UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

     FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

     FOR THE TRANSITION PERIOD FROM _______TO________

                         COMMISSION FILE NUMBER: 1-14076

                                  VIZACOM INC.
        (Exact name of small business issuer as specified in its charter)


           Delaware                                      22-3270045
  (State or other jurisdiction                         (IRS Employer
of incorporation or organization)                  Identification Number)

                         3512 Veterans Memorial Highway
                             Bohemia, New York 11716

                    (Address of principal executive offices)

                                 (631) 981-5500
                           (Issuer's telephone number)

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 requirements for the past 90 days. Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,063,867 shares of Common Stock, as
of July 31, 2001.

Transitional Small Business Disclosure Format (check one): Yes [ ]   No [X]


<PAGE>

                                  VIZACOM INC.

                                TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

Item                                                                   Pages
----                                                                   -----

ITEM 1.  FINANCIAL STATEMENTS:

Condensed Consolidated Balance Sheets as of June 30, 2001
  (Unaudited) and December 31, 2000                                     3

Condensed Consolidated Statements of Operations for the
   Three and Six Months Ended June 30, 2001 and 2000 (Unaudited)        4

Condensed Consolidated Statement of Changes in Stockholders'
   Equity for the Six Months Ended June 30, 2001 (Unaudited)            5

Condensed Consolidated Statements of Cash Flows for the Six
   Months Ended June 30, 2001 and 2000 (Unaudited)                      6

Notes to Condensed Consolidated Financial Statements                    7-14

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS                                     15-22

PART II - OTHER INFORMATION                                             23-25

                                       2
<PAGE>


                                  VIZACOM INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                           June 30,        December 31,
                                                                             2001              2000
                                                                        --------------    --------------
ASSETS                                                                    (Unaudited)
<S>                                                                     <C>               <C>
Current assets:
   Cash and cash equivalents                                            $     152,719     $     843,836
   Marketable securities                                                         -                  797
   Receivables
      Trade,  less allowances of  $521,232 and  $608,975                    2,383,206         3,341,960
      Other                                                                    26,227           155,025
      Notes                                                                   408,257            60,336
   Inventories                                                                426,303           864,031
   Restricted cash                                                            150,000              -
   Prepaid expenses and other current assets                                  147,561           329,152
                                                                        --------------    --------------
      Total current assets                                                  3,694,273         5,595,137
Property and equipment, net                                                   262,765           818,132
Goodwill, net of accumulated amortization of $948,425 and $780,012          1,501,627         1,670,040
Business processes and methodologies, workforce, and customer
   lists, net of accumulated amortization of $1,254,517 and $779,746        3,283,483         3,758,254
Deferred consulting costs                                                   1,215,593         1,371,823
Note receivable, long term                                                    493,301              -
Other assets                                                                   63,383           868,811
                                                                        --------------    --------------
      Total assets                                                      $  10,514,425        14,082,197
                                                                        ==============    ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Bank notes payable                                                       1,364,172         1,214,172
   Inventory financing payable                                                248,031              -
   Related party notes payable                                                302,168           563,867
   Current portion of long-term debt and capital lease obligations            262,219           465,105
   Accounts payable                                                         3,118,157         5,027,736
   Accrued liabilities                                                      1,671,018         2,622,875
   Sales and value-added taxes payable                                         41,041           386,089
                                                                        --------------    --------------
      Total current liabilities                                             7,006,806        10,279,844
Long-term debt and capital lease obligations, less current maturities           4,906            48,717
                                                                        --------------    --------------
      Total liabilities                                                     7,011,712        10,328,561
                                                                        --------------    --------------

Commitments and contingencies

Stockholders' equity:
   Common stock, par value $.001 per share,
      60,000,000 shares authorized, 2,064,177 and 1,619,087
      shares issued                                                             2,064             1,619
   Additional paid-in capital                                              71,812,251        70,851,835
   Accumulated deficit                                                    (68,205,442)      (66,954,898)
   Accumulated other comprehensive income                                     (95,765)         (134,525)
   Treasury stock, 310 shares, at cost                                        (10,395)          (10,395)
                                                                        --------------    --------------

      Total stockholders' equity                                            3,502,713         3,753,636
                                                                        --------------    --------------
      Total liabilities and stockholders' equity                           10,514,425        14,082,197
                                                                        ==============    ==============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       3

<PAGE>


                                  VIZACOM INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Three Months Ended June 30,          Six Months Ended June 30,
                                                           ---------------- --------------      -------------- ---------------
                                                                 2001            2000                 2001          2000
                                                           ---------------- --------------      -------------- ---------------
<S>                                                        <C>              <C>                   <C>            <C>
Net sales                                                  $   4,793,615    $    5,243,564       $  8,737,035  $    5,625,814
Cost of sales                                                  4,120,256         4,150,208          7,523,119       4,255,428
                                                           --------------   ---------------      ------------- ---------------
Gross profit                                                     673,359         1,093,356          1,213,916       1,370,386

Selling, general and administrative expenses                   1,480,648         1,781,222          3,054,636       3,013,344
Restructuring expenses                                              -                 -               187,584            -
Amortization of goodwill, business processes and
  methodologies, workforce, and customer lists                   321,592           477,415            643,184         558,704
Realized loss (gain) on marketable securities                     85,226              -                85,226      (1,095,348)
Interest and other expense, net of other income                   55,252            80,050            106,551         139,467
                                                           --------------   ---------------      ------------- ---------------
                                                               1,942,718         2,338,687          4,077,181       2,616,167

      Loss from continuing operations                         (1,269,359)       (1,245,331)        (2,863,265)     (1,245,781)

Discontinued operations:
      Income (loss) from operations of
        discontinued businesses                                 (174,739)       (1,501,694)           139,384      (2,892,765)
      Gain (loss) on sale of discontinued operations                -                 -             1,473,337             -
                                                           --------------   ---------------      ------------- ---------------
      Income (loss) from discontinued operations                (174,739)       (1,501,694)         1,612,721      (2,892,765)

      Net loss                                             $  (1,444,098)   $   (2,747,025)      $ (1,250,544) $   (4,138,546)
                                                           ==============   ===============      ============= ===============

Net income (loss) per common share:
      Continuing operations                                $       (0.66)   $        (1.04)      $      (1.54) $        (1.25)
      Discontinued operations                              $       (0.09)   $        (1.25)      $       0.87  $        (2.90)
                                                           --------------   ---------------      ------------- ---------------
      Net loss per common share - basic and diluted        $       (0.75)   $        (2.29)      $      (0.67) $        (4.15)
                                                           ==============   ===============      ============= ===============
      Weighted average number of common shares
        outstanding - basic and diluted                        1,912,107         1,201,082          1,863,573         996,457
                                                           ==============   ===============      ============= ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       4

<PAGE>



                                  VIZACOM INC.
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                             Additional
                                                                                               Paid-In        Accumulated
                                                                 Shares         Amount          Capital         Deficit
                                                             ------------- -------------- ---------------- ----------------
<S>                                                          <C>           <C>            <C>              <C>
Balance at December 31, 2000                                   1,619,087    $     1,619    $  70,851,835    $ (66,954,898)

Net  loss                                                           -              -                -          (1,250,544)
Realized loss on marketable securities                              -              -                -                -
Currency translation adjustment                                     -              -                -                -
                                                                                                            --------------
TOTAL COMPREHENSIVE INCOME                                                                                     (1,250,544)
                                                                                                            --------------
Sale of common stock in private placements, net                  149,000            149          269,166             -
Common stock issued to satisfy outstanding liabilties             17,800             18          132,700             -
Common stock issued in connection with settlement agreement       30,000             30          167,900             -
Common stock  and warrants issued  in connection with
   consulting services                                           157,000            157          390,741             -
Common stock issued in connection with merger agreement           91,290             91              (91)            -
                                                             ------------- -------------- ---------------- ----------------
Balance at June 30, 2001                                       2,064,177    $     2,064    $  71,812,251    $ (68,205,442)
                                                             ============= ============== ================ ================

<CAPTION>

                                                                Accumulated
                                                                   Other                           Total
                                                               Comprehensive    Treasury       Stockholders'
                                                               Income (Loss)      Stock           Equity
                                                             ---------------- -------------- ----------------
<S>                                                          <C>              <C>            <C>
Balance at December 31, 2000                                  $    (134,525)   $   (10,395)   $   3,753,636

Net  loss                                                              -              -                -
Realized loss on marketable securities                               85,226           -                -
Currency translation adjustment                                     (46,466)          -                -
                                                              ---------------
TOTAL COMPREHENSIVE INCOME                                           38,760           -          (1,211,784)
                                                              ---------------
Sale of common stock in private placements, net                        -              -             269,315
Common stock issued to satisfy outstanding liabilties                  -              -             132,718
Common stock issued in connection with settlement agreement            -              -             167,930
Common stock  and warrants issued  in connection with
   consulting services                                                 -              -             390,898
Common stock issued in connection with merger agreement                -              -                -
                                                             ---------------- -------------- ----------------
Balance at June 30, 2001                                      $     (95,765)   $   (10,395)   $   3,502,713
                                                             ================ ============== ================
</TABLE>


See accompanying notes to condensed consolidated financial statements.

