SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

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

                         COMMISSION FILE NUMBER: 0-20406

                            EZCONY INTERAMERICA INC.
                            ------------------------
             (Exact name of registrant as specified in its charter)

    BRITISH VIRGIN ISLANDS                             NOT APPLICABLE
    ----------------------                             --------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

            Craigmiur Chambers
               P.O. Box 71
Road Town, Tortola, British Virgin Islands                               NONE
      ------------------------------                                     ----
 (Address of principal executive offices)                             (Zip Code)

       Registrant's telephone number, including area code: (507) 441-6566

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                           Common stock, no par value
                           --------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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  [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the Common Stock held by non-affiliates of the
registrant as of March 29, 2001 was approximately $86,292 based on the $.125
closing sale price for the Common Stock quoted on OTC Bulletin Board on such
date. For purposes of this computation, all executive officers and directors of
the registrant have been deemed to be affiliates. Such determination should not
be deemed to be an admission that such directors and officers are, in fact,
affiliates of the registrant. The number of shares of Common Stock of the
registrant outstanding as of March 29, 2001 was 4,510,000.

<PAGE>

                            EZCONY INTERAMERICA INC.
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                       Page
<S>      <C>                                                                                        <C>
                                  PART I

ITEM 1.  BUSINESS                                                                                       1
ITEM 2.  PROPERTIES                                                                                     5
ITEM 3.  LEGAL PROCEEDINGS                                                                              6
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            6

                                  PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK EQUITY AND RELATED STOCKHOLDER MATTERS                    6
ITEM 6.  SELECTED FINANCIAL DATA                                                                        7
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS          8

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                   14
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES         14

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY                                               14
ITEM 11. EXECUTIVE COMPENSATION                                                                        15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                19
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                20

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.                             20
</TABLE>

<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL

Ezcony Interamerica Inc. (the "Company") is a leading distributor to Latin
America of major brand name consumer electronics, including but not limited to,
Sony, Pioneer, AIWA, Samsung, Sharp, Daewoo, Brother and Philips. See page 2
(Major Brand Name Products).

Our consumer electronics products are sold principally to other wholesalers and
distributors, as well as directly to retail chains. We believe that we are one
of the largest independent distributors of Sony, AIWA and Pioneer products to
Latin America.

MARKET OVERVIEW

Since the beginning of our operations in 1982, the principal Latin American
markets for our products have varied significantly. In fiscal year 2000, the
largest Latin American markets for our products were Venezuela, Colombia, Mexico
and Paraguay.

The following table illustrates, for the periods presented, the changes in the
principal Latin American markets for our products by sales volume (in thousands)
and percentage of total net sales from continuing operations. A small amount of
sales were made through distributors and exporters located in the U.S., however,
this means of distribution was substantially eliminated as of the end of fiscal
year 2000.

<TABLE>
<CAPTION>
                        2000                    1999                    1998
                       Amount        %         Amount        %         Amount        %
                      -------     -------     -------     -------     -------     -------
<S>                   <C>             <C>      <C>            <C>      <C>            <C>
Venezuela             $18,369          30      15,612          25      18,120          17
Colombia               14,732          24      12,559          20      29,000          27
Mexico                  5,785           9       5,276           8       4,461           4
Paraguay                4,215           7       3,570           6      15,728          14
Ecuador                 1,466           2         422           1       8,015           7
Caribbean               2,353           4       5,535           9           0           0
All Other              15,108          24      19,141          31      33,606          31
                      -------     -------     -------     -------     -------     -------
            Total     $62,028         100     $62,115         100     108,930         100
                      =======     =======     =======     =======     =======     =======
</TABLE>

For a variety of political and economic reasons, the importation of
non-essential items such as consumer electronics has been restricted or
prohibited from time to time by many Latin

<PAGE>

American countries through exchange controls, import quotas and restrictions,
tariffs and other means. Changes in the trade policies of Latin American
countries affect the market for our products as well as our ability to sell our
products. Future political and economic changes in certain Latin American
countries, including changes in exchange rates, import duties or quotas,
imposition or lifting of exchange controls and other import restrictions, are
likely to result in changes in the markets we operate in.

In fiscal year 1999, we experienced a loss as a result of a forfeiture dispute
that arose with the U.S. government over certain structured payments received
during that year; the resolution of which was recognized for financial purposes
during that year. We have discontinued accepting this form of payment in
connection with our Columbian receivables. We do not believe that this change in
payment policy will materially or adversely affect our business; however, there
can be no assurance that other similar forms of payment will not be challenged
by the U.S. government, or that the business conducted by us in Columbia will
not be materially affected by any further governmental scrutiny.

As described above, we conduct a substantial amount of business in Latin America
and we believe it to be in compliance with all applicable governmental
regulations. There are significant risks in certain countries which arise in
connection with our business, including those associated with the receipt of
payment for goods sold. In particular, Colombia, which represents a significant
market for us, is a country in which the U.S. government has taken a particular
interest in monitoring the flow of funds, especially those involving "structured
payments," e.g., payment practices using a repetitive high volume of cash or
financial instruments in "round" amounts.

We believe that the market for consumer electronics in Latin America differs
from similar markets in the U.S. for the following reasons: (i) Independent
regional distributors are usually the principal means of distribution of
consumer electronics in Latin America, unlike in the U.S. where direct sales by
manufacturers are more typical. Although most major consumer electronics
manufacturers have single-country distributors, operating subsidiaries or joint
ventures; in Latin America, independent regional distributors, such as Ezcony,
still represent the predominant channel for consumer electronics sales. We
believe that over a period of time this means of distribution may well evolve
into a system more like that in the U.S. (ii) State-of-the-art technology, while
an important factor in marketing consumer electronics in the U.S., is often less
important in Latin America where consumers generally are willing to purchase
less advanced products for longer periods of time. (iii) Latin American markets
for consumer electronics generally are less developed than in the U.S.

MAJOR BRAND NAME PRODUCTS

We distribute a wide range of major brand name consumer electronics, including
televisions, video cassette recorders, cellular products, automobile audio
equipment, personal portable

                                       2
<PAGE>

stereos, home audio equipment, camcorders and appliances. In fiscal year 2000,
sales of Sony, Pioneer, Samsung, Daewoo and AIWA products accounted for
approximately 34%, 18%, 23%, 5% and 12%, respectively, of our total net sales.

Most of our major brand name consumer electronics are purchased directly from
manufacturers. As is customary with independent distributors of consumer
electronics in Latin America, we have no written distributorship agreements or
arrangements with these manufacturers. We do have, however, continuing
relationships with certain of these manufacturers that span long periods of
time, ie. our relation with Sony extends over sixteen years. The lack of
distribution agreements or arrangements with our manufacturers, has not caused
us to experience any difficulties in obtaining a satisfactory supply of
marketable consumer electronics from any of our suppliers. From time to time, we
have purchased major brand name consumer electronics from other sources,
including other wholesalers and distributors. During fiscal year 2000, we
executed a distribution agreement with Rockford Corporation of Arizona, U.S.
("Rockford"), to serve as the exclusive and sole distributor of the products
manufactured by Rockford within the Latin American market, except Puerto Rico
and Venezuela. This distribution agreement will significantly enhance our sales
in the assigned territories.

Most of our purchases of Sony and Pioneer products, are supplied from inventory
of these manufacturers located at their respective warehouses in the Colon
Panama Free Zone, Republic of Panama (the "Colon Free Zone"). This method of
supply allows us to limit the amount of inventory that we must keep on hand
which in turn lowers the related inventory holding costs and reduces the lead
time on the placement of orders for products. Sony, Pioneer, Daewoo, Rockford
and Samsung extend us credit for our purchases. On December 31, 2000, our trade
accounts payable to Sony, Pioneer, Daewoo, Rockford and Samsung were
approximately $2.8 million, $2.5 million, $1.2 million, $877,725 and $999,743
respectively.

Sales of Sony products accounted for approximately 34%, 38% and 31% of our major
brand name product sales in 2000, 1999, and 1998, respectively. Sales of Pioneer
products accounted for approximately 20%, 16% and 30% of our major brand name
products sales in 2000, 1999, and 1998, respectively. Sales of Daewoo products
represented 6.1% , 13.5% and 3.1% of our major brand name products sales in
2000, 1999 and 1998, respectively. Sales of Rockford products represented 2.2%,
0% and 0% of our major brand name products sales in 2000, 1999 and 1998,
respectively. Sales of Samsung products represented 23%, 13% and 17% of our
major brand name products sales in 2000, 1999 and 1998, respectively.

DISCONTINUED OPERATIONS

In the third quarter of 1998, we decided to restructure our operations by
closing our facilities in the U.S. and transferring our operations to the Colon
Free Zone facilities. During the 1998 fiscal year, we recorded restructuring
charges totaling $250,759 to recognize: (i) severance and benefits

                                       3
<PAGE>

for employees to be terminated in the amount of $45,000; (ii) lease obligations
ranging from a minimum of $20,800 to a maximum of $137,259; (iii) legal fees in
the amount of $17,500; and (iv) a provision for asset impairment in the amount
of $51,000. The various benefits of this restructuring resulted in a decrease of
our overhead costs in general administrative and sales departments by
approximately 49% and were attributable to: (i) decrease of salaries and
commissions; (ii) closing of sales offices; (iii) implementation of a severe
austerity program to reduce operating expenses; and (iv) implementation of an
integrated operations program to increase gross profit margins.

SALES AND DISTRIBUTION

We sell our products primarily to wholesalers and distributors for re-sale in
Latin America. In addition, we sell directly to several Latin American retail
chains. Our sales staff, which regularly calls on and visits existing and
prospective customers, assists us in evaluating market conditions and customers'
creditworthiness in their assigned market areas.

In certain countries sales are made to a small number of customers, while in
other countries, such as Colombia, sales are made to approximately 100
customers. Our customers include distributors and exporters located in the U.S.,
most of whom re-export our products directly to Latin America; however, this
aspect of our distribution has been significantly curtailed. During the last
three fiscal years, no customers accounted for more than 10% of our total net
sales.

We maintain warehouse facilities in the Colon Free Zone. During 1998, we leased
a warehouse in Miami, Florida which was used as a customs-bonded warehouse on an
"as needed" basis. In the last quarter of 1998, however, we ceased using these
U.S. facilities. Operating from a customs-bonded warehouse in the Colon Free
Zone allows us to import, store and export products without incurring customs
duties unless the products are sold locally. See page 5 (Properties), below.

Generally, sales are recorded upon delivery of merchandise to the shipper. At
times, we sell inventory while still on board vessels inbound from Asia. In
these instances, inbound freight containers are transloaded in the port, or at
public warehouses, for shipment to our customers in order to minimize
warehousing and handling costs. Since products are normally shipped to our
customers shortly after receiving an order, in the past we have not maintained a
significant backlog of orders relative to our sales.

CUSTOMER CREDIT

The majority of our sales are made on open account terms, with receipt of
payment within 30 to 107 days after receipt of goods by the customer. All other
sales are made on the basis of payment

                                       4
<PAGE>

on, or in advance, of delivery of merchandise to the shipper or upon receipt of
a letter of credit. Certain sales made by us are collected in cash and other
negotiable instruments. We require payment in U.S. dollars for all of our sales.
Credit limits are established for our customers based on: (i) our knowledge of
the customer; (ii) the customer's payment history along with available trade
references; and (iii) market conditions. We perform our own analysis of the
creditworthiness of our customers, because of a lack of credit reporting systems
in Latin America with an extensive base. In addition to the risks customarily
associated with extending credit, we have experienced losses from uncollectible
receivables due to the difficulty of pursuing judicial remedies in most Latin
American countries.

