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, 2000

[ ]      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)

                             Glenpointe Centre East
                     300 Frank W. Burr Boulevard, 7th Floor
                            Teaneck, New Jersey 07666
                    (Address of principal executive offices)

                                 (201) 928-1001
                           (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: 12,057,739 shares of Common Stock, as
of July 31, 2000.

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, 2000
   (Unaudited) and December 31, 1999                                          3

Condensed Consolidated Statements of Operations for the Three and
   Six Months Ended June 30, 2000 and 1999 (Unaudited)                        4

Condensed Consolidated Statement of Changes in Stockholders'
   Equity for the Six Months Ended June 30, 2000 (Unaudited)                  5

Condensed Consolidated Statements of Cash Flows for the Six
   Months Ended June 30, 2000 and 1999 (Unaudited)                            6

Notes to Condensed Consolidated Financial Statements                       7-13

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations                                       14-21


                                       2
<PAGE>

                                  VIZACOM INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  June 30,           December 31,
                                                                                    2000                 1999
                                                                                ------------         ------------
                                                                                 (Unaudited)
<S>                                                                             <C>                  <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                    $    491,636         $  1,730,495
   Marketable securities                                                              58,145            2,746,678
   Receivables
      Trade, less allowances of $911,575 and $434,290                              5,498,878              558,550
      Other                                                                           65,723               88,842
      Notes                                                                           73,289               86,018
    Inventories                                                                    1,478,042            1,457,604
    Prepaid expenses and other current assets                                        327,454              526,552
                                                                                ------------         ------------
           Total current assets                                                    7,993,167            7,194,739

Property and equipment, net                                                          947,091              828,108
Goodwill, net of accumulated amortization of $659,297 and $256,066                 7,180,965              118,665
Business processes and methodologies, workforce, and customer lists,
  net of accumulated amortization of $398,999                                      5,183,001                 --
Restricted cash                                                                    1,735,093              259,838
Deferred consulting costs                                                          1,387,430            1,269,859
Other assets                                                                       1,127,274              803,762
                                                                                ------------         ------------
           Total assets                                                         $ 25,554,021         $ 10,474,971
                                                                                ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Revolving lines of credit                                                    $  2,432,622         $       --
   Related party notes payable                                                       685,048                 --
   Current portion of capital lease obligations                                       89,195               63,792
   Current portion of long-term debt                                                  80,296              155,554
   Accounts payable                                                                3,971,253            4,111,748
   Accrued liabilities                                                             1,945,114            1,816,744
   Subscription liability                                                          1,475,255                 --
   Sales and value-added taxes payable                                               300,203              393,927
                                                                                ------------         ------------
           Total current liabilities                                              10,978,986            6,541,765

Capital lease obligations, less current portion                                       93,562               98,265
Long-term debt, less current maturities                                              104,634              100,410
                                                                                ------------         ------------
           Total liabilities                                                      11,177,182            6,740,440
                                                                                ------------         ------------

Commitments and contingencies

Stockholders' equity:
   Common stock, par value $.001 per share,
       60,000,000 shares authorized, 12,060,834 and 7,235,578 shares issued           12,061                7,236
   Additional paid-in capital                                                     66,537,808           49,851,699
   Accumulated deficit                                                           (52,003,181)         (47,864,635)
   Accumulated other comprehensive income (loss)                                    (159,454)           1,750,626
   Treasury stock, 3,095 shares, at cost                                             (10,395)             (10,395)
                                                                                ------------         ------------
           Total stockholders' equity                                             14,376,839            3,734,531
                                                                                ------------         ------------
           Total liabilities and stockholders' equity                           $ 25,554,021         $ 10,474,971
                                                                                ============         ============
</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,
                                                                      2000              1999             2000               1999
                                                                 ------------      ------------      ------------      ------------
<S>                                                              <C>               <C>               <C>               <C>
Net sales                                                        $  8,270,977      $  4,362,187      $ 12,213,442      $  9,297,715
Cost of sales                                                       4,980,991         1,524,653         6,297,015         3,057,618
                                                                 ------------      ------------      ------------      ------------
Gross profit                                                        3,289,986         2,837,534         5,916,427         6,240,097

Selling, general and administrative expenses                        5,204,820         3,972,003         9,945,301         7,976,399
Product development                                                   115,308           112,975           277,883           266,344
Amortization of goodwill, business processes and
  methodologies, workforce, and customer lists                        657,419           578,528           802,774         1,172,848
Realized gain on marketable securities                                   --                --          (1,095,348)             --
Unrealized holding gain on marketable securities                         --            (760,146)             --          (1,420,146)
Other expenses (income), net                                           59,464          (241,051)          124,363          (258,631)
                                                                 ------------      ------------      ------------      ------------
                                                                    6,037,011         3,662,309        10,054,973         7,736,814

       Net loss                                                    (2,747,025)         (824,775)       (4,138,546)       (1,496,717)

Dividends on Series A and Series C Preferred Stock                       --             (25,155)             --             (51,316)
                                                                 ------------      ------------      ------------      ------------

       Net loss attributable to common stockholders              $ (2,747,025)     $   (849,930)     $ (4,138,546)     $ (1,548,033)
                                                                 ============      ============      ============      ============
Net loss per common share:
        Net loss per common share - basic and diluted            $      (0.23)     $      (0.16)     $      (0.42)     $      (0.30)
                                                                 ============      ============      ============      ============
        Weighted average number of common shares
          outstanding - basic and diluted                          12,010,815         5,278,524         9,964,566         5,229,233
                                                                 ============      ============      ============      ============
</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, 1999                                            7,235,578     $      7,236     $ 49,851,699    $(47,864,635)

Net loss                                                                     --               --               --        (4,138,546)
Decline in market value of marketable securities                             --               --               --              --
Realization of gain on transfer of marketable securities                     --               --               --              --
Currency translation adjustment                                              --               --               --              --
                                                                                                                       ------------
Total comprehensive loss                                                                                                 (4,138,546)
                                                                                                                       ------------
Sale of common stock in private placements, net                         1,699,425            1,699        6,359,565            --
Common stock issued on exercise of warrants and  stock options            480,107              480          838,679            --
Common stock issued in connection with acquisitions                     2,645,724            2,646        8,597,361            --
Issuance of options to consultants in  connection with an acquisition        --               --            186,500            --
Issuance of  warrants in connection with line of credit                      --               --            382,500            --
Issuance of options and warrants for consulting services                     --               --            321,504            --

                                                                      -----------     ------------     ------------    ------------
Balance at June 30, 2000                                               12,060,834     $     12,061     $ 66,537,808    $(52,003,181)
                                                                      ===========     ============     ============    ============

<CAPTION>
                                                                           Accumulated
                                                                              Other                             Total
                                                                          Comprehensive       Treasury      Stockholders'
                                                                          Income (Loss)         Stock           Equity
                                                                           ------------     ------------     ------------
<S>                                                                        <C>              <C>              <C>
Balance at December 31, 1999                                               $  1,750,626     $    (10,395)    $  3,734,531

Net loss                                                                           --               --               --
Decline in market value of marketable securities                               (696,013)            --               --
Realization of gain on transfer of marketable securities                     (1,095,348)            --               --
Currency translation adjustment                                                (118,719)            --               --
                                                                           ------------
Total comprehensive loss                                                     (1,910,080)            --         (6,048,626)
                                                                           ------------
Sale of common stock in private placements, net                                    --               --          6,361,264
Common stock issued on exercise of warrants and  stock options                     --               --            839,159
Common stock issued in connection with acquisitions                                --               --          8,600,007
Issuance of options to consultants in  connection with an acquisition              --               --            186,500
Issuance of  warrants in connection with line of credit                            --               --            382,500
Issuance of options and warrants for consulting services                           --               --            321,504