                                       5

<PAGE>


                                  VIZACOM INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      Six Months Ended June 30,
                                                                                -------------------------------------
                                                                                      2001                2000
                                                                                ----------------     ----------------
OPERATING ACTIVITIES:
<S>                                                                             <C>                  <C>
Loss from continuing operations                                                  $  (2,863,265)       $  (1,245,782)
Adjustments to reconcile loss from continuing operations
   to net cash used in operating activities:
  Depreciation and amortization                                                      1,208,788              915,451
  Realized loss (gain) on marketable securities                                         85,226           (1,095,348)
  Realized loss on sale of property and equipment                                          891                 -
  Warrants, common stock, and stock options issued for consulting services             235,430              321,504
  Provision for bad debts                                                              164,462               20,103
  Changes in assets and liabilities, net of effects of acquisitions and
     dispositions:
   Receivables                                                                         662,259           (1,236,012)
   Inventories                                                                          54,969              (11,478)
   Prepaid expenses and other current assets                                           (86,959)              16,642
   Accounts payable                                                                    (25,139)              80,722
   Accrued liabilities                                                                  41,147              260,329
   Sales and value-added taxes payable                                                   4,784              198,771
                                                                                ----------------     ----------------
      Net cash used in continuing operations                                          (517,407)          (1,775,098)
      Net cash used in discontinued operations                                         (17,400)          (4,457,999)
                                                                                ----------------     ----------------
      Net cash used in operating activities                                           (534,807)          (6,233,097)
                                                                                ----------------     ----------------
INVESTING ACTIVITIES:
Purchase of property and equipment                                                        (875)             (78,254)
Net proceeds from sale of property and equipment                                         1,350                 -
Proceeds from note receivable                                                           85,942                 -
Increase in other assets                                                               (21,763)             (11,892)
Decrease in restricted cash                                                             89,838                 -
Disposition of business, net of cash disposed                                         (387,767)                -
Acquisitions of businesses, net of cash acquired                                          -              (1,662,898)
                                                                                ----------------     ----------------
      Net cash used in continuing operations                                          (233,275)          (1,753,044)
      Net cash used in discontinued operations                                        (209,646)             (17,240)
                                                                                ----------------     ----------------
      Net cash used in investing activities                                           (442,921)          (1,770,284)
                                                                                ----------------     ----------------
FINANCING ACTIVITIES:
Proceeds from sale of common stock - net                                               269,315            6,361,264
Proceeds from bank notes payable and inventory financing facility, net                 398,031              140,385
Proceeds from exercise of warrants and options                                            -                 839,159
Payment of related party notes payable                                                (261,699)            (308,310)
Payment of long-term debt and capital lease obligations                               (124,379)             (54,591)
                                                                                ----------------     ----------------
      Net cash provided by continuing operations                                       281,268            6,977,907
      Net cash used in discontinued operations                                         (43,998)            (162,489)
                                                                                ----------------     ----------------
      Net cash provided by financing activities                                        237,270            6,815,418
                                                                                ----------------     ----------------
                                                                                ----------------     ----------------
Effect of exchange rate changes on cash and cash equivalents                            49,341              (50,896)
                                                                                ----------------     ----------------

Decrease in cash and cash equivalents                                                 (691,117)          (1,238,859)
Cash and cash equivalents at beginning of period                                       843,836            1,730,495
                                                                                ----------------     ----------------
Cash and cash equivalents at end of period                                       $     152,719        $     491,636
                                                                                ================     ================

Supplemental disclosure of cash flow information:
  Interest
    Continuing operations                                                        $      95,314        $      80,462
                                                                                ================     ================
    Discontinued operations                                                      $       5,730        $      20,862
                                                                                ================     ================
  Income taxes
    Continuing operations                                                        $       2,286        $        -
                                                                                ================     ================
    Discontinued operations                                                      $         627        $        -
                                                                                ================     ================
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       6

<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     The  accompanying  unaudited  condensed  consolidated  financial statements
     of Vizacom Inc. (the "Company") and its wholly owned subsidiaries have been
     prepared in accordance with generally  accepted  accounting  principles for
     interim financial  information and with the instructions to Form 10-QSB and
     Item 310 of  Regulation  S-B.  Accordingly,  they do not include all of the
     information  and  footnotes  required  by  generally  accepted   accounting
     principles for complete financial statements. In the opinion of management,
     all  adjustments  (consisting  of  normal  recurring  accruals)  considered
     necessary for a fair presentation have been included. All share amounts and
     prices have been  adjusted to reflect a  one-for-ten  (1:10)  reverse stock
     split that became  effective  on May 23,  2001.  Operating  results for the
     six-month period ended June 30, 2001 are not necessarily  indicative of the
     results  that may be expected for the year ending  December  31, 2001.  For
     further  information,  refer to the consolidated  financial  statements and
     footnotes  thereto  included in the Company's  Annual Report on Form 10-KSB
     for the year ended  December 31, 2000. The condensed  consolidated  balance
     sheet as of December 31, 2000 has been derived from the  Company's  audited
     consolidated balance sheet as of that date.

2.   LIQUIDITY AND BUSINESS RISKS

     The Company  has  experienced  recurring  net losses  since its  inception,
     except  during the first  quarter of 2001 due to the sale of the  Company's
     visual communications  operations,  and had a working capital deficiency of
     $3,312,533 at June 30, 2001, an improvement of $1,372,174  from its working
     capital  deficiency  of  $4,684,707  at December 31,  2000.  This change is
     primarily  attributable to the Company's sale of its visual  communications
     operations on March 31, 2001. See Note 3. In January 2001, the Company sold
     149,000  shares of common stock for aggregate  gross  proceeds of $372,500.
     Working capital as of June 30, 2001 includes current obligations to related
     parties  totaling  approximately  $1,039,000.  See  Note 8. Of this  amount
     approximately  $302,000 was outstanding to its President and Vice President
     and Chief Information  Officer,  who are the former selling stockholders of
     the Company's PWR Systems  subsidiary.  Under a waiver  agreement  with the
     Company and an assignment and subordination  agreement entered into between
     a lender and these persons  dated April 13, 2001,  the amounts due to these
     persons will not be paid until January 2002.  The  promissory  note held by
     the Company from its former visual  communications  subsidiary provides for
     the Company to receive monthly  installments  aggregating  $360,000 in 2001
     and  $480,000 in 2002.  The  Company  believes  that over the next  several
     months it will need to raise at least an additional  $1,000,000 to meet its
     currently  anticipated  liquidity  and  capital  expenditure  requirements.
     Management  intends to seek additional  financing through one or more debt,
     equity, or convertible securities offerings,  through the sale of assets or
     through a merger or acquisition. There can be no assurance that the Company
     will be successful in  completing  any such offering or offerings,  sale of
     assets or merger or acquisition, or any other offerings or transactions, or
     that  the  terms  of  any  such  offering  or  offerings,   transaction  or
     transactions  will be  beneficial to the Company or its  stockholders.  The
     financial  statements do not include any adjustments that might result from
     the outcome of this uncertainty.

     Approximately  $1,600,000 of the Company's  outstanding debt obligations at
     June 30, 2001 was owed to two financing  institutions on a short-term basis
     with no long-term lending commitment.  The unavailability of either or both
     of these  borrowings  would have a material adverse effect on our business.
     On  July  18,  2001,  one of  these  lenders  notified  the  Company's  PWR
     subsidiary  that it was in  default  of its  obligations  in the  amount of
     $199,765,  and the lender demanded payment of such amount by July 31, 2001.
     Subsequent  to the  receipt  of the  notification,  PWR has  made  periodic
     payments to the lender and made arrangements to liquidate the balance which
     was still  outstanding at July 31,  2001.The  unavailability  of loans from
     this  lender,  if not  replaced  by loans  from this or other  lenders,  is
     expected to have a material adverse effect on PWR's business.

                                       7

<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

3.   PLAN OF RESTRUCTURING; DISCONTINUED OPERATIONS

     In early 2001,  the Company  determined to  restructure  its operations and
     management  team. The Company  relocated its principal  executive  offices.
     Certain  members  of  management  and  other  employees  resigned  or  were
     terminated.  In addition, the Company determined to divest its software and
     overseas  operations so as to better focus on  developing  its internet and
     technology solutions business in the United States. Accordingly, on January
     9, 2001,  the Company  entered into an agreement  with a German company for
     the sale of certain  assets and  assumption of liabilities of the Company's
     Aachen, Germany contact center operation.  On February 2, 2001, Junction 15
     Limited and  interMETHODS  Limited,  two  companies  in England,  which the
     Company acquired in 2000, were placed into creditors voluntary  liquidation
     in the United Kingdom. These software and overseas operations are reflected
     in discontinued operations.

     The  Company  entered  into an  agreement  dated  as of March  27,  2001 to
     terminate its sublease for space in Teaneck, New Jersey. In accordance with
     the agreement,  the premises were vacated on March 31, 2001 with no further
     lease obligations for the premises.

     On March 31, 2001, the Company sold its wholly owned, United  Kingdom-based
     subsidiary, Serif (Europe) Limited ("Serif Europe") and its subsidiaries to
     an English  company,  GW 313 Limited (the "Buyer")  owned by the management
     team of Serif Europe and Serif Europe's wholly owned subsidiary, Serif Inc.
     The operations of Serif Europe, Serif Inc., and Serif Europe's other wholly
     owned  subsidiaries,  Serif GmbH and Dialog 24 Limited,  together  with the
     Company's Software Publishing Corporation ("SPC") subsidiary,  comprised in
     all material  respects its visual  communications  operations.  The Company
     received  $150,000  in  cash  upon  closing,  the  use of  which  has  been
     restricted.  See Note 9. The Company also  received a promissory  note from
     Serif Inc.  in the  aggregate  principal  amount of  $987,500,  which bears
     interest  at a rate of 10% per  annum,  and which is  payable  $40,000  per
     month, except for each April and November, in which months the payments are
     $30,000 and $50,000, respectively. The Buyer has guaranteed this promissory
     note and has pledged the shares of Serif Europe as collateral therefor. The
     Company or one of its  subsidiaries  remain  responsible for some potential
     liabilities  which have been recorded on the Company's  books, as set forth
     in the bill of sale and assignment and  assumption  agreement,  executed at
     the time of the Share Acquisition Agreement.

