UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                  FORM 10-KSB/A
                                (Amendment No. 2)

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

      For the fiscal year ended December 31, 2002

                                       OR

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

                           Commission File No. 0-16530

                            BRANDPARTNERS GROUP, INC.
                 (Name of Small Business Issuer in its Charter)

             Delaware                                          13-3236325
(State or Other Jurisdiction of                             (I.R.S. Employer
Incorporation or Organization)                              Identification No.)

                                777 Third Avenue
                            New York, New York 10017
          (Address of Principal Executive Offices, Including Zip Code)

                                 (212) 446-0200
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.01 per share
    Class A Warrants, exercisable at $2.00 per share until November 30, 2006
    Class B Warrants, exercisable at $3.00 per share until November 30, 2006
                               (Title of Classes)

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act 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   |_|
<PAGE>

      Check if there is no disclosure of delinquent  filers pursuant to Item 405
of Regulation S-B contained in this form,  and no disclosure  will 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-KSB or any
amendment to this Form 10-KSB. |_|

      The issuer's revenues for its most recent fiscal year were $38,879,500.

      On March 18, 2003, the aggregate  market value of the voting stock held by
non-affiliates of the registrant,  using the average bid and asked prices of the
registrant's common stock on said date, was $1,257,405.

      As of March 18, 2003, there were issued and outstanding  18,063,553 shares
of the registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Identification of Document                     Part into which Incorporated
--------------------------                     ----------------------------
Proxy Statement for the 2003 Annual Meeting
of Stockholders to be filed by April 30, 2003  Part III - Items 9, 10, 11 and 12

      Transitional Small Business Disclosure Format (check one). Yes |_|  No |X|

                                EXPLANATORY NOTE

      This Amendment No. 2 to the  BrandPartners  Group,  Inc.  Annual Report on
Form  10-KSB for the year ended  December  31, 2002 (the  "Amendment")  includes
restated  consolidated  financial  statements  for the period ended December 31,
2002.  At December 31, 2002 the Company was  eligible  for a federal  income tax
refund,  the  effect  of which was not  reflected  in the  financial  statements
contained  it its Annual  Report on Form 10-KSB for the year ended  December 31,
2002 as originally filed on March 31, 2003 (the "Original Filing"). Accordingly,
the Company has  restated its  consolidated  financial  statements  for the year
ended December 31, 2002 to reflect the effect of such tax refund.  The effect of
the  restatement  is discussed in detail in Note B to the restated  consolidated
financial statements included herewith. This Amendment amends and restates Items
6 and 7 and Item 14 of Part III of the  Original  Filing.  Readers  should  note
that,  due to recent  changes in the required form of the 10-KSB,  the amendment
and restatement of Item 14 of Part III of the Original Filing is set forth under
Item 8A of Part I of the  Amendment.  The  remaining  portions  of the  Original
Filing are not  affected  by this  Amendment.  This  Amendment  does not reflect
events occurring after the date of the Original Filing,  or modify or update the
disclosures contained in the Original Filing (including  disclosures relating to
risks,  uncertainties and other factors that may affect our future  performance)
in any way,  except  as  required  to  reflect  the  effect  of the  restatement
described in Note B to the restated  consolidated  financial statements included
herewith.
<PAGE>

                                     PART I

Item 6. Management's Discussion and Analysis or Plan of Operation.

      Critical Accounting Policies

      The Securities and Exchange  Commission ("SEC") recently issued disclosure
guidance for critical accounting policies.  The SEC defines "critical accounting
policies" as those that require complex judgments, often as a result of the need
to make estimates about the effect of matters that are inherently  uncertain and
may change in subsequent periods.

      Management's  discussion  and  analysis  of its  financial  condition  and
results  of  operations  are based  upon the  Company's  consolidated  financial
statements,  which have been prepared in accordance with  accounting  principles
generally  accepted in the United States. The Company's  consolidated  financial
statements  include a summary of  significant  accounting  policies  used in the
preparation  of  such  financial  statements  (see  Note B to  the  consolidated
financial  statements).  The  following  reviews  the more  critical  accounting
policies used:

      Revenue Recognition

      Willey   Brothers   records  sales  on  its  long  term   contracts  on  a
percentage-of-completion  basis,  based  upon  current  estimates  of  costs  to
complete such contracts.  The Company performs an ongoing review of contracts in
progress  including  evaluation of the stage of  completion,  site  inspections,
costs  incurred  and  estimates  to  complete.  This  evaluation  is  inherently
judgmental and requires  material  estimates.  Contract costs include all direct
materials,  labor and subcontractor costs.  General and administrative  expenses
are  accounted  for as period  charges and,  therefore,  are not included in the
calculation of the estimates to complete. Anticipated losses are provided for in
their entirety without reference to the percentage-of-completion.

      Revenue  from short  term  contracts  is  recognized  when the  product is
shipped and/or the service is rendered.

      Valuation of Accounts Receivable

      Periodically  the Company  reviews  accounts  receivable  to reassess  its
estimates of  collectibility.  Willey Brothers provides  valuation  reserves for
bad debts based on specific  identification  of likely and probably  losses.  In
addition,  Willey  Brothers  provides  valuation  reserves for estimates of aged
receivables  that may be written  off,  based upon  historical  evidence.  These
valuation   reserves  are   periodically   re-evaluated  and  adjusted  as  more
information  about the ultimate  collectibility of accounts  receivable  becomes
available.  Circumstances  that could cause the Company's  valuation reserves to
increase  include changes in its clients'  liquidity and credit  quality,  other
factors  negatively  impacting clients' ability to pay their obligations as they
come due, and the quality of its collection efforts.