COMPETITION

We compete in the sale of consumer electronics with numerous wholesalers and
distributors, some of which have greater financial means and resources than us.
We believe that the most important competitive factors in the sale of consumer
electronics in Latin America are: (i) extension of customer credit; (ii) price;
(iii) quality; (iv) the variety of merchandise and; (v) the ability to obtain
sufficient quantities of merchandise for immediate delivery.

EMPLOYEES

At December 31, 2000, we had 50 full-time employees, all in Panama. As of that
date, there were no employees in the U.S. None of our employees are represented
by a labor union and we have not experienced any material work stoppages. We
consider our relations with our employees to be good.

GEOGRAPHICAL SEGMENT INFORMATION

See pages F-9 (Notes to the Company's Consolidated Financial Statements), Part
II, Item 8, for geographical segment information regarding sales, assets and
operating income for 2000, 1999 and 1998.

ITEM 2. PROPERTIES

In October 1997, we transferred our warehousing operations from two leased
warehouses to a 106,000 square foot warehouse in the Colon Free Zone.
Subsequently, in January 1998 we took occupancy of our new 16,140 square foot
office and showroom in the Colon Free Zone, which was completed at a cost of
approximately $1,235,000. We believe that these new facilities are essential to
support the current operations and future growth. Our facilities in the Colon
Free Zone are leased from "La Zona Libre De Colon" a Republic of Panama
governmental agency

                                       5
<PAGE>

which owns the land of the Colon Free Zone. The leases of the real property
underlying the warehouse, office and showroom expire on July 31, 2014 and
October 31, 2016, respectively, and require annual payments of $12,952 and
$6,811, respectively. The leases can be renewed, at the Company's option, for a
20-year renewal term at the rental rate and terms which are in effect for the
Colon Free Zone at the time of renewal.

ITEM 3. LEGAL PROCEEDINGS

We are, from time to time, involved in routine litigation. We believe that
presently pending actions will not have a material adverse impact on our
financial position or results of operations.

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

No matters were submitted to a vote of security holders during the quarter ended
December 31, 2000.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK EQUITY AND RELATED STOCKHOLDER
        MATTERS

Our common stock trades on the "OTC Bulletin Board" under the symbol "EZCOF".
The following table sets forth the high and low sales prices for our common
stock for each quarter during the last two fiscal years, as reported by the "OTC
Bulletin Board".

                            2000                        1999
                     High          Low           High          Low
                   --------      --------      --------      --------
First Quarter      $   0.31      $   0.10      $   0.19      $   0.06
Second Quarter         2.37          0.28          0.12          0.04
Third Quarter          3.37          0.62          0.14          0.10
Fourth Quarter         0.63          0.28          0.12          0.10

                                       6
<PAGE>

We are not in compliance with the new market value of public float requirements
pursuant to NASD Marketplace Rule 4450 (a) (2), which became effective February
23, 1998. Because of this deficiency, effective August 6, 1998, our common stock
was no longer included in the Nasdaq SmallCap Market, and thereafter our common
stock began trading on the "OTC Bulletin Board" market.

As of March 30, 2001 there were 63 shareholders of record of our common stock.

In the past we have never paid any dividends and we presently have no plans to
pay any dividends on our common stock. All earnings will be retained for the
foreseeable future to support operations and to finance the growth and
development of our business. The payment of future cash dividends, if any, will
be at the discretion of our board of directors and will depend upon, among other
things, future earnings, capital requirements, our financial condition and on
such other factors deemed relevant by our board of directors.

We are not currently subject to any law or regulation of the British Virgin
Islands which would restrict or affect the remittance of dividends or other
payments to any holders of our common stock or which require tax withholding
from any U.S. holders of our common stock. There is no reciprocal tax treaty
between the British Virgin Islands and the U.S. regarding withholding.

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data for each of the years in the five-year period ended
December 31, 2000 are derived from our Consolidated Financial Statements which
have been prepared in accordance with generally accepted accounting principles
in the U.S. and have been audited by our independent accountants. The selected
financial data should be read in conjunction with our Consolidated Financial
Statements and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in Part II Item 7 of this Form 10-K.

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,2000
                                                        --------------------------------------------------------------------
                                                          1996            1997           1998           1999          2000
                                                        ---------      ---------      ---------      ---------     ---------
                                                                          (in thousands, except per share data)
<S>                                                     <C>            <C>            <C>            <C>           <C>
Net sales - continuing operations                       $ 108,746      $ 158,823      $ 108,930      $  62,114     $  62,028
Operating income (loss) from Continuing operations          2,596            929           (810)         1,473     $      78
Income (loss) from continuing operations                    1,930           (933)        (2,944)           509     $  (1,806)
Income (loss) from discontinued operations                   (852)        (2,609)            --             --            --
Net income (loss)                                           1,078         (3,541)        (2,944)           509        (1,806)
</TABLE>

                                       7
<PAGE>

<TABLE>
<CAPTION>
<S>                                                     <C>            <C>            <C>            <C>           <C>
Per Common Share:
Income (loss) from continuing operations                $    0.43      $   (0.21)         (0.65)     $    0.11         (0.42)
Income (loss) from discontinued operations                  (0.19)         (0.58)            --             --            --
                                                        ---------      ---------      ---------      ---------     ---------
Net Income (loss)                                       $    0.24      $   (0.79)     $   (0.65)     $    0.11     $   (0.42)
                                                        ---------      ---------      ---------      ---------     ---------
Common shares outstanding                               $   4,500          4,504          4,510          4,510         4,510
                                                        ---------      ---------      ---------      ---------     ---------
<CAPTION>
                                                           1996           1997           1998           1999          2000
                                                        ---------      ---------      ---------      ---------     ---------
<S>                                                     <C>            <C>            <C>            <C>           <C>
Balance Sheet Data:
Working Capital                                         $   8,386      $   3,444      $   1,608      $   1,414     $     249
  Total Assets                                             37,542         56,929         32,631         28,173        24,340
Short-Term debt                                            11,765         29,057         19,524         14,067        10,166
Long-Term debt                                                458          1,717          2,732          2,256         2,775
Shareholders equity                                         9,737          6,208          3,264          3,773         1,513
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included herein should be read in conjunction with our Consolidated
Financial Statements and the Related Notes to Consolidated Financial Statements.

The financial information in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" refers to our continuing operations.

COMPARISON OF YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998.

Net Sales. Net sales in year 2000 were $62.0 million compared to $62.1 million
in 1999. In 1999 net sales decreased 43% to $62.1 million from $109 million in
1998. Both in 2000 and 1999, the decrease is primarily attributable to decreased
sales in our existing markets, as well as the winding up of business in the U.S.
We have also reduced our product lines products with low profit margins.
Although there were significant increases in some of our markets in 2000; ie.
Venezuela (18%), Columbia (17.8%) and Ecuador (348%), these were offset by
overall decreases in the Caribbean region (-57.5%) and Central America (- 41%).

During 2000, sales of Sony products decreased to $21.3 million or 34.4% of net
sales as compared to 1999 sales of $23.7 million or 37.9% of net sales. Pioneer
sales were $12.2

                                       8
<PAGE>

million in 2000 or 19.9% of net sales compared to $10.1 million or 16.1% of net
sales in 1999. Samsung contributed $13.9 million in net sales in 2000 (22.5% of
net sales) as compared to $8.3 million in net sales in 1999 (13.3% of net
sales).

During 1999, sales of Sony products decreased to $23.7 million or 37.9% of net
sales as compared to 1998 sales of $33.7 million or 31% of net sales. Pioneer
sales were $10.1 million in 1999 or 16.1% of net sales compared to $32.3 million
or 30% of net sales in 1998. Samsung contributed $8.3 million in net sales in
1999 (13.3% of net sales) as compared to $18 million in net sales in 1998 (16.5%
of net sales).

Gross Profit. Gross profit increased 12.7% to $5.4 million in 2000 from $4.8
million in 1999. Our gross profit margin increased to 8.8% in 2000 from 7.7% in
1999. In 1999, gross profit decreased 32% to $4.8 million from $7.1 million in
1998. Our gross profit margin increased to 7.7% in 1999 from 6.5% in 1998. Both
increases are primarily attributable to selective sales of merchandise with
better than historic margins.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $5.37 million in 2000 versus $3.36 million
in 1999. The increase was principally attributable to: (i) a $21,000 increase in
travel expenses as a result of our efforts in exploring new opportunities and
different business'; (ii) a $1.6 million increase in bad debt expense; (iii) a
$26,000 increase in utilities and telephone; (iv) a $49,600 increase in licenses
and shipment taxes; and (v) a $41,200 increase in warehouse maintenance and
repairs.

In 1999, selling, general and administrative expenses decreased to $3.4 million
versus $7.9 million in 1998. The reduction was principally attributable to: (i)
decrease in salaries and commissions; (ii) the implementation of a severe
austerity program to reduce operating expenses to a minimum; and (iii) benefits
of the implementation of a restructuring program.

Interest. Interest income increased from $326,460 in 1999 to $349,478 in 2000
due to interest charged to customers for past due balances. In 1999, interest
income decreased to $326,460 from $495,540 in 1998 due to lower average daily
balances of restricted cash.

Interest expense increased from $1.7 million in 1999 to $1.8 million in 2000 as
a result of increased interest paid to Hamilton Bank due to monthly overdrafts.
In 1999, Interest expense decreased to $1.7 million from $2.9 million in 1998 as
a result of decreased sales.

                                       9
<PAGE>

Other Income (Loss). Other income (expenses) decreased from $421,889 in 1999 to
an expense of ($405,348) in 2000, primarily attributable to the devaluation of
investment securities in the trading classification. In 1999, other income
increased to $421,889 from $276,268 in 1998. This increase was primarily
attributable to additional rental income derived from partially leasing our
warehouse and the yearly increase of rental income from property leased to third
parties.

Income (Loss) from Continuing Operations. Losses from continuing operations were
($1,805,714) ($-.42 per share) in 2000 compared to an income of $508,759 ($.11
per share) in 1999. The change was primarily due to the extraordinary reserve
for doubtful accounts receivable of $1,858,000 recorded for the year 2000 for
accounts that are more than 90 days due. In 1999, income from continuing
operations was $508,759 ($.11 per share) compared to a loss from continuing
operations of $2.9 million ($.65 per share) in 1998. The change was primarily
due to the decrease in the selling, general and administrative expenses along
with the increase in other income (expense). Losses from continuing operations
in the 2000 fiscal year, as well as in past years, can also be attributed to
write off's for uncollectible account receivables due to poor economic
conditions in Latin America. Management has taken steps to accurately reflect
the impact of uncollectible accounts in fiscal year 2000, along with revising
their credit/sales policy. We believe our revised credit/sales policy will
minimize future write offs for uncollectible accounts.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed our operations through short-term bank borrowings,
trade credit and, to a lesser extent, internally generated funds. During 2000 we
significantly decreased our bank borrowings and relied more heavily on trade
credit from our principal suppliers (described below). Overall, our borrowings
decreased due to decreased sales resulting from deterioration in the economic
environment of the foreign countries in which we sell goods.