                                                                           ------------     ------------     ------------
Balance at June 30, 2000                                                   $   (159,454)    $    (10,395)    $ 14,376,839
                                                                           ============     ============     ============
</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,
                                                                                                        2000                1999
                                                                                                    -----------         -----------
<S>                                                                                                 <C>                 <C>
Operating activities:
Net loss                                                                                            $(4,138,546)        $(1,496,717)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                                                      1,323,164           1,412,037
   Provision for doubtful accounts                                                                       51,518                --
   Unrealized holding gain on trading securities                                                           --            (1,420,146)
   Realized gain on marketable securities                                                            (1,095,348)               --
   Gain on licensing of technology                                                                         --              (211,006)
   Warrants and stock options issued for consulting services                                            321,504              20,462
   Changes in assets and liabilities, net of effects of acquisitions:
      Receivables                                                                                    (1,073,862)            519,451
      Inventories                                                                                       420,584              17,909
      Prepaid expenses and other current assets                                                         230,954            (550,927)
      Other assets                                                                                     (304,492)             (5,479)
      Accounts payable                                                                               (1,545,403)             61,366
      Accrued liabilities                                                                              (339,250)           (550,467)
      Sales and value-added taxes payable                                                               (95,812)               --
                                                                                                    -----------         -----------
             Net cash used in operating activities                                                   (6,244,989)         (2,203,517)
                                                                                                    -----------         -----------

Investing activities:
Purchase of property and equipment                                                                     (103,596)           (219,001)
Investment in website                                                                                   (62,482)               --
Collection of note receivable                                                                            70,584               4,709
Payment for acquisitions, net of cash acquired                                                       (1,662,898)               --
                                                                                                    -----------         -----------
             Net cash used in investing activities                                                   (1,758,392)           (214,292)
                                                                                                    -----------         -----------

Financing activities:
Proceeds from sale of common stock - net                                                              6,361,264             988,356
Proceeds from exercise of warrants and options                                                          839,159               5,500
Borrowings under revolving line of credit                                                               140,385                --
Payment of related party notes                                                                         (308,310)               --
Payment of long-term debt and capital lease obligations                                                (217,080)           (144,292)
Costs related to issuance of equity instruments                                                            --               (33,905)
                                                                                                    -----------         -----------
            Net cash provided by financing activities                                                 6,815,418             815,659
                                                                                                    -----------         -----------

Effect of exchange rate changes on cash and cash equivalents                                            (50,896)            (12,756)
                                                                                                    -----------         -----------

Decrease in cash and cash equivalents                                                                (1,238,859)         (1,614,906)
Cash and cash equivalents at beginning of period                                                      1,730,495           2,377,648
                                                                                                    -----------         -----------
Cash and cash equivalents at end of period                                                          $   491,636         $   762,742
                                                                                                    ===========         ===========

Supplemental disclosure of cash flow information:
  Interest                                                                                          $   104,324         $    10,744
                                                                                                    ===========         ===========
  Income taxes                                                                                      $      --           $      --
                                                                                                    ===========         ===========

Supplemental disclosure of non-cash financing and investing activities:
  Fixed assets acquired with capital lease obligations                                              $    28,725         $      --
                                                                                                    ===========         ===========
  Dividends accrued on preferred stock                                                              $      --           $    51,316
                                                                                                    ===========         ===========
  Fair value of net assets acquired for common stock,
    stock options, and notes payable (see Note 3)                                                   $ 9,890,469         $      --
                                                                                                    ===========         ===========
  Capital stock subscriptions reflected as a liability and restricted cash                            1,475,255         $      --
                                                                                                    ===========         ===========
   Increase in provision for doubtful accounts for pre-acquisition receivables
     reflected as a reduction in related party notes payable                                        $   210,611         $      --
                                                                                                    ===========         ===========
   Warrants issued for other assets                                                                 $   382,500         $   101,265
                                                                                                    ===========         ===========
</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.  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.  Operating  results  for the
     six-month period ended June 30, 2000 are not necessarily  indicative of the
     results  that may be expected for the year ending  December  31, 2000.  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, 1999.

     The condensed  consolidated  balance sheet as of December 31, 1999 has been
     derived from the Company's  audited  consolidated  balance sheet as of that
     date.

2.   Significant Accounting Policies

     Business Combinations

     The Company has accounted for all business  combinations under the purchase
     method of accounting.  Under this method the purchase price is allocated to
     the assets and liabilities of the acquired enterprise as of the acquisition
     date based on their estimated  respective fair values, which are subject to
     revision for a period not to exceed one year from the date of  acquisition.
     The results of operations of the acquired  enterprises  are included in the
     Company's  consolidated  financial  statements for the period subsequent to
     their acquisition.

     Goodwill, Business Processes and Methodologies, Workforce, and Customer
     Lists

     Goodwill,  business  processes and methodologies,  workforce,  and customer
     lists  represent the excess of the purchase  price over the estimated  fair
     values of tangible  assets  acquired in the  purchases of  businesses.  The
     values of these  items  have been  determined  by  independent  appraisals.
     Goodwill  is  amortized  on a  straight-line  basis over a period of 5 to 7
     years. Business processes and methodologies,  workforce, and customer lists
     are being amortized on a straight-line  basis over periods of 3 to 7 years.
     The Company  periodically  evaluates  the  recoverability  of the  carrying
     amounts of these assets as current events or  circumstances so warrant such
     determination.

     Product Development Costs

     Costs incurred in the development of new software  products are expensed as
     incurred until  technological  feasibility  has been  established.  Product
     enhancement  costs  for  products  which  have  established   technological
     feasibility are capitalized,  and  capitalization  is discontinued when the
     product  is  available   for  sale.   Approximately   $787,000  of  product
     enhancement costs had been capitalized through June 30, 2000. Amortization,
     which  commences  when the products are  available  for general  release to
     customers,  is computed at the greater of the  straight-line  rate over the
     estimated life of each product,  or an amount based on the ratio of current
     revenues to the total of current and anticipated revenues.

     Web Site Development Costs

     Certain direct internal and external costs of web site development incurred
     during  the  application   development  stage  are  being  capitalized  and
     amortized  over a three-year  period.  At June 30, 2000,  $254,000 of these
     development costs, net of $77,000 of accumulated amortization, are included
     in other assets.

     Reclassifications

     Certain  reclassifications  have been made to prior periods to conform with
     the current period presentation.


                                       7
<PAGE>

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

3.   Liquidity and Business Risks

     The Company had a working  capital  deficiency of  ($2,985,819) at June 30,
     2000. The Company believes that over the next twelve months it will need to
     raise at least $4,500,000 to meet its currently  anticipated  liquidity and
     capital   expenditure   requirements   and   implement  its  business  plan
     objectives.  Management intends to seek additional financing through one or
     more debt, equity, or convertible  securities offerings.  In June 2000, the
     Company  commenced an offering of up to 1,200,000 shares of common stock at
     a price of $2.47 per share, to existing European  investors who invested in
     March  2000.  In July 2000,  the  Company  commenced  an  offering of up to
     2,500,000  shares  of  common  stock at a price of $2.63  per  share to new
     investors. There can be no assurance that the Company will be successful in
     completing any such offering or offerings,  or any other offerings, or that
     the terms of any such  offering  or  offerings  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.

4.   Acquisitions

     On February 15, 2000, the Company acquired Renaissance Computer Art Center,
     Inc., d/b/a Renaissance  Multimedia,  a New York City based interactive web
     site design firm. The aggregate purchase price, including all direct costs,
     was  $2,691,920  and was paid through the issuance of 449,870 shares of the
     Company's  common stock and a $250,000  cash payment.  The Company  entered
     into a three-year  employment  contract with the  President of  Renaissance
     Multimedia  at an annual  salary of $175,000,  with  certain  predetermined
     performance  bonus targets.  Additionally,  the Company  granted options to
     purchase an aggregate of 600,000  shares of its common stock under its 1994
     Long Term  Incentive Plan to certain  employees of Renaissance  Multimedia.
     The $2,468,487  cost in excess of net tangible  assets acquired of $223,433
     is reflected as goodwill, business processes and methodologies,  workforce,
     and customer lists.