      Valuation of Intangible Assets

      The  Company  assesses  the  impairment  of goodwill  whenever  changes in
circumstances,  such as continuing  losses,  indicate that the fair value may be
less than the carrying  value. In the event of such  circumstances,  or at least
annually,  the Company  estimates  the  recoverability  of goodwill by obtaining
appraisals of fair value from outside specialists.
<PAGE>

Results of Operations

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

      Revenues.  Revenues from  continuing  operations  decreased  approximately
$814,000,  or 2%, to  $38,879,000  for the twelve months ended December 31, 2002
from $39,693,000 for the twelve months ended December 31, 2001. This decrease is
related to the Company's Willey Brothers subsidiary, which experienced a decline
in revenues attributable to a slow-down in the United States economy.

      Cost of Revenues.  Cost of revenues from continuing  operations  increased
approximately  $2,468,000,  or 9%, to $29,726,000 (76% of net revenues), for the
twelve months ended December 31, 2002 from $27,258,000 (69% of net revenues) for
the  twelve  months  ended  December  31,  2001.   This  increase  is  primarily
attributable to a shift in product mix from higher margin merchandising products
to branch planning and design,  which has a lower margin,  resulting from shifts
in market  demands for the  Company's  products and  services,  and higher costs
primarily for consultants.

      Selling,  General  and  Administrative  Expenses.   Selling,  general  and
administrative  expenses  from  continuing  operations  increased  approximately
$262,000,  or 2%, to  $12,342,000  for the twelve months ended December 31, 2002
from  $12,080,000 for the twelve months ended December,  31, 2001. This increase
is  primarily  attributable  to  amendment  fees and  expenses of  approximately
$857,000  related  to the  amendment  of the  Company's  debt  agreement  and to
increases in selling and marketing  expenses,  primarily trade show expenses and
sales presentation  expenses,  offset by decreases in general and administrative
expenses, primarily salary expenses, professional and consulting fees and travel
expenses.

      Depreciation  and   Amortization.   Depreciation  and  amortization   from
continuing operations decreased  approximately  $2,631,000,  or 75%, to $890,000
for the twelve  months ended  December 31, 2002 from  $3,521,000  for the twelve
months ended December 31, 2001.  This decrease is primarily  attributable to the
cessation of annual  goodwill  amortization,  of  approximately  $2,700,000,  on
January 1, 2002, in conformance with SFAS No. 142.

      Operating  Loss.  Operating  loss  from  continuing  operations  increased
approximately  $913,000,  or 29%,  to  $4,079,000  for the twelve  months  ended
December 31, 2002,  from  $3,166,000  for the twelve  months ended  December 31,
2001.  The increase in the operating loss from  continuing  operations is due to
the factors referred to above.

      Interest Expense.  Interest expense from continuing  operations  increased
approximately  $496,000,  or 25%,  to  $2,461,000  for the twelve  months  ended
December 31, 2002 from $1,965,000 for the twelve months ended December 31, 2001.
This increase is  attributable  to interest on a  subordinated  promissory  note
issued in October 2001 and to increased  borrowings  under the credit  facility,
offset by lower interest rates.

      Other  Income.   Other  income  from   continuing   operations   increased
approximately  $737,000 to $751,000  for the twelve  months  ended  December 31,
2002,  from $14,000 for the twelve months ended December 31, 2001. This increase
is primarily  due to  management  fee income  received  from MKP, the  Company's
former  majority-owned  subsidiary,  which was  reclassified  as a  discontinued
operation  for the twelve  months  ended  December  31,  2000 but from which the
Company had the right to receive  management  fee income for 2001 in 2002 and to
an unrealized gain of approximately  $384,000  resulting from the valuation of a
put feature on warrants issued in conjunction with a note payable.

      Income  Taxes.   Income  taxes  from   continuing   operations   decreased
approximately  $710,000,  to a benefit of $523,000  for the twelve  months ended
December  31,  2002 from an expense of  $187,000  for the  twelve  months  ended
December  31,  2001.  This  benefit is due to a  carryback  of Willey  Brothers'
taxable loss for the tax year ended December 31, 2002.

      Loss from Continuing Operations. Loss from continuing operations decreased
approximately $38,000, or 1%, to $5,266,000 for the twelve months ended December
31, 2002 from  $5,304,000  for the twelve  months ended  December 31, 2001.  The
increase in the loss from continuing  operations is due to the factors  referred
to above.


                                       2
<PAGE>

      Loss  from  Discontinued  Operations.  Loss from  discontinued  operations
increased approximately $5,459,000, or 319%, to $7,170,000 for the twelve months
ended December 31, 2002 from $1,711,000 for the twelve months ended December 31,
2001.  This  increase  is  primarily  attributable  to an  impairment  charge of
approximately  $6.6 million,  recognized  September 30, 2002, in connection with
the sale of the  Company's  majority  interest in iMapData on October 31,  2002,
partially  offset by the cessation of amortization of goodwill of  approximately
$717,000 on January 1, 2002, in conformance with SFAS No. 142.