     As part of the  transaction,  Serif  Europe  received a 12-month  exclusive
     license in Europe and a 24-month  non-exclusive  license in the rest of the
     world with respect to the software of the Company's SPC  subsidiary.  Serif
     Europe  was also  granted a  non-exclusive  license  to use  SPC's  Harvard
     Graphics(R) brand name for the purpose of selling repackaged Serif products
     using such name.  These  licenses  were  granted  pursuant to the  software
     license  agreement,  dated as of March  31,  2001,  between  SPC and  Serif
     Europe. Each of such licenses shall be renewed if minimum royalty and other
     conditions  are met. In  consideration  therefor,  Serif  Europe will pay a
     royalty fee of 12.5% in respect of sales of SPC software and 3% of sales of
     repackaged Serif software.  The Company also agreed that while it continues
     to own SPC, it will not compete with Serif in the software business as long
     as the licenses are in effect.

4.   LOSS PER SHARE

     Basic loss per share is computed based upon the weighted  average number of
     common shares outstanding  during each period presented.  Stock options and
     warrants did not have an effect on the computation of diluted  earnings per
     share in the three and six-month periods ended June 30, 2001 and 2000 since
     they were anti-dilutive.

                                       8
<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

5.   DEBT

     The bank notes payable consist of ninety-day renewable term notes which are
     secured by the assets of PWR and guaranteed by the Company.  The notes bear
     interest at prime plus one-half  percent (7.25% at June 30, 2001). On April
     13, 2001, PWR borrowed an additional  $600,000 from its bank,  with payment
     including  interest,  at prime plus 1 1/2%, due by May 14, 2001.  This note
     was personally guaranteed by the Company's President and Vice President and
     Chief  Information  Officer and guaranteed by the Company.  This additional
     indebtedness  was repaid on May 7, 2001 and the  personal  guarantees  were
     returned.

     The  related   party  notes  consist  of  6.3%  notes  payable  in  monthly
     installments to the two PWR selling stockholders.  In connection with PWR's
     bank borrowing on April 13, 2001, the PWR selling shareholders entered into
     a waiver  agreement  with the  Company  and  subordination  and  assignment
     agreements  with the bank,  pursuant  to which  such  notes may not be paid
     until January 2002.

     On July 21,  2000,  PWR  terminated  its  relationship  with its  inventory
     financing  lender and  repaid the  outstanding  inventory  loan  balance of
     approximately  $925,000 with existing working capital.  On August 25, 2000,
     PWR  entered  into  a  temporary  $500,000  inventory   financing  security
     agreement with a finance company. In May 2001, this facility was reduced to
     $300,000.  At June 30,  2001,  there was  $248,031  outstanding  under this
     facility.  The  temporary  financing  facility  provides  for  21 to 30 day
     financing  without interest as long as payment is made within the allowable
     terms.  The line is presently  collateralized  by a second priority lien on
     all of the  assets of PWR and is  guaranteed  by the  Company.  On July 18,
     2001,  the lender  notified  PWR that it was in default of its  obligations
     under this  facility.  See Note 2. In  December  2000,  one of PWR's  major
     suppliers was granted a third priority lien on its assets.

     On  January 8, 2000,  the  Company  entered  into an  agreement,  which was
     amended as of March 15, 2000,  for a maximum  $1,000,000  unsecured line of
     credit  note  arrangement  with  a  foreign  company.  Advances  under  the
     arrangement  bear  interest  at 8%.  The  Company  borrowed  $1,000,000  on
     February 17, 2000. This borrowing was paid in full with accrued interest on
     March 20, 2000. In connection with this credit facility, the Company issued
     seven-year warrants to purchase an aggregate of 25,000 shares of its common
     stock  exercisable  at $30 per share.  The warrants were valued at $382,500
     and are being charged to interest expense over the two-year benefit period.

6.   STOCKHOLDERS' EQUITY

     On January 2, 2001, the Company retained an investment banking firm for the
     purpose of providing financial advisory and investment banking advice for a
     one-year  term.  Pursuant to this  agreement,  the Company  agreed to issue
     45,000  shares of its common  stock and  three-year  warrants  to  purchase
     60,000 shares of common  stock.  On February 28, 2001,  this  agreement was
     terminated, and the investment banking firm returned all Company securities
     obtained pursuant to the agreement which were still owned by it.

     On January 15, 2001,  the Company  retained a consultant for the purpose of
     providing investor relations, public relations and corporate communications
     and other services for a one-year  term.  Pursuant to this  agreement,  the
     Company agreed to issue 30,000 shares of its common stock,  10,000 of which
     shares are subject to a lockup agreement that prohibits their sale prior to
     July 15, 2001; and three-year  warrants to purchase 20,000 shares of common
     stock;  10,000  immediately  exercisable  at an exercise price of $2.50 per
     share, and 10,000 exercisable commencing July 15, 2001 at an exercise price
     of $10 per share.

     On January 15, 2001,  the Company  issued 30,000 shares of its common stock
     in connection  with the  resignation of its chief  executive  pursuant to a
     settlement and release agreement.

                                       9
<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

6.   STOCKHOLDERS' EQUITY (CONTINUED)

     On January 22,  2001,  and  January 24,  2001,  the  Company  entered  into
     agreements  with  certain  outside   consultants  to  satisfy   outstanding
     liabilities to them.  Under their respective  agreements,  3,200 and 14,600
     shares were  issued.  The 14,600  shares are subject to a six-month  lockup
     agreement  prohibiting their sale until July 2001, except that an aggregate
     of 7,300 shares may be sold through  July 22, 2001,  provided  that no more
     than 1,000 shares per week may be sold.  The 3,200 shares were subject to a
     lock-up  agreement  restricting  the sale of certain of such shares through
     March 1, 2001.

     On January 26,  2001,  the Company  accepted  subscriptions  for a total of
     149,000  shares of common  stock  from 13  accredited  investors  for gross
     proceeds of  $372,500.  In  connection  with this  private  placement,  the
     Company issued three-year warrants to purchase 2,300 shares of common stock
     at an exercise price of $2.50 per share as a finders fee.

     On February 9, 2001,  the Company  terminated a December 27, 2000 agreement
     related to  consulting  services for  financial  advisory and other related
     services.  Under the terms of the original agreement,  3,000 shares held in
     escrow were cancelled upon such termination.

     On May 17, 2001,  the  stockholders  approved the issuance of shares to the
     Company's President and Vice President and Chief Information  Officer,  who
     were also the former selling  shareholders  of PWR, due under the March 27,
     2000 merger agreement with PWR, as amended.  In connection  therewith,  the
     Company   issued   45,645   shares  to  each  of  the  former  PWR  selling
     shareholders.

     On May 23, 2001,  the Company  effected a one-for-ten  (1:10) reverse stock
     split.

     On June 29, 2001, the Company expanded the scope of services to be provided
     by one of its  consultants and extended the term of the agreement with such
     consultant.  Pursuant to this agreement,  the Company issued 100,000 shares
     of its common stock.

7.   SEGMENT INFORMATION

     During 2000,  the Company  completed  four  acquisitions.  The two domestic
     acquisitions formed the foundation for the Company's  professional internet
     and technology solutions business, which is referred to as Vizy Interactive
     and consists of Vizy  Interactive  New York,  formerly known as Renaissance
     Multimedia,  and Vizy Interactive-PWR  Systems,  also known as PWR Systems.
     Revenues  from  this  business  segment  consist  primarily  of  e-business
     consulting,  web site design,  network and systems integration services and
     computer hardware sales.

     In early 2001,  the Company  determined to divest its software and overseas
     operations so as to better focus on developing  its internet and technology
     solutions business in the U.S. Accordingly, on January 9, 2001, the Company
     entered  into an  agreement  with a German  company for the sale of certain
     assets and  assumption  of  liabilities  of the Company's  Aachen,  Germany
     contact  center  operation.  On February  2, 2001,  Junction 15 Limited and
     interMETHODS Limited, two companies in London,  England,  which the Company
     acquired in 2000, were placed into creditors  voluntary  liquidation in the
     United   Kingdom.   On  March  31,  2001,   the  Company  sold  its  visual
     communications   operations.   These  visual  communications  and  overseas
     operations are reflected in discontinued operations.

                                       10
<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

7.   SEGMENT INFORMATION (CONTINUED)

     The Company's  historical business prior to 2000 consisted primarily of its
     direct sale of software and digital  cameras,  collectively  referred to as
     visual  communications  products,   utilizing  the  Company's  direct  mail
     marketing  and  telemarketing  operations  at its  Nashua,  New  Hampshire,
     Nottingham,   England  and  Aachen,  Germany  call  center  locations.  The
     Company's web-enabled call center business was referred to as Dialog24. The
     results of the  Company's  VisualCities.com  website  business and Dialog24
     business are included in "Visual Communications Products."