We generated approximately $2.3 million in cash from operating activities in
2000. This was primarily due to a decrease in trade accounts receivables of $1.1
million, bank overdrafts of $957,802, and an increase in accounts payable of
$766,101 offset by an increase in inventories of $1.3 million. Cash flow from
operating activities in fiscal 2000, was significantly less than in prior years,
and should this trend continue, the Company will not have sufficient working
capital to continue its present operations. Future decreases in cash from
operating activities may force us to rely on further financing from third
parties, which may not be available, or in the sale of certain assets which may
not be readily marketable. In 1999, we generated approximately $5.2 million in
cash from operating activities. This was primarily due to a decrease in trade
accounts receivables of $4.1 million primarily as a result of reduced sales on
credit and an increase in accounts payable of 1.5 million, offset by an increase
in accrued expenses of $927,499.

Cash provided for investing activities was approximately $1.2 million in 2000
compared to $154,659 in 1999 primarily attributable to net decreases in
restricted cash in both years.

Cash used for financing activities was approximately $3.8 million in 2000
principally due to the repayment of bank notes and payables of $4.5 million, a
$1.1 million increase in long term debt and the purchase of treasury stock in an
amount of $454,398. In 1999, cash used for financing activities was
approximately $6 million, principally due to the repayment of notes and
acceptances due banks and long term debt.

We believe that our ability to repay indebtedness must be achieved through funds
generated from our operations. Expanded sales in existing markets were primarily
made

                                       10
<PAGE>

on a credit basis as opposed to a cash basis. Future political and economic
changes in the Latin American countries in which we sell our products, such as
the imposition or lifting of exchange controls, may affect our ability to
collect our accounts receivable. From time to time, we experience temporary
liquidity problems that are typically related to our credit policies with our
customers. We have taken measures to decrease the number of days to collect on
our accounts receivable by not shipping merchandise to certain customers that
have significant past due balances and increasing the collection efforts of our
credit and collections department. At December 31, 2000, we had available, with
three banks, an aggregate of $19 million in bank facilities of which $17.8
million were being utilized. From time to time, we incur overdrafts with various
financial institutions for periods of a few days. At December 31, 2001 our
aggregate liability for bank overdrafts incurred during the 2000 fiscal year was
$957,802. All of our credit lines and credit facilities from our various lenders
are on demand.

We receive open account credit from the majority of our principal suppliers in
amounts determined by such manufacturers from time to time and are due on terms
which range from 30 days to 90 days after receipt of inventory.

We continue to have good relationships with our principal suppliers, Sony and
Pioneer. At December 31, 1999 and 2000, respectively, our credit facility with
Sony was $4.8 million and $3.4 million which were partially collateralized by
$1.9 and $2.4 million in stand-by letters of credit. Our credit facility with
Pioneer at December 31, 1999 and 2000, respectively, was $4 million and $1.5
million which were partially collateralized by $1.7 million and $800,000 in
stand-by letters of credit. From time to time both Sony and Pioneer have allowed
us to exceed our credit line above its stated amount. At December 31, 1999 and
2000, our trade payable to Sony was $3.9 million and $2.8 million and Pioneer's
were approximately $1.2 million and $2.5 million, respectively. Overall credit
facilities from suppliers was approximately $8 million at December 31, 2000, of
which $8.3 were used at the end of the period.

At December 31, 1999 and 2000, respectively, our outstanding short-term
borrowings, comprised of notes and acceptances, were $8.7 million and $8.9
million, principally maturing at varying dates through 2001 and at varying
interest rates based on prime rates.

Our short-term borrowings are partially collateralized by approximately $2.8
million of time deposits owned by us. None of our lenders is under any
obligation to continue to provide credit to us under currently existing terms.

At December 31, 2000, our working capital decreased to $249,000 from $1.4
million at December 31, 1999, primarily due to maintaining higher inventories.
At December 31, 1999, our working capital decreased to $1.4 million from $1.6
million at December 31, 1998, primarily due to maintaining lower inventories.

                                       11
<PAGE>

At December 31, 1999 and 2000, we had available with three banks an aggregate of
$19 million and $20 million, respectively, in bank facilities of which $19.7
million and $18.7 million, was utilized. From time to time, we are overdue with
various bank lenders for periods of a few days for amounts we do not consider to
be significant in light of the size of our borrowings. All of our lines of
credit and credit facilities from our various lenders are "on demand."

For a variety of political and economic reasons, the importation of
non-essential items such as consumer electronics has been restricted or
prohibited from time to time by many Latin American countries through exchange
controls, import quotas and restrictions, tariffs and other means. Accordingly,
changes in the trade policies of Latin American countries affect both the market
for our products as well as our ability to sell our products. Our ability to
sustain continued sales growth is greatly dependent on the continuing favorable
economic and political climate of the Latin American countries that we are
currently operating in, our ability to maintain or increase the profit margins
on our sales within the competitive market we operate in, availability of
payment methods to our customers, and, to a lesser extent, product availability.

COUNTRY RISK

We do a substantial amount of business in Latin America. There are significant
"Country Risks" which arise in connection with this business, including those
associated with the receipt of payment for goods sold. In particular, Colombia,
which represents a significant market for us, is a country for which the U.S.
government has taken particular interest in monitoring the flow of funds.
Although we believe that payments received currently comply with all applicable
U.S. government laws and regulations, there can be no assurance that forms of
payment will not be challenged by the U.S. government, or that business done in
Colombia by us will not be materially affected by U.S. government scrutiny. See
page 1, (Market Overview).

SEASONALITY

Our operations have historically been seasonal with generally higher sales in
the second and third fiscal quarters. Higher second and third quarter sales
result from increased sales to retail chains and in anticipation of the
Christmas holiday season. Sales may also vary by fiscal quarter as a result of
the availability of merchandise for sale. Therefore, the results of any interim
period are not necessarily indicative of the results that might be expected
during a full fiscal year.

FOREIGN EXCHANGE FLUCTUATIONS

Although fluctuations in foreign exchange rates could affect our cost of
inventory, such fluctuations have not been material to our results of operations
since we make all of our

                                       12
<PAGE>

purchases in U.S. dollars. Unforeseen fluctuations in foreign exchange rates
could result in our customers being unable to meet their obligations since we
require payment in U.S. dollars for all of our sales.

ASSET MANAGEMENT

In 2000, our inventory turnover from continuing operations was 15 times compared
to 25 times for the year ended December 31, 1999 and 17 times for the year ended
December 31, 1998. The generally high rate of inventory turnover benefits us by
allowing us to maximize our sales within our limitations in supplier and bank
credit. We generally do not maintain a significant inventory of our products. At
December 31, 2000 inventories were $3.7 million compared to $2.3 million at
December 31, 1999, a 56% increase and $2.2 million at December 31, 1998, an 8.4%
decrease.

At December 31, 2000, trade accounts receivable were $11 million compared to
$14.7 million at December 31, 1999, a decrease of 25% and $19.3 million at
December 31, 1998, a decrease of 24.4%. At December 31, 2000, the number of
days of sales from continuing operations in accounts receivable was 107 days
compared to 99 days at December 31, 1999 and 85 days at December 31, 1998. This
increase was principally due to political and economic changes that affected the
timing of collections. Future political and economic changes in the Latin
American countries in which we sell, such as the imposition or lifting of
exchange controls, may affect our ability to collect our accounts receivable.

We grant credit to our customers after considering various factors, including
reputation, location, available financial information and the number of years in
business. No formal credit reporting is available for Latin American companies.
We closely monitor credit sales by monitoring each customer's payment history
and other relevant information.

FORWARD LOOKING STATEMENTS

From time to time, we publish "forward-looking statements", within the meaning
of the Private Securities Litigation Reform Act of 1995, including certain
statements in the "Management's Discussion and Analysis of Financial Condition
and Results of Operations," of this Form 10-K, which relate to such matters as
anticipated financial performance, business prospects, new products and similar
matters. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. In order to comply with the terms of the
safe harbor, we note that a variety of factors could cause our actual results
and experience to differ materially from the anticipated results or other
expectations expressed in our forward-looking statements. Such factors include,
among others: (i) increasing working capital; (ii) obtaining and maintaining
bank credits despite overdue status or other defaults from time to time. The
general availability of credit from our principal suppliers and banks to finance
our inventory, specifically, the continued cooperation of our major suppliers
and

                                       13
<PAGE>

our banks to provide credit, and their forbearance from time to time as well as
the successful consolidation of our borrowings; (iii) the discontinuation of
certain non-profit aspects of our business, e.g., certain products and
customers; (iv) collection of receivables in excess of 90 days; (v) economic
developments in those foreign countries in which we conduct a material amount of
business, including Colombia, Paraguay, Ecuador, and Venezuela, as well as those
markets which are the source of competition, e.g., Asia.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See pages F-1 - F-24 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURES

We were formally advised in writing on December 2, 1998, that our independent
certified public accountants were withdrawing from their engagement to audit our
financial statements. The accountants' report on our financial statements for
the previous two years did not contain any adverse opinion, or disclaimer of
opinion, nor were any such reports modified as to uncertainty, audit scope or
accounting principles. Further, there have been no disagreements with our former
accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of the accountants, would have caused the
accountants to make reference to the subject matter of the disagreement(s) in
connection with their report(s) thereon during our two most recent fiscal years
and the subsequent interim period through December 2, 1998 (ie. the date of the
former accountant's resignation).

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Certain information concerning our directors and executive officers is
set forth below:

         Ezra Cohen, age 39, has been our President and Chief Executive Officer
since January 1992. He became Chairman of our board of directors on April 30,
1996. Mr. Cohen has also been a director and President of Ezcony International
Corporation, a subsidiary of ours, since March 1988. Mr. Cohen was a director
and President of Ezcony Trading Corporation ("Ezcony Trading"), another
subsidiary of ours, from 1982 until March 1988. Mr. Cohen again became President
of Ezcony Trading on April 30, 1996.

         Moises Ezra Cohen, age 72, has been a director of ours since 1990. Mr.
Cohen was Chairman of our board of directors from January 1992 until April 30,
1996, and President of Ezcony Trading from March 1988 until April 30, 1996.
Prior to December

                                       14
<PAGE>

1989, Mr. Cohen was owner and President of Novedades Toby, a group of consumer
retail stores in Panama City, Republic of Panama.

         Carlos N. Galvez, age 55, has been a director of ours since 1999 and
our Chief Financial Officer since September of 1998. Mr. Galvez served as Vice
President of Finance and Administration of Atlantic Time, S.A., a Nevada
corporation and subsidiary of Seiko Corporation of America in Mahwah, NJ. Mr.
Galvez joined Ezcony Trading as Finance Manager in September 1996 and remains in
that post today.

         Leonard J. Sokolow, age 43, has been a director of ours since 1995. Mr.
Sokolow has served as President of Union Atlantic, L.C., a privately-held
consulting and merchant banking group, since September 1996. Mr. Sokolow was
Chairman of the Board and President of The Americas Growth Fund, Inc., an
investment company, from August 1994 until December 1998. Since August 1993, Mr.
Sokolow has been President and Chief Executive Officer of Genesis Partners,
Inc., a privately-held corporation that provides domestic and international
investment banking and financial advisory services. From May 1988 to July 1993,
Mr. Sokolow was employed by Windmere-Durable Holdings, Inc., a public company
engaged in the manufacture and distribution of personal care products and small
household appliances, most recently as its Executive Vice President of
Operations, Administration and Finance and General Counsel. Mr. Sokolow is a
director of Catalina Lighting Inc., a public company engaged in the import and
distribution of commercial and residential electrical lighting.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers, directors and
persons who beneficially own greater than 10% of a registered class of our
equity securities to file certain reports ("Section 16 Reports") with the SEC
with respect to ownership and changes in ownership of our common stock. Based
solely on our review of Section 16 Reports furnished to us and written
representations from reporting persons, all Section 16(a) requirements
applicable to our officers, directors and greater than 10% beneficial owners
were complied with during the year ended December 31, 2000.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation paid
by us to our Chief Executive Officer for services rendered in all capacities to
us and our subsidiaries for each of our last three fiscal years.