      Net  Loss.  Net  loss  increased  approximately  $5,421,000,  or  77%,  to
$12,436,000  for the twelve months ended  December 31, 2002 from  $7,015,000 for
the twelve months ended  December 31, 2001.  The increase in the net loss is due
to the impairment charge of approximately  $6.6 million included in discontinued
operations at December 31, 2002,  offset by the income tax benefit  derived from
the carryback claim referred to above.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

      Revenues.  Revenues from continuing  operations  were  $39,693,000 for the
twelve months ended December 31, 2001 and are attributable to the acquisition of
Willey Brothers,  which is included in the consolidated revenues from continuing
operations  from  January 16, 2001 (date of  acquisition)  through  December 31,
2001.  There were no revenues from  continuing  operations for the twelve months
ended December 31, 2000.

      Cost  of  Revenues.  Cost  of  revenues  from  continuing  operations  was
$27,258,000 for the twelve months ended December 31, 2001 and is attributable to
the acquisition of Willey Brothers,  which is included in the consolidated  cost
of revenues from continuing  operations  from January 16, 2001 through  December
31, 2001. In the fourth quarter of 2001, the Company  recorded post  acquisition
adjustments,  related to the  acquisition of Willey  Brothers,  reducing cost of
sales by approximately  $744,000.  There was no cost of revenues from continuing
operations for the twelve months ended December 31, 2000.

      Selling,  General  and  Administrative  Expenses.   Selling,  general  and
administrative  expenses  from  continuing  operations  increased  approximately
$9,435,000 to  $12,080,000  for the twelve  months ended  December 31, 2001 from
$2,645,000  for the twelve  months ended  December 31,  2000.  This  increase is
primarily attributable to the acquisition of Willey Brothers,  which is included
in the consolidated selling, general and administrative expenses from continuing
operations  from  January 16, 2001 through  December 31, 2001,  and to increased
costs of the parent company,  primarily payroll costs and professional  fees. In
the fourth quarter of 2001 the Company  recorded post  acquisition  adjustments,
related to the acquisition of Willey  Brothers,  reducing  selling,  general and
administrative expenses by approximately $204,000.

      Depreciation  and   Amortization.   Depreciation  and  amortization   from
continuing operations increased  approximately  $3,387,000 to $3,521,000 for the
twelve months ended  December 31, 2001 from $134,000 for the twelve months ended
December 31, 2000. This increase is primarily  attributable to the  amortization
of goodwill  and  deferred  charges  resulting  from the  acquisition  of Willey
Brothers on January 16, 2001.

      Operating  Loss.  Operating  loss  from  continuing  operations  increased
approximately  $387,000,  or 14%,  to  $3,166,000  for the twelve  months  ended
December 31, 2001,  from  $2,779,000  for the twelve  months ended  December 31,
2000.  The increase in the operating loss from  continuing  operations is due to
the factors referred to above.

      Interest  Expense.   Interest  expense  from  continuing   operations  was
approximately  $1,965,000  for the twelve months ended  December 31, 2001 and is
attributable to interest on the Company's revolving credit facilities, term loan
and notes payable.  There was no interest expense from continuing operations for
the twelve months ended December 31, 2000.

      Other  Income.   Other  income  from   continuing   operations   decreased
approximately  $187,000, or 93%, to $14,000 for the twelve months ended December
31, 2001 from  $201,000  for the twelve  months ended  December  31, 2000.  This
decrease is due to the write down of securities,  a loss on put warrants and the
absence of management  fee income in 2001 due to the  disposition of MKP and its
reclassification  as a  discontinued  operation  for  the  twelve  months  ended
December 31, 2000, offset by higher interest income.


                                       3
<PAGE>

      Income Taxes.  Income taxes from continuing  operations were approximately
$187,000  for the  twelve  months  ended  December  31,  2001 and are  primarily
attributable  to the state  taxable  income of Willey  Brothers.  There  were no
income taxes from continuing  operations in the twelve months ended December 31,
2000.

      Loss from Continuing Operations. Loss from continuing operations increased
approximately  $2,726,000,  or 106%, to  $5,304,000  for the twelve months ended
December 31, 2001,  from  $2,578,000  for the twelve  months ended  December 31,
2000. The increase in the loss from continuing  operations is due to the factors
referred to above.

      Discontinued  Operations.  Loss  from  discontinued  operations  decreased
approximately  $568,000,  or 25%,  to  $1,711,000  for the twelve  months  ended
December 31, 2001 from $2,279,000 for the twelve months ended December 31, 2000.
On January  16,  2001 the  Company  disposed  of its 80% equity  interest in MKP
through a sale to MKP. It was classified as a discontinued operation in the year
ended  December  31,  2000 and a net loss of  $382,000  recorded.  There were no
operations  for MKP in the twelve months ended December 31, 2001. On October 31,
2002, the Company disposed of its majority equity interest in iMapData through a
sale to the minority stockholders. In that regard, results of operations for the
years ended  December 31, 2001 and 2000 have been restated for the  discontinued
operation.   The  loss  from  discontinued   operations  of  iMapData  decreased
approximately  $186,000,  or 10%,  to  $1,711,000  for the twelve  months  ended
December  31,  2001  from  $1,897,000  for the  period  March 3,  2000  (date of
acquisition) through December 31, 2000. The decrease in the loss is attributable
to the absence in 2001 of an impairment  charge of $1,150,000  that was recorded
in the year ended  December 31,  2000,  offset by a build up in cost of revenues
and selling,  general and administrative expenses during 2001 in anticipation of
sales from a product that proved unsuccessful and was subsequently abandoned.

