<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  FORM 10-KSB/A
                                 Amendment No. 1

                     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


                         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 (the
Company), filed a Report on 10-KSB for the fiscal year ended March 31, 2001.
The Company is filing this Amendment No.1 in order to expand and clarify
certain information contained Management's Discussion and Analysis and in the
notes to the financial statements. Unless otherwise explicitly stated, the
information contained in this Amendment No. 1 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/


<Page>

                                TABLE OF CONTENTS
<Table>
<S>                                                                                        <C>
PART I ..............................................................................       4

    ITEM 1 ..........................................................................       4
       Forward Looking Statements ...................................................       4
       History of the Company .......................................................       4
       Other Information ............................................................       6
       Principal Products and Services ..............................................       7
       Patents, Trademarks and Copyrights ...........................................       7
       Employees ....................................................................      13

    ITEM 2 ..........................................................................      13
       Description of Property ......................................................      13

    ITEM 3 ..........................................................................      14
       Legal Proceedings ............................................................      14

    ITEM 4 ..........................................................................      14
       Submission of Matters to a Vote of Security Holders ..........................      14

PART II .............................................................................      15

    ITEM 5 ..........................................................................      15
       Market for Common Equity and Related Stockholder Matters .....................      15

    ITEM 6 ..........................................................................      16
       Management's Discussion and Analysis of Financial Condition and
       Results of Operations ........................................................      16

    ITEM 7 ..........................................................................      19
       Financial Statements .........................................................      19
       Independent Auditors Report ..................................................      22
       Consolidated Balance Sheets ..................................................      24
       Consolidated Statements of Operations ........................................      26
       Consolidated Statements of Stockholders' Equity (Deficit) ....................      28
       Consolidated Statements of Cash Flows ........................................      29
       Notes to Consolidated Financial Statements ...................................      31

    ITEM 8 ..........................................................................      49
       Changes in and Disagreements with Accountants on Accounting
       and Financial Disclosure .....................................................      49

PART III ............................................................................      49

    ITEM 9 ..........................................................................      49
       Directors, Executive Officers, Promoters and Control Persons;
       Compliance with Section 16(a) of the Exchange Act ............................      49
       Directors ....................................................................      49
       Business Experience ..........................................................      50
       Committees of the Board of Directors .........................................      51
       Executive Officers ...........................................................      51
       Business Experience ..........................................................      51

    ITEM 10 .........................................................................      52
       Executive Compensation .......................................................      52

    ITEM 11 .........................................................................      52
       Security Ownership of Certain Beneficial Holders .............................      52

    ITEM 12 .........................................................................      53
       Certain Related Transactions .................................................      53

    ITEM 13 .........................................................................      54
       Exhibits and Reports on form 8K ..............................................      54

           Exhibits Index ...........................................................      54

    SIGNATURES ......................................................................      55

           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 ..........................
</Table>
<Page>

     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.

HISTORY OF THE COMPANY

We were incorporated under the laws of the State of Texas on April 21, 1989
as Ainsley Corporation. Originally, we were organized primarily for the
purpose of raising capital to take advantage of potential business
opportunities. We later changed our name to Automated Compliance & Training,
Inc. (AC&T), when the Texas Corporation was merged with a Utah corporation to
make the change to Utah as the state of incorporation. In September 1996,
AC&T merged with its wholly owned subsidiary, Chequemate International, Inc.
(CMI), and assumed the name of the subsidiary. Although we continue to use
the name Chequemate International, we have filed for, and are operating under
the d/b/a name of C-3D Digital, Inc.

Our Products and Services

Our current line of products and services can be separated primarily into three
operating divisions:

1)    Hotel Movie Network (HMN)
2)    VisionComm, Inc. (VCI); and
3)    3D.COM, Inc.

Our goal is to consolidate all operations and focus principally on HMN and VCI,
as these two divisions are currently our primary source of revenue.

      Hotel Movie Network

The current key business segment of Chequemate International, and which
accounted for 86% of our revenue for the year ended March 31, 2001, is its hotel
Pay-Per-View and direct digital television services or "Free-to-Guest" services,
called the Hotel Movie Network, which currently delivers television programming
to approximately 11,000 hotel rooms. We became involved in this business area
through a series of acquisitions from Alpha Broadcasting Corporation. The first
acquisition occurred in December 1998, when we purchased from Alpha Broadcasting
Corporation inventory, equipment and contracts to provide pay-per-view
television services to 19 hotel properties, which amounted to approximately
3,000 hotel rooms. The hotel properties are primarily located in Arizona,
California, Idaho, Nevada, New Mexico, Texas, Utah and Washington. Our interest
in the hotel market is as a stable revenue source and as a focused test market
for our 3D technologies. With the acquisitions, we purchased a combination of
operating service contracts with additional inventory to outfit hotels for
Pay-Per-View and Free-to-Guest services. When deployed, our current inventories
will outfit and additional 25,000 hotel Pay-Per-View rooms.

HMN will install and operate a hotel entertainment system (movies, interactive
guest services, Internet on TV, PC games) in hotel properties, and will resell
 free-to-guest (FTG) television programming.

Our inventory consists of equipment located within the guest room connected
via a local-area cable distribution network to a headend located elsewhere in
the hotel (a central point equipment rack that sends the video signal via
coax cable to each room). Typical in-room equipment includes a terminal unit
(set top), and a hand-held remote television control. Movie programming
originates from the system headend and is transmitted to individual rooms
over the hotel's master distribution system. The system computer controls the
delivery of the Guest Pay interactive services to the guest room 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.

HMN has contracts with many of the Hollywood's major studios to provide first
and second window (hotel/airline and video store) movies. The principals have
well-established contacts in Hollywood.

VisionComm, Inc.