     Information  concerning the Company's  six-month segment  operations is set
     forth below:

<TABLE>
<CAPTION>
                                                      Foreign          Visual
                                                   Operations in   Communications      Vizy
                                                    Liquidation       Products      Interactive   Corporate   Consolidated
                                                  -------------------------------------------------------------------------
<S>                                               <C>              <C>              <C>           <C>          <C>
SIX-MONTHS ENDED JUNE 30, 2001:

CONTINUING OPERATIONS
Net sales                                         $      -         $         -      $ 8,737,035   $     -      $ 8,737,035
Depreciation and amortization                            -                   -          676,193      532,595     1,208,788
Investment loss                                          -                   -             -         (85,226)      (85,226)
Loss from continuing operations                          -                   -       (1,067,481)  (1,795,784)   (2,863,265)
Total assets                                             -                   -        7,821,246    2,666,221    10,487,467

DISCONTINUED OPERATIONS
Gain on sale of discontinued operations                  -              1,473,337          -            -        1,473,337
Income from operations of discontinued businesses        -                139,384          -            -          139,384
Income from discontinued operations                      -              1,612,721          -            -        1,612,721
Total assets                                             -                 26,958          -            -           26,958

SIX-MONTHS ENDED JUNE 30, 2000:

CONTINUING OPERATIONS
Net sales                                         $      -         $         -      $ 5,625,814   $     -      $ 5,625,814
Depreciation and amortization                            -                   -          564,443      312,910       877,353
Investment gains                                         -                   -             -       1,095,348     1,095,348
Income (loss) from continuing operations                 -                   -         (447,827)    (797,954)   (1,245,781)
Total assets                                             -                   -       16,412,347    2,703,393    19,115,740

DISCONTINUED OPERATIONS
Loss from operations of discontinued businesses      (251,358)         (2,641,407)         -           -        (2,892,765)
Total assets                                        2,980,041           3,458,240          -           -         6,438,281

</TABLE>

8.   RELATED PARTY TRANSACTIONS

     During the first  six-months of 2001,  the Company  incurred  approximately
     $232,000 of legal fees to a law firm of which the Company's Chairman of the
     Board is a member. Approximately $737,000 owed to this law firm is included
     in accounts payable at June 30, 2001.

     At June 30, 2001,  the Company had $302,168 of related  party notes payable
     outstanding  to its  President  and Vice  President  and Chief  Information
     Officer,  the two former selling  shareholders of the Company's PWR Systems
     subsidiary. See Note 5.

                                       11
<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

9.   COMMITMENTS AND CONTINGENCIES

     LITIGATION

     In the fourth  quarter of 1998,  an action was commenced  against  Software
     Publishing  Corporation ("SPC") in California in which plaintiff is seeking
     $300,000 in damages for SPC's alleged violation of a lease for office space
     located in San Jose, California.  This is the location at which SPC had its
     principal  place of business  and at which the  Company  had its  principal
     executive  offices during the period of January 1997 through  January 1998.
     Neither the Company nor SPC currently has any offices at this location. SPC
     has filed an answer in this  action  denying  the  plaintiffs'  claims.  In
     October 2000, the plaintiff  amended its complaint to name Neil M. Kaufman,
     the Company's chairman of the board, as a defendant.  This action currently
     is in the discovery  stage.  While it is  reasonably  possible that SPC may
     have some  liability to the  plaintiff,  the Company  believes this action,
     including  the claim against Mr.  Kaufman,  is without merit and intends to
     vigorously defend this action.

     In  February  2000,  the  Company  received a demand for  arbitration  with
     respect to certain fees payable in connection  with an  investment  banking
     agreement  which it terminated.  The claim calls for payment of $45,000 and
     reinstatement  of the  warrants to purchase  15,000  shares of common stock
     cancelled upon termination of the investment  banking  agreement or payment
     of the value of such  warrants,  and legal and other expenses in connection
     with the arbitration.  This arbitration proceeding has been suspended.  The
     Company  believes  that the claims in this  arbitration  action are without
     merit and intends to vigorously defend this action.

     On January 9, 2001,  the Company  entered into an  agreement  with a German
     company to sell certain  assets and  liabilities  of the Company's  Aachen,
     Germany contact center operation, including the assumption of the remaining
     lease  obligation.  The  agreement  calls for a payment  to the  Company of
     approximately $100,000, of which approximately $50,000 would be utilized to
     pay remaining tax  obligations.  The $100,000 payment has not been received
     and is past due. The Company has  commenced  legal  proceedings  to collect
     this amount, the collection of which is unlikely.

     On February 2, 2001, the Company divested Junction 15 Ltd. and interMETHODS
     Ltd., its London-based subsidiaries acquired during 2000, through creditors
     voluntary  liquidation in the United  Kingdom.  The Company  terminated the
     employment of the two  executives  of Junction 15 Limited and  interMETHODS
     Limited,  and it  currently  intends to pursue  indemnification  claims for
     breaches of representations  and warranties by the sellers of both Junction
     15 Limited and interMETHODS Limited. On April 2, 2001, the Company received
     a "freezing  injunction  order" from the Supreme Court of England and Wales
     restricting   its  ability  to  remove  any  assets  up  to  the  value  of
     (pound)362,000,  or approximately $517,000, from England or Wales. The only
     assets that the Company owned in England or Wales at such time or as of the
     date hereof is the  $150,000  in cash that it received  upon the closing of
     the  Serif  transaction,  which is held on its  behalf  by its  lawyers  in
     England.  The  applicants  with respect to the  injunction are three former
     executive officers of Junction 15 Limited and interMETHODS  Limited who are
     claiming payment under their terminated employment  agreements.  One of the
     officers is claiming a deferred payment of approximately $100,000 under the
     interMETHODS  acquisition  agreement.  The  Company  believes  that  it has
     significant  warranty,  breach of contract and other claims  against  these
     applicants,  and intends to prosecute  its claims  vigorously.  The Company
     also believes that the injunction was issued  improperly and may attempt to
     have  the  injunction  vacated;  however,  there is no  assurance  that the
     Company will be successful in this regard.  Further,  the Company  believes
     that this injunction will not affect its ability to receive and utilize the
     monthly  payments  pursuant  to the  promissory  note to be made from Serif
     Inc., a U.S. incorporated and domiciled company.

                                       12

<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

9.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

     LITIGATION (CONT.)

     In  addition  to the  aforementioned  litigation,  the  Company  has  other
     litigation  matters  in  progress  in  the  ordinary  course  of  business.
     Management  believes  that all pending  litigation  of the Company  will be
     resolved  without a further  material  effect  on the  Company's  financial
     position, results of operations or cash flows.

     LONG TERM CONSULTING AGREEMENT

     In  1998,  the  Company  entered  into  a  five-year  financial  consulting
     agreement  pursuant  to which the Company is required to pay .3% of its net
     revenue  (subject  to an  annual  minimum  fee of  $125,000,  and an annual
     maximum fee of $250,000) to the  consultant.  The term of the agreement was
     automatically  extendable by eighteen months if the Company reported annual
     net revenues of $40,000,000,  and an additional  eighteen months should net
     revenues  exceed  $60,000,000.  In December 2000, the Company  amended this
     agreement to provide that $269,861 of accrued  consulting fees were payable
     in 123,337 shares of the Company's common stock. This agreement was further
     amended to increase  the revenue  thresholds  required  for  extensions  to
     $45,000,000  and  $65,000,000,   respectively.  Any  revenues  of  acquired
     companies  not  introduced  directly or indirectly  by the  consultant  are
     excluded from the amended revenue thresholds.

     EMPLOYMENT AGREEMENT

     On January 15, 2001, the Company's chief executive resigned.  Pursuant to a
     settlement  and  release   agreement,   he  received  $10,500  monthly  for
     consulting  services  through April 15, 2001 and received  30,000 shares of
     the Company's common stock.  Additionally,  he will receive five percent of
     the gross  proceeds  received  by the  Company  from the sale of the visual
     communications operations.

     POSSIBLE DELISTING

     On March 1, 2001, the Company received correspondence from The Nasdaq Stock
     Market Inc.  stating that its common  stock would be delisted  from trading
     because the bid price of its common stock did not equal or exceed $1.00 for
     a minimum  of ten  consecutive  trading  days  prior to March 1,  2001,  as
     required by Nasdaq  Marketplace Rule 4310(c)(4).  The Company appealed this
     determination   and   requested   a   hearing   before  a  Nasdaq   Listing
     Qualifications  Panel.  At the hearing,  the Company  presented its plan to
     achieve  compliance  with  all  Nasdaq  listing  maintenance  requirements,
     including a plan to seek  approval  from  shareholders  of a reverse  stock
     split to satisfy Nasdaq's minimum bid requirement.  On May 17, 2001, at its
     annual stockholders meeting, the Company's stockholders approved a proposal
     to authorize  the Board of Directors to effect a reverse stock split of the
     Company's  common  stock.  On May  23,  2001,  the  Company  effectuated  a
     one-for-ten  reverse stock split which enabled it to meet Nasdaq's  minimum
     bid  requirement.  In a letter  dated  June 5,  2001,  the  Nasdaq  Listing
     Qualifications  Panel  determined  to allow the Company to remain listed on
     The Nasdaq  SmallCap  Market so long as the Company  continued  to meet all
     Nasdaq  listing  requirements,  including that at June 30, 2001 the Company
     report  financial  results which reflect  either net tangible  assets above
     $2,000,000  or,  in  the  alternative,  stockholders'  equity  of at  least
     $2,500,000.  Both of these alternative  requirements were satisfied at June
     30, 2001.  In the event that the  Company's  common stock is delisted  from
     Nasdaq, the Company expects that its common stock would trade on the NASD's
     OTC Bulletin Board.