     On March 9, 2000,  the Company  acquired all of the  outstanding  shares of
     Junction 15 Limited,  a London based  interactive web site design firm. The
     aggregate  purchase price,  including all direct costs,  was $2,729,593 and
     was paid through the  issuance of 681,818  shares of the  Company's  common
     stock and a $250,000  cash  payment.  The Company  entered into  three-year
     employment  agreements with two directors and  stockholders of Junction 15,
     with annual salaries of approximately  $150,000 and $80,000,  respectively,
     with  various   provisions   for   pensions,   commissions,   and  bonuses.
     Additionally,  the Company  granted  options to purchase  an  aggregate  of
     250,000  shares of its common stock under its 1994 Long Term Incentive Plan
     to certain  employees of Junction 15. The $2,724,422  cost in excess of net
     tangible  assets  acquired of $5,171 is  reflected  as  goodwill,  business
     processes and methodologies, workforce, and customer lists.

     On March 27, 2000,  the Company  acquired PWR Systems,  a Long Island,  New
     York based interactive  integrator and value-added reseller of computer and
     digital information equipment, for $8,546,112.  The purchase price was paid
     in the form of a $1,000,000 cash payment,  one-year promissory notes in the
     aggregate  principal  amount of $500,000,  convertible  into the  Company's
     common stock at $3 per share,  and payable in equal quarterly  installments
     with  interest of 6.3% per annum,  and  1,500,000  shares of the  Company's
     common  stock,   valued  at  $3  per  share,  issued  to  the  two  selling
     stockholders  of PWR. The  acquisition  agreement also calls for additional
     contingent  consideration  of up to $350,000  per annum for the  three-year
     period  following the  acquisition  based upon  increases in PWR's earnings
     before interest,  taxes,  depreciation,  and  amortization.  The Company is
     further  obligated to issue  additional  common stock if, during the twelve
     months following the acquisition,  the market price of the Company's common
     stock falls below $1 per share for any  thirty-consecutive  day period. The
     Company  entered into three-year  employment  agreements with PWR's selling
     stockholders providing for annual salaries of $200,000 each, and provisions
     for bonuses upon attaining specified performance thresholds.  Additionally,
     the Company  granted  options to purchase an aggregate of 750,000 shares of
     its  common  stock  under its 1994 Long Term  Incentive  Plan to  officers,
     employees and  independent  contractors  of PWR.  Furthermore,  the Company
     agreed to prepay, upon receipt of gross proceeds of $15,000,000 from equity
     offerings, 6.3% notes payable in the aggregate principal amount of $762,745
     to the PWR selling stockholders, equivalent to the retained earnings of PWR
     at the closing date. Otherwise,  these 6.3% notes will be paid in quarterly
     installments  through  March  2001.  The  $7,854,621  cost in excess of net
     tangible  assets  acquired of $691,491 is reflected  as goodwill,  business
     processes and methodologies, workforce, and customer lists.

                                       8
<PAGE>

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

4.   Acquisitions (cont.)

     The following table summarizes the net assets of such acquired businesses:

<TABLE>
<CAPTION>
                                             Renaissance
              Category                       Multimedia         Junction 15        PWR Systems           Total
     ================================        ===========        ===========        ===========        ===========
<S>                                          <C>                <C>                <C>                <C>
     Current assets                          $   365,983        $   163,614        $ 4,086,805        $ 4,616,402
     Noncurrent assets                            97,990             42,728             21,467            162,185
                                             -----------        -----------        -----------        -----------
     Total assets                                463,973            206,342          4,108,272          4,778,587
                                             -----------        -----------        -----------        -----------

     Current liabilities                         209,997            167,997          3,416,781          3,794,775
     Noncurrent liabilities                       30,543             33,174               --               63,717
                                             -----------        -----------        -----------        -----------
     Total liabilities                           240,540            201,171          3,416,781          3,858,492
                                             -----------        -----------        -----------        -----------

     Net assets acquired                         223,433              5,171            691,491            920,095
     Goodwill                                    989,487          1,680,422          4,795,621          7,465,530
     Business processes and methodologies        656,000            484,000            496,000          1,636,000
     Workforce                                   413,000            180,000            413,000          1,006,000
     Customer lists                              410,000            380,000          2,150,000          2,940,000
                                             -----------        -----------        -----------        -----------
     Purchase price                          $ 2,691,920        $ 2,729,593        $ 8,546,112        $13,967,625
                                             ===========        ===========        ===========        ===========
</TABLE>

     Under an August 1999  agreement  with a third party,  the Company agreed to
     transfer  certain of its  marketable  securities,  consisting  of shares of
     common  stock  of  Xceed  Inc.,  based  upon  the  consideration  paid  for
     acquisitions  of any company  identified  by this third party.  The Company
     recorded a realized  gain of  $1,095,348  during the six month period ended
     June 30, 2000  related to 59,813  Xceed  shares  transferred  to this third
     party in the  connection  with the Company's  acquisitions  of  Renaissance
     Multimedia and PWR. The gain represents the realization of the appreciation
     in  market  value at the  dates  of these  acquisitions.  The  third  party
     received 14,953 Xceed shares for the Renaissance Multimedia acquisition and
     44,860 Xceed shares for the PWR acquisition,  resulting in respective gains
     of $371,962 and $723,386.

5.   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 did
     not have an effect on the computation of diluted  earnings per share in the
     three and six month  periods  ended June 30,  2000 and 1999 since they were
     anti-dilutive.

6.   Debt

     The revolving lines of credit consist of the following:

     Notes payable to bank                                       $1,514,172
     Inventory financing facility note payable                      918,450
                                                                 ----------
                                                                 $2,432,622
                                                                 ==========

     The  notes  payable  to  bank  are  secured  by the  assets  of PWR and are
     guaranteed  by the Company.  The notes bear interest at prime plus one-half
     percent (10% at June 30, 2000).


                                       9
<PAGE>

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

6.   Debt (cont.)

     The inventory  financing facility note payable may be repaid within 40 days
     without  interest.  On the 41st day,  interest begins accruing at a rate of
     1.25%  per  month.  The  line is  collateralized  by  PWR's  inventory  and
     personally  guaranteed by the PWR selling  stockholders.  On July 21, 2000,
     PWR terminated its relationship with this lender and repaid the outstanding
     inventory loan balance of approximately  $925,000 with existing cash funds.
     PWR  is  currently  negotiating  with  another  financing  company  for  an
     inventory financing facility.

     The related party notes consist of two notes payable to the two PWR selling
     stockholders and consist of the following:

     Notes payable to stockholders, 6.3%:
     Convertible notes, payable in monthly installments            $377,930
     Retained earnings notes, payable in quarterly installments     307,118
                                                                   --------
                                                                   $685,048
                                                                   ========

     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.  All future  advances  are payable  within 180 days of the
     receipt of the advance,  and the credit  facility has a two-year  term.  In
     connection with the first advance under this credit  facility,  the Company
     issued  seven-year  warrants to purchase an aggregate of 250,000  shares of
     its common stock  exercisable at $3 per share.  The warrants were valued at
     $382,500  and are being  charged  to  interest  expense  over the  two-year
     agreement period.

7.   Stockholders' Equity

     On January 8, 2000,  the Company  entered into a three-year  agreement  for
     consulting   services   primarily  related  to  acquisition  and  financing
     assistance  under  which the Company  issued  650,000  three-year  warrants
     exercisable  at $3 per share.  One hundred  thousand of these  warrants are
     exercisable  immediately,  and 400,000  warrants are  exercisable  upon the
     attainment of specified performance targets. In addition,  150,000 warrants
     are being held in escrow  and are to be  released  on  January 7, 2003,  or
     earlier with the Company's  approval.  The Company has recorded a charge of
     $172,404 related to the currently  exercisable 100,000 warrants, as well as
     a $34,507  pro-rata  variable  charge for the 150,000  warrants  subject to
     escrow.

     In March 2000, the Company completed two private  placements under which it
     sold 1,699,425 shares of its common stock for gross proceeds of $7,609,290.
     Under the first of these  private  placements,  the  Company  sold  936,954
     shares of its common stock and received gross  proceeds of  $4,216,294.  In
     the second private placement, conducted in Europe, the Company sold 762,471
     shares of its common stock for gross proceeds of $3,392,996.