Currently, VisionComm, Inc. (VCI) operates private cable systems in three
states (Texas, California and Michigan) and manages two franchise cable
systems in Missouri, in total covering 6,000 passings (the number of
residences and/or businesses that have access to a particular cable service).
As of August 2000, VCI also had installed 1,000 payphones in various
facilities in 18 states. Going forward, we expect VCI to account for
approximately 60% of our revenue, until such time as our 3D product line is
launched (see "Products and Services Under Development"). Located in St.
Charles, Missouri and Detroit, Michigan, VCI was founded in 1995 for the
purpose of becoming a provider of telecommunications and cable television
services to residents of multiple dwelling units (MDUs), hotels and
hospitals. CMI acquired VisionComm in December 2000, with the consummation of
a Stock Purchase Agreement between CMI and the shareholders of VCI. This
acquisition gave CMI additional revenue opportunities and at the same time
stayed within CMI's core business of media and entertainment distribution.

VCI 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 VCI's cable
subscribers, and oversees all other aspects of our cable business. Subscriber
billing and collection are handled at the St. Charles office.

VCI delivers its cable services through a combination of both private cable
(headend at each MDU) and franchise feeds. A private cable system servicing a
multiple dwelling unit (MDU) physically operates in a fashion identical to
that of a franchise system, but on a relatively smaller scale. VCI utilizes
various design architectures tailored to each property when determining the
method of delivery of its video product. Our goal is to maintain consistency
in the construction of its cable systems and by upgrading the systems it
acquires to meet the VCI's standards.

The private cable industry developed in the early 1980's by application of
technology from the franchised cable television and related industries to
individually owned and operated master antenna television (MATV) systems. An
MATV system is designed to provide television reception to residents of
multi-unit complexes, where individual antennas either are not feasible or
are restricted by aesthetic or other requirements. The expansion of
programming carried by satellites induces owners of multi-unit complexes to
install satellite-receiving stations at the headend (a central point within
the complex) of their MATV systems to allow residents to receive both
satellite and off-air programming


                                       4
<Page>

(programming received locally via an antenna from UHF and VHF broadcasters).
The private cable industry emerged when the owners and developers of
multi-unit complexes sought independent operators to construct, develop and
operate MATV and private cable systems.

The following table is an operational summary of VCI as of March 31, 2001:

<Table>
<Caption>
CABLE                                                                 TOTAL
----------------------------------------------------------------------------
<S>                                                                   <C>
PROPERTIES (INCLUDING FRANCHISES)                                         23
Homes/Doors Passed                                                     6,605
SUBSCRIBERS                                                            2,656
   Penetration                                                        40.21%
PAY UNITS                                                              1,776
   Penetration                                                        66.87%
UNDER CONSTRUCTION
   Properties                                                              2
   Homes/Doors Passed                                                    800
BACKLOG(1)
   Properties                                                              7
   Homes/Doors Passed                                                  4,000
PAYPHONES
   Total Installed                                                       994
</Table>

     (1) VCI has obtained the ROE / Franchise Agreement but the building of
the infrastructure has not been completed.

VCI is currently building out complexes that pass a total of 800 units in the
New Orleans and the Tulsa areas for a national REIT as shown in the under
construction section Operations Summary. This REIT passes approximately
15,000 doors in all of the properties it manages nationally. In the Dallas
Metroplex area (another VCI footprint) they have 15 complexes passing
approximately 4,000 doors.

Discussions have begun with a national private cable company regarding their
MDUs in the St. Louis and Detroit regions (both VCI footprints). 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.

VCI has remained in contact with the court regarding the Optel bankruptcy
proceedings. Management of VCI 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.

In addition, numerous opportunities are continuously being brought to VCI via
personal contacts in the industry, networking, REITs, brokers and current
customers. Management plans to carefully review each opportunity to determine
if it should be pursued to supplement our expansion in its existing
footprints, and expand into new markets across the country.

Franchises

VCI is currently in the process of establishing a franchise footprint 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. VCI has recently negotiated an
asset purchase agreement with a small private cable company that currently
provides service to 10 townships, passing a total of 1,424 homes and
currently servicing 605 subscribers. VCI is currently in the process of
securing new franchise agreements with these townships, providing for 15-year
terms. Seven (7) of the ten (10) agreements with townships have been
obtained. It is presently anticipated that the asset purchase agreement will
be finalized when the remaining three (3) agreements with townships, have
been obtained. One of the head-ends that is part of the purchase will then be
used to provide the signal for part of the build out of the seven (7) new
franchises, as shown in the backlog section of the Operations Summary, above.

VCI has also recently entered into a letter of intent with another provider
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.

Once these acquisitions are finalized, and VCI establishes its footprint, it
plans to approach other small providers within and around the footprint to
further solidify its position in the area. There can be no assurance these
acquisitions will be consummated, or on the terms planned by VCI, or that VCI
will be successful in negotiating acquisition terms with respect to other
providers.

The following communities, all in the state of Michigan, are under franchise
agreements with VisionComm. 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.

Chester Township
Charlton Township
Vienna Township
Weber Township
Yates Township
Elk Township
Sauble Township

All customer service calls are handled by our cable office located in
Detroit, Michigan. Service and repair are handled by VCI's national network
of professional providers. These trained technicians handle all routine
diagnostics and maintenance during normal business hours, and are ready to
respond to major emergency repairs at all times. VCI's Customer Service
Center is reached via an 800 number for emergency service, 24 hours a day,
seven days a week. Residents are billed directly by VCI from its corporate
office located in St. Charles, Missouri. VCI's trained staff handles billing
questions, along with credit and collection. The billing department is
reached by calling an 800


                                       5
<Page>

number during normal business hours. Both offices have access to customer
files, billing and payment records, and customer notes, and have the ability
to create work orders on our proprietary software.

VCI's Payphone Division is also headquartered in St. Charles, Missouri. In
1995, VCI 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.
CMI, however, is currently attempting to sell VCI's Payphone Division,
allowing CMI to devote its 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.