                                       13

<PAGE>

                                  VIZACOM INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

10.  STATEMENTS OF CASH FLOWS

     Supplemental  disclosure of non-cash financing and investing activities for
     the six months ended June 30, 2001 and 2000 is set forth below:
<TABLE>
<CAPTION>
                                                                                2001              2000
                                                                          ----------------  ----------------

CONTINUING OPERATIONS:
<S>                                                                       <C>               <C>
Fair value of net assets acquired for common stock,
  stock options, and notes payable                                        $    -            $     9,890,469
                                                                          ================  ================
Note receivable for business disposition                                  $      987,500    $          -
                                                                          ================  ================
Transfer of prepaid licenses to inventory                                      $ 131,606
                                                                          ================  ================
Unrealized holding loss on marketable securities                          $          797    $          -
                                                                          ================  ================
Payment of liabilities with common stock                                  $      134,498    $          -
                                                                          ================  ================
Capital stock subscriptions reflected as a liability and restricted cash                    $     1,475,255
                                                                          ================  ================
Warrants and common stock issued for deferred consulting costs            $      323,398    $       382,500
                                                                          ================  ================
Listing fees accrued and offset against additional paid-in capital        $       (1,780)   $          -
                                                                          ================  ================

DISCONTINUED OPERATIONS:
Fixed assets acquired with capital lease obligations                      $         -       $        28,725
                                                                          ================  ================
</TABLE>


11.  SPC DUAL CONSOLIDATED LOSSES CLOSING AGREEMENT

     In  connection  with the  purchase  of SPC in  December  1996,  the Company
     applied for a closing  agreement  with the  Internal  Revenue  Service (the
     "IRS") in September 1997 pursuant to which the Company would become jointly
     and  severally  liable  for  SPC's tax  obligations  upon  occurrence  of a
     "triggering event" requiring recapture of dual consolidated losses ("DCLs")
     previously  utilized by SPC. Such closing agreement would avoid SPC's being
     required to recognize a tax of  approximately  $8 million on  approximately
     $24.5  million of SPC's  pre-acquisition  DCLs. On May 18, 2001 the Company
     received the closing agreement from the Internal Revenue Service.  An event
     otherwise  constituting  a triggering  event  applicable to a DCL would not
     constitute  a  triggering  event if it occurs in any taxable year after the
     fifteenth taxable year following the year in which the DCL was incurred. In
     certain  circumstances,  a  future  acquirer  of the  Company  may  also be
     required to agree to a similar closing agreement in order to avoid the same
     tax liability, to the extent it is able to do so, assuming the fifteen year
     period with respect to the DCL had not expired.  The report of our auditors
     covering the December 31, 2000 consolidated financial statements, which was
     issued  before the Company  received  the closing  agreement  from the IRS,
     contains a paragraph emphasizing these dual consolidated losses.

                                       14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         Statements contained in this Quarterly Report on Form 10-QSB include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which could cause our
actual results, performance and achievements, whether expressed or implied by
such forward-looking statements, not to occur or be realized. Such
forward-looking statements generally are based upon our best estimates of future
results, performance or achievement, based upon current conditions and the most
recent results of operations. Forward-looking statements may be identified by
the use of forward-looking terminology such as "may," "will," "expect,"
"believe," "estimate," "anticipate," "continue" or similar terms, variations of
those terms or the negative of those terms.

         Potential risks and uncertainties include, among other things, such
factors as:

-    the market acceptance and amount of sales of our products and services;
-    the success of our professional internet and technology solutions
     offerings, such as business strategy formation, web site interface design,
     and systems integration;
-    our success in integrating the operations of acquired companies, including
     Vizy Interactive - New York (formerly known as Renaissance Multimedia) and
     Vizy Interactive - PWR Systems (also known as PWR Systems) into a
     coordinated and complementary operation;
-    our ability to develop long-lasting relationships with our clients and
     attract new clients;
-    our ability to develop long-lasting relationships with our industry
     partners and vendors and attract new industry partners and vendors;
-    the competitive environment within the industries in which we operate;
-    our ability to raise additional capital;
-    our ability to maintain our existing debt facilities;
-    the extent to which we are successful in developing, acquiring or licensing
     technologies which are accepted by the market;
-    our ability to attract and retain qualified personnel;
-    business and consumer trends, and economic conditions; and
-    the other factors and information disclosed and discussed in other sections
     of this Quarterly Report on Form 10-QSB.

         You should carefully consider such risks, uncertainties and other
information, disclosures and discussions which contain cautionary statements
identifying important factors that could cause actual results to differ
materially from those provided in the forward-looking statements. We undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

                                       15

<PAGE>

RESULTS OF OPERATIONS

GENERAL:

         In 2000, we became a provider of professional internet and technology
solutions in addition to continuing to operate our historical visual
communications business, which included our software operations. We became a
provider of professional internet and technology solutions through the
acquisition of four companies: Renaissance Multimedia and PWR Systems in the
United States, and Junction 15 and interMETHODS in England. In early 2001, we
determined to divest our software and overseas operations so as to better focus
on developing our internet and technology solutions business in the U.S.
Accordingly:

         -     in February 2001, we placed Junction 15 and interMETHODS into
               creditors voluntary liquidation in the United Kingdom, thereby
               divesting these assets; and
         -     in March 2001, we sold our visual communications operations.

         Our Serif software and international operations have been classified as
discontinued operations, and our statements of operations have been reclassified
accordingly. Our results of continuing operations reflect the results of our
professional internet and technology solutions business in the U.S., which
consists of Vizy Interactive New York, formerly known as Renaissance Multimedia
("Vizy NY") and Vizy Interactive-PWR Systems, also known as PWR Systems ("PWR").
These businesses are collectively referred to as Vizy Interactive. The results
of our discontinued software and overseas operations are presented separately
below. As a result of the changes in our business described above, our
historical financial statements are of limited use.

CONTINUING OPERATIONS:

         GENERAL: Continuing operations are represented by the operations of our
Vizy NY and PWR subsidiaries, together with our corporate overhead. We acquired
Vizy NY and PWR on February 15 and March 27, 2000, respectively.

         In light of declining gross margins and inadequate capital to support
growth in our PWR computer hardware business, we are attempting to transition
that business to selling less hardware and providing more information technology
and security services, which we expect to generate higher gross margins. We
intend to maximize our gross profits from our continued hardware sales primarily
by being more selective in our hardware customers and pricing. We expect that
during at least the first 90 days of this transition, which has been commenced,
our PWR subsidiary will not generate positive cash flow.

                                       16
<PAGE>

QUARTER ENDED JUNE 30, 2001 COMPARED TO THE QUARTER ENDED JUNE 30, 2000.

         The results of operations for our continuing operations for the
quarters ended June 30, 2001 and 2000 are set forth below:

<TABLE>
<CAPTION>
                                              Quarter ended June 30, 2001                   Quarter ended June 30, 2000
                                    --------------------------------------------- ----------------------------------------------
                                           Vizy                                          Vizy
                                       Interactive       Corporate       Total          Interactive    Corporate       Total
                                    --------------------------------------------- ----------------------------------------------
<S>                                 <C>                <C>           <C>           <C>                <C>           <C>
Net sales                            $  4,793,615      $      -      $ 4,793,615   $    5,243,564     $      -      $ 5,243,564
Cost of sales                           4,120,256             -        4,120,256        4,150,208            -        4,150,208
                                    ---------------------------------------------  ---------------------------------------------
Gross profit                              673,359             -          673,359        1,093,356            -        1,093,356
Gross profit                                  14%                            14%              21%                            21%

SG&A                                      850,608          630,040     1,480,648        1,014,452         766,770     1,781,222
Amortization - goodwill,
  business processes, etc.                321,592             -          321,592          477,415            -          477,415
Loss (gain) on marketable securities         -              85,226        85,226             -               -             -
Interest and other expense, net            33,999           21,253        55,252           44,918          35,132        80,050
                                    ---------------------------------------------  ---------------------------------------------
                                        1,206,199          736,519     1,942,718        1,536,785         801,902     2,338,687
                                    ---------------------------------------------  ---------------------------------------------
Loss from continuing operations     $    (532,840)     $  (736,519)  $(1,269,359)  $     (443,429)    $  (801,902)  $(1,245,331)
                                    =============================================  =============================================
</TABLE>

         NET SALES. Net sales from continuing operations decreased in the 2001
second quarter by $449,949, or 9%, to $4,793,615 from $5,243,564 in the 2000
second quarter. $4,216,011, or 88%, of these net sales are attributable to PWR,
and $577,604, or 12%, of these net sales are attributable to Vizy NY. We believe
that our decline in net sales was primarily attributable to PWR's inability to
obtain sufficient trade and other credit or capital required to obtain inventory
to maximize our sales, as well as weak economic conditions.

         GROSS PROFIT. Gross profit decreased by $419,997, or 38%, to $673,359
in the 2001 second quarter, from $1,093,356 in the 2000 second quarter.
$322,554, or 48%, of our 2001 second quarter gross profit was generated by PWR,
and $350,805, or 52%, of our 2001 second quarter gross profit was generated by
Vizy NY. Overall gross profit percentages declined from 21% in the 2000 second
quarter to 14% in the 2001 second quarter. The lower gross margin was
attributable to PWR's net sales consisting primarily of lower margin hardware
and hardware-related components. Additionally, PWR's inability to obtain
sufficient credit to fill orders impaired its ability to obtain optimal pricing
from its suppliers.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses ("SG&A") decreased by $300,574, or 17%, to $1,480,648 in
the 2001 second quarter from $1,781,222 in the 2000 second quarter. The decrease
in SG&A of $163,846 at our operating subsidiaries reflects lower recruitment and
advertising costs and a reduction in the number of employees. Corporate overhead
declined $136,730 due to reductions in corporate expenses resulting from our
2001 restructuring as well as other cost reduction efforts.

         AMORTIZATION OF GOODWILL, BUSINESS PROCESSES AND METHODOLOGIES,
WORKFORCE, AND CUSTOMER LISTS. Amortization of Goodwill, Business Processes and
Methodologies, Workforce, and Customer Lists, decreased $155,823, or 33%, due to
a lower amortization base in 2001 caused by the impairment writedown of PWR's
goodwill in the fourth quarter of 2000.