     The Company has received  additional  subscriptions  in the second European
     private  placement for 331,518 shares with an aggregate gross  subscription
     price of $1,475,255. Accordingly, at June 30, 2000 the Company recorded the
     $1,475,255  received from these  investors as restricted  cash as well as a
     subscription   liability   in  the  same  amount.   The  Company   accepted
     subscriptions   for  311,518  of  these  shares,   for  gross  proceeds  of
     $1,386,255, on July 31, 2000. The Company is awaiting a final determination
     by the Nasdaq Stock Market relating to the non-integration of the two first
     quarter  private   placements  under  the  Nasdaq   Marketplace  Rules,  or
     alternatively, that notwithstanding any such integration of the two private
     placements  that the number of shares of common  stock  issued and issuable
     does not exceed 20% of the Company's  outstanding common stock for purposes
     of such Marketplace  Rules.

                                       10
<PAGE>

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

8.   Litigation

     In the fourth quarter of 1998, an action was commenced  against  Vizacom in
     California  in which  plaintiff  is seeking  $300,000  in  damages  for the
     Company's  alleged  violation  of a lease for office  space  located in San
     Jose,  California.  This is the location at which one of our  subsidiaries,
     Software Publishing Corporation, 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. The Company no longer has any offices at
     this  location.  The Company has filed an answer in this action denying the
     plaintiffs'  claims and at the  appropriate  time,  plans to file a summary
     judgment  motion seeking a  determination  in its favor on the claims.  The
     Company  believes that the plaintiffs  claims are without merit and intends
     to vigorously defend itself in 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  warrants  to  purchase  150,000  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.  The Company believes that the claims in this action
     are without merit and intends to vigorously defend itself in this action.

     On January 30,  1998,  an action was  commenced  against the  Company,  its
     current chief executive officer and its former chief executive officer. The
     action alleged that the plaintiffs'  investment in 296,333 shares of common
     stock  for  $919,495  was made  based  upon  certain  information  that was
     intended to deceive the  plaintiffs.  The plaintiffs  sought to rescind the
     investment and certain other relief. In April 2000, this case was dismissed
     with prejudice with no further cost to the Company.

     The Company has other litigation matters in progress in the ordinary course
     of business.  In the opinion of management,  all pending  litigation of the
     Company will be resolved without a material adverse effect on the Company's
     financial position, results of operations or cash flows.


                                       11
<PAGE>

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

9.   Segment Information

     During the  quarter  ended March 31,  2000,  the  Company  completed  three
     acquisitions described in Note 4. Collectively, the three acquisitions form
     the  foundation  for the  Company's  international  interactive  e-commerce
     solutions business, which is referred to as Vizy Interactive. Revenues from
     this business segment consist primarily of e-commerce consulting,  web site
     design, web and systems integration services and hardware sales.

     The Company's  historical business consists 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,   and  its  internet-based
     e-commerce  network  portal  VisualCities.com.  During the first quarter of
     2000, the Company began to market its web-enabled call center  capabilities
     to third party  customers.  During the second  quarter of 2000, the Company
     reorganized   its   historical   business   into   two   segments:   visual
     communications  products  and  web-enabled  call  center  operations.   The
     Company's   web-enabled   call  center   business  is  included  in  visual
     communications  products, and is not shown separately as its operations are
     as yet  insignificant.  In addition,  the Company's  visual  communications
     segment  discontinued the sale of digital  cameras,  except for promotional
     activities and the liquidation of existing inventories.

     Information concerning our six-month segment operations is set forth below:

<TABLE>
<CAPTION>
                                                                   Visual
                                                               Communication        Vizy
                                                                  Products       Interactive       Corporate      Consolidated
                                                               ===============================================================
<S>                                                            <C>              <C>              <C>              <C>
     Six months ended June 30, 2000:
     Net sales                                                 $  6,057,858     $  6,155,584     $       --       $ 12,213,442
     Investment gains                                                  --               --          1,095,348        1,095,348
     EBITDA                                                      (2,234,594)         105,333         (364,617)      (2,493,878)
     Depreciation and amortization                                  236,485          773,768          312,911        1,323,164
     Warrants and stock options for consulting services                --               --            321,504          321,504
     Segment profit (loss)                                       (2,471,079)        (668,435)        (999,032)      (4,138,546)
     Total assets                                                 3,458,239       19,393,001        2,702,782       25,554,021

     Six months ended June 30, 1999:
     Net sales                                                 $  9,297,715     $       --       $       --       $  9,297,715
     Investment gains                                                  --               --          1,420,146        1,420,146
     EBITDA                                                       1,080,589             --         (1,144,807)         (64,218)
     Depreciation and amortization                                1,398,832             --             13,205        1,412,037
     Warrants and stock options for consulting services                --               --             20,462           20,462
     Segment profit (loss)                                         (318,243)            --         (1,178,474)      (1,496,717)
     Total assets                                                 4,054,856             --          4,882,266        8,937,122
</TABLE>

10.  Related Party Transactions

     During the first six months of 2000,  the  Company  incurred  approximately
     $734,000  of  legal  fees,  primarily  in  connection  with  the  Company's
     acquisition and financing  transactions,  to a law firm of which a director
     of the Company is a member. Approximately $452,000 owed to this law firm is
     included in accounts payable at June 30, 2000.


                                       12
<PAGE>

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

11.  Commitments

     In April  2000,  the  Company  entered  into a letter of intent to  acquire
     certain  operating assets of Silkroad  Interactive Inc. in a cash and stock
     transaction.  Silkroad  Interactive  Inc.  is a New York City based web and
     systems integration company focused on internet security systems,  customer
     relationship   management  software,  and  e-commerce  systems  development
     activities.  The  consummation of this  acquisition is subject to customary
     closing conditions.

     In May 2000,  the  Company  entered  into a letter  of  intent  to  acquire
     interMETHODS   Limited,   a  London-based  web  systems   integrator.   The
     consummation   of  this   acquisition  is  subject  to  customary   closing
     conditions.

     On June 1 2000,  PWR entered into a five year,  three month lease for 3,817
     square feet in Long Island,  New York. The Company  intends to utilize this
     space to provide  data  center  services  to its  clientele  as well as for
     internal use. Rental commitments under this lease for the five years ending
     August 31, 2005 are as follows:

      Year        Amount
     --------   -----------
      2001        $ 75,227
      2002        $ 77,135
      2003        $ 88,109
      2004        $ 89,700
      2005        $ 59,800

12.  Subsequent Events

     On July 21,  2000,  PWR  terminated  its  relationship  with its  inventory
     finance  lender and repaid its  outstanding  loan balance of  approximately
     $925,000. See Note 6.

     On July 31, 2000 the Company accepted  subscriptions  from certain European
     investors  for  311,518  shares for gross  proceeds  of  $1,386,255.  These
     subscriptions  were  reflected  as  restricted  cash  and  a  corresponding
     subscription liability as of June 30, 2000. See Note 7.


                                       13
<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 the Company's 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:

o    the market acceptance and amount of sales of our products and services,
o    the success of our expansion into internet and other interactive e-commerce
     solutions offerings, such as web site design, web-enabled customer service
     and systems integration,
o    our success in integrating the operations of acquired companies, including
     Renaissance Multimedia, Junction 15 and PWR, into a coordinated and
     complementary operation,
o    our ability to retain an active user base, attract new users and maintain
     customer satisfaction for our software products,
o    the extent that our direct marketing operations achieve satisfactory
     response rates,
o    the competitive environment within the industries in which we operate,
o    our ability to raise additional capital,
o    the extent to which we are successful in developing, acquiring or licensing
     products which are accepted by the market,
o    our ability to attract and retain qualified personnel,
o    business and consumer trends,
o    the cost-effectiveness of our product development activities, and
o    the other factors and information disclosed and discussed in other sections
     of this Quarterly Report on Form 10-QSB.

Investors  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.