      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 CMI. 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
existing Web effort to distribute 3D content and tools both online and
through over-the-counter software. As part of its online strategy, CMI,
through this division, plans to launch an Internet 3D and virtual reality
internet portal (a focused internet destination). Though we have licensed the
use of the Strata product line to a third party, we are pursuing selling of
the assets of Strata, Inc. and focus our plans on our Web portal strategy.
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.

In addition to the three divisions discussed above, 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.

Products and Services under Development

Since 1997, through our wholly owned subsidiary, Chequemate Electronics, Inc.
(CE), we have focused on manufacturing and marketing breakthrough 3D imaging
technology that was acquired from Advanced Technology Group, LLC (ATG). In
June 1997 an agreement was finalized by which CE obtained the exclusive
worldwide license to the 3D technology developed by ATG, 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.

On March 15, 2001, we entered into an agreement (Master Agreement) which
contemplates a private placement to raise up to $3.5 million in return for
the issuance of approximately 43,125,565 shares to new investors, most of
which are shareholders of Another World Inc., a company established under the
laws of the Republic of Korea (Another World). These shares will constitute a
51% equity interest in CMI on a fully diluted basis and provides a cross
marketing of assets and operations of CMI and Another World. We believe
Another World's cutting-edge technologies in stereoscopic 3D image creation
and conversion may significantly add to our existing 3D content and
established network distribution base. In particular, Another World's
stereoscopic conversion tools (software and hardware) to convert any 2D media
to 3D, may significantly add to our revenue opportunities.

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.

Our Growth Strategy

Our growth strategy will vary according to each respective product and
service. Below is a brief summary of our corresponding strategies as they
relate to each division.

Hotel Movie Network

The primary growth strategy with respect to HMN is to take our existing large
Pay-Per-View (PPV) inventory and expand our installed base of medium-sized
hotel properties. Therefore, HMN focuses its sales and marketing strategies
on acquiring new contracts from hotels, extending and retaining existing
contracts, and marketing our PPV services to the hotel guest. Since 1998, we
have been targeting mid-size hotels of 75 to 200 rooms as part of our
marketing strategy. This market has historically been underserved by our
industry because smaller average property sizes generally lack economies of
scale. The mid-size hotel segment represents a large and attractive market
for our services that can generate financial returns that meet or exceed
those achieved in larger hotels. Today there are over one million hotel rooms
in the USA without such services.

HMN understands that hotel guests demand a full range of cable and TV
channels in addition to pay-per-view video services. Hotel managers want a
single-source provider of all video services: "free-to-guest" television and
pay-per-view programming. From sports to news to entertainment HMN provides
the highest quality programming available. HMN helps its hotel customers
maximize guest satisfaction with the widest array of familiar and new
programming sources.


                                       6
<Page>

To meet the changing needs of hotels and hotel guests, HMN has aligned itself
with DIRECTV(R), and Dish Network North America's leading providers of
high-power direct broadcast satellite television. Using the mini-dish system,
HMN give guests more entertainment choices than any other system. Plus, the
digital quality signal ensures crisp clear images and CD-quality sound.
Hotel Movie Networks hotel partners choose from an a la carte menu of
programming options, comprising all the major cable channels as well as many
offerings guests may not have at home. Each hotel can pick the best mix of
channels to match the viewing habits of its typical guests.

HMN will continue to install entertainment and Video services systems in the
hospitality industry. It will focus on providing systems to the North American
hotel market.
As the company grows, it will seek to additional properties in other markets,
such as Hospitals, Time Shares, Third party COOP services, MDU (Apartments).
Continued growth may be sustained by partnering with a company that serves
related fields such as Schools, Airlines and Cruise Lines.

VCI - Cable

VCI is focusing on the continued growth efforts in the private cable
division. The growth, as planned, will encompass both acquisitions and the
construction of new cable locations, with VCI's initial concentration on
acquisitions. VCI plans to target areas of the country where it has a current
presence, as it is believed this will allow for economies of scale. VCI will
also seek growth by exploring "add-on" possibilities at its existing
properties, such as cable modem services.

A critical aspect of VCI's sales and marketing efforts is the development of
strategic contractual relationships with the MDU property owners and/or
managers. These relationships encourage the owners to promote and sell VCI's
cable television services to the MDU residents. A variety of materials are
used, including but not limited to, direct mail pieces, fliers, brochures,
sales incentive gifts, resident introduction parties, sign up packets for new
lessees and sales follow up.

   VCI will attempt to implement growth in its private cable business in the
   following ways.

   1. By securing new Right of Entry and/or Franchise agreements (Agreements)
      with property owners of MDUs and government bodies currently being served
      by other providers.
   2. By negotiating new agreements for new construction.
   3. By acquiring existing operators that serve MDUs and franchises.
   4. By expanding its current offering of cable television with additional
      services.
   5. By creating innovative revenue-sharing opportunities for the property
      owners of MDUs.

We believe that bringing affordable programming to specific markets, coupled
with its ability to initiate creative contracts that allow for new revenue
opportunities for property owners, are its primary competitive advantages in
the cable arena.

      3D.COM

With regard to our 3D products and services, we plan to continue to aggregate
3D content and technologies, thereby becoming the preeminent and most
comprehensive source for such products. A large part of this strategy is our
plan to launch an online 3D and virtual reality portal. We believe that
through volume and quality of content and technology, it will have the
ability to pull users to the site and utilize its online presence to generate
sales. At the completion of the Another World transaction we will have a
comprehensive set of products and services to market on the internet and
traditional retail.