         REALIZED LOSS (GAIN) ON MARKETABLE SECURITIES. The realized loss of
$85,226 reflects the realization of an investment loss in our marketable
securities consisting of Xceed Inc. common stock resulting from the recent
bankruptcy of Xceed. $84,429 of this loss had been included in other
comprehensive income as of March 31, 2001. Accordingly, substantially all of the
loss reported constitutes a reclassification of equity.

                                       17

<PAGE>


         INTEREST AND OTHER EXPENSE, NET. Interest and other expense, net,
decreased by $24,798, or 31%, to $55,252 in the 2001 second quarter from $80,050
in the 2000 second quarter. The decline reflects the impact of interest income
received in connection with payments under a note issued to us by our former
Serif Inc. software subsidiary, which partially offset PWR's interest expense.

SIX-MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX-MONTHS ENDED JUNE 30, 2000.

The results of operations for our continuing operations for the six-month
periods ended June 30, 2001 and 2000 are set forth below:

<TABLE>
<CAPTION>
                                              Quarter ended June 30, 2001                   Quarter ended June 30, 2000
                                    ---------------------------------------------  ---------------------------------------------
                                           Vizy                                          Vizy
                                       Interactive       Corporate       Total          Interactive    Corporate       Total
                                    ---------------------------------------------  ---------------------------------------------
<S>                                 <C>                <C>           <C>           <C>                 <C>           <C>
Net sales                           $    8,737,035     $       -     $ 8,737,035   $ 5,625,814        $      -      $ 5,625,814
Cost of sales                            7,523,119             -       7,523,119     4,255,428               -        4,255,428
                                    ---------------------------------------------  ---------------------------------------------
Gross profit                             1,213,916             -       1,213,916     1,370,386               -        1,370,386
Gross profit                                   14%                           14%           24%                              24%

SG&A                                     1,606,629        1,448,007    3,054,636     1,214,814          1,798,530     3,013,344
Restructuring expenses                        -             187,584      187,584          -                  -             -
Amortization - goodwill,
  business processes, etc.                 643,184             -         643,184       558,704               -          558,704
Loss (gain) on marketable securities                         85,226       85,226          -            (1,095,348)   (1,095,348)
Interest and other expense, net             31,584           74,967      106,551        44,695             94,772       139,467
                                    ---------------------------------------------  ---------------------------------------------
                                         2,281,397        1,795,784    4,077,181     1,818,213            797,954     2,616,167
                                    ---------------------------------------------  ---------------------------------------------
Loss from continuing operations     $   (1,067,481)    $ (1,795,784) $(2,863,265)  $  (447,827)       $  (797,954)  $(1,245,781)
                                    =============================================  =============================================
</TABLE>

         NET SALES. Net sales from continuing operations increased in the
six-months ended June 30, 2001 ("2001 six-month period") by $3,111,221, or 55%,
to $8,737,035 from $5,625,814 in the six-months ended June 30, 2000 ("2000
six-month period"). $7,764,635, or 89%, of these 2001 net sales are attributable
to PWR, and $972,400, or 11%, of these 2001 net sales are attributable to Vizy
NY. Net sales from continuing operations for the 2000 six-month period are
comprised of net sales of Vizy NY after February 15, 2000, and net sales of PWR
after March 27, 2000, the dates on which we acquired these entities. Net sales
in the 2001 six-month period declined $1,471,191, or 14%, from 2000 six-month
period pro forma net sales of $10,208,226, assuming that our continuing
operations had been acquired on January 1, 2000. We believe that this decline is
primarily attributable to PWR's inability to obtain sufficient trade and other
credit or capital required to obtain inventory to maximize our sales, as well as
weak economic conditions.

         GROSS PROFIT. Gross profit decreased by $156,470, or 11%, to $1,213,916
in the 2001 six-month period, from $1,370,386 in the 2000 six-month period.
$814,080, or 67%, of our 2001 six-month period gross profit was generated by
PWR, and $399,836, or 33%, of our 2001 six-month period gross profit was
generated by Vizy NY. Overall gross profit percentages declined from 24% in the
2000 six-month period to 14% in the 2001 six-month period. The lower gross
margin was attributable to PWR's net sales consisting primarily of lower margin
hardware and hardware-related components. 2001 six-month period gross profit
declined $1,076,597, or 47%, from 2000 six-month period pro forma gross profit
of $2,290,513, assuming that our continuing operations had been acquired on
January 1, 2000. Gross margin as a percent of sales declined to 14% in the 2001
six-month period from 36% (pro forma) in the 2000 six-month period. The decline
is primarily attributable to our inability to obtain optimal pricing from our
suppliers due to our inability to obtain sufficient credit.

         RESTRUCTURING EXPENSES. In the 2001 first quarter, we commenced a
restructuring initiative, pursuant to which we relocated our principal executive
offices, and certain members of management and other staff resigned or were
terminated. In addition, we divested our visual communications and overseas
operations. Restructuring expenses for the 2001 six-month period primarily
consists of common stock valued at approximately $170,000 issued to our former
chief executive officer pursuant to a settlement and mutual release agreement.

                                       18
<PAGE>


         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses ("SG&A") increased by $41,292, or 1%, to $3,054,636 in
the 2001 six-month period from $3,013,344 in the 2000 six-month period. An
increase in SG&A of $391,815 at our operating subsidiaries was offset by a
$350,523 decline in corporate overhead. The increase in SG&A is due to the
inclusion of a full six-months of SG&A for our two operating subsidiaries for
the 2001 six-month period compared to only five months of Vizy NY SG&A for the
2000 six-month period, and only three months of PWR SG&A in the 2000 six-month
period. Corporate overhead declined due to reductions in corporate expenses
resulting from our 2001 restructuring as well as other cost reduction efforts.
2001 six-month period SG&A decreased by $627,249, or 17%, from 2000 six-month
pro forma SG&A of $3,681,885, assuming that our continuing operations had been
acquired on January 1, 2000.

         AMORTIZATION OF GOODWILL, BUSINESS PROCESSES AND METHODOLOGIES,
WORKFORCE, AND CUSTOMER LISTS. Amortization of Goodwill, Business Processes and
Methodologies, Workforce, and Customer Lists, increased $84,480, or 15%, due to
inclusion of a full six-months of amortization for our two operating
subsidiaries compared to five months of Vizy NY amortization and three-months of
PWR amortization in the 2000 six-month period. Such increase would have been
greater, absent the impairment charge to PWR's goodwill taken in the fourth
quarter of 2000.

         REALIZED LOSS (GAIN) ON MARKETABLE SECURITIES. The realized loss amount
of $85,226 in the 2001 six-month period represents the realization of an
investment loss in our marketable securities consisting of Xceed Inc. common
stock resulting from the recent bankruptcy of Xceed. $84,429 of this loss had
been included in other comprehensive income as of March 31, 2001. Accordingly,
substantially all of the loss reported constitutes a reclassification of equity.

         The realized gain of $1,095,348 in the 2000 six-month period represents
the gain recognized upon the transfer of 59,813 shares of Xceed Inc. common
stock to a finder in connection with an August 1999 agreement, based upon the
appreciation in the market value of such shares. The agreement set forth a
formula to determine the number of shares to be paid the finder upon the closing
of an acquisition target identified by such finder. The finder received 14,953
Xceed shares for the Renaissance acquisition and 44,860 Xceed shares for the PWR
acquisition, resulting in respective gains of $371,962 and $723,386.

         INTEREST AND OTHER EXPENSE, NET. Interest and other expense, net,
decreased by $32,916, or 24%, to $106,551 in the 2001 six-month period from
$139,467 in the 2000 six-month period. The decline reflects the impact of
interest income received in connection with payments under a note issued to us
by our former Serif Inc. software subsidiary, which partially offset PWR's
interest expense. Interest and other expense decreased $72,688, from pro forma
2000 six-month period interest and other expense of $179,239, assuming that our
continuing operations had been acquired on January 1, 2000.

DISCONTINUED OPERATIONS:

         GENERAL: Discontinued operations consist of our London internet
solutions business acquired in 2000, our historical visual communications
products segment, which included our software subsidiaries, Serif (Europe)
Limited and subsidiaries, Serif Inc., Software Publishing Corporation and
subsidiaries, our Dialog24 operations and our VisualCities.com operations.

         On January 9, 2001, we entered into an agreement with a German company
to purchase certain assets and assume certain liabilities of our Aachen, Germany
contact center operation, including the assumption of the remaining lease
obligations. The agreement calls for a payment of approximately $100,000, of
which we expect to utilize approximately $50,000 to pay remaining tax
obligations. The $100,000 payment has not been received and is past due. We have
commenced legal proceedings to collect this amount, the collection of which is
unlikely.

         In February 2001, we divested through English law creditors voluntary
liquidation our two internet service firms in the United Kingdom, Junction 15
Limited and interMETHODS Limited. As of December 31, 2000, all of the assets and
liabilities of these entities were written-off, resulting in an impairment
charge of $4,511,063. We terminated the employment of the two executives of
Junction 15 Limited and interMETHODS Limited, and we currently intend to pursue
indemnification claims for breaches of representations and warranties by the
sellers of both Junction 15 Limited and interMETHODS Limited.