Business Overview

Vizacom is a provider of interactive  professional internet solutions that build
the  strategy,  design,  processes  and customer  support  systems for companies
seeking to benefit  from the use of  internet-based  technologies.  We currently
operate nine offices in the United  States,  United  Kingdom,  and Germany.  Our
solutions consist of business strategy  consulting,  creative graphic design and
branding,  e-commerce and interactive assistance, web and network infrastructure
design and  integration,  and data center  services.  We also provide  web-based
customer  relationship  support  solutions  through our web-enabled  call center
operations,  and we believe that these solutions differentiate us from competing
Internet architect solutions providers. Additionally, we continue to operate our
historical software business, in which we develop and sell visual communications
computer software products and market third-party computer software products.

Our  professional  internet  solutions  are  intended  to assist our  clients in
improving  their business  systems and  efficiencies,  enhancing  their customer
relationships,  promoting  revenue-generating  opportunities,  and marketing and
branding their businesses,  products and services. We gained our competencies in
business  consulting,   creative  design  and  branding,  and  web  and  network
infrastructure  design  and  integration  through  our  recent  acquisitions  of
Renaissance  Multimedia,   Junction  15  and  PWR.  These  three  companies  are
collectively  referred  to as  Vizy  Interactive.  We  also  recently  developed
web-based customer  relationship  support solutions,  which are provided through
our  multinational  multilingual  call  center  operation,  known  as  Dialog24.
Dialog24 was developed from our established  telemarketing  operations utilizing
state of the art licensed  technology  which provides  real-time chat, audio and
video over internet protocol.


                                       14
<PAGE>

Our professional internet solutions consist of the following services:

o    business  consulting,  in which we  conceptualize,  develop  and  guide the
     strategy and  implementation  of a client's  electronic  business model and
     objectives;
o    web site  creative  graphic  design and  branding,  in which we produce the
     graphic  design  and  interactivity  of a web site and  promote a  client's
     online brand and market presence;
o    e-commerce and interactive assistance,  in which we assist with the various
     elements and scope of projects;
o    web and network design and integration,  in which we design and develop the
     technology   components  of  the  client's  network  connectivity  and  its
     internet, intranet or extranet, integrate a company's internet, intranet or
     extranet to legacy systems,  and provide  authorized  value-added  reseller
     services of network,  internet,  intranet and extranet  technology products
     and other digital communications equipment; and
o    web-based customer relationship support solutions,  to facilitate real-time
     human  interaction  between an  electronic  business  and its  customers to
     provide and enhance online  customer  satisfaction  and promote  e-commerce
     revenues,  by  allowing  customers  interested  in  purchasing  products or
     navigating  one of our  clients' web sites to  communicate  with one of our
     call  center  agents in a choice  of five  languages  in real time  through
     text-based chat, voice and video over internet protocol.

Clients  of our  Vizy  Interactive  business  primarily  consist  of  small  and
mid-sized  companies,  divisions  and local  offices  of  large,  multi-national
corporations,  and early  stage  internet  ventures.  Current  Vizy  Interactive
clients include Petrossian Paris, SoBe Beverage, MTV Networks, The Harbour Club,
Phillips   Van-Heusen,   Sony  Music,  and  several   additional   domestic  and
internationally recognized companies.

We believe that our professional  internet  solutions business possesses several
competitive  advantages.  We believe that as the professional internet solutions
industry and market matures,  electronic businesses will increasingly demand the
broad spectrum of customer  support  solutions that we currently  offer. We also
believe that our industry-specific  knowledge and local implementation abilities
allow us to effectively  service the business  objectives of companies concerned
with  presenting  an online  brand that is  consistent  with the values of their
locale. Additionally,  we believe that our international operations and presence
will continue to facilitate relationships with interactive companies that we may
target for acquisition or strategic alliance.

We intend to continue to grow the geographic reach of our professional  internet
solutions  business through a disciplined  acquisition  strategy that focuses on
acquiring  interactive  companies  with  reputable  and  established  clientele,
aggressive  and  innovative   boutique  cultures,   and  talented,   experienced
management.   Our  acquisition  strategy  is  to  purchase  companies  or  their
operations for a purchase price that will allow us to achieve positive  earnings
before income taxes,  depreciation and amortization,  or EBITDA, with respect to
such entities, within a reasonable period of time.

We  continue  to develop  and market  visual  communications  consumer  software
products  that  operate on  Windows-based  operating  systems for  personal  and
networked  computers.  Our current  flagship  software  products  include  Serif
PagePlus 6,  Harvard  Graphics  Pro  Presentations,  Serif  DrawPlus 4 and Serif
PhotoPlus 6. We expect to commence  marketing of new upgrades of Serif  PagePlus
and  Harvard  Graphics  in  September  2000.  In  connection  with our  software
business,  we also operate  VisualCities.com,  a destination  web site providing
information  and  products of interest to our software  product  users and other
visual  communications  computer users. We expect to defer continued development
of VisualCities.com at least until internet bandwidth increases  sufficiently to
facilitate  electronic delivery of our complex software programs.  Additionally,
we market a number of  hardware  and  software  products  manufactured  by third
parties.  As a result of declining demand and margins for digital cameras in the
first quarter of 2000, we discontinued  the sale of third-party  digital cameras
in the  second  quarter  of 2000,  except  for  promotional  activities  and the
liquidation of existing inventories.

Through our Serif  subsidiaries,  which we acquired in August 1996, we have over
ten years of experience in software development and multinational telemarketing.
We believe the Serif brand and product line is highly  regarded  and  well-known
throughout  the United  Kingdom.  Through our  Software  Publishing  Corporation
subsidiaries,  which we acquired in December  1996, we own the Harvard  Graphics
brand and product line. We believe the Harvard Graphics brand is internationally
recognized  as  a  pioneer  in  computer  software  applications,   particularly
presentation  graphics  software.  We believe our  reputation  as a developer of
pioneering  software  products and  intellectual  property  gives us competitive
advantages  that may allow us to penetrate  other  software  markets,  including
markets for software that promote e-commerce and support e-businesses.


                                       15
<PAGE>

Results of Operations

General.  Our  operations  for the quarter  ended June 30,  2000  ("2000  Second
Quarter") and the six month period ended June 30, 2000 ("2000 Six Month Period")
reflect the acquisition of Renaissance Multimedia on February 15, 2000, Junction
15 on March 9,  2000,  and PWR on March  27,  2000.  Collectively,  these  three
companies  form  the  foundation  of  our  international  professional  Internet
solutions  business,  which we  refer to as Vizy  Interactive.  The  results  of
operations  of our 2000  visual  communications  business  includes  our  direct
marketing  activities  at our  Aachen,  Germany  call  center  which  began  its
operations in January  2000.  In addition,  our three and six month 2000 periods
included  VisualCities.com  Inc.  operations  which began in October  1999,  and
therefore  were not  reflected in the  comparative  quarter and six month period
ended June 30, 1999. The 2000 Second Quarter  results of operations  reflect our
reduction of direct marketing lead generation  activities and associated  costs,
as  well  as the  refocusing  of  our  direct  sales  activities  in the  visual
communications  area away from digital cameras,  primarily  focusing on our core
software products.

The result of such 2000 changes were increased  revenues from our newly acquired
companies,  increased costs  associated with  integrating and marketing our Vizy
Interactive  business,  and a  decline  in  revenues  in our  historical  visual
communications  business.  The  decline in  revenues  in our  historical  visual
communications  business was due to the  elimination of digital cameras from the
product mix and a reduction in software sales. The Vizy  Interactive  businesses
carried lower gross margins than our historical visual communications  business.
Selling,  general and administrative  expenses and goodwill,  business processes
and methodologies, workforce, and customer lists  amortization  increased due to
the costs  associated with our  acquisitions,  while  marketing  expenses in our
visual  communications  business  decreased  as a  result  of  changes  in  lead
generation  activities  implemented as a result of declines in response rates to
promotional  software  mailings.  We were not able to reduce our more  expensive
lead generation  activities as fast as the decline in revenues. We experienced a
slight increase in our response rates to lead generating activities near the end
of the second quarter.