      Net  Loss.  Net  loss  increased  approximately  $2,158,000,  or  44%,  to
$7,015,000 for the twelve months ended December 31, 2001 from $4,857,000 for the
twelve months ended December 31, 2000. The increase in the net loss is primarily
due to the factors referred to above.

Liquidity and Capital Resources

      As of December 31, 2002, the Company had negative working capital (current
assets  less  current  liabilities)  of  $5,448,000,   stockholders'  equity  of
$8,644,000 and a working capital ratio (current  assets to current  liabilities)
of approximately .79:1. At December 31, 2001, the Company had working capital of
$14,615,000,  stockholders' equity of $20,809,000 and a working capital ratio of
approximately  1.96:1.  The negative working capital at December 31, 2002 arises
primarily from the classification of $4,568,000 of the Company's debt as current
maturities  and to an  increase in accounts  payable and accrued  expenses.  The
balances of the Term Loan and Revolving  Credit  Facility (as each of such terms
is defined below) of approximately $2,239,000 and $4,825,000,  respectively,  as
of March 12, 2003, are due to be repaid on August 22, 2003. The Company  intends
to refinance  this debt on terms and conditions  acceptable to the Company,  and
has obtained a commitment from another lender for a $6,000,000  credit facility,
subject to the execution of definitive  agreements.  The commitment expires June
12, 2003.  No  assurances  can be given that the Company will be  successful  in
concluding this or any other financing transaction.  In addition, two $1,000,000
Notes (as defined below) with accrued interest of approximately $690,000 are due
to be repaid October 11, 2003. As of December 31, 2002 and December 31, 2001 the
Company had unrestricted cash and cash equivalents of $2,813,000 and $4,226,000,
respectively.

      For the twelve months ended  December 31, 2002 and December 31, 2001,  net
cash used in operating  activities  of  continuing  operations  was $903,000 and
$2,509,000, respectively, net cash provided by (used in) investing activities of
continuing  operations  was  $1,385,000  (primarily  from the sale of  iMapData,
offset  by  fixed  asset  purchases)  and   $(13,284,000)   (primarily  for  the
acquisition of Willey Brothers),  respectively,  and net cash (used in) provided
by  financing   activities  of  continuing   operations  was   $(1,895,000)  and
$20,016,000   (primarily   through   long  term  debt  and  equity   issuances),
respectively.

      On  January  11,  2001,  the  Company's  wholly-owned  subsidiary,  Willey
Brothers,  established a loan facility (the  "Facility") with a third party. The
Facility  consists of an $8,000,000 term loan (the "Term Loan") and a $6,000,000
revolving credit facility (the "Revolving  Credit Facility") and bears interest,
at the  borrower's  option,  at a rate per annum equal to either the bank's base
rate plus the  applicable  margin or LIBOR  plus the  applicable  margin.  As of
December  31, 2002,  there was  $2,499,000  outstanding  under the term loan and
$4,000,000


                                       4
<PAGE>

outstanding  under the credit  facility.  The weighted  average interest rate in
effect on  December  31,  2002 was 6.00% for the Term Loan and  4.3156%  for the
Credit  Facility.  The  Facility  has  been  amended  by  Amendment  and  Waiver
Agreements dated May 21, 2001, October 22, 2001 and March 29, 2002, by Amendment
Agreements  dated September 25, 2002,  December 20, 2002 and March 18, 2003, and
by a letter agreement dated February 12, 2003. The various  amendment and waiver
agreements  waive  certain  financial  covenants  for the remainder of the term,
require the payment of amendment fees, limit the  availability  under the credit
facility,  place restrictions on the use of $4,000,000 of Willey Brothers's cash
and restrict  the payment of certain  other  obligations.  The December 20, 2002
Amendment  applied  the  $4,000,000  of cash  restricted  by the March 29,  2002
Amendment to the Term Loan. The February 12, 2003 letter agreement  extended the
payment  date of the  amendment  fee until  March 28,  2003.  The March 18, 2003
Amendment  extended the  expiration  of the  Facility  from March 31, 2003 until
August 22, 2003,  extended the payment of the amendment fee until such date, and
mandated  weekly  pre-payments  toward the balance of the Term Loan. As of March
12, 2003 there were outstanding  balances of approximately  $2,239,000 under the
Term Loan and  $4,825,000  under the  Revolving  Credit  Facility.  The  Company
intends to refinance  the  Facility on terms and  conditions  acceptable  to the
Company.  While it has obtained a commitment  for a $6,000,000  credit  facility
from  another  lender,  no  assurances  can be given  that the  Company  will be
successful in concluding  this or any other  financing  transaction.  If for any
reason the Company is unable to refinance  the Facility upon  maturity,  and the
amount  outstanding  under the Facility becomes due and payable,  the lender has
the  right to  proceed  against  the  collateral  granted  to it to  secure  the
indebtedness under the Facility,  including the Company's  ownership interest in
Willey  Brothers  which was pledged to the lender as security for the  Facility.
The Company has guaranteed 100% of the loan.  Should that foreclosure  occur the
Company would have no further operations.