                                       19
<PAGE>


         On March 31, 2001, we sold our visual communications operations to the
management of our Serif subsidiaries. We received $150,000 in cash at closing
and a promissory note from Serif Inc. in the aggregate principal amount of
$987,500, which note bears interest at a rate of 10% per annum, and which is
payable $40,000 per month, except for April and November, in which months the
payments are $30,000 and $50,000, respectively. We, or one of our subsidiaries,
remain responsible for some potential liabilities. Serif (Europe) Limited
received a 12-month exclusive license in Europe and a 24-month non-exclusive
license in the rest of the world with respect to the software of our SPC
subsidiary. Serif (Europe) Limited was also granted a non-exclusive license to
use the Harvard Graphics(R) brand name for the purpose of selling repackaged
Serif products using such name. Each of such licenses shall be renewed if
minimum royalty and other conditions are met. In consideration therefor, Serif
(Europe) Limited will pay a royalty fee of 12.5% in respect of sales of SPC
software and 3% of sales of repackaged Serif software. While we continue to own
SPC, we agreed not to compete with Serif in the software business as long as the
licenses are in effect.

Results of operations of discontinued businesses reflected a loss of ($174,739)
for the 2001 second quarter and income of $139,584 for the 2001 six-month
period. Our software and overseas operations were discontinued in the first
quarter of 2001, and there was only residual activity in the second quarter of
2001. We recognized a gain of $1,473,337 upon the sale of our Serif software
operations on March 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

         Our cash and cash equivalents decreased by $691,117 to $152,719 at June
30, 2001 from $843,836 at December 31, 2000. We used $534,807 of cash in our
operations, and $442,921 of cash for investing activities as a result of the
disposition of cash held by our divested visual communication operations, which
was partially offset by the receipt of $237,270 in net proceeds from financing
activities, and $49,341 as a result of foreign exchange rate fluctuations.

         We had a working capital deficiency of $3,312,533 at June 30, 2001, an
improvement of $1,372,174 from our working capital deficiency of $4,684,707 at
December 31, 2000. This change is primarily attributable to the sale of our
visual communications operations on March 31, 2001. See Note 3 to the
accompanying financial statements. In January 2001, we sold 149,000 shares of
common stock for aggregate gross proceeds of $372,500. Our working capital as of
June 30, 2001 includes current obligations to related parties totaling
approximately $1,039,000. See Note 8 to the accompanying financial statements.
Of this amount approximately $302,000 was outstanding to our President and Vice
President and Chief Information Officer, who are the former selling stockholders
of our PWR Systems subsidiary. Under a waiver agreement with us, and an
assignment and subordination agreement entered into between a lender and these
persons on April 13, 2001, the amounts due these persons will not be paid until
January 2002. The promissory note held by us from our former visual
communications subsidiary provides for the Company to receive monthly
installments aggregating $360,000 in 2001 and $480,000 in 2002. We believe that
over the next several months we will need to raise at least an additional
$1,000,000 to meet our currently anticipated liquidity and capital expenditure
requirements. We intend to seek additional financing through one or more debt,
equity, or convertible securities offerings, through the sale of assets or
through a merger or acquisition. There can be no assurance that we will be
successful in completing any such offering or offerings, sale of assets or
merger or acquisition, or any other offerings or transactions, or that the terms
of any such offering or offerings, transaction or transactions, will be
beneficial to the Company or its stockholders. We intend to consider all viable
strategic alternatives, including possible business combinations, to maximize
stockholder value.

         We intend to utilize our available funds in 2001 to finance the working
capital requirements of our professional internet and technology solutions
business. Our cash requirements, however, may change depending upon numerous
factors, including, without limitation, the cost of integrating our businesses,
as well as increased personnel costs, inventory and accounts receivable arising
from the sale and shipment of new or additional products, and other expansion of
our Vizy Interactive business. There can be no assurance that we will be
successful in attaining our sales or strategic goals, or that attaining such
goals will have the desired effect on our cash resources.

         On January 9, 2001, we entered into an agreement with a German company
to purchase certain assets and assume certain liabilities of our Aachen, Germany
contact center operation, including the assumption of the remaining lease
obligations. The agreement calls for a payment of approximately $100,000, of
which we expect to utilize approximately $50,000 to pay remaining tax
obligations. The $100,000 payment has not been received and is past due. We have
commenced legal proceedings to collect this payment, the collection of which is
unlikely.

                                       20
<PAGE>

         In February 2001, we divested through English law creditors voluntary
liquidation our two internet service firms in the United Kingdom, Junction 15
Limited and interMETHODS Limited. As of December 31, 2000 all of the assets and
liabilities of these entities were written-off, resulting in an impairment
charge of $4,511,063. We terminated the employment of the two executives of
Junction 15 Limited and interMETHODS Limited, and we currently intend to pursue
indemnification claims for breaches of representations and warranties by the
sellers of both Junction 15 Limited and interMETHODS Limited. On April 2, 2001,
we received a "freezing injunction order" from the Supreme Court of England and
Wales restricting our ability to remove any assets up to the value of
(pound)362,000, or approximately $517,000, from England or Wales. The only
assets that we owned in England or Wales at such time or as of the date hereof
is the $150,000 in cash that we received upon the closing of the Serif
transaction, which is held on our behalf by our lawyers in England. The
applicants with respect to the injunction are three former executive officers of
Junction 15 Limited and interMETHODS Limited who are claiming payment under
their terminated employment agreements. One of the officers is claiming a
deferred payment of approximately $100,000 under the interMETHODS acquisition
agreement. We believe that we have significant warranty, breach of contract and
other claims against these applicants, and intend to prosecute our claims
vigorously. We also believe that the injunction was issued improperly and may
attempt to have the injunction vacated; however, there is no assurance that we
will be successful in this regard. Further, we believe that this injunction will
not affect our ability to receive and utilize the monthly payments pursuant to
the promissory note to be made from Serif Inc., a U.S. incorporated and
domiciled company.

         On March 31, 2001, we sold our visual communications operations to the
management of our Serif subsidiaries. We received $150,000 in cash at closing,
the use of which is subject to a United Kingdom "freezing injunction order." We
also hold a promissory note from Serif Inc. in the aggregate principal amount of
$987,500, which note bears interest at a rate of 10% per annum, and which is
payable $40,000 per month, except for April and November, in which months the
payments are $30,000 and $50,000, respectively. We, or one of our subsidiaries,
remain responsible for some potential liabilities. Serif (Europe) Limited
received a 12-month exclusive license in Europe and a 24-month non-exclusive
license in the rest of the world with respect to the software of our SPC
subsidiary. Serif (Europe) Limited was also granted a non-exclusive license to
use the Harvard Graphics(R) brand name for the purpose of selling repackaged
Serif products using such name. Each of such licenses shall be renewed if
minimum royalty and other conditions are met. In consideration therefor, Serif
(Europe) Limited will pay a royalty fee of 12.5% in respect of sales of SPC
software and 3% of sales of repackaged Serif software. While we continue to own
SPC, we agreed not to compete with Serif in its software business as long as the
licenses are in effect.

         In the first quarter of 2000, we entered into an unsecured line of
credit agreement for maximum borrowings of $1,000,000, at an 8% interest rate,
with a foreign company. Under this agreement, we borrowed $1,000,000 in February
2000. This loan was repaid in full with accrued interest on March 20, 2000. Our
PWR subsidiary has $1,200,000 of bank short-term renewable notes payable, which
we have guaranteed and which are secured by PWR's assets. On April 13, 2001, PWR
borrowed an additional $600,000 from its banking institution, with payment
including interest, at prime plus 1 1/2 %, due by May 14, 2001. The loan was
repaid on May 7, 2001. In connection therewith, the PWR selling stockholders
agreed to waive any payments on their notes until January 2002. See Note 5 to
the accompanying financial statements. PWR also has an interim inventory
financing facility for up to $300,000 in purchases (which was reduced from
$500,000 in May 2001). The line is presently collateralized by a second lien on
all of the assets of PWR and is guaranteed by the Company. On July 18, 2001, the
lender notified PWR that it was in default of its obligations under this
facility in the amount of $199,765, and demanded payment of such amount by July
31, 2001. Subsequent to the receipt of the notification, PWR has made periodic
payments to the lender and made arrangements to liquidate the balance which was
still outstanding at July 31, 2001. The unavailability of loans from this
lender, if not replaced by loans from this or other lenders, is expected to
have a material adverse effect on PWR's business. Additionally, a
major supplier of PWR has been granted a third lien on PWR's assets.

         We are dependent on the availability of a short-term loan facility from
a financial institution to finance our PWR operations. The lender does not have
any long-term commitment to lend. The unavailability of this borrowing could
have a material adverse effect on our business.

         Our exposure to foreign currency gains and losses has been partially
mitigated as we have incurred operating expenses in the principal foreign
currency in which we invoiced foreign customers. As of June 30, 2001,

                                       21
<PAGE>

we had no foreign  exchange  contracts  outstanding.  Our foreign  exchange
gains and losses have been  substantially  reduced given the  divestiture of our
international operations.

         In 1999, we entered into a five-year consulting agreement pursuant to
which we are required to pay 0.3% of our net revenue (subject to an annual
minimum fee of $125,000, and an annual maximum fee of $250,000) to the
consultant. The term of the agreement was automatically extendable by an
additional eighteen months if we reported annual net revenues of $40,000,000,
and an additional eighteen months should net revenues exceed $60,000,000. In
December 2000, we amended this agreement to provide that $269,861 of accrued
consulting fees were payable in 123,337 shares of our common stock. This
agreement was further amended to increase the revenue thresholds required for
extensions to $45,000,000 and $65,000,000, respectively. Any revenues of
acquired companies not introduced directly or indirectly by the consultant are
excluded from the amended revenue thresholds. At June 30, 2001, we had accrued
$20,834 of consulting fees owing in connection with this agreement.