Comparison of the Three Month Periods Ended June 30, 2000 and 1999

Net Sales.  Net sales  increased by $3,908,790,  or 89.6%,  to $8,270,977 in the
2000 Second  Quarter  from  $4,362,187  in the quarter  ended June 30, 1999 (the
"1999 Second  Quarter").  The increase was primarily  attributable  to our newly
acquired Vizy Interactive business,  which contributed $5,714,557 in revenues in
the 2000 Second Quarter. We had no Vizy Interactive  revenues in the 1999 Second
Quarter. This was partially offset by a decline of $1,805,767 in the revenues of
our historical visual communications business from $4,362,187 in the 1999 Second
Quarter to $2,556,420 in the 2000 Second Quarter.  Approximately $539,000 of the
decline was attributable to the termination of the digital camera  programs.  As
of June 30, 2000 we had approximately $1,270,000 in confirmed back orders.

North  America and  International  net sales for the second  quarter of 2000 and
1999 were as follows:

                                   Three Months Ended June 30,
                      -------------------------------------------------
                          2000           %           1999            %
                      -------------------------------------------------
North America         $ 6,063,325      73.3      $ 1,803,879       41.4
International           2,207,652      26.7        2,558,308       58.6
                      -----------     -----      -----------      -----
Total                 $ 8,270,977     100.0      $ 4,362,187      100.0
                      ===========     =====      ===========      =====

In the 2000 Second  Quarter,  approximately  27% of our net sales were generated
outside the United  States as compared to  approximately  59% in the 1999 Second
Quarter.   While  most  of  the  visual  communications   revenues  are  derived
internationally,  most of our Vizy  Interactive  revenues  are  generated in the
United States.

Gross Profit.  Gross profit  increased by $452,452,  or 15.9%, to $3,289,986 for
the 2000 Second Quarter  compared to $2,837,534 in the 1999 Second Quarter.  Our
gross profit margin was 40% of net sales for the 2000 Second Quarter compared to
65% of net sales in the 1999 Second  Quarter.  Cost of sales was  $4,980,991 for
the 2000 Second Quarter as compared to $1,524,653  for the 1999 Second  Quarter.
The increase in gross profit was primarily  attributable  to our newly  acquired
Vizy Interactive business.  The decline in gross profit margins was attributable
to lower gross profit margins for our Vizy Interactive operations as compared to
our historical visual  communications  business.  $4,726,785,  or 82.7%, of Vizy
Interactive's  revenue  in the 2000  Second  Quarter  was  derived  from our PWR
subsidiary,  where margins  historically  have been in the 15% to 18% range. The
increase in the amount of cost of sales is attributable to the change in the mix
of our sales  revenues  from lower cost  software  sales and digital  cameras to
higher cost items such as web design services and hardware components.  Our cost
of  sales  consisted  primarily  of  product  costs,   royalties  and  inventory
allowances for damaged and obsolete products,  payroll for production  personnel
as well as the costs of hardware and hardware related components.  Product costs
historically  consisted of the costs to purchase the  underlying  materials  and
print both boxes and manuals,  media costs  (CD-ROMs and other media),  assembly
costs, and hardware costs.

                                       16
<PAGE>

Our gross margins and operating income have been affected in particular  periods
by the mix of distribution  channels used, the mix of international and domestic
revenues,  the mix of  products  sold and the timing of  product  introductions,
promotional   pricing  and  rebate  offers,   return  privileges  and  marketing
promotions  in connection  with new product  introductions  and upgrades.  These
promotions  have had a negative  influence on average  selling  prices and gross
margins.  In addition,  gross margins have fluctuated on a quarterly basis as we
utilized alternative direct response  promotions.  Gross margins have also been,
and may continue to be, adversely affected by competitive  pricing strategies in
the software industry as a whole, including competitive upgrade pricing, the OEM
business and alternative  licensing  arrangements.  We expect  additional  gross
margin  fluctuations  for the  balance  of 2000 as we  continue  to  expand  our
professional internet solutions business.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses ("SG&A")  increased by $1,232,817 or 31%, to $5,204,820
in the 2000 Second  Quarter from  $3,972,003 in the 1999 Second Quarter with the
increase attributable as follows: approximately $1,210,000 of was related to our
Vizy  Interactive  business;  approximately  $250,000 to  operating  our Aachen,
Germany call center; and approximately  $428,000 is related to various increases
in consulting fees primarily associated with financial,  investment banking, and
other  consulting  agreements.  These increases were offset by a decrease in our
direct mail  expenditures  of  approximately  $700,000  which  resulted from the
termination of our digital camera  programs and the most of the U. S. sales lead
generation activities associated with our historical software business.

Amortization of Goodwill,  Business Processes and Methodologies,  Workforce, and
Customer Lists. In the 2000 Second Quarter,  $638,683, or 97.2%, of our $657,419
of  amortization  charges  represent  the  amortization  of  goodwill,  business
processes and methodologies, workforce and customer lists for our newly acquired
Vizy  Interactive   businesses.   The  remaining  amortization  relates  to  our
historical  visual  communications  software  business.  The 1999 Second Quarter
amount  represents  our  amortization  of  purchased   technology  and  goodwill
associated with our acquisitions of Serif and SPC.

Realized and Unrealized Gains on Marketable  Securities.  The unrealized gain of
$760,146 in the 1999 Second Quarter  represented  the Company's gain as a result
of holding Xceed stock during those periods.  We had no similar gain in the 2000
Second Quarter.

Product  Development.  Product  development  expenses in the 2000 Second Quarter
increased  by $2,333,  or 2.0%,  to  $115,308  from  $112,975 in the 1999 Second
Quarter.  Product  development  costs,  which  were  primarily  related  to  our
historical visual communications software business, as a percentage of net sales
were  1.4% for the  2000  Second  Quarter  compared  to 2.6% in the 1999  Second
Quarter.  We capitalized  approximately  $153,000 in the 2000 Second Quarter and
$116,000 in the 1999 Second Quarter of product development costs associated with
product designs where technological feasibility had been established.  All other
development  costs have been  expensed  in the period  incurred.  As part of our
historical visual  communications  software  business,  we intend to continue to
acquire externally developed  technology,  explore strategic alliances and other
methods of  acquiring or licensing  technology,  and invest in certain  internal
development projects,  including updating existing products. As part of our Vizy
Interactive and Dialog24 operations, we intend to continue to acquire externally
developed technology,  either through alliances or licensing  arrangements,  and
invest in certain  internal  development  projects.  We believe that development
expenses may  increase in dollar  amount in the future,  although our  long-term
goal is to continue  to reduce  product  development  costs as a  percentage  of
sales.  Because of the  inherent  uncertainties  associated  with  software  and
Internet technology and e-commerce projects,  there can be no assurance that our
research and development efforts will result in successful product introductions
or increased revenues or profitability.

Other (income) expense.  Other expense, net for the 2000 Second Quarter amounted
to $59,464.  This amount consisted primarily of $49,000 of amortization  charges
relating to warrants  issued in  connection  with the  Company's  line of credit
facility. The 1999 Second Quarter amount reflected a gain of $241,051 related to
the licensing of certain software technology.


                                       17
<PAGE>

Comparison of the Six Month Periods Ended June 30, 2000 and 1999

Net Sales. Net sales for the 2000 Six Month Period increased $2,915,727, or 31%,
to $12,213,442  from $9,297,715 in the six months ended June 30, 1999 (the "1999
Six Month Period").  The increase was mainly  attributable to our newly acquired
Vizy Interactive  business which contributed  $6,158,150 in revenues in the 2000
Six Month  Period.  We had no Vizy  Interactive  business  in the 1999 Six Month
Period.  This was partially offset by a decline of $3,242,423 in the revenues of
our historical  visual  communications  business from $9,297,715 in the 1999 Six
Month Period to $6,055,292 in the 2000 Six Month Period.

North  America and  International  net sales for the first half of 2000 and 1999
were as follows:

                                  Six Months Ended June 30,
                       ---------------------------------------------
                           2000          %          1999          %
                       ---------------------------------------------
North America           7,340,836      60.1      3,489,249      37.5
International           4,872,606      39.9      5,808,466      62.5
                       ----------     -----      ---------     -----
Total                  12,213,442     100.0      9,297,715     100.0
                       ==========     =====      =========     =====

In the 2000 Six Month Period,  approximately 40% of our net sales were generated
outside the United States as compared to approximately 63% in the 1999 Six Month
Period.   While  most  of  the  visual   communications   revenues  are  derived
internationally,  most of our Vizy  Interactive  revenues  are  generated in the
United States.