                                       15
<PAGE>

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                              Long-term
                                                                             Compensation
                                            Annual Compensation                 Awards
                            --------------------------------------------------------------
                                                                              Securities
  Name and Principal                                           Other Annual   Underlying     All Other
      Position              Year      Salary        Bonus      Compensation     Options    Compensation
      --------              ----      ------        -----      ------------     -------    ------------
<S>                         <C>      <C>          <C>               <C>            <C>      <C>
Ezra Cohen                  2000     $200,000     $      0          0              0        $28,600(1)
Chief Executive Officer     1999     $157,500     $      0          0              0        $12,420(1)
and President               1998     $310,000     $      0          0              0        $50,252(2)
</TABLE>

----------------
(1) Premiums on life insurance paid by us.
(2) Includes $30,000 in return for personally guaranteeing bank loans and
    life and health insurance.

              Aggregated Options Exercised in the Last Fiscal Year
                        and Fiscal Year-End Option Values

The following table sets forth information with respect to the value of
unexercised stock options held by our Chief Executive Officer December 31, 2000.
During the year ended December 31, 2000, no options were exercised by our Chief
Executive Officer and no SAR's were granted.

<TABLE>
<CAPTION>
                     Shares                       Number of Securities             Value of Unexercised
                     Acquired on    Value         Underlying Unexercised           In-the-Money Options at
Name                 Exercise (#)   Realized($)   Options at fiscal Year-End (#)   Fiscal Year-End ($)

                                                  Exerciseable/Unexercisable       Exerciseable/Unexercisable
<S>                      <C>            <C>                 <C>                             <C>
Ezra Cohen               0              0                   192,140                         $54,030
</TABLE>

                                       16
<PAGE>

                            Compensation of Directors

Non-employee directors receive fees of $500 per month plus $250 for attendance
at each board and committee meeting. In addition, each year they receive options
for 5,000 shares of common stock, or some greater amount at the boards
discretion, exercisable at the closing price on the date awarded.

                 Employment Arrangements and Compensation Plans

Ezra M. Cohen, has been our President and CEO since 1996 and has a salary of
$200,000 per year since January 2000, plus life insurance coverage. Mr. Cohen
was also a Director and President of Ezcony Trading Corporation , a subsidiary
of Ezcony Interamerica, Inc., from 1982 until April 30, 1996.

Carlos N. Galvez was hired on September 24, 1996 as our Finance and
Administration Manager with a yearly salary of $36,000. Mr. Galvez became a
Director and CFO of Ezcony Interamerica, Inc. since January 1999.

Ezra Homsany Gateno served as our Chief Operating Officer and Executive Vice
President until his resignation on June 18, 1997. Mr. Homsany Gateno resigned
from the Company effective June 30, 1997, pursuant to a Termination Agreement
(the "Consulting/Non-Compete Agreement"). The terms of the
Consulting/Non-Compete Agreement provide for a consulting period beginning July
1, 1997 through December 31, 1999 during which Mr. Homsany Gateno served as a
consultant to us in exchange for a total compensation of $375,770 ($114,500 from
July 1, 1997 through December 31, 1997, $146,170 from January 1, 1998 through
December 31, 1998 and $114,500 from January 1, 1999 through December 31, 1999)
and for the provision of health insurance benefits through June 30, 1998. The
Consulting/Non-Compete Agreement also requires Mr. Homsany Gateno to (i)
continue as a guarantor for certain of our existing credit lines, (ii) execute a
non-compete and confidentiality agreement covering a period through June 30,
2000, and (iii) fully vests him on his existing options waiving the requirement
that he exercise the vested options within ninety days after his termination. As
of the date of this filing Mr. Homsany Gateno no longer serves in any capacity
to the Company.

           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Board's Compensation Committee, is now or has been an employee
of ours or any of our subsidiaries or has any relationship disclosed under
"Certain Transactions" below.

                                       17
<PAGE>

             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Under rules established by the SEC, we are required to provide a report
explaining the rationale and considerations that led to fundamental compensation
decisions affecting our executive officers during the past fiscal year. The
report of the Compensation Committee is set forth below.

The Compensation Committee, which is composed of our only outside director, has
determined that compensation for executive officers should be linked to our
performance and, to a lesser extent, recognize an individual's contribution to a
business unit and personal performance for our long-term success.

In 1997, with the assistance of an outside consulting firm, the Compensation
Committee developed a Strategic Compensation Program (the "Program") which
established a performance management process linked to our Strategic Plan. The
Program is applicable to compensation policies for all executive officers, and
there is no differentiation in application among the executive officers named in
the compensation table.

The 2000 compensation of the executive officers was established in 1995 under
the Program, and comprised of a base salary, bonus payout computed on
achievement of objective goals and the grant of stock options pursuant to our
stock option plan.

The Compensation Committee determined the base salary based upon a number of
factors. The most important factor in determining base salary was market
comparison of similarly-situated officers in similarly-situated companies based
on research and information supplied by the outside consulting firm to the
Compensation Committee. Other factors that the Compensation Committee evaluated
were the individual officer's contribution to the Company since its inception,
as well as the officer's level of base salary in prior years, responsibilities
and importance to the Company and accomplishments in relation to objective
goals.

While the Compensation Committee reviews each executive officer's performance
against objective goals and in light of similarly-situated officers in
similarly-situated companies, the review and analysis is somewhat subjective.
Also, in connection with these reviews the Compensation Committee and the
outside consulting firm considered the input of our Chief Executive Officer as
to the performance of each of the other executive officers.

                                       18
<PAGE>

                                PERFORMANCE GRAPH

The following graph compares the year-end total return of our common stock with
the NASDAQ Stock Market Index and the Ibbotson Small Company Index from the
close on December 31, 1995 to December 31, 2000, assuming a hypothetical initial
value of $100. We have chosen to use the Ibbotson Small Company Index because
our business profile does not fit into any published industry or
line-of-business index. Moreover, as a wholesale distributor of consumer
electronics in Latin America, we do not have a peer group of publicly traded
companies. There are a number of companies that are wholesale distributors of
computers and computer products in the U.S., however, we believe that these
companies are not comparable to us and do not form a peer group. The Ibbotson
Small Company Index is a market value weighted index of the ninth and tenth
decile market capitalization New York Stock Exchange stocks plus stocks listed
on the American Stock Exchange and traded over-the-counter with the same or less
capitalization as the upper bound of the New York Stock Exchange's ninth decile.

                                 [INSERT GRAPH]






ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of December 31, 2000, regarding
all persons known to us to be the beneficial owners of more than 5% of our
outstanding common stock.

            Name                     Number of Shares        Percent of Class
--------------------------------------------------------------------------------
Moises Ezra Cohen                     1,838,110(1)               40.8%
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama

Moises Homsany                          854,900                  20.0%
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama

                                       19
<PAGE>

            Name                     Number of Shares        Percent of Class
--------------------------------------------------------------------------------
Ezra Cohen                              275,846(2)                6.1%
7620 N.W. 25th St., Unit 5
Miami, Florida 33122

--------------------
(1) Includes options to purchase 15,000 shares.
(2) Includes options to purchase 192,140 shares



                        SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of March 31, 2001, the beneficial ownership
of common stock by all of our current directors, all persons nominated to become
directors, all executive officers named in the "Executive Compensation" section
of this Form 10-K, and by all directors and executive officers as a group.

            NAME                     NUMBER OF SHARES        PERCENT OF CLASS
--------------------------------------------------------------------------------
Ezra Cohen                               275,846(1)                 6.12%
Moises Ezra Cohen                      1,838,110(2)                40.76%
Leonard J. Sokolow                        40,000(3)
All current directors and
   executive officers as a
   group (three people)                2,133,956(4)
                                                                   47.31%
---------------
 *  Less than 1%
(1) Includes options to purchase 192,140 shares.
(2) Includes options to purchase 15,000 shares.
(3) Includes options to purchase 40,000 shares.
(4) Includes options to purchase 227,140 shares.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In fiscal 2000 we paid on behalf of Ezra Cohen, our CEO, a total of $107,786.58
in connection with personal and unaccounted for business expenses. The monies
owed are considered to be unsecured loans by the Company, payable on demand and
bearing no interest. At December 31, 1999 and 2000, the aggregate balance owed
by Mr. Cohen to the Company under this arrangement was $313,204.98 and
$420,991.56. Mr. Cohen has agreed to repay us $2,000 per month against the
outstanding balance.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a) (1) FINANCIAL STATEMENTS

                                       20
<PAGE>

Financial statements of the Company are set forth in Part II, Item 8.

(2) FINANCIAL STATEMENTS SCHEDULE

Schedule II - Valuation and Qualifying accounts for the year ended December 31,
              2000, 1999 and 1998, are set forth herein

(3) EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.                      Description                          Method of Filing
-----------                      -----------                          ----------------
   <S>        <C>                                                           <C>
   3 (a)      Amended and Restated Memorandum of Association and
              Articles of Association of the Registrant.                    (2)
   3 (b)      Amendment to Amended and Restated Memorandum of
              Association and Articles of Association.                      (3)
   4 (a)      Form of Warrant Agreement.                                    (1)
   4 (b)      Amendment to Warrant Agreement.                               (5)
   4 (c)      Second Amendment to Warrant Agreement.                        (6)
   10.1       Amended and Restated Stock Option Plan.                       (6)
   10.2       Retirement Agreement dated February 26, 1996 with
              Moises Ezra Cohen.                                            (5)
   10.3       "Poliza de Credito" from "Banco Exterior" dated
              January 27, 1992(accompanying English summary).               (1)
   10.4       "Poliza de Credito" from "Banco Exterior" dated
              September 4, 1991 (with accompanying English
              summary).                                                     (1)
   10.5       Confidentiality and Non-Competition Agreement of
              Enrique P. Lacs.                                              (1)
   10.6       "Permiso de Operacion 179" (with accompanying English
              summary).                                                     (1)
   10.7       Lease from Ezcony Trading Corporation to Hooters and
              Dreams, S.A. dated March 18, 1994 (with accompanying
              English summary).                                             (4)
   10.8       Hamilton Bank Security Agreement made by Ezcony
              Trading Corporation.                                          (5)
   10.9       Loan Contract (Line of Credit) with Banco de
              Iberoamerica (with English summary).                          (5)
   10.10      Addendum dated May 12, 1997 to the Distribution
              Agreement for Motorola Cellular Products dated June
              17, 1996 by and between King David Com. Exportacao e
              Importacao Ltda. and Ezcony Interamerica Inc.                 (7)
</TABLE>

                                       21
<PAGE>

<TABLE>
<CAPTION>
Exhibit No.                      Description                          Method of Filing
-----------                      -----------                          ----------------
   <S>        <C>                                                           <C>
   10.11      Termination Agreement dated June 18, 1997 and
              Confidentiality and Noncompetition Agreement by and
              between Ezcony Interamerica Inc. and Subsidiaries and
              Ezra Homsany.                                                 (7)
   10.12      "Poliza de Credito" from "Banco Exterior" dated July
              8, 1997 (with accompanying English summary).                  (8)
   10.13      "Poliza de Credito" from "The Chase Manhattan Bank"
              dated June 4, 1997 (with accompanying English
              summary).                                                     (8)
   10.14      "Poliza de Credito" from "Banco Confederado De
              America Latina, S.A." dated June 18, 1997 (with
              accompanying English summary).                                (8)
   10.15      "Poliza de Credito" from "Banco Panamericano, S.A."
              dated June 17, 1997 (with accompanying English
              summary).                                                     (8)
   10.16      Loan Contract (Line of Credit) with Banco de
              Iberoamerica (with accompanying English summary).             (8)
   10.17      "Contrato de Compraventa De Acciones" dated September
              2, 1997 (with accompanying English summary).                  (8)
   10.18      Contract for purchase of building from COFRISA dated
              July 28, 1997 (with accompanying English summary).            (8)
   10.19      Credit Facility with Hamilton Bank dated December 31,
              1998.                                                         (8)
   10.20      Rockford Corporation Distribution Agreement dated
              Jan.26, 2000. (10)10.21 J.W Genesis Capital Market,
              Inc. Agreement dated Nov. 17, 1999.                          (10)
   16         Accountant's letter.                                          (9)
   22         List of subsidiaries.                                         (5)
   23         Consent of McClain & Company, L.C.                           (10)
   99         Accountant's resignation letter.                             (11)
</TABLE>

--------------------
(1)      Incorporated by reference to Ezcony's Form F-1 dated May 21, 1992 (No.
         33-48061).
(2)      Incorporated by reference to Ezcony's Amendment No. 1 dated July 9,
         1992 to Ezcony's Form F-1.
(3)      Incorporated by reference to Ezcony's Form 10-Q for the quarterly
         period ended June 30, 1993.
(4)      Incorporated by reference to Ezcony's Form 10-K for the year ended
         December 31, 1994.
(5)      Incorporated by reference to Ezcony's Form 10-K for the year ended
         December 31, 1995.
(6)      Incorporated by reference to Ezcony's Form 10-K for the year ended
         December 31, 1996.