NET OPERATING LOSS CARRYFORWARDS

         We estimate our consolidated tax net operating loss carryforwards to be
approximately $38 million at December 31, 2000, after consideration for
limitations on the use thereof, which expire in years 2003 through 2020. Under
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"),
changes in the ownership or the business of a corporation that has net operating
loss carryforwards can result in the inability to use, or the imposition of
significant restrictions on the use of, such net operating loss carryforwards to
offset future income and tax liability of such corporation. An "ownership
change" may be deemed to have occurred under Section 382 of the Code and the
regulations thereunder with respect to both the Company and SPC, and the use by
the Company of these net operating loss carryforwards will be limited.
Utilization of the net operating loss carryforwards of SPC may be limited
further by reason of the consolidated return/separate return limitation year
rules. We estimate the maximum utilization of such net operating loss
carryforwards to be approximately $1,200,000 per year for losses through
December 31, 1996. There can be no assurance that we will be able to utilize all
of our net operating loss carryforwards. In addition, the foreign losses
incurred by SPC may decrease or otherwise restrict our ability to claim U.S. tax
credits for foreign income taxes.

SPC DUAL CONSOLIDATED LOSSES CLOSING AGREEMENT

         On May 18, 2001 we received a closing agreement with the IRS pursuant
to which we become jointly and severally liable for SPC's tax obligations upon
occurrence of a "triggering event" requiring recapture of dual consolidated
losses ("DCLs") previously utilized by SPC. This closing agreement avoids SPC's
being required to recognize a tax of approximately $8 million on approximately
$24.5 million of SPC's pre-acquisition DCLs. An event otherwise constituting a
triggering event applicable to a DCL would not constitute a triggering event if
it occurs in any taxable year after the fifteenth taxable year following the
year in which the DCL was incurred. A future acquirer of our Company may also be
required to agree to a similar closing agreement in order to avoid the same tax
liability, to the extent it is able to do so, assuming the fifteen year period
with respect to the DCL hadn't expired. This could have a material adverse
effect on our future ability to sell SPC. The report of our auditors covering
the December 31, 2000 consolidated financial statements, which was issued before
the Company received the closing agreement from the IRS, contains a paragraph
emphasizing these dual consolidated losses.

SEASONALITY

         We believe that our professional internet and technology solutions
business is not characterized by significant fluctuations, though the fourth
quarter of each year may be our period of strongest financial performance as
corporations attempt to meet their budget allocations.

INFLATION

         We believe that inflation has generally not had a material impact on
our operations.

                                       22
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

                  Reference is hereby made to Item 3 of our Annual Report on
         Form 10-KSB, for the fiscal year ended December 31, 2000, filed April
         2, 2001 (Commission File No.: 1-14076), and to the references therein,
         for a discussion of all material pending legal proceedings to which we
         or any of our subsidiaries are parties.

                  In February 2000, we received a demand for arbitration with
         respect to certain fees payable in connection with an investment
         banking agreement which we terminated. The claim calls for payment of
         $45,000 and reinstatement of the warrants to purchase 15,000 shares of
         common stock cancelled upon termination of the investment banking
         agreement or payment of the value of such warrants, and legal and other
         expenses in connection with the arbitration. This arbitration
         proceeding has been suspended. We believe that the claims in this
         arbitration action are without merit and intend to vigorously defend
         this action.

                  On January 9, 2001, we entered into an agreement with a German
         company to sell certain assets and liabilities of our Aachen, Germany
         contact center operation, including the assumption of the remaining
         lease obligation. The agreement calls for a payment to us of
         approximately $100,000, of which approximately $50,000 would be
         utilized to pay remaining tax obligations. The $100,000 payment has not
         been received and is past due. We have commenced legal proceedings to
         collect this amount, the collection of which is unlikely.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

                  On May 17, 2001,our stockholders granted our Board of
         Directors the authority to amend our certificate of incorporation to
         authorize a one-for-three (1:3), one-for-five (1:5), one-for-eight
         (1:8), or one-for-ten (1:10) reverse stock split of the common stock.
         Following such stockholder action, the Company's Board of Directors
         authorized a one-for-ten reverse stock split of our common stock. The
         reverse stock split became effective as of the opening of business on
         May 23, 2001.

                  On May 23, 2001, we issued 91,290 shares of our common stock,
         consisting of 45,645 shares to each of Vincent DiSpigno, our President,
         and David N. Salav, our Vice President and Chief Information Officer,
         in connection with the Agreement and Plan of Merger, as amended,
         between Vizacom and PWR dated March 27, 2000. The issuances of these
         shares were a private transaction exempt from registration pursuant to
         Section 4(2) of the Securities Act.

                  On June 29, 2001, we issued 100,000 shares of our common stock
         to one of our consultants in consideration for the extension of our
         agreement with the consultant and the expansion of the scope of
         services to be provided by such consultant. The issuance of these
         shares was a private transaction exempt from registration pursuant to
         Section 4(2) of the Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

                  Not applicable.

                                       23

<PAGE>

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

                  At the annual meeting of stockholders held on May 17, 2001,
         the following matters were voted upon and adopted by the votes
         indicated:
<TABLE>
<CAPTION>

         ------------------------------------------------------- -------------- ----------- ------------- ----------
                                                                      For        Withheld     Against      Abstain
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         <S>                                                     <C>            <C>         <C>           <C>
         To elect  two  directors  in Class II to our  board of
         directors, Vincent DiSpigno and Neil M. Kaufman.           13,335,293      99,279             -          -
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         To consider to act upon a proposal to grant our board
         of directors authority to amend our certificate of
         incorporation to authorize a reverse split of our
         common stock in the following reverse split ratios:
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         one-for-three (1:3)                                        12,799,083           -       564,906     70,583
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         one-for-five (1:5)                                         12,777,026           -       595,840     61,706
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         one-for-eight (1:8)                                        12,167,768           -     1,197,515     69,289
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         one-for-ten (1:10)                                         12,217,394           -     1,175,048     42,130
         ------------------------------------------------------- -------------- ----------- ------------- ----------
         To approve the issuance of 91,290 shares of our common
         stock that we are currently obligated to issue pursuant
         to the terms of our agreement and plan of merger, as
         amended, with respect to our acquisition of our PWR
         Systems subsidiary in March 2000.                           6,306,291           -       373,817    618,977
         ------------------------------------------------------- -------------- ----------- ------------- ----------
</TABLE>

          The other  directors  whose terms  continued  after the meeting  were:
Francis X. Murphy  (Class I),  David A. Buckel  (Class  III),  and David N.
Salav (Class  III).  Marc E. Jaffe (Class I) resigned as a director on June
20, 2001.

          There were 6,135,487  broker non-votes with respect to the proposal to
approve the issuance of 91,290  shares of our common  stock.  There were no
other broker non-votes with respect to the matters listed above.

ITEM 5.  OTHER INFORMATION.

               None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)   Exhibits.

               Set forth below are all exhibits to this Quarterly Report on
               Form 10-QSB.

         Number   Description
         ------   -----------
         10.01    Closing  Agreement  between the  Internal  Revenue  Service
                  and Software Publishing Corporation last dated May 11, 2001.
         10.02    Promissory Note, dated June 20, 2001, by PWR Systems, Inc.
                  in favor of The Chase Manhattan Bank.
         10.03    Amendment No. 1, dated as of June 29, 2001, to Consulting
                  Agreement, dated as of October 20, 1999, between Vizacom
                  Inc. and Sinclaire International.

         (B)      REPORTS ON FORM 8-K.

                           On April 12, 2001 we filed a Current Report on Form
                  8-K (Date of Report: March 31, 2001) with the Commission
                  reporting, as an Item 2 disclosure: (i) our disposition of our
                  visual communications operations, and (ii) our receipt of a
                  "freezing injunction order" from the Supreme Court of England
                  and Wales restricting our ability to remove assets from
                  England or Wales up to an approximate value of $517,000. The
                  only assets we owned in England or Wales was $150,000

                                       24
<PAGE>

                  we received from one of our former visual communications
                  subsidiaries. Additionally, we reported as an Item 5
                  disclosure that we terminated the employment of five
                  individuals at our Vizy Interactive New York subsidiary
                  resulting in anticipated annual savings of approximately
                  $450,000.

                           On May 22, 2001, we filed a Current Report on Form
                  8-K (Date of Report: May 17, 2001) with the Commission, as an
                  Item 5 disclosure, reporting our one-for-ten (1:10) reverse
                  stock split and the results of our annual stockholders meeting
                  held on May 17, 2001.


                                       25

<PAGE>

                                   SIGNATURES

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

                                                    VIZACOM INC.



Dated:  August 13, 2001               By:           /s/ Vincent DiSpigno
                                          --------------------------------------
                                                      Vincent DiSpigno
                                                        President
                                               (Principal Executive Officer)


Dated:  August 13, 2001               By:          /s/ Alan W. Schoenbart
                                          --------------------------------------
                                                     Alan W. Schoenbart
                                           Vice President - Finance, Treasurer
                                              and Chief Financial Officer
                                             (Principal Financial Officer)

                                       26
<PAGE>


                                  VIZACOM INC.
                                INDEX TO EXHIBITS

Exhibit No.       Description

Number   Description
------   -----------
10.01    Closing  Agreement  between the  Internal  Revenue  Service
         and Software Publishing Corporation last dated May 11, 2001.
10.02    Promissory Note, dated June 20, 2001, by PWR Systems, Inc.
         in favor of The Chase Manhattan Bank.
10.03    Amendment No. 1, dated as of June 29, 2001, to Consulting
         Agreement, dated as of October 20, 1999, between Vizacom
         Inc. and Sinclaire International.

                                       27