      In connection  with the purchase of Willey  Brothers,  in January 2001 the
Company issued two convertible promissory notes, each in the principal amount of
$1,000,000 (the "$1,000,000  Notes").  The $1,000,000 Notes bear interest at 11%
per annum and provide for quarterly principal payments.  The remaining principal
and accrued  interest are due in one payment on October 11, 2003.  The notes are
convertible  into  common  stock of the Company  subject to certain  conditions.
Pursuant to an agreement made with the noteholders in October 2001, all payments
required to be made under the  $1,000,000  Notes for the first three quarters of
2001  were  deferred  until  the end of the  term and the  maturity  date of the
$1,000,000  Notes was  extended  to October  11,  2003 from  January  11,  2003.
Pursuant to the Amendment and Waiver Agreement,  dated March 29, 2002, among the
Company,  Willey  Brothers and Willey  Brothers's  lender for the Facility,  and
consented to by the noteholders,  no payments in respect of the $1,000,000 Notes
can be made until all of the  obligations  are paid, in full, to the lender.  No
payments have been made under the $1,000,000 Notes to date.

      During the fourth  quarter of 2001, the Company issued shares and warrants
in a private placement offering. The offering was completed on February 5, 2002.
During the year ended December 31, 2001, the Company  received net proceeds from
the  offering of  $2,976,250  and issued  2,702,268  shares of common  stock and
common stock purchase warrants to acquire an additional  4,728,959 shares of the
Company's common stock at various prices ranging from $1.056 to $3.00 per share.
During 2002, the Company  received  additional net proceeds from the offering of
$311,800 and issued  285,258  shares of common  stock and common stock  purchase
warrants to acquire an additional  474,198 shares of the Company's  common stock
at various  prices  ranging from $1.152 to $3.00 per share.  All of the warrants
are exercisable until November 30, 2006. The proceeds from the private placement
were used for working capital purposes.

      In  the  fourth  quarter  of  2002,  the  Company  announced  that  it had
experienced an unanticipated reduction in its capital resources and liquidity in
2002. After a review of the Company's internal records by management and, at the
direction  of the  Board of  Directors,  a review by the  Company's  independent
auditors,  the Company  determined that this unanticipated  liquidity  shortfall
resulted  principally from the payment by its deceased former Chairman and Chief
Executive  Officer,  Jeffrey  S.  Silverman,  to  himself  of over  $265,000  of
unauthorized  compensation  and the payment by Mr.  Silverman to himself of more
than $130,000 in unauthorized expense  reimbursements and unauthorized  directed
payments  for  personal  expenses in 2002.  The  Company's  independent  auditor
reviewed  the  matter  and  concluded  that no  changes  were  warranted  to the
Company's  financial  statements for the year ended December 31, 2001 or for the
quarters  ended March 31, 2002 and June 30, 2002.  The Company is  continuing to
explore all possible  avenues of recovery of these funds,  including  evaluating
possible recourse against Mr. Silverman's estate.


                                       5
<PAGE>

      On October 31, 2002, the Company disposed of its majority  interest in its
subsidiary,  iMapData,  for  $2,000,000,  through a sale to iMapData's  minority
stockholders. At closing the Company received cash of $450,000 and a note in the
amount of  $1,550,000,  due November 21, 2002.  The note was paid in full on the
due date. The proceeds are being used for working capital purposes.

      In  response  to current  market  conditions  and as a part of its ongoing
corporate  strategy,  the Company is pursuing  several  initiatives  intended to
increase  liquidity and better  position the Company in the  marketplace.  These
initiatives  include  vigorously  pursuing new sales and customers,  continually
reviewing costs and expenses and aggressively collecting accounts receivable. In
addition,  the Company is pursuing various  financing  arrangements to allow the
execution of its business  plan.  While no assurances  can be given,  management
believes that implementation of these initiatives, the proceeds from the sale of
the Company's  majority interest in iMapData and the anticipated  refinancing of
the Facility will provide sufficient cash flow for the next twelve months.

      Our ability to satisfy our working capital  requirements depends on, among
other things,  whether we are successful in generating  revenues and income from
Willey  Brothers and the cost and  availability  of  third-party  financing.  We
continue to be impacted by the economic downturn in the United States, which has
resulted in a decline in revenues and  profitability  at Willey Brothers for the
twelve months ended  December 31, 2002,  and by  limitations  placed upon Willey
Brothers by its lender with respect to funds available under its Facility.

      We may in the future  continue to  experience  fluctuations  in  quarterly
operating  results.  Factors that may cause our quarterly  operating  results to
vary  include  the  number of active  customer  projects,  the  requirements  of
customer projects, the termination of major customer projects, the loss of major
customers and the timing of new engagements.

      Long Term Debt and Credit Facility

      On October 22, 2001, Willey Brothers issued a subordinated promissory note
in the principal amount of $5,000,000 (the "Willey  Subordinated  Note Payable")
to a third party.  The note bears  interest at 16% per annum payable as follows:
12% on the  accreted  principal  amount,  payable  in  cash  at the  end of each
calendar quarter;  and, 4% on the accreted principal amount,  added to principal
(PIK  amount).  The  balance of the note at  December  31,  2002 was  $4,965,000
including  PIK  interest of $247,000  and less the  aggregate  discount on notes
payable of $282,000.  The note  matures on October 22,  2008,  at which time the
principal  and all PIK amounts are due. The funds were used for working  capital
and to reduce the balance of the Term Loan. Concurrently, and in connection with
the  issuance  of the Willey  Subordinated  Note  Payable,  the  Company  issued
warrants  to  purchase  405,000  shares of  common  stock of the  Company  at an
exercise price of $0.01.  The warrants expire October 22, 2011 and can be put to
Willey Brothers after the fifth year, or earlier under certain conditions, based
on certain  criteria.  The Company is also required to maintain  compliance with
certain  financial and other  covenants.  Pursuant to a letter  agreement  dated
October 9, 2002  between the  noteholder  and Willey  Brothers,  the  noteholder
waived its rights to demand immediate  payment of the Willey  Subordinated  Note
Payable  and to put the  warrants  to Willey  Brothers,  which  rights  had been
triggered  by the change in control  resulting  from the death of the  Company's
former Chairman and Chief Executive  Officer.  The Company has received  waivers
from certain  financial  covenants through March 31, 2003. At December 31, 2002,
the  Company  had a  liability  of  approximately  $56,000  related  to the  put
warrants.