                                       22
<PAGE>

(7)      Incorporated by reference to Ezcony's Form 10-Q for the quarterly
         period ended June 30, 1997.
(8)      Incorporated by reference to Ezcony's Form 10-K405/A as filed with the
         Securities and Exchange Commission on April 15, 1998.
(9)      Incorporated by reference to Ezcony's Form 8-K/A as filed with the
         Securities and Exchange Commission on December 18, 1998.
(10)     Incorporated by reference to Ezcony's Form 10-K405/A as filed with the
         Securities and Exchange Commission on April 15, 2000. (11) Incorporated
         by reference to Ezcony's Form 8-K as filed with the Securities and
         Exchange Commission on December 7, 1998.

         (b)      Reports on Form 8-K

                  None.

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                             EZCONY INTERAMERICA INC.

Date: May 29, 2001                           BY: /S/ EZRA COHEN
                                                --------------------------------
                                                Ezra Cohen
                                                Chief Executive Officer


/S/ CARLOS N. GALVEZ                            Chief Financial Officer
-------------------------------                 May 29, 2001
Carlos N. Galvez


/S/ MOISES EZRA COHEN                           Director
-------------------------------                 May 29, 2001
Moises Ezra Cohen


/S/ LEONARD J. SOKOLOW                          Director
-------------------------------                 May 29, 2001
Leonard J. Sokolow

                                       23
<PAGE>


                       CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998
                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES


                               ROAD TOWN, TORTOLA

                             BRITISH VIRGIN ISLANDS





                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Ezcony Interamerica, Inc. and Subsidiaries
British Virgin Islands

We have audited the consolidated balance sheets of Ezcony Interamerica, Inc. and
Subsidiaries as of December 31, 2000 and 1999 and the related consolidated
statements of operations, equity, and cash flows for each of the three years in
the three-year period ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Ezcony
Interamerica, Inc. and Subsidiaries as of December 31, 2000 and 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the three-year period ended December 31, 2000, in conformity with
generally accepted accounting principles.

McClain & Company, L.C.

February 16, 2001
Miami, Florida

                                      F-2
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                            (STATED IN U.S. DOLLARS)
<TABLE>
<CAPTION>

                                                        ASSETS

                                                                                           December 31,
                                                                                  ----------------------------
                                                                                       2000            1999
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents                                                     $    379,031    $    660,644
    Trade accounts receivables, net                                                 11,006,830      14,656,363
    Due from directors, officers and employees, net                                    876,807         369,015
    Inventories                                                                      3,700,662       2,374,284
    Marketable securities                                                              388,706         278,625
    Prepaid expenses and other current assets                                        1,173,684         937,123
    Restricted cash                                                                  2,775,663       4,283,039
                                                                                  ------------    ------------

           Total current assets                                                     20,301,383      23,559,093

PROPERTY AND EQUIPMENT, NET                                                          3,962,308       4,146,435

OTHER ASSETS                                                                            75,963         468,461
                                                                                  ------------    ------------

           Total assets                                                           $ 24,339,654    $ 28,173,989
                                                                                  ============    ============

                                           LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Bank overdraft                                                                $    957,802    $         --
    Notes and acceptances payable                                                    8,928,294      13,454,687
    Current portion of long-term debt                                                1,237,824         612,399
    Accounts payable                                                                 8,752,251       7,986,150
    Accrued expenses and other current liabilities                                     175,771          92,100
                                                                                  ------------    ------------

           Total current liabilities                                                20,051,942      22,145,336

LONG-TERM DEBT                                                                       2,774,863       2,255,692
                                                                                  ------------    ------------

           Total liabilities                                                        22,826,805      24,401,028
                                                                                  ------------    ------------

COMMITMENTS AND CONTINGENCIES (NOTES 15, 16 AND 17)

SHAREHOLDERS' EQUITY
    Common stock, no par value, 15,000,000 shares
        authorized, 4,188,780  and 4,510,000 shares
        issued and outstanding in 2000 and 1999                                     12,954,723      12,954,723
    Accumulated deficit                                                            (10,987,476)     (9,181,762)
    Accumulated other comprehensive income:
        Unrealized gain on securities available for sale                                    --              --
                                                                                  ------------    ------------
                                                                                     1,967,247       3,772,961
    Less treasury stock at cost                                                        454,398              --
                                                                                  ------------    ------------

           Total shareholders' equity                                                1,512,849       3,772,961
                                                                                  ------------    ------------

           Total liabilities and shareholders' equity                             $ 24,339,654    $ 28,173,989
                                                                                  ============    ============
</TABLE>

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

                                      F-3
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            (STATED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
                                                        Years ended December 31,
                                              -----------------------------------------------
                                                   2000             1999             1998
                                              -------------    -------------    -------------
<S>                                           <C>              <C>              <C>
NET SALES                                     $  62,027,663    $  62,114,794    $ 108,930,340

COST OF SALES                                    56,575,858       57,279,674      101,836,237
                                              -------------    -------------    -------------

         Gross profit                             5,451,805        4,835,120        7,094,103

SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES                                        5,374,258        3,361,310        7,904,052
                                              -------------    -------------    -------------

         Operating income (loss)                     77,547        1,473,810         (809,949)

OTHER INCOME (EXPENSES)
  Interest income                                   349,478          326,460          495,540
  Interest expense                               (1,827,415)      (1,713,400)      (2,905,694)
  Other                                            (405,324)         421,889          276,268
                                              -------------    -------------    -------------

         (Loss) income from continuing
             operations before income taxes      (1,805,714)         508,759       (2,943,835)

PROVISION FOR INCOME TAXES                               --               --               --
                                              -------------    -------------    -------------

         Net (loss) income                    $  (1,805,714)   $     508,759    $  (2,943,835)
                                              =============    =============    =============

EARNINGS PER COMMON SHARE:
  Basic earnings per common share             $        (.42)   $         .11    $        (.65)
                                              =============    =============    =============

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING:                             4,268,865        4,510,000        4,510,000
                                              =============    =============    =============

DILUTED EARNINGS PER COMMON SHARE:                     (.42)             .11             (.65)
                                              =============    =============    =============

WEIGHTED AVERAGE DILUTED NUMBER OF
  COMMON SHARES OUTSTANDING:                      4,268,865        4,510,000        4,510,000
                                              =============    =============    =============
</TABLE>

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

                                      F-4
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                            (STATED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
                                                        Years ended December 31,
                                                 ----------------------------------------
                                                     2000           1999          1998
                                                 -----------    -----------   -----------
<S>                                              <C>            <C>           <C>
NET (LOSS) INCOME                                $(1,805,714)   $   508,759   $(2,943,835)

Other comprehensive income:
  Unrealized holding gains arising
      during the period                                   --             --            --

Less reclassification adjustments for gains
      included in net income                              --             --            --
                                                 -----------    -----------   -----------

             Total comprehensive (loss) income   $(1,805,714)   $   508,759   $(2,943,835)
                                                 ===========    ===========   ===========
</TABLE>

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

                                      F-5
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                            (STATED IN U.S. DOLLARS)



<TABLE>
<CAPTION>
                                     Number of
                                      Shares                                                        Total
                                    Issued and        Common      Treasury       (Accumulated    Shareholders'
                                   Outstanding        Stock         Stock          (Deficit)       Equity
                                  ------------    ------------   ------------    ------------    ------------
<S>                                  <C>          <C>            <C>             <C>             <C>
BALANCE, January 1, 1997             4,510,000    $ 12,954,723   $         --    $ (6,746,686)   $  6,208,037

         Net loss                           --              --             --      (2,943,835)     (2,943,835)
                                  ------------    ------------   ------------    ------------    ------------

BALANCE, December 31, 1998           4,510,000      12,954,723             --      (9,690,521)      3,264,202

         Net income                         --              --             --         508,759         508,759
                                  ------------    ------------   ------------    ------------    ------------

BALANCE, December 31, 1999           4,510,000      12,954,723             --      (9,181,762)      3,772,961

  Acquisition of treasury stock       (321,220)             --       (454,398)             --        (454,398)

         Net loss                           --              --             --      (1,805,714)     (1,805,714)
                                  ------------    ------------   ------------    ------------    ------------

BALANCE, December 31, 2000           4,188,780    $ 12,954,723   $   (454,398)   $(10,987,476)   $  1,512,849
                                  ============    ============   ============    ============    ============
</TABLE>

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

                                      F-6
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (STATED IN U.S. DOLLARS)

<TABLE>
<CAPTION>

                                                                    Years ended December 31,
                                                          --------------------------------------------
                                                               2000           1999            1998
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss) income                                     $ (1,805,714)   $    508,759    $ (2,943,835)
    Adjustments to reconcile net (loss) income
        to net cash provided by operating activities:
           Depreciation and amortization                       217,925         214,644         262,709
           Provision for doubtful accounts                   2,481,190         623,980       3,326,551
           Bad debt recoveries                                      --        (181,000)             --
           Loss on abandonment                                      --              --          50,886
           Gain on sale of fixed assets, net                        --         (11,220)             --
           Changes in operating assets and liabilities:
              Decrease in trade accounts receivable          1,168,343       4,168,756       8,915,695
              Decrease (increase) in trading securities        148,346        (278,625)             --
              Increase in due from directors, officers
                and employees, net                            (507,792)        (21,971)       (167,882)
              (Increase) decrease in inventories            (1,326,378)       (155,915)      6,958,583
              (Increase) decrease in prepaid
                expenses and other assets                      155,937        (648,874)        757,543
              Increase in bank overdraft                       957,802              --              --
              Increase (decrease) in accounts payable          766,101       1,532,822     (11,799,378)
              Increase (decrease) in accrued expenses
                and other current liabilities                   83,671        (565,038)     (1,044,233)
                                                          ------------    ------------    ------------