Gross Profit. Gross profit declined by $323,670,  or 5.2%, to $5,916,426 for the
2000 Six Month Period  compared to $6,240,097 in the 1999 Six Month Period.  Our
gross profit margin was 48% of net sales for the 2000 Six Month Period  compared
to 67% in the 1999 Six Month Period.  Cost of sales was  $6,297,015 for the 2000
Six Month Period as compared to $3,057,618  for the 1999 Six Month  Period.  The
decrease in gross profit was due to a decline in higher margin historical visual
communications  software  revenues  which more than offset higher  revenues with
lower  margins from Vizy  Interactive.  The decline in gross profit  margins was
attributable  to  lower  overall  gross  profit  margins  for  Vizy  Interactive
operations  as  compared  to  our  historical  visual  communications  business.
$4,726,785,  or 76.8%,  of Vizy  Interactive's  revenues  for the 2000 Six Month
Period derived from our PWR subsidiary,  where margins historically have been in
the  15%  to 18%  range.  The  increase  in the  amount  of  cost  of  sales  is
attributable  to the  change in the mix of our sales  revenues  from  lower cost
software  sales and  digital  cameras  to higher  cost  items such as web design
services and hardware components.

Selling, General and Administrative Expenses. SG&A for the 2000 Six Month Period
increased  $1,968,902,  or 24.7%,  to $9,945,301 from $7,976,399 in the 1999 Six
Month Period with the increase attributable as follows: approximately $1,477,000
was  related  to  our  Vizy  Interactive  business;  approximately  $536,000  to
operating our Aachen, Germany call center;  approximately $525,000 is related to
various  increases in  consulting  fees  primarily  associated  with  financial,
investment banking, and other consulting agreements;  and approximately $157,000
was associated with the operations of  VisualCities.com,  which did not exist in
the corresponding 1999 Six Month period. A significant portion of the balance of
the increased  SG&A was related to  additional  salaries for executive and other
positions  created  in  2000  in  connection  with  our  international  internet
solutions  business  strategy.  These increases were offset by a decrease in our
direct mail  expenditures of  approximately  $1,100,000  which resulted from the
termination  of our  digital  camera  programs  and most of the U. S. sales lead
generation activities associated with our historical software business.

Amortization of Goodwill,  Business Processes and Methodologies,  Workforce, and
Customer Lists. In the 2000 Six Month Period, $765,301, or 95.3%, of $802,774 of
amortization   charges  represented  the  amortization  of  goodwill,   business
processes and methodologies, workforce and customer lists for our newly acquired
Vizy Interactive  businesses.  The remaining  amortization  relates to purchased
technology and goodwill associated with our acquisitions of Serif and SPC.

Realized and  Unrealized  Gains on Marketable  Securities.  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  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.

The unrealized gain of $1,420,146,  in the 1999 Six Month Period represented the
Company's gain as a result of holding Xceed stock during that period.


                                       18
<PAGE>

Product Development.  Product development expenses for the 2000 Six Month Period
increased  $11,539,  or 4.3%,  to $277,883  from  $266,344 in the 1999 Six Month
Period.  Product development costs as a percentage of net sales was 2.3% for the
2000  Six  Month  Period,  compared  to 2.9% in the 1999 Six  Month  Period.  We
capitalized  approximately $309,000 in the 2000 Six Month Period and $166,000 in
the 1999 Six Month  Period of our  product  development  costs  associated  with
product designs where technological feasibility had been established.  All other
development costs have been expensed in the period incurred.

Other (income)  expense.  Other  expense,  net for the 2000 Six Month Period was
$124,363.  This amount  consisted  primarily of $96,000 of amortization  charges
relating to warrants  issued in  connection  with the  Company's  line of credit
facility.  The 1999 Six Month Period amount reflected a gain of $258,631 related
to the licensing of certain software technology.

Liquidity and Capital Resources

Our cash and cash  equivalents  decreased by  $1,238,859 to $491,636 at June 30,
2000 from  $1,730,495 at December 31, 1999. The Company  received  $6,815,418 in
net proceeds from financing activities,  used $6,244,989 of cash for operations,
and used $1,758,392  primarily for  investments  relating to the cash portion of
the purchase price of three companies comprising our Vizy Interactive  business.
In addition,  we received $1,475,255 of payments from certain foreign investors'
stock subscriptions which were reflected at June 30, 2000 as restricted cash and
a corresponding  subscription liability pending acceptance of such subscriptions
by the Company.  On July 31, 2000 we accepted  subscriptions  from these foreign
investors for 311,518 shares, for gross proceeds of $1,386,255.

Our  operating  and  investing  activities  for the 2000 Six Month  Period  were
primarily  related to the acquisition of three new companies,  increased  direct
marketing  expenditures,  our European expansion,  and the costs associated with
the development of future software products.  We intend to utilize our available
funds  in  2000:  to  finance  the  costs  of  building  our  Vizy   Interactive
professional  internet solutions  business,  including the costs of acquisitions
and the respective working capital needs of acquired companies; for Internet web
site development; for European expansion, for product development, for marketing
and advertising,  for capital expenditures,  including the purchase of computer,
accounting and internet  services  equipment and software,  and for internal and
external  software  development.  Our cash  requirements,  however,  may  change
depending upon numerous  factors,  including,  without  limitation,  the cost of
integrating  our  businesses,  as  well  as  increased  inventory  and  accounts
receivable  arising  from the sale and shipment of new or  additional  products.
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.

Our 2000 Six Month Period financing  activities  consisted of the receipt of net
proceeds of $6,361,264  from the sale of our common stock,  $839,159 from option
and  warrant  exercises,  net  proceeds of $140,385  from  borrowings  under our
revolving  lines of credit,  and the  repayment  of  $217,080  of debt and lease
obligations  and $308,310 of related party notes to the selling  stockholders of
PWR.

We had a working capital  deficiency of ($2,985,819) at June 30, 2000, a decline
of  $3,638,793  from our  working  capital at  December  31,  1999 of  $652,974,
primarily as a result of operating losses and investments in new businesses.  We
believe  that  over  the  next  twelve  months  we will  need to  raise at least
$4,500,000 to meet our currently  anticipated  liquidity and capital expenditure
requirements  and to implement our business plan  objectives.  We intend to seek
additional financing through one or more debt, equity, or convertible securities
offerings.  In June 2000, we commenced an offering of up to 1,200,000  shares of
common stock at a price of $2.47 per share, to our existing  European  investors
who invested in March 2000. In July 2000, we also commenced an offering of up to
2,500,000 shares of common stock at a price of $2.63 per share to new investors.
There can be no assurance  that we will be  successful  in  completing  any such
offering or  offerings,  or any other  offerings,  or that the terms of any such
offering or offerings 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.

In March  2000,  we  completed  private  placements  of our common  stock for an
aggregate of 1,699,425  shares raising  aggregate  gross proceeds of $7,609,290,
before associated placement costs. We utilized approximately $5,000,000 of these
proceeds to fund our  acquisitions and associated legal and other costs thereof;
for working  capital needs of Renaissance  Multimedia,  Junction 15, PWR and our
historical business; and for repayment of our $1,000,000 line of credit loan. We
plan to utilize the proceeds of any additional  financings to pursue  additional
acquisition  targets,  develop our interactive  e-commerce  solutions  business,
expand  our  European  operations,   and  to  fund  our  other  working  capital
requirements.


                                       19
<PAGE>

We are awaiting a final determination by The Nasdaq Stock Market relating to the
non-integration  of our foreign  private  placement with our United States first
quarter 2000 private  placement of 936,954 shares with aggregate  gross proceeds
of $4,216,293,  under the Nasdaq  Marketplace  Rules,  or  alternatively,  that,
notwithstanding any such integration of these two private placements, the number
of  shares  of our  common  stock  issued  and  issuable  in these  two  private
placements does not exceed 20% of our  outstanding  common stock for purposes of
such Marketplace  Rules. In June and July 2000, we responded to Nasdaq's request
for information relating to this determination.