      In connection  with the purchase of Willey  Brothers in January 2001,  the
Company  issued  two  subordinated  convertible  promissory  notes,  each in the
principal  amount of $3,750,000 (the "$3,750,000  Notes").  The $3,750,000 Notes
bear interest at LIBOR plus 150 basis points and provide for quarterly  interest
payments and  quarterly  interest  reset dates.  The interest  rate in effect on
December 31, 2002 was 3.27%.  The principal and any accrued  interest are due in
one payment on October 11, 2007. The notes are convertible  into common stock of
the Company  subject to certain  conditions.  Pursuant to an agreement made with
the  noteholders  in October  2001,  all payments  required to be made under the
$3,750,000  Notes,  for the first three quarters of 2001 were deferred until the
end of the term.  In addition,  the maturity  date of the  $3,750,000  Notes was
extended to October 11, 2007 from  January 11, 2007.  Pursuant to the  Amendment
and Waiver Agreement dated March 29, 2002 among the Company, Willey Brothers and
Willey Brothers's  lender,  and consented to by the noteholders,  no payments in
respect of the  $3,750,000  Notes can be made until all of the  obligations  are
paid,  in full, to the lender.  No payments have been made under the  $3,750,000
Notes to date.


                                       6
<PAGE>

Recently Issued Accounting Standards

      In June 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement  of  Financial  Accounting  Standard  No. 143,  "Accounting  for Asset
Retirement Obligations." SFAS No. 143 provides accounting and reporting guidance
for legal  obligations  associated with the retirement of long-lived assets that
result from the  acquisition,  construction  or normal  operation of  long-lived
assets.  The standard is effective  for fiscal  years  beginning  after June 30,
2002. The Company is reviewing the provisions of this standard.  Its adoption is
not expected to have a material effect on the financial statements.

      On April  30,  2002 the FASB  issued  Statement  of  Financial  Accounting
Standard No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB  Statement  No.  13, and  Technical  Corrections."  SFAS No.  145  rescinds
Statement  No. 4, which  required all gains and losses from  extinguishments  of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect.  Upon adoption of SFAS No. 145,  companies will be
required to apply the criteria in APB Opinion No. 30,  "Reporting the Results of
Operations - Reporting  the Effects of Disposal of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently  Occurring Events and  Transactions" in
determining  the   classification   of  gains  and  losses  resulting  from  the
extinguishment  of debt.  SFAS No. 145 is effective  for fiscal years  beginning
after May 15, 2002. We are currently  evaluating the  requirements and impact of
this statement on our consolidated results of operations and financial position.

      On July 30,  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standard  No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities." The standard requires  companies to recognize costs associated with
exit or disposal  activities when they are incurred rather than at the date of a
commitment  to an exit or  disposal  plan.  Examples  of  costs  covered  by the
standard include lease  termination  costs and certain employee  severance costs
that are associated with a restructuring, discontinued operation, plant closing,
or other exit or disposal activity.  SFAS No. 146 is to be applied prospectively
to exit or disposal  activities  initiated  after December 31, 2002. The Company
will follow the  requirements  of the statement for any applicable  transactions
initiated after December 31, 2002.

      In November 2002,  FASB  Interpretation  45,  "Guarantor's  Accounting and
Disclosure  Requirements  for  Guarantees,   Including  Indirect  Guarantees  of
Indebtedness  of Others"  (FIN 45),  was  issued.  FIN 45  requires a  guarantor
entity, at the inception of a guarantee covered by the measurement provisions of
the  interpretation,  to record a liability for the fair value of the obligation
undertaken in issuing the  guarantee.  The Company  previously  did not record a
liability  when  guaranteeing  obligations  unless it became  probable  that the
Company would have to perform under the guarantee.  FIN 45 applies prospectively
to guarantees  the Company  issues or modifies  subsequent to December 31, 2002,
but has certain disclosure requirements effective for interim and annual periods
ending after December 15, 2002. The Company has historically  issued  guarantees
only on a limited  basis  and does not  anticipate  FIN 45 will have a  material
effect on its 2003  financial  statements.  Disclosures  required  by FIN 45 are
included in the accompanying financial statements.