                   Net cash provided by operating
                      activities                             2,339,431       5,186,318       4,316,639
                                                          ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net decrease in restricted cash                          1,507,376         208,876       4,342,405
    Purchases of securities available for sale                (258,427)             --              --
    Purchases of property and equipment                        (33,798)        (80,467)       (176,534)
    Proceeds from sale of property and equipment                    --          26,250              --
                                                          ------------    ------------    ------------

                   Net cash provided by investing
                      activities                             1,215,151         154,659       4,165,871
                                                          ------------    ------------    ------------
</TABLE>

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

                                      F-7
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                            (STATED IN U.S. DOLLARS)



<TABLE>
<CAPTION>
                                                         Years ended December 31,
                                                 -----------------------------------------
                                                     2000           1999           1998
                                                 -----------    -----------    -----------
<S>                                              <C>            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayment of notes and acceptances
        payable, net                             $(4,526,393)   $(5,624,409)   $(9,755,513)
    Proceeds from long-term borrowings             1,144,596             --      1,450,000
    Repayment of long-term debt                           --       (308,997)      (204,811)
    Purchase of treasury stock                      (454,398)            --
                                                 -----------    -----------    -----------

                Net cash used in financing
                   activities                     (3,836,195)    (5,933,406)    (8,510,324)
                                                 -----------    -----------    -----------

                Net decrease in cash and
                   cash equivalents                 (281,613)      (592,429)       (27,814)

CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR:                               660,644      1,253,073      1,280,887
                                                 -----------    -----------    -----------

CASH AND CASH EQUIVALENTS AT
    END OF YEAR:                                 $   379,031    $   660,644    $ 1,253,073
                                                 ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:
        Cash paid during the year for interest   $ 1,800,718    $ 1,910,058    $ 2,425,377
                                                 ===========    ===========    ===========

        Cash paid during the year for taxes      $        --    $        --    $        --
                                                 ===========    ===========    ===========
</TABLE>

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

                                      F-8
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE  1  -      ORGANIZATION
                Ezcony Interamerica, Inc. and Subsidiaries (the "Company") was
                incorporated in the British Virgin Islands on November 29, 1990.

                The Company is a wholesale distributor to Latin American markets
                of a wide range of brand name consumer electronic products,
                including televisions, videocassette recorders, home and
                automobile audio equipment, cellular products and appliances.
                The Company's products are distributed to a variety of
                customers, including wholesalers and distributors who resell to
                retail markets.

NOTE  2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                PRINCIPLES OF CONSOLIDATION
                The consolidated financial statements include the accounts of
                Ezcony Interamerica, Inc. and its wholly-owned Subsidiaries. All
                intercompany transactions and balances have been eliminated in
                consolidation.

                CASH AND CASH EQUIVALENTS
                Cash equivalents include all highly liquid investments with
                maturities of three months or less when acquired.

                INVESTMENT SECURITIES
                Securities identified by management under one of the following
                three classifications will be carried at either amortized cost
                or fair value, with fair values determined primarily from
                closing market prices.

                    Securities Held to Maturity
                    ---------------------------
                    Bonds, notes, and debentures for which the Company has the
                    positive intent and ability to hold to maturity are reported
                    at cost and adjusted for amortization of premium and
                    accretion of discounts that are recognized in interest
                    income using methods approximating the interest method over
                    the period to maturity.

                    Trading Securities
                    ------------------
                    Bonds, notes, debentures, and certain equity securities
                    which the Company intends to sell in the near term are
                    reported at fair value with unrealized gains and losses
                    included in earnings. Premiums and discounts are recognized
                    in interest income using a method approximating the interest
                    method over the period to maturity.

                                      F-9
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE  2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                INVESTMENT SECURITIES (CONTINUED)

                    Securities Available for Sale
                    -----------------------------
                    Bonds, notes, debentures, and certain equity securities not
                    classified as trading securities nor as held to maturity
                    securities are classified as securities available for sale.
                    Unrealized gains and losses are reported as a net amount in
                    other comprehensive income. Premiums and discounts are
                    recognized in interest income using a method approximating
                    the interest method over the period to maturity.

                In the case that investment securities are sold, gains and
                losses are computed under the specific identification method.

                INVENTORIES
                Inventories are stated at the lower of cost or market, using the
                first-in, first-out method. Inventories in transit are stated at
                cost.

                PROPERTY AND EQUIPMENT
                Property and equipment are stated at cost less accumulated
                depreciation and amortization. Depreciation on equipment is
                computed using the straight-line method over the estimated lives
                of these assets, which range from seven years to 20 years.
                Depreciation on property is computed using the straight-line
                method over a period of 40 years. Amortization of leasehold
                improvements is computed using the straight- line method over
                the shorter of the lease term (including renewal periods) or the
                estimated useful life of the related asset. Repairs and
                maintenance are charged to expense as incurred while
                expenditures for major renewals and betterments are capitalized.

                LONG-LIVED ASSETS
                The Company evaluates its long-lived assets for impairment
                whenever events or changes in circumstances indicate that the
                carrying amount of such assets may not be recoverable.
                Recoverability of assets to be held and used is measured by a
                comparison of the carrying amount of any asset to future net
                cash flows expected to be generated by the asset. If such assets
                are considered to be impaired, the impairment to be recognized
                is measured by the amount by which the carrying amount of the
                assets exceed the fair value of the assets. Assets to be
                disposed of are reported at the lower of the carrying amount or
                fair value less costs to sell.

                INCOME TAXES
                The Company utilizes the asset and liability method of
                accounting for income taxes. Under this method, deferred tax
                assets and liabilities are determined based on the difference
                between the financial statements and tax bases of assets and
                liabilities using tax rates in effect for the year in which the
                differences are expected to reverse. A valuation allowance is
                established when it is more likely than not that some or all of
                the deferred tax assets will not be realized.

                                      F-10
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE  2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                The Company does not file a consolidated tax return in the
                United States. The Company's United States subsidiaries, which
                are inactive, file an income tax return for both state and
                federal taxes. The Company's Panamanian subsidiary, which
                operates in the Colon Free Zone, Republic of Panama, enjoys
                special tax rates granted by the Panamanian tax authorities.
                Effective January 1, 1997, all income derived from export
                operations of companies operating in the Colon Free Zone are tax
                exempt.

                EARNINGS PER SHARE
                Basic earnings per common share are computed by dividing income
                available to common stockholders by the weighted average number
                of common shares outstanding. Diluted earnings per common share
                include the diluting effect of stock options and warrants.

                REVENUE RECOGNITION
                The Company recognizes revenue when products are shipped to
                customers. Expenses are recognized when incurred.

                USE OF ESTIMATES
                The preparation of financial statements in conformity with
                generally accepted accounting principles requires management to
                make estimates and assumptions that affect the reported amounts
                of assets, liabilities and disclosure of contingent assets and
                liabilities at the date of the financial statements and the
                reported amount of revenues and expenses during the reporting
                period. These estimates primarily relate to the determination of
                the allowance for doubtful accounts. Although these estimates
                are based on management's knowledge of current events and
                actions that it may undertake in the future, actual results may
                ultimately differ from estimates.

                RECENT PRONOUNCEMENTS
                In December 1999, the Securities and Exchange Commission ("SEC")
                staff issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue
                Recognition", which summarized the SEC staff's views regarding
                the recognition and reporting of revenues in financial
                statements and requires companies to comply with the SAB no
                later than the fourth fiscal quarter of the fiscal year. The
                adoption of this SAB did not have an effect on the Company's
                financial condition or results of operations.

                Effective for the year ended December 31, 1998, the Company
                adopted SFAS No. 131, Disclosures About Segments of an
                Enterprise and Related Information, which requires a new basis
                of determining reportable business segments. This approach
                (contrasted with the prior requirement which utilized a specific
                classification system for determining segments) designates the
                Company's internal organizational structure, as used by
                management for making operating decisions, as the basis for
                determining business segments. On this basis, the Company has
                one reportable segment:

                    Wholesale distributor of consumer electronic products.

                                      F-11
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE  2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                RECENT PRONOUNCEMENTS (CONTINUED)
                During 1998, the Company adopted SFAS No. 130, reporting
                comprehensive income. It requires disclosure of non-owner
                changes in stockholders' equity and is defined as net income,
                plus direct adjustments to stockholders' equity.

                The FASB recently issued Statement No. 137, "Accounting for
                Derivative Instruments and Hedging Activities - Deferral of
                Effective Date of FASB Statement No. 133". This statement
                defers for one year the effective date of FASB Statement No.
                133, "Accounting for Derivative Instruments and Hedging
                Activities". This rule now will apply to all quarters to all
                years beginning after June 15, 2000.

                In 1998, the FASB issued SFAS No. 133 Accounting for Derivative
                Instruments and Hedging Activities. This statement establishes
                accounting and reporting standards that require every derivative
                instrument be recorded in the balance sheet as either an asset
                or liability at its fair value. SFAS 133 was to be adopted for
                the Company's year 2000 financial statements. The Company
                anticipates that the adoption of SFAS 133 will have no effect on
                the Company's financial condition or results of operations as
                the Company does not presently have any derivative or
                hedging-type investment as defined by SFAS 133.

                The adoption of SFAS Nos. 130, 131 and 133, will have no effect
                on the Company's reported net income.

                FAIR VALUES OF FINANCIAL INSTRUMENTS
                The following assumptions were used to estimate the fair value
                of each class of financial instruments for which it is practical
                to estimate that value:

                    Cash, Cash Equivalents and Restricted Cash
                    The carrying amounts of cash, cash equivalents and
                    restricted cash approximate their fair value.

                    Due from Directors, Officers and Employees, Net
                    The carrying amounts of due from directors, officers and
                    employees approximate their fair value.

                    Notes Payable, Acceptances Payable and Long-term Debt
                    The fair values of the notes payable, acceptances payable
                    and long-term debt are estimated based upon current rates
                    offered to the Company for debt of the same remaining
                    maturities. Carrying amounts of notes payable, acceptances
                    payable and long-term debt are reasonable estimates of their
                    fair values.

                RECLASSIFICATIONS

                Certain amounts included in the prior years' consolidated
                financial statements have been reclassified to conform with the
                current year's presentation.

                                      F-12
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE  3 -       INVESTMENT SECURITIES
                Investment securities have been classified in the consolidated
                balance sheet according to management's intent. At December 31,
                2000, the Company had equity securities classified as available
                for sale with a cost and fair market value of $258,427. At
                December 31, 1999, the Company did not have investment
                securities classified as available for sale or held to maturity.
                At December 31, 1998, the Company did not have investment
                securities.

                At December 31, 2000 and 1999, trading securities totaled
                $137,740 and $278,625, respectively. Net unrealized holding
                (losses)/gains on trading securities of approximately $(600,000)
                and $76,000 were included in earnings during the years ended
                December 31, 2000 and 1999, respectively, as a component of
                other income.

NOTE  4 -       RESTRICTED CASH
                At December 31, 2000 and 1999, certificates of deposit were
                pledged by the Company with various banks to guarantee the
                credit lines. The certificates of deposit were placed in various
                banks in the following locations:

                                       2000         1999
                                    ----------   ----------
                    United States   $       --   $1,401,498
                    Panama           2,775,663    2,881,541
                                    ----------   ----------
                                    $2,775,663   $4,283,039
                                    ==========   ==========

                The certificates of deposit at December 31, 2000 and 1999 have
                annual interest rates ranging from 4.7% to 6.0% and 4.5% to
                5.8%, respectively.