In the first quarter of 2000 we entered into a two-year unsecured line of credit
agreement for maximum  borrowings of $1,000,000,  at an 8% interest rate, with a
foreign company.  We borrowed  $1,000,000 under this agreement in February 2000.
This loan was repaid in full with accrued interest on March 20, 2000, and we now
have $1 million  available  under this line of credit.  We have letter of credit
facilities of  approximately  $260,000  relating to certain  lease  obligations.
Serif  (Europe)  Limited  has a  letter  of  credit  facility  of  approximately
$200,000,  which was fully drawn upon as of June 30, 2000, with its primary bank
in the  United  Kingdom,  and which is secured by Serif  (Europe)  Limited  cash
reserves of a similar amount.  Serif (Europe) Limited has outstanding bank loans
of  approximately  $95,000 at June 30, 2000,  which are secured by substantially
all of its assets.  Our PWR  subsidiary has a $1,500,000  bank credit  facility,
which we have guaranteed and which is secured by PWR's assets. On July 21, 2000,
PWR  terminated  its  relationship  with its inventory  finance lender which had
granted PWR a  temporary  $1,000,000  inventory  flooring  line,  and repaid its
outstanding inventory loan balance of approximately  $925,000 with existing cash
funds.  PWR is  currently  negotiating  with  another  financing  company for an
inventory facility .

Our exposure to foreign  currency gains and losses is partially  mitigated as we
incur operating expenses in the principal foreign currencies in which we invoice
foreign  customers.  As of June 30,  2000,  the Company had no foreign  exchange
contracts  outstanding.  The Company's  foreign exchange gains and losses may be
expected to  fluctuate  from  period to period  depending  upon the  movement in
exchange rates.

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 may be extended  automatically by an additional eighteen months if
we report annual net revenues of $40,000,000,  and an additional eighteen months
should net  revenues  exceed  $60,000,000.  At June 30,  2000,  we have  accrued
$187,500 of consulting fees in connection with this agreement.

Net Operating Loss Carryforwards

We  estimate  our  consolidated  tax  net  operating  loss  carryforwards  to be
approximately  $35  million  at  December  31,  1999,  after  consideration  for
limitations on the use thereof,  which expire in years 2002 through 2019.  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.

Possible Tax Obligation

We have applied for a closing  agreement with the IRS pursuant to which we would
become jointly and severally liable for SPC's tax obligations upon occurrence of
a "triggering event" requiring  recapture of dual consolidated losses previously
utilized by SPC. Such closing  agreement  would avoid the  requirement  that SPC
recognize a tax of approximately  $8 million on  approximately  $24.5 million of
SPC's previous dual consolidated  losses. The IRS notified us that it determined
not to act on our application until SPC submitted certain filings  pertaining to
pre-acquisition  consolidated  tax  year  return  filings  made by SPC.  We have
submitted these filings in an application for relief. We believe that should the
IRS accept the application for relief,  and once a re-application  for a closing
agreement is made, the IRS should agree to such a closing agreement. However, no
assurance  can be given that the IRS will do so, and any  failure to do so could
result in the recognition of this tax liability. Should such a closing agreement
be obtained, in certain circumstances,  a future acquirer of Vizacom 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. This could have a material adverse
effect on our future  ability to sell SPC. The report of


                                       20
<PAGE>

our auditors  covering the December 31, 1999 consolidated  financial  statements
contains a paragraph emphasizing these dual consolidated losses.

Reserves

We provided for allowances on trade  receivables of approximately  16.6% at June
30, 2000 compared to 77.8% at December 31, 1999.  The decline in this  allowance
as a percentage of  outstanding  accounts  receivable is  attributable  to lower
historical bad debt exposure  experienced by our newly acquired Vizy Interactive
business,  which comprised  85.8% of our gross  receivables at June 30, 2000, as
compared to our historical visual communications business.

Seasonality

The computer software market is characterized by significant  seasonal swings in
demand,  which  typically  peak in the fourth quarter of each calendar year. The
seasonal  pattern is due primarily to the increased  demand for software  during
the year-end  holiday buying season and reduced retail and corporate  demand for
business  software  during the European Easter and summer  vacation  period.  We
expect our net sales and  operating  results from our  historical  operations to
continue  to  reflect  this  seasonality.   Our  revenues  may  also  experience
substantial  variations as a result of a number of factors, such as consumer and
business  preferences and  introduction of competing  titles by competitors,  as
well as limited time promotional pricing offers.  There can be no assurance that
we will  achieve  consistent  growth or  profitability  on a quarterly or annual
basis.

We are hopeful that we can mitigate the seasonal  nature of the software  market
with the typically less seasonal pattern of our professional  internet solutions
business.

Inflation

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


                                       21
<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, 1999,  filed April 15, 2000  (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.

Item 2. Changes in Securities and Use of Proceeds

     In the second  quarter of 2000, we issued an aggregate of 129,103 shares of
     common stock to a total of eight individuals for gross proceeds of $149,933
     upon the exercise of options and warrants  held by these  individuals.  The
     issuances of such shares were private transactions exempt from registration
     under Section 4(2) of the Securities Act.

     On May 27, 2000, we issued 14,036 shares of our common stock to Alberdale &
     Co.,  valued at  $46,320,  in  partial  payment of a fee due  Alberdale  in
     connection with our acquisition of Junction 15. The issuance of such shares
     was a private  transaction  exempt from registration  under Section 4(2) of
     the Securities Act.

Item 3. Defaults Upon Senior Securities.

     None.

Item 4. Submission of Matters to a Vote of Security Holders.

     None.

Item 5. Other Information.

     We have  received a number of requests for  information  and  documentation
     from The Nasdaq Stock Market's Listing  Investigations  unit. While we have
     responded to these requests,  we may receive  further  requests to which we
     may be unable to respond,  particularly  with respect to information  about
     certain third parties with whom we transacted business. In addition, Nasdaq
     has  advised us that upon review of our  responses,  its staff may take any
     action that may be appropriate under Nasdaq's Marketplace Rules,  including
     the removal of our common stock from listing on The Nasdaq Stock Market. In
     such event we expect  that our common  stock will  continue to trade on the
     Boston Stock  Exchange and would be eligible to trade on the OTC Electronic
     Bulletin  Board.  A  delisting  of our common  stock  could have an adverse
     effect on the market  price of our common  stock and the ability of persons
     wishing to acquire or sell shares of our common stock to do so.

     Norman  Alexander  has  informed  us  that  he  intends  not to  stand  for
     re-election as a director in class II at our annual meeting of stockholders
     to be held in 2001.

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

          10.1     Lease dated June 1, 2000 between Spacely LLC and PWR
                   Systems, Inc.

          27       Financial Data Schedule.

     (b)  Reports on Form 8-K.

          On June 21,  2000,  we filed a  Current  Report  on Form 8-K  (Date of
          Report:  June  12,  2000)  with  the  SEC  reporting,  as  an  item  5
          disclosure:  (a) the appointment of Edward Proctor as a Vice President
          and chief technology  officer and Vincent DiSpigno as our acting chief
          operating  officer;  (b)  the  resignation  of  Rand  Schulman  as our
          executive vice  president and (c) the status of certain  subscriptions
          in our European private placement with an aggregate gross subscription
          price of $1,475,255, which subscriptions were not yet then accepted.


                                       22
<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 14, 2000              By:         /s/ Mark E. Leininger
                                         ---------------------------------------
                                                     Mark E. Leininger
                                         President and Chief Executive Officer
                                             (Principal Executive Officer)


Dated:  August 14, 2000              By:        /s/ Alan W. Schoenbart
                                         ---------------------------------------
                                                    Alan W. Schoenbart
                                          Vice President - Finance, Treasurer
                                              and Chief Financial Officer
                                             (Principal Financial Officer)


                                       23
<PAGE>

                                  VIZACOM INC.
                                INDEX TO EXHIBITS


Exhibit No.       Description

10.1              Lease dated June 1, 2000 between Spacely, LLC and PWR
                  Systems, Inc.

27                Financial Data Schedule.


                                       24