      In November  2002,  the  Emerging  Issues  Task Force  reached a consensus
opinion on EITF 00-21,  "Revenue  Arrangements with Multiple  Deliverables." The
consensus provides that revenue  arrangements with multiple  deliverables should
be divided into separate  units of  accounting if certain  criteria are met. The
consideration  for the arrangement  should be allocated to the separate units of
accounting based on their relative fair values, with different provisions if the
fair value of all  deliverables are not known or if the fair value is contingent
on delivery of specified  items or performance  conditions.  Applicable  revenue
recognition  criteria should be considered  separately for each separate unit of
accounting.  EITF 00-21 is effective  for revenue  arrangements  entered into in
fiscal periods  beginning after June 15, 2003.  Entities may elect to report the
change as a cumulative  effect  adjustment  in  accordance  with APB Opinion 20,
Accounting  Changes.  The Company has not  determined  the effect of adoption of
EITF 00-21 on its financial statements or the method of adoption it will use.


                                       7
<PAGE>

      Qualitative and Quantitative Disclosure About Market Risk

      The Company's Facility and $3,750,000 Notes expose the Company to the risk
of  earnings  or cash flow loss due to changes  in market  interest  rates.  The
Facility accrues interest at LIBOR plus an applicable  margin or the bank's base
rate plus an applicable  margin.  The $3,750,000  Notes accrue interest at LIBOR
plus 150 basis points.  On April 23, 2001, and in conjunction with obtaining the
Company's  Revolving Credit Facility,  the Company entered into an interest rate
cap  agreement,  which limits the Company's  exposure if the LIBOR interest rate
exceeds 6.5%. The notional  amount under the cap is  $4,000,000.  The fair value
was immaterial at December 31, 2002.

      The table below  provides  information on the Company's  market  sensitive
financial instruments as of December 31, 2002.

                                                            Weighted Average
                                                             Interest Rate
                                     Principal Balance    at December 31, 2002
                                     -----------------    --------------------

      Term Loan                         $2,499,000              6.0000%
      Revolving Credit Facility         $4,000,000              4.3156%
      $3,750,000 Notes                  $7,500,000              3.2700%

      Holding Company and Operating Subsidiaries

      We conduct our operations  through our subsidiaries.  We have relied,  and
continue to rely, on cash payments  from our  operating  subsidiaries  to, among
other  things,   pay  creditors,   maintain   capital  and  meet  our  operating
requirements.  Currently,  Willey Brothers is our sole operating subsidiary. The
March 29, 2002 Amendment and Waiver  Agreement with our lender  prohibits Willey
Brothers from paying  management fees to the Company until the debt is repaid in
full to the lender.  The debt is due and payable  August 22, 2003.  Regulations,
legal restrictions and contractual agreements could restrict any needed payments
from Willey  Brothers or any other operating  subsidiaries  we may  subsequently
acquire.  If we are unable to receive cash funds from Willey  Brothers,  or from
any operating  subsidiaries  we may acquire in the future,  our  operations  and
financial condition will be materially and adversely affected.

      Stock Price Fluctuations

      The market price of our common stock has fluctuated  significantly and may
be affected by our operating  results,  changes in our business and  management,
changes in the industries in which we conduct  business,  and general market and
economic  conditions.  In addition,  the stock  markets in general have recently
experienced  extreme  price and volume  fluctuations.  These  fluctuations  have
affected  stock  prices  of many  companies  without  regard  to their  specific
operating performance. The price of our common stock may fluctuate significantly
in the future.

      Inflation

      We believe that  inflation has not had a material  effect on the Company's
results of operations.


                                       8
<PAGE>

      Forward-Looking Statements

      This Annual  Report on Form  10-KSB  contains  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the  Securities  Exchange Act of 1934,  as amended,  that are not
historical  facts  but  rather  reflect  the  Company's   current   expectations
concerning  future  results and  events.  The words  "believes,"  "anticipates,"
"expects," and similar expressions,  which identify forward-looking  statements,
are subject to certain risks,  uncertainties and factors,  including those which
are economic, competitive and technological,  that could cause actual results to
differ  materially  from those forecast or  anticipated.  Such factors  include,
among others:

      o     the  continued  services of Edward T.  Stolarski as Chief  Executive
            Officer of  BrandPartners  Group and Willey  Brothers,  and of James
            Brooks as Chief Operating Officer of Willey Brothers;

      o     our ability to refinance  our existing  short term debt at all or on
            terms favorable to the Company;

      o     our ability to reach a  settlement  acceptable  to the Company or to
            obtain an outcome  favorable to the Company in litigating the matter
            entitled  Marvin M.  Reiss and Rebot  Corporation  v.  BrandPartners
            Group, Inc., formerly known as Financial Performance Corporation;

      o     our ability to identify appropriate acquisition candidates,  finance
            and complete such acquisitions and successfully  integrate  acquired
            businesses;

      o     changes in our business strategies or development plans;

      o     competition;

      o     our ability to grow within the financial services industries;

      o     our ability to obtain sufficient  financing to continue  operations;
            and

      o     general economic and business conditions, both nationally and in the
            regions in which we operate.

      Readers are cautioned not to place undue reliance on these forward-looking
statements  which speak only as of the date hereof.  The Company  undertakes  no
obligation to republish revised forward-looking  statements to reflect events or
circumstances   after  the  date  hereof  or  to  reflect  the   occurrence   of
unanticipated  events.  Readers are also urged to carefully  review and consider
the  various  disclosures  made by the  Company in this  report,  as well as the
Company's periodic reports on Forms 10-KSB and 10-QSB and other filings with the
Securities and Exchange Commission.

Item 7. Restated Financial Statements.

      The restated audited consolidated  financial statements of the Company for
the  years  ended  December  31,  2002 and 2001 are set forth at the end of this
Amendment No. 2 to Annual Report on Form 10-KSB and begin on page F-1.


