*

  10.6         Amended and Restated Master Agreement between the Company and
               Another World Inc. dated June 13, 2001. (Incorporated by reference
               from Schedule 14A filed by the Company with the Commission on June
               14, 2001).

  10.7         Right of Entry Agreement between VisionComm and Sevo Miller,
               Inc. dated August 28, 2000.
</Table>


* Previously filed with the Commission as an exhibit to the Company's 10-KSB for
the fiscal year ended March 31, 2001 filed with the Commission July 11, 2001.

                                       73
<Page>

                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                       CHEQUEMATE INTERNATIONAL, INC.

May 8, 2002                            /s/ Chandos Mahon
                                       ----------------------------------
                                       CHANDOS MAHON
                                       PRESIDENT, CEO AND CFO


Date: May 8, 2002

By /s/ William Brinkmeier
------------------------------------
William Brinkmeier, Director Date: May 8, 2002

By /s/ In Q Lee
------------------------------------
In Q Lee, Director Date: May 8, 2002

By /s/ Chandos Mahon
-------------------------------------
Chandos Mahon, Director, President, CEO, CFO Date: May 8, 2002

By /s/ Thomas Nix
------------------------------------
Thomas Nix, Director Date: May 8, 2002

By /s/ Philmoon Seong
------------------------------------
Philmoon Seong, Director Date: May 8, 2002

                                       74