NOTE  5 -       INVENTORIES
                At December 31, 2000 and 1999, inventories consisted primarily
                of consumer electronic products at the following locations:

                                                         2000          1999
                                                     -----------    -----------
                    Colon Panama Free Zone warehouse $ 3,734,572    $ 2,404,722
                    In transit                             2,300          5,772
                                                     -----------    -----------
                                                       3,736,872      2,410,494
                    Reserve for obsolescence             (36,210)       (36,210)
                                                     -----------    -----------
                                                     $ 3,700,662    $ 2,374,284
                                                     ===========    ===========

NOTE  6 -       PROPERTY AND EQUIPMENT
                At December 31, 2000 and 1999, property and equipment consists
                of the following:

                                                         2000           1999
                                                     -----------    -----------
                    Buildings                        $ 3,956,448    $ 3,955,808
                    Furniture and office equipment       856,342        829,763
                    Transportation equipment             307,372        305,072
                    Machinery and equipment              208,419        204,140
                                                     -----------    -----------
                                                       5,328,581      5,294,783
                    Less accumulated depreciation     (1,366,273)    (1,148,348)
                                                     -----------    -----------

                                                     $ 3,962,308    $ 4,146,435
                                                     ===========    ===========

                                      F-13
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE  7 -       CONCENTRATION OF CREDIT RISK
                The Company's sales were made to customers located in, or for
                distribution in, the following countries:

<TABLE>
<CAPTION>
                                                             2000           1999           1998
                                                        ------------   ------------   ------------
                    <S>                                 <C>            <C>            <C>
                    Colombia                            $ 14,731,894   $ 12,558,788   $ 29,000,026
                    Paraguay                               4,215,198      3,569,665     15,727,964
                    United States                          3,727,703      3,337,331     11,883,274
                    Ecuador                                1,465,628        421,809      8,015,145
                    Venezuela                             18,368,594     15,611,948     18,119,708
                    Mexico                                 5,784,483      5,276,397      4,461,177
                    Peru                                     367,184         54,098        812,023
                    Brazil                                   170,679        285,030        512,299
                    Caribbean region                       2,352,901      5,534,911             --
                    Turkey                                 1,490,305             --             --
                    All other countries (primarily in
                       Latin America and composed
                       of over 10 countries)               9,353,094     15,464,817     20,398,724
                                                        ------------   ------------   ------------

                                                        $ 62,027,663   $ 62,114,794   $108,930,340
                                                        ============   ============   ============
</TABLE>

                A summary of accounts receivable by country of distribution is
                as follows:

<TABLE>
<CAPTION>
                                                                   2000            1999
                                                              ------------    ------------
                    <S>                                       <C>             <C>
                    Colombia                                  $  4,645,507    $  5,093,796
                    Paraguay                                     1,840,940       2,626,384
                    Ecuador                                        814,775         365,709
                    Venezuela                                    3,023,083       4,718,132
                    Mexico                                       1,482,835       2,010,631
                    Caribbean region                             1,046,350       2,237,823
                    Argentina                                      323,884         314,461
                    Turkey                                         451,864              --
                    All other countries (primarily in Latin
                       America)                                  2,163,756       2,455,306
                                                              ------------    ------------
                                                                15,792,994      19,822,242
                    Less allowance for doubtful accounts        (4,790,187)     (5,165,879)
                                                              ------------    ------------

                                                              $ 11,002,807    $ 14,656,363
                                                              ============    ============
</TABLE>

                Certain sales made by the Company are collected in cash or other
                negotiable instruments. During 2000, 1999, and 1998, the Company
                had no major customers whose sales exceeded 10% of total net
                sales.

                At various times during the years ended December 31, 2000 and
                1999, the Company maintained cash balances with financial
                institutions in the United States in excess of the amount
                insured by the Federal Deposit Insurance Corporation, $100,000.

                                      F-14
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE  8 -       MAJOR SUPPLIERS
                During the years ended December 31, 2000, 1999, and 1998, 35%,
                38%, and 31%, respectively, of the Company's purchases consisted
                of products purchased from Sony Corporation of Panama, S.A.
                ("Sony"). Amounts payable to Sony as of December 31, 2000 and
                1999, were approximately $2,837,000 and $3,882,000,
                respectively. International Latin America, S.A. ("Pioneer"),
                purchases represented 19%, 16%, and 30% of total purchases for
                the years ended December 31, 2000, 1999 and 1998, respectively.
                Amounts payable to Pioneer as of December 31, 2000 and 1999,
                were approximately $2,510,000 and $1,167,000, respectively.

                The Company does not have a written agreement with either Sony
                or Pioneer to act as a distributor in any particular country.
                Sony and Pioneer could, at any time, stop or limit sales to the
                Company or prohibit the Company from distributing its products
                in any one or more countries. The Company is extended credit
                terms from year-to- year.

NOTE  9 -       GEOGRAPHICAL SEGMENT INFORMATION
                Sales originating from Panama, the United States and British
                Virgin Islands for the years ended December 31, 2000, 1999 and
                1998, were as follows:

<TABLE>
<CAPTION>
                                                 2000           1999           1998
                                              -----------   ------------   ------------
                    <S>                       <C>           <C>            <C>
                    Panama                    $62,027,663   $62,114,794    $ 90,391,151
                    United States                      --            --      18,439,249
                    British Virgin Islands             --            --          99,940
                                              -----------   -----------    ------------
                                              $62,027,663   $62,114,794    $108,930,340
                                              ===========   ===========    ============
</TABLE>

                Identifiable assets by geographical area are as follows:

<TABLE>
<CAPTION>
                                                                2000           1999
                                                            -----------    -----------
                    <S>                                     <C>            <C>
                    Panama                                  $22,808,709    $26,772,491
                    United States                             1,530,945      1,401,498
                                                            -----------    -----------

                                                            $24,339,654    $28,173,989
                                                            ===========    ===========
</TABLE>

                                      F-15
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE  9 -       GEOGRAPHICAL SEGMENT INFORMATION (CONTINUED)
                Operating income (loss) from continuing operations by
                geographical area is as follows:


<TABLE>
<CAPTION>
                                                  2000         1999           1998
                                             ------------   ------------   ------------
                    <S>                      <C>           <C>            <C>
                    Panama                   $    77,547   $ 1,473,810    $   699,225
                    United States                     --            --       (557,112)
                    British Virgin Islands            --            --       (952,062)
                                             -----------   -----------    -----------

                                             $    77,547   $ 1,473,810    $  (809,949)
                                             ===========   ===========    ===========
</TABLE>

                (Loss) income from continuing operations before income taxes by
                geographical area is as follows:


<TABLE>
<CAPTION>
                                                  2000         1999           1998
                                             ------------   ------------   ------------
                    <S>                      <C>           <C>            <C>
                    Panama                   $(1,805,714)  $   508,759    $(1,247,559)
                    United States                     --      (756,503)
                    British Virgin Islands            --      (939,773)
                                             -----------   -----------    -----------

                                             $(1,805,714)  $   508,759    $(2,943,835)
                                             ===========   ===========    ===========
</TABLE>

NOTE 10 -       NOTES AND ACCEPTANCES PAYABLE
                At December 31, 1999, acceptances payable to banks and
                borrowings available under several lines of credit aggregate
                approximately $19,000,000. These borrowings bear interest
                between 9.14% to 9.75% and mature at varying dates through 2000.
                They are collateralized by certificates of deposit of $4,283,039
                at December 31, 1999, trade accounts receivables, inventories
                and guaranteed by certain of the Company's shareholders.

                The weighted average interest rate as of December 31, 1999 was
                9.45%.

                As of December 31, 2000, the Company had only one $14,000,000
                line of credit and numerous acceptances payable to a bank. This
                line of credit has an interest rate of prime plus 1% and matures
                June 20, 2001. This line of credit and acceptances are
                collateralized by certificates of deposit totaling $1,401,498,
                mortgage on commercial property in Colon Free Zone, Panama, and
                guaranteed by a shareholder of the Company. At December 31,
                2000, the Company had available approximately $1,600,000 of
                unused lines of credit after taking into account acceptances and
                letters of credit.

                                      F-16
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE 11 -       LONG-TERM DEBT
                Long-term debt at December 31, 2000 and 1999, consists of the
                following:

<TABLE>
<CAPTION>
                                                                                             2000                 1999
                                                                                           ----------          ----------
                <S>                                                                        <C>                 <C>
                Notepayable, bearing interest at 10.25%, payable in monthly
                    installments of principal and interest in the amount of
                    $12,681, expiring in April 2003, collateralized by a first
                    mortgage on the rental building.                                       $1,610,745          $  202,525

                Note payable, bearing interest at prime plus 2%
                    (10.5% at December 31, 2000), payable in monthly
                    installments of principal and interest in the amount of
                    $21,090, with the unpaid balance due in December 2002,
                    collateralized by a first mortgage on the warehouse.                    1,210,871           1,301,876

\                Note payable, bearing interest at prime plus 2%
                    (11.5% at December 31, 2000), payable in monthly principal
                    installments of $17,262, expiring in June 2004,
                    collateralized by a first mortgage on building.                         1,191,071           1,363,690
                                                                                           ----------          ----------

                                                                                            4,012,687           2,868,091
                    Less current portion                                                    1,237,824             612,399
                                                                                           ----------          ----------

                                                                                           $2,774,863          $2,255,692
                                                                                           ==========          ==========
</TABLE>

                Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
                    Year ending
                    December 31,
                    ------------
                       <S>                                                                 <C>
                       2001                                                                $1,237,824
                       2002                                                                 1,237,824
                       2003                                                                   967,400
                       2004                                                                   569,639
                                                                                           ----------

                                                                                           $4,012,687
                                                                                           ==========
</TABLE>

                                      F-17
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE 12 -       INCOME TAXES
                The provision for income taxes includes the following
                components:

<TABLE>
<CAPTION>
                                                          2000       1999        1998
                                                        --------   --------   --------
                    <S>                                 <C>        <C>        <C>
                    United States - Federal             $     --   $     --   $     --
                    Panama                                    --         --         --
                                                        --------   --------   --------

                                                        $     --   $     --   $     --
                                                        ========   ========   ========
</TABLE>

                The provision for income taxes differed from the amounts
                computed by applying the U.S. federal income tax rate of 34% in
                2000, 1999 and 1998 to income (loss) before income tax expense
                as a result of the following:

<TABLE>
<CAPTION>
                                                           2000      1999        1998
                                                        --------   --------   --------
                    <S>                                 <C>        <C>        <C>
                    Computed "expected" United States

                       tax (benefit) expense            $     --   $     --   $     --
                    Effect of foreign operations              --         --         --
                    Valuation allowance change                --         --         --
                    Other, net                                --         --         --
                                                        --------   --------   --------

                    Provision for income taxes          $     --   $     --   $     --
                                                        ========   ========   ========
</TABLE>

                At December 31, 2000, the Company's U.S. subsidiaries had net
                operating loss carryforwards for U.S. tax purposes of
                approximately $2,855,000, expiring in various years through
                2012. A full valuation allowance has been recorded by the
                Company since management believes that the Company will not be
                subject to taxation in the future.

                The Company's Panamanian subsidiary operates in the Colon Free
                Zone, Republic of Panama, and sells to customers abroad. All
                income derived form export operation of companies operating in
                the Colon Free Zone are 100% tax exempt.

                                      F-18
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE 13 -       STOCK OPTION PLAN AND OTHER
                The Company's 1992 stock option plan (the "Plan"), adopted by
                the board of directors and the shareholders of the Company on
                April 21, 1992, is intended to improve the Company's financial
                performance by providing long-term incentives to the Company's
                directors, officers and key employees and to aid in the
                recruitment of additional qualified and competent employees. The
                Plan is administered by a committee comprised of outside
                directors (the "Committee").