Our Customers

As with our growth strategy, our customer base varies with the type of
product or service that we offer. For HMN, our customers are primarily hotel
owners and operators that are looking to create added value. Our customers
for HMN are also the hotel guests who purchase PPV content. For our cable
business through VCI, our customers are both townships, with which we have
and can further secure franchise agreements, and the owners and/or managers
of MDUs. Of course our cable customers are also the end subscribers who
actually purchase our cable content. 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

On June 23, 1997, we acquired an exclusive, worldwide and perpetual license
to the Realeyes proprietary three-dimensional video technology and
subsequently filed U.S. provisional patent application number 60/034,149 with
regard to aspects of such technology. We have proceeded to file additional
patent applications, including a U.S. utility application, Serial No.
08/997,068, with regard to the system and method of synthesizing
three-dimensional video from a two-dimensional video source. Patent
Cooperation Treaty (PCT) national phase patent applications based upon this
technology have been filed in Australia, Brazil, Canada, China, Japan, Europe
and Mexico. An International Patent Application under the Patent Cooperation
Treaty (PCT) was filed with regard to a system and method for recording and
broadcasting three-dimensional video synthesized from a two-dimensional
source. All countries that are members of the PCT were designated in this PCT
application.

On June 16, 1999, we acquired certain copyrights and trademarks relative to
the technology and products of our Strata Division.


                                       7
<Page>

We currently own or license the following U.S. and foreign patents:

<Table>
<Caption>
                          APPLICATION OR                                        YEAR OF EXPIRATION OR
PATENT/PRODUCT            REGISTRATION NO.    COUNTRY     GRANTED OR FILED            RENEWAL
-----------------------   ----------------    -------     -----------------     ---------------------
<S>                       <C>                 <C>         <C>                   <C>
Chequemate 2D to 3D       08/997,068           U.S.A.     December 23, 1997           Pending
Chequemate 2D to 3D       P-19713629-8        Brazil      December 24, 1997           Pending
Chequemate 2D to 3D       2,276,190            Canada     December 24, 1997           Pending
Chequemate 2D to 3D       97181060.5          China       December 24, 1997           Pending
Chequemate 2D to 3D       10-530238            Japan      December 24, 1997           Pending
Chequemate 2D to 3D       97953466.6          Europe      December 24, 1997           Pending
Chequemate 2D to 3D       996050              Mexico      December 24, 1997           Pending
Chequemate Recording and  60/114,264           U.S.A.     December 30, 1998        Converted to PCT
Broadcasting 3D from 2D   PCT/US99/31233                                           December 30, 1999
</Table>

We currently own or license the following U.S. copyrights:


<Table>
<Caption>
COPYRIGHT/PRODUCT         REGISTRATION NO.    COUNTRY        GRANTED
-----------------         ----------------    -------     -----------------
<S>                       <C>                 <C>         <C>
StrataVISION 3D           TX 2,688,747         U.S.A.     October 2, 1989
AIM - 3D                  TXu 507, 718         U.S.A.     February 13, 1992
</Table>

We currently own or license the following U.S. and foreign trademarks:

<Table>
<Caption>
                              REGISTRATION NO.                                       YEAR OF EXPIRATION OR
TRADEMARK/PRODUCT              OR SERIAL NO.       COUNTRY     GRANTED OR FILED            RENEWAL
------------------------      ----------------     -------     -----------------     ---------------------
<S>                           <C>                  <C>         <C>                   <C>
C-3D Digital class 38           75/605,796          U.S.A.     December 15, 1998           Pending
C-3D Digital class 9            75/605,795          U.S.A.     December 15, 1998           Pending
C-3D class 9                    75/605,794          U.S.A.     December 15, 1998           Pending
C-3D class 38                   75/605,904          U.S.A.     December 15, 1998           Pending
3D.COM class 42                 75/729,813          U.S.A.     June 16, 1999               Pending
3D TRAVEL class 38              75/279,982          U.S.A.     June 16, 1999               Pending
3D SPORTS class 9               75/729,984          U.S.A.     June 16, 1999               Pending
3D SPORTS class 38              75/729,985          U.S.A.     June 16, 1999               Pending
3D TRAVEL class 42              75/729,812          U.S.A.     June 16, 1999               Pending
3D SPORTS class 25              75/729,811          U.S.A.     June 16, 1999               Pending
3D SPORTS class 42              75/729,031          U.S.A.     June 16, 1999               Pending
STRATAVISION 3D                  1,606,234          U.S.A.     July 17, 1990            July 17, 2000
STUDIOPRO                        1,892,027          U.S.A.     May 2, 1995              May 2, 2001 (1)
MEDIAPAINT                       2,042,281          U.S.A.     March 4, 1997            March 4, 2003 (1)
POWERING THE CREATIVE            2,098,858          U.S.A.     September 23, 1997     September 23, 2003 (1)
ENVIRONMENT
STRATAVISION                    TMA404,400          Canada     November 6, 1992         November 6, 2007
TELECHARGE                       2,241,551          U.S.A.     April 27, 1999            April 27, 2009
TELECHARGE SIMPLE ACCESS         2,241,550          U.S.A.     April 27, 1999            April 27, 2009
</Table>


We have also licensed other technology regarding its Strata product line that
enables us to offer certain of its Strata products on the Microsoft Windows
95 (or higher), operating system.

(1) Affidavits of Continued Use are due by this date. If filed the trademark
will be valid for ten years from the date of grant. If not filed the
trademark will expire on this date.

Our Competition

      Hotel Guest Programming

The hotel video on demand (VOD) industry is effectively serviced by two
primary competitors and thus a competitive analysis is relatively
straightforward.

1. The two leading competitors jointly service over 1,500,000 mid-to-large
property hotel rooms out of the approximately 3,600,000
[Smith Travel Research]rooms in the domestic U.S. hotel market. High
production, installation, and operation costs keep these two competitors from
servicing mid-to-large hotel market profitably and from serving the
small-to-mid hotel market at all. The attractive production and operating
costs of our proposed system allows HMN to successfully service the entire
hospitality market.

2. The leading competitor in the small hotel market, which serves
approximately 300,000 rooms, provides primarily scheduled (non VOD) 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 HMN to
provide services far beyond the capability of this competitor.