                                       9
<PAGE>

Item 8A. Controls and Procedures.

(Note that, due to recent changes in the format of the required form,  this Item
8A  amends  and  restates  in its  entirety  Part III,  Item 14 of the  Original
Filing.)

      The  rules of the  Securities  Exchange  Commission  ("SEC")  require  the
Company, under the supervision and with the participation of its Chief Executive
Officer and Chief Financial  Officer,  to conduct an evaluation of the Company's
disclosure controls and procedures as of the end of each fiscal quarter,  and to
present the results of such  evaluation in its periodic  reports filed under the
Securities  Exchange Act of 1934, as amended (the  "Exchange  Act").  Disclosure
controls and procedures are controls and other  procedures  that are designed to
ensure  that the  information  required  to be  disclosed  by the Company in the
reports that it files or submits under the Exchange Act is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation,  controls
and procedures  designed to ensure that information  required to be disclosed by
the Company in the reports  that it files or submits  under the  Exchange Act is
accumulated and  communicated to the Company's  management,  including its Chief
Executive  Officer and Chief Financial  Officer,  as appropriate to allow timely
decisions regarding required disclosure. In making this evaluation,  the Company
has  considered  matters  relating  to  its  restatement  of  previously  issued
financial statements for the year ended December 31, 2002, including the process
that was undertaken to ensure that all material adjustments necessary to correct
the previously issued financial statements were recorded.

      During the second  quarter of 2003, in the course of preparing its federal
income tax returns for the tax year ended December 31, 2002, the Company learned
that its wholly-owned subsidiary, Willey Brothers, Inc., could take advantage of
a five-year  carryback rule effective for the tax years ending December 31, 2001
and December 31, 2002, the effects of which  carryback were not reflected in the
Company's audited consolidated  financial statements for the year ended December
31, 2002. Accordingly, in this Amendment No. 2 to the Company's Annual Report on
Form 10-KSB for the year ended  December 31, 2002,  the Company has restated its
consolidated  financial  statements  for the year ended  December  31,  2002 and
amended  such other  portions  of its Annual  Report on Form 10-KSB for the year
ended  December 31, 2002 as  originally  filed on March 31, 2003 as necessary to
reflect the effects of such restatement.

      The Company's disclosure system, no matter how well designed and operated,
can provide reasonable, but not absolute,  assurance that its objectives will be
met. The Company's disclosure controls may be rendered ineffective due to faulty
judgments in  decision-making,  or honest errors and  mistakes.  Due to inherent
limitations  in  cost-effective   control  systems,   including  the  Company's,
misstatements  caused by error may occur and not be  detected.  The  Company has
conducted an inquiry into the facts and circumstances surrounding the unrecorded
carryback claim described above.  Following such inquiry,  the Company concluded
that the  failure  to record  the  carryback  claim  resulted  from a failure to
recognize the availability of the carryback claim under the applicable tax laws.

      Based on their  evaluation  as of the end of the  period  covered  by this
Amendment  No. 2 to the Company's  Annual  Report on Form 10-KSB,  the Company's
Chief Executive  Officer and Chief Financial Officer have concluded that, except
as  described  above,  the  Company's  disclosure  controls and  procedures  are
effective  to ensure that  information  required to be  disclosed in the reports
that the Company files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms. There has been no change in the Company's internal control over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Rule 13a-15  promulgated  under the  Exchange  Act that  occurred  during the
Company's  fiscal quarter ended December 31, 2002 that has materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reporting.


                                       10
<PAGE>

Item 13. Exhibits and Reports On Form 8-K.

      (a) The  following  exhibits are  included  with this  Amendment  No. 2 to
Annual Report on Form 10-KSB:

      23.1    Consent of Grant Thornton LLP.

      31.1    Certification  of Chief  Executive  Officer  Pursuant to 17 C.F.R.
              240.13a-14(a),   as  adopted   pursuant  to  Section  302  of  the
              Sarbanes-Oxley Act of 2002.

      31.2    Certification  of Chief  Financial  Officer  Pursuant to 17 C.F.R.
              240.13a-14(a),   as  adopted   pursuant  to  Section  302  of  the
              Sarbanes-Oxley Act of 2002.

      32.1    Certification  of Chief  Executive  Officer  Pursuant to 18 U.S.C.
              Section  1350,   as  adopted   pursuant  to  Section  906  of  the
              Sarbanes-Oxley Act of 2002.

      32.2    Certification  of Chief  Financial  Officer  Pursuant to 18 U.S.C.
              Section  1350,   as  adopted   pursuant  to  Section  906  of  the
              Sarbanes-Oxley Act of 2002.


                                       11
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                      Page
                                                                      ----

Report of Independent Certified Public Accountants                    F-2

Financial Statements

      Consolidated Balance Sheets                                     F-3 - F-4

      Consolidated Statements of Operations                           F-5

      Consolidated Statements of Stockholders' Equity                 F-6 - F-7

      Consolidated Statements of Cash Flows                           F-8

      Notes to Consolidated Financial Statements                      F-9 - F-39


                                      F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of
    BrandPartners Group, Inc.

We have audited the  accompanying  consolidated  balance sheets of BrandPartners
Group,  Inc. and  Subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of BrandPartners
Group,  Inc. and Subsidiaries at December 31, 2002 and 2001 and the consolidated
results of their operations and their consolidated cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

As discussed in Note D