                On June 28, 1996, the shareholders approved the board of
                directors' amendment to the Plan to increase the number of
                shares available for grant from 450,000 shares to 900,000
                shares.

                Under the Plan, 900,000 shares of common shares have been
                reserved for issuance upon exercise of options. The Plan
                provides for the granting of both "incentive stock options" and
                non-statutory stock options. Options can be granted under the
                Plan on such terms and at such prices as determined by the
                Committee, except that the per share exercise price of incentive
                stock options will not be less than the fair market value of the
                common shares on the date of grant. Each option will be
                exercisable after the period or periods specified in the option
                agreement, but no option will be exercisable within six months
                after the date of grant or after the expiration of 10 years from
                the date of grant. Options granted under the Plan are not
                transferable other than by will or by the laws of descent and
                distribution. The Plan authorizes the Company to make loans to
                optionee's to enable them to exercise their options and
                authorizes optionee's to exercise their stock options by payment
                with common shares, in each case at the discretion of the
                Committee.

                During 1999, the Company entered into an agreement with an
                unrelated party who is to provide financial advisory services
                ("Advisor"). In relation to this agreement, the Company issued a
                warrant to the Advisor to purchase 100,000 common shares
                exercisable at a price of 10 cents per share, and 100,000 common
                shares exercisable at a price of 40 cents per share. Depending
                upon achieving certain goals within the agreement, these options
                can expire in November 2000 or in November 2004.

                                      F-19
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE 13 -       STOCK OPTION PLAN AND OTHER (CONTINUED)
                The following table presents additional information concerning
                the activity in the stock option plan:

<TABLE>
<CAPTION>
                                                                                                                Weighted
                                                                                                               Average of
                                                                                                 Number         Exercise
                                                                                               of Options        Price
                                                                                              -----------      ----------
                <S>                                                                              <C>              <C>
                Balance at December 31, 1997                                                     705,030          $2.04
                    Options granted                                                               20,000          $0.22
                                                                                               ----------
                Balance at December 31, 1998                                                     725,030          $1.98
                                                                                                ---------
                    Options granted                                                              200,000          $ .25
                    Options exercised                                                                 --          $  --
                    Options terminated                                                           (10,000)         $4.13
                                                                                               ----------
                Balance at December 31, 1999                                                     915,030          $1.58
                    Options granted                                                                  --              --
                    Options exercised                                                                --              --
                    Options terminated                                                          (200,000)         $ .25
                                                                                                ---------
                Balance at December 31, 2000                                                     715,030          $1.96

<CAPTION>
                                                                                 2000              1999            1998
                                                                                 ----              ----            ----
                <S>                                                              <C>               <C>             <C>
                Weighted average fair value of
                    options granted during the
                       year                                                      $N/A              $0.01          $0.15
                                                                                 ====              =====          =====
</TABLE>

                The following table summarizes information about stock options
                outstanding at December 31, 2000:

<TABLE>
<CAPTION>
                                                                Weighted
                                                                Average          Weighted                        Weighted
                                                               Remaining         Average         Vested          Average
                          Exercise            Number          Contractual        Exercise         Number         Exercise
                         Price Range        Outstanding       Life (Years)         Price        Exercisable        Price
                         ------------       -----------       ------------       ---------      -----------      --------
                         <S>                   <C>                <C>             <C>            <C>             <C>
                         $ .22- $ .22          20,000             2.76            $ .22           20,000          $ .22
                         -----  -----
                         $1.25- $1.88         277,530             4.76            $1.77          277,530          $1.77
                          ----   ----
                         $1.94- $2.56         371,500             5.08            $1.98          371,500          $1.98
                          ----   ----
                         $3.50- $4.13          46,000             3.30            $3.63           46,000          $3.30
                          ----   ----         -------                                            -------
                                              715,030                             $1.96          715,030
                                              =======                                            =======
</TABLE>

                                      F-20
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE 13 -       STOCK OPTION PLAN AND OTHER (CONTINUED)
                As of December 31, 1996, the Company adopted the disclosure
                provisions of SFAS No. 123, Accounting for Stock-Based
                Compensation. Accordingly, the Company is required to disclose
                proforma net income and earnings per share as if compensation
                expense relative to the fair value of the options granted had
                been included in earnings. The fair value of each option grant
                was estimated using the Black-Scholes option-pricing model with
                the following weighted average assumptions used for grants in
                1999 and 1998, expected life of one year in 1999 and five years
                in 1998, volatility factors of 80% for 1999 and 1998; risk-free
                interest rates of 6.2% in 1999 and 5.2% for 1998, and no
                dividend payments. Had compensation cost for the Company's
                option plan been determined and recorded consistent with SFAS
                No. 123, the Company's net income and earnings per share would
                have been reduced to the proforma amounts as follows:

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                      -------------------------------------
                                                          2000         1999         1998
                                                      -----------    --------   -----------
                    <S>                               <C>            <C>        <C>
                    Net (loss) income
                       as reported                    $(1,805,714)   $508,759   $(2,943,835)
                                                      ===========    ========   ===========

                    Proforma                          $(1,805,714)   $445,427   $(3,032,888)
                                                      ===========    ========   ===========

                    (Loss) earnings per share-basic
                       and assuming dilution
                           as reported                $      (.42)   $    .11   $      (.65)
                                                      ===========    ========   ===========

                    Proforma                          $      (.42)   $    .10   $      (.67)
                                                      ===========    ========   ===========
</TABLE>

                The 2000, 1999 and 1998 proforma effect on net (loss) income is
                not necessarily indicative of the effect in future years because
                it does not take into consideration proforma compensation
                expense related to grants made prior to 1996.

NOTE 14 -       EARNINGS PER SHARE
                Basic earnings or loss per share is computed by dividing income
                or loss available to common shareholders by the weighted average
                number of common shares outstanding. Diluted earnings or loss
                per common share includes the diluting effect of stock options
                and warrants. For the year ended 1999, options and warrants to
                purchase 915,030 shares of common stock at prices ranging from
                $.10 - $3.88 per share were outstanding but not included in the
                computation of diluted earnings per share because the exercise
                price was greater than the average market price of the common
                shares. For the years ended 2000 and 1998, the effect of stock
                options and warrants were not included in the computation
                because such inclusion would have been antidilutive.

                                      F-21
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE 15 -       COMMITMENTS AND CONTINGENCIES
                The Company has entered into various operating lease agreements.
                The following is a schedule of future rental payments as of
                December 31, 2000, for operating leases having initial
                non-cancelable lease terms in excess of one year.

                    Year ending
                    December 31,
                    ------------
                       2001                              $ 19,763
                       2002                                19,763
                       2003                                19,763
                       2004                                19,763
                       2005                                19,763
                       Thereafter                         184,957
                                                         --------

                                                         $283,772
                                                         ========

                As a result of restructuring its operations during 1998, the
                Company bought out its existing lease contract for an office
                facility, warehouse and equipment located in the United States
                for approximately $155,000.

                Rent expense was $23,732, $22,550, and $112,372 for the years
                ended December 31, 2000, 1999 and 1998, respectively.

                The Company leases its building in Panama City, Panama. Rental
                income included in other income in the accompanying Consolidated
                Statements of Operations was $59,843 and $223,110 in 1999 and
                1998, respectively. During 1999, the lease was cancelled due to
                the inability of the tenant to make the monthly payments.

                At December 31, 2000, the Company had standby letters of credit
                in the amount of $4,450,000, collateralizing the trade accounts
                of various vendors, primarily Sony, Pioneer and AIWA.

                                      F-22
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)

NOTE 16 -       LEGAL MATTERS
                In 1998 and 1999, the Company was notified of a forfeiture
                action against certain funds deposited by the Company. The
                action requested the forfeiture of the seized funds to the
                United States Government. The Company believes there is no basis
                for the seizure or forfeiture. Nonetheless, to avoid the expense
                and disruption of litigation and also the use of the seized
                funds for an extended period of time, the Company reached an
                agreement to settle the forfeiture civil action against these
                funds. Terms of the agreement require the return of all funds
                seized less $255,000. The Company has recorded the settlement
                amount as litigation expense in the accompanying Consolidated
                Statement of Operations, and as accrued expense and other
                current liabilities in the accompanying Consolidated Balance
                Sheet as the seized funds related to 1997 sales.

                The Company is also engaged in ordinary litigation incidental to
                its business. The Company does not believe that such ordinary
                routine litigation will have a material adverse effect on its
                consolidated financial position or results of operations.

NOTE 17 -       RELATED PARTY TRANSACTIONS
                On March 31, 1999, the Company entered into an arbitration
                settlement with David Djemal and Daniel Homsany, two former
                directors, officers, and shareholders of the Company. In return
                for their resignations as officers and directors of the Company
                and the surrender of all of their equity interests in the
                Company, the Company paid each individual $200,000 (these
                deposits are included in other assets at December 31, 1999) plus
                $12,000 per individual representing accrued and unpaid salaries,
                and the Company canceled debts owed by the individuals to the
                Company in the aggregate of $52,000. Along with their
                resignations, both individuals deposited their Company common
                stock into an escrow account where it would be held until the
                Company removed both individuals from a number of personal
                guarantees that they had entered into for the Company. During
                the year ended December 31, 2000, these two individuals were
                removed from their personal guarantees and the common stock was
                released from escrow and returned to the Company. Accordingly,
                $454,398 was removed from other assets and recorded as Treasury
                Stock as a result of the terms of this agreement being met.

NOTE 18 -       SELECTED QUARTERLY DATA FOR 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                First       Second          Third         Fourth
                                               Quarter      Quarter        Quarter        Quarter          Year
                                            -----------   -----------    -----------    -----------     ----------
                    Calendar Year 2000
                    ------------------
                       <S>                  <C>           <C>            <C>            <C>             <C>
                       Revenues             $18,686,314   $14,430,119    $16,372,828    $12,538,402     $62,027,663
                       Operating income
                         (loss)                 563,832       374,275        508,108     (1,368,668)         77,547
                       Net income (loss)        247,367         8,849         17,647     (2,079,577)     (1,805,714)
                       Earnings per share
                         Basic                      .05          .002           .004           (.50)           (.42)
                                            ===========   ===========    ===========    ===========     ===========

                       Weighted average
                         shares assuming

                         dilution                   .05          .002           .004           (.50)           (.42)
                                            ===========   ===========    ===========    ===========     ===========
</TABLE>

                                      F-23
<PAGE>

                   EZCONY INTERAMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (STATED IN U.S. DOLLARS)


NOTE 18 -       SELECTED QUARTERLY DATA FOR 2000 (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
                                                First         Second          Third         Fourth
                                               Quarter        Quarter        Quarter        Quarter          Year
                                            ------------    -----------   ------------    -----------     -----------
                    Calendar Year 1999
                    ------------------
                       <S>                  <C>            <C>             <C>            <C>             <C>
                    Revenues                $15,711,922    $17,398,793     $15,756,239    $13,247,840     $62,114,794
                    Operating income
                      (loss)                    382,661        450,659         229,829        410,661       1,473,810
                    Net income (loss)            77,227        123,400         108,410        199,722         508,759
                    Earnings per share
                      Basic                         .02            .03             .02            .04             .11
                                            ===========    ===========     ===========    ===========     ===========

                    Weighted average
                      shares assuming
                      dilution                4,510,000      4,510,000       4,510,000      4,510,000       4,510,000
                                            ===========    ===========     ===========    ===========     ===========
</TABLE>

                                      F-24