      Cable
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


                                       8
<Page>

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.

      Telecommunications

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 Imagery

We believe that 3D graphics capability represents one of the primary means
users differentiate among various forms of entertainment. For example, PC
users today can easily differentiate the quality of graphics and prefer
personal computers that provide a superior visual experience. These factors
have dramatically increased demand for 3D graphics processors and components.
Mercury Research estimates that 3D graphics will be standard in every PC unit
shipped by the end of 2001. Mercury Research also estimates that 182 million
3D graphics processors were sold worldwide in 2000 and that 356 million will
be sold worldwide in 2005. Because of this, the overall market for the
provision of 3D graphics and imagery is intensely competitive and
characterized by rapid technological change. We believe that the principal
competitive factors in this market are performance, breadth of product
offerings, access to customers and distribution channels, backward-forward
software support, and conformity to industry standards. We expect competition
to increase both from existing competitors and new market entrants with
products that may be less costly than ours or may provide better performance
or additional features not provided by our products.

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
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


                                       9
<Page>

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
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
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


                                      10
<Page>

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
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
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.


                                       11
<Page>

      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
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
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


                                       12
<Page>

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
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, CMI and its subsidiaries had 18 full time employees, and
4 consultants.

Recent Developments

On July 9, 2001, we filed a Definitive Proxy Statement DEFS14A with the
Securities and Exchange Commission that details our proposed transaction with
the shareholders of Another World, which make up the bulk of new investors
that may purchase a 51% equity stake in CMI in exchange for $3.5 million. We
urgently need the $3.5 million cash infusion for our operations, to improve
our cash-flow position and to meet some of the continued listing requirements
of the American Stock Exchange. We also need the cash infusion to implement
our expansion strategy. The $3.5 million cash infusion will help us meet
these needs. The issuance of additional shares to the new investors will be
made according to a subscription agreement (Subscription Agreement) attached
to the Master Agreement. The Subscription Agreement can be found at the end
of Exhibit 99(a) in our Definitive Proxy Statement DEFS14A, filed with the
Securities and Exchange Commission on July 9, 2001. We believe that the
contemplated merger of assets and operations with Another World will provide
synergy in terms of technology sharing and transfer to CMI.

We intend to use the $3.5 million raised for the following business purposes:
For repayment of our outstanding debts; For 3D products marketing, sales,
development and content distribution, and for other working capital purposes.
Depending on the actual business needs, the actual use of proceeds may vary
from the use mentioned above.

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.


                                       13
<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.


                                       14
<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.

                                       15
<Page>

ITEM 6

Management's  Discussion  and Analysis of Financial  Condition  and Results
of Operations

Overview

The "Company" or "Chequemate International, Inc." doing business as C-3D
Digital, Inc. includes; C-3D Digital - a division developing 3D technology
for converting 2D content to 3D content for film, television and computer
applications; VisionComm, Inc. - a wholly owned subsidiary; Hotel Movie
Network - a division of Chequemate International, Inc.; and 3D.com - a wholly
owned subsidiary of Chequemate International, Inc. that discontinued its
"Strata" division in November, 2000.

Hotel Movie Network (HMN) accounted for $775, 265, or approximately 86%, of
our revenues reported on the Consolidated Statement of Operations for the
year ended March 31, 2001. The remaining 14% of revenues were generated by
miscellaneous consulting and services of 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 the 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 roughly $65,000 a month in
revenue. This business will serve as an internal test market for providing 3D
entertainment to hotel guests. We have adapted its 3D technology to work
through the hotel pay-per-view system and are seeking additional hotel
properties in which to conduct market testing. During the next twelve 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.

Our auditors have issued a going concern opinion in regard to our audited
consolidated financial statements as of March 31, 2001. We continue to be
dependent on investment capital to fund our operations. We plan to
significantly reduce our debt by continuing to negotiate stock settlements
with our creditors to satisfy outstanding obligations and to raise additional
working capital by issuing stock via a private placement to Another World,
Inc. The Company expects to receive approximately $3,500,000 upon completion
of the Another World Private Placement. The Company has also established an
equity line of credit but has determined to not make any draws on the line of
credit through June 30, 2001. We believe revenues from the expansion of the
VisionComm, Inc. subsidiary and the Hotel Movie Network division combined
with new capital invested in our company 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 and accordingly none of the operations of VisionComm
are included in our Consolidated Statements of Operations as of March 31,
2001. However, the balance sheet of VisionComm is included in our
Consolidated Balance Sheet as of March 31, 2001.

The purchase of VisionComm resulted in the creation of $5,335,881 of goodwill
and a net increase in fixed assets of $1,080,473. The Company will evaluate
the recoverability of its 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 our Strata division of 3D.Com are excluded from
the operating results of the Company. The Strata assets were acquired in June
of 1999 through a foreclosure proceeding against Strata, Inc. 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. The Company expects to
recover its 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).

Our revenues for the years ended March 31, 2001 and 2000 have been restated
to reflect the Strata division of 3D.Com as a discontinued operation. The
sales of Strata of $362,446 have been removed from the consolidated numbers
as have the related operating expenses.

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 84%. These sales were the
result of the growth of Hotel Movie Network. We continue to seek out
additional hotels to deploy our inventory of headend equipment, video
cassette players, and movies to increase our revenue. If we had owned
VisionComm for all of 2000 sales would have been $3,580,705 on a proforma
basis.

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 due primarily to
a write-down of certain inventory relating to the C-3D Digital division.
While revenues increased, our gross margin as a percentage of sales decreased
due to the increase in cost of good sold as discussed above. Our Gross Margin
was $379,229 or 42% for the year ended March 31, 2001 compared to $262,464 or
53% for the year ended March 31, 2000.

General and administrative expenses increased by $10,402,239. This increase
was primarily the result of shares and options which were issued for
services, compensation and in settlement of various claims. The shares and
options were valued at their estimated fair value and resulted in an expense
of $10,821,527. Amortization and depreciation were $1,748,763 and $392,128,
respectively for the year ended March 31, 2001 compared to $1,053,376 and
$295,431, respectively for the year ended March 31, 2000.


                                       16
<Page>


                                  Current Assets

Current assets increased by $301,872 from March 31, 2000 to March 31, 2001.
The increase is the result of the purchase of VisionComm, Inc. and the
inclusion of its accounts receivable in our current assets.

<Table>
<Caption>
                                                                              MARCH 31,        MARCH 31,
                                                                                2001               2000
                                                                         ----------------    ----------------
<S>                                                                      <C>                 <C>
 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                                                                      698,379            727,512
 Prepaid expenses                                                                20,893             74,170
                                                                         ----------------    ----------------
Total Current Assets                                                        $ 1,366,637        $ 1,064,765
                                                                         ================    ================
</Table>

Accounts receivable are primarily due from our small to mid-size hotels that
we show our movies at either on a pay-per view basis or on a free-to-guest
basis in which the hotel pays us a fee for the movie services we provide and
includes an overhead charge in the total room charge. The accounts receivable
are net of an allowance for doubtful accounts and we believe the net amount
shown is fully collectable.

<Table>
<Caption>
                                                                            MARCH 31,           MARCH 31,
                                                                               2001               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>

Hotel Movie Network inventory is units placed in the hotels for the pay per
view and free- to- guest movies and on hand inventory in the warehouse ready
for deployment. VisionComm's inventory consists of receivers, cable boxes,
cable and connectors to install additional units at new and existing
properties.

<Table>
<Caption>
                                                                            MARCH 31,           MARCH 31,
                                                                               2001               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>
                                                                                        NET BOOK VALUE
                                                               ACCUMULATED       ---------------------------------
                                              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>

The change in Net Book Value between March 31, 2001 and 2000 is due to purchases
of equipment, other personal property and the VisionComm acquisition netted
against an increase in accumulated depreciation for the current year end of
$392,128.

                                  Other Assets

Total other assets increased $6,141,004 between March 31, 2001 and March 31,
2000 due mainly to an addition of Goodwill to the balance sheet of $5,335,881
due to the acquisition of VisionComm, Inc.

<Table>
<Caption>
                                                                               MARCH 31,          MARCH 31,
                                                                                 2001                 2000
                                                                            ----------------    ----------------
<S>                                                                         <C>                 <C>
Net assets of discontinued operations                                       $        752,224    $        988,312
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                                                     $      9,875,855    $      3,734,851
                                                                            =================   ================
</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 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 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.


                                       17
<Page>

Movie Production 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 consisted of the Company's 3D technologies that include the
ability to convert 2D products to 3D products, the ability to film with
special 3D cameras and rights to certain content that can be converted to 3D
products to be distributed through the television channel, video, and DVD.
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.

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. 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,
including goodwill. If the carrying value exceeds fair value, the Company
will compare the implied fair value of the goodwill to the carrying amount of
the goodwill. If the carrying amount of the goodwill exceeds the implied fair
value, then we will adjust the goodwill to the implied fair value.

                               Current Liabilities

Total current liabilities decreased by $1,571,864 between March 31, 2001 and
2000 due primarily to a reduction in short-term obligations of $1,972,502 via
a common stock issuance to various individuals and companies for services
performed during the prior year and accrued as a liability pending the board
of directors' approval of the stock issuance. Accrued expenses increased
$1,318,300 due mainly to an increase in accrued salaries and payroll to
directors and officers who were working without being fully paid their
salaries. We plan on reducing these accruals by issuing stock in lieu of cash
in whole or in part depending on approvals of each respective party. These
increases were offset by a net reduction in the current portion of long-tem
debt of $1,349,565 which consisted of $3,050,000 reduction of debt via a
common stock issued to twelve individual companies collectively managed by
Capital Asset, Ltd. This reduction was offset by other long-term debt
becoming current during the year.


<Table>
<Caption>
                                                                            MARCH 31,           MARCH 31,
                                                                               2001                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>


                                       18
<Page>

                              Long-term Liabilities

During the past year ending March 31, 2001 we increased our long-term portion
of our long-term debt to $6,397,141. This increase was due mainly to the
acquisition of VisionComm, Inc., which resulted in us issuing a note to their
shareholders for $2,800,000 (which was subsequently converted to 10,300,000
common shares) and the assumption of 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 shareholder's equity increased during the year ended March 31, 2001 by
$2,698,072 due to new capital invested in our company exceeding our current
year's loss. During the year ended March 31, 2001 we incurred a loss of
$(17,572,016) and we have incurred losses from our inception through March
31, 2001 of $(55,713,971). We do not have an established source of revenues
sufficient to cover operating costs and, accordingly, there is substantial
doubt about our ability to continue as a going concern.

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; 3,833,743 shares for debt conversion;
2,500,000 shares for acquisition of the VisionComm subsidiary; 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, 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 38,504,275 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 they 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.

<Table>
<Caption>
                                                                            MARCH 31,          MARCH 31,
                                                                               2001              2000
                                                                         ----------------    -------------
<S>                                                                      <C>                 <C>
  Common stock, $0.0001 par value, 500,000,000 shares
   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                                                          (55,713,971)     (38,141,955)
                                                                         ------------------- ----------------
     Total Stockholders' Equity (Deficit)                                $       1,457,777   $   (1,240,635)
                                                                         =================== ================
</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 current portion of long-term debt of
$2,276,222 which we plan on significantly reducing via settlement
negotiations and issuance of common stock in lieu of cash.

We increased our long-term liabilities by $6,397,141 due to the acquisition
of VisionComm, Inc. in both debt assumed of VisionComm of $4,341,236 and a
note payable due to VisionComm, Inc. shareholders of $2,800,000 for the
purchase of VisionComm, Inc. We plan on negotiating an equity transaction to
issue common stock for the $2,800,000 note payable to further reduce our
long-term debt.

We are in negotiations with the shareholders of Another World, Inc., a
Korean-based, 3D technology company, to issue our common stock to their
shareholders for approximately $3,500,000. This infusion of cash would enable
us to expand our cable and hotel movie network operations as well as reduce
our current accounts payable and accrued liabilities and develop a sales and
marketing team to roll out the Another World, Inc. 3D products.

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, credit facilities, vendor
financing, equity lines of funding, and other forms of financing as
appropriate. 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.

                        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 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.


                                       19
<Page>

                         CHEQUEMATE INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                               (DBA C3-D DIGITAL)

                        CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 2001 AND 2000




                                      20
<Page>

                                 C O N T E N T S

<Table>
<S>                                                                  <C>
Independent Auditors' Reports ...................................      22

Consolidated Balance Sheets .....................................      24

Consolidated Statements of Operations ...........................      26

Consolidated Statements of Stockholders' Equity (Deficit) .......      28

Consolidated Statements of Cash Flows ...........................      29

Notes to Consolidated Financial Statements ......................      31

</Table>


                                      21
<Page>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Chequemate International, Inc. and Subsidiaries
(dba C3-D Digital)
St. Charles, Missouri

We have audited the accompanying consolidated balance sheets of Chequemate
International, Inc. and Subsidiaries (dba C3-D Digital) 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 C3-D Digital) 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 C3-D Digital) 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.



HJ & Associates, LLC
Salt Lake City, Utah
July 3, 2001

                                       22
<Page>

                          INDEPENDENT AUDITORS' REPORT


Board of Directors
VisonComm, 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.


                                        Kerber, Eck & Braeckel LLP

St. Louis, Missouri
May 25, 2001

                                       23
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                           Consolidated Balance Sheets


                                     ASSETS

<Table>
<Caption>
                                                                  MARCH 31, 2001
                                                           ----------------------------
                                                              2001              2000
                                                           -----------      -----------
<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
  Net assets of discontinued operations (Note 14)              752,224          988,312
  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                                      9,875,855        3,734,851
                                                           -----------      -----------
     TOTAL ASSETS                                          $13,471,813      $ 5,948,464
                                                           ===========      ===========
</Table>

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

                                       24
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                     Consolidated Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<Table>
<Caption>
                                                                      MARCH 31,
                                                           -------------------------------
                                                               2001               2000
                                                           ------------       ------------
CURRENT LIABILITIES
<S>                                                        <C>                <C>
  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                                       (55,713,971)       (38,141,955)
                                                           ------------       ------------
     Total Stockholders' Equity (Deficit)                     1,457,777         (1,240,295)
                                                           ------------       ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                           $ 13,471,813       $  5,948,464
                                                           ============       ============
</Table>

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

                                       25
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                      Consolidated Statements of Operations

<Table>
<Caption>
                                                          FOR THE YEARS ENDED MARCH 31,
                                                --------------------------------------------------
                                                    2001               2000               1999
                                                ------------       ------------       ------------
<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                           (2,137,266)       (13,596,782)           (40,859)
                                                ------------       ------------       ------------
NET LOSS                                        $(17,572,016)      $(18,735,469)      $ (4,212,079)
                                                ============       ============       ============
</Table>

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

                                       26
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                      Consolidated Statements of Operations

<Table>
<Caption>
                                               FOR THE YEARS ENDED MARCH 31,
                                  ------------------------------------------------------
                                       2001                 2000                1999
                                  --------------       -------------       -------------
<S>                               <C>                  <C>                 <C>
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)
                                  ==============       =============       =============
FULLY DILUTED LOSS PER SHARE
   Continuing operations          $        (1.31)      $       (0.85)      $       (0.93)
   Discontinued operations                 (0.18)              (2.24)              (0.01)
                                  --------------       -------------       -------------
                                  $        (1.49)      $       (3.09)      $       (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.

                                       27
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
            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                                  --                --                --         (18,735,469)       (18,735,469)
                                  ------------      ------------      ------------      ------------       ------------
Balance, March 31, 2000              6,781,669               678        36,900,982       (38,141,955)        (1,240,295)

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                                  --                --                --         (17,572,016)       (17,572,016)
                                  ------------      ------------      ------------      ------------       ------------
Balance, March 31, 2001             20,686,192      $      2,068      $ 57,169,680      $(55,713,971)      $  1,457,777
                                  ============      ============      ============      ============       ============
</Table>

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

                                       28
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                      Consolidated Statements of Cash Flows

<Table>
<Caption>
                                                                         FOR THE YEARS ENDED MARCH 31,
                                                              --------------------------------------------------
                                                                  2001               2000               1999
                                                              ------------       ------------       ------------
<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)              --
   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               --
  Increase (decrease) in:
   Employee advances                                               (11,700)              --                 --
   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
                                                              ------------       ------------       ------------
</Table>

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

                                       29
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                Consolidated Statements of Cash Flows (Continued)

<Table>
<Caption>
                                             FOR THE YEARS ENDED MARCH 31,
                                     -----------------------------------------------
                                         2001              2000              1999
                                     -----------       -----------       -----------
<S>                                  <C>               <C>               <C>
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.

                                       30
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 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.

                                       31
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     MOVIE PRODUCTION COST AND PRODUCT RIGHTS (CONTINUED)

     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.

     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.

                                       32
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     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.

     ADVERTISING

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

     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

                                       33
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     CHANGE IN ACCOUNTING PRINCIPLES (CONTINUED) 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.

     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.

     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

                                       34
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     LONG-LIVED ASSETS (CONTINUED)

     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 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.
     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.

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

                                       35
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 2 - INVENTORY (Continued)

     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.

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
                                                        -------      --------
</Table>


                                       36
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 5 - RELATED PARTIES (Continued)

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

                                       37
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 6 - LONG-TERM DEBT (Continued)

<Table>
<Caption>
                                                                                2001            2000
                                                                             ----------      ----------
<S>                                                                          <C>             <C>
     Balance Forward                                                         $   49,287      $   48,287

     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 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
                                                                             ----------      ----------
</Table>

                                       38
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 6 - LONG-TERM DEBT (Continued)

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

     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>

                                       39
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 6 - LONG-TERM DEBT (Continued)

     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>

     As additional consideration for $1,612,081 of the convertible notes payable
     and $1,187,919 of the convertible notes payable to related parties (Note
     5), the Company granted 2,800,000 warrants valued at $2,800,000. The
     Company evaluated these securities in accordance with EITF 98-5 using the
     Black-Scholes pricing model to calculate the values of any beneficial
     conversion feature under the following assumptions: a risk-free interest
     rate of 5.12%, expected volatility of 114%, and an expected life of 16
     months. As a result, the conversion feature was deemed non-beneficial and
     the entire amount of the notes was allocated to debt.

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.

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>

                                       40
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 8 - CASH FLOW AND NON CASH INVESTING AND FINANCING ACTIVITIES (Continued)

     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      $        --      $        --
</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 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.

     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.

                                       41
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000

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, among other things,
     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.

     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.

                                       42
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 13 - STOCK OPTIONS AND WARRANTS (Continued)

     STOCK OPTIONS (CONTINUED)

     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>
                                                         1999
                                           ------------------------------
                                                              Exercise
                                             Shares             Price
                                           ----------       -------------
<S>                                        <C>              <C>
     Outstanding at beginning of year         517,890       $ 0.04 - 28.00
     Granted                                   16,000         0.04 - 28.00
     Exercised                               (268,703)        0.04 - 28.00
     Forfeited / Cancelled                    (63,200)       14.00 - 28.00
                                           ----------
     Outstanding at end of the year           201,987
                                           ==========
</Table>

<Table>
<Caption>
                                                         2000
                                           ------------------------------
                                                              Exercise
                                             Shares             Price
                                           ----------       -------------
<S>                                        <C>              <C>
     Outstanding at beginning of year         201,987       $ 0.04 - 7.00
     Granted                                2,314,717         0.04 - 28.00
     Exercised                                (87,501)        0.04
     Forfeited / Cancelled                         --         0.04 - 28.00
                                           ----------
     Outstanding at end of the year         2,429,203
                                           ==========
</Table>

<Table>
<Caption>
                                                         2001
                                           ------------------------------
                                                              Exercise
                                             Shares             Price
                                           ----------       -------------
<S>                                        <C>              <C>
     Outstanding at beginning of year       2,429,203       $ 0.04 - 28.00
     Granted                                  784,522         0.04 - 28.00
     Exercised                               (600,000)        0.04
     Forfeited / Cancelled                   (799,037)        0.04
                                           ----------
     Outstanding at end of the year         1,814,688
                                           ==========
</Table>

     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.

                                       43
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000

NOTE 13 - STOCK OPTIONS AND WARRANTS (Continued)

     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. The Company believes that the possibility of a new agreement
     not to be concluded is remote. Should a new agreement not be concluded the
     value of the assets would be significantly impaired. Therefore, under FASB
     5 the Company feels that there is only a remote chance that the
     uncertainties will give rise to a contingency. The total net assets and
     liabilities were $752,224 and $215,146, respectively.

     During the fiscal year, the Company ceased operation of its cable channel
     and 3-D 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.

                                       44
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000

NOTE 14 - DISCONTINUED OPERATIONS (Continued)

<Table>
<Caption>
                                                                MARCH 31,
                                          --------------------------------------------------
                                              2001               2000               1999
                                          ------------       ------------       ------------
<S>                                       <C>                <C>                <C>
     NET SALES                            $    362,446       $    268,478       $    570,886
                                          ------------       ------------       ------------
     OPERATING EXPENSES
       Operating cost                        2,262,891         13,384,554            571,241
       Depreciation and amortization           236,821            480,706             40,504
                                          ------------       ------------       ------------
         Total Operating Expenses            2,499,712         13,865,260           (611,745)
                                          ------------       ------------       ------------
     LOSS BEFORE INCOME TAXES               (2,137,266)       (13,596,782)           (40,859)
                                          ------------       ------------       ------------
     INCOME TAXES                                   --                 --                 --
                                          ------------       ------------       ------------
     LOSS FROM DISCONTINUED
     OPERATIONS                           $ (2,137,266)      $(13,596,782)      $    (40,859)
                                          ============       ============       ============
</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).

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>

                                       45
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


NOTE 16 - PROVISION FOR INCOME TAXES (Continued)

     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.

                                       46
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


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            Cable
                                          Graphical     Pay-Per-View       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            Cable
                                          Graphical     Pay-Per-View       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                       6,115,019       5,117,803       6,304,114       2,775,907      20,312,843
     Segment loss                         4,396,365       5,139,027       6,738,351       2,553,898      18,827,641
</Table>

<Table>
<Caption>
                                                                            1999
                                          -------------------------------------------------------------------------
                                           Centric         Hotel            Cable
                                          Graphical     Pay-Per-View       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>

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.

                                       47
<Page>

                 CHEQUEMATE INTERNATIONAL, INC. AND SUBSIDIARIES
                               (dba C3-D Digital)
                 Notes to the Consolidated Financial Statements
                             March 31, 2001 and 2000


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 Vision.Comm 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>

                                       48
<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
indivdual 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     ?               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.

                                       49
<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


                                       50
<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


                                       51
<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


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<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 this year.


                                       53
<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).
</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.


                                       54
<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.

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


Date: February 8, 2002

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

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

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

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

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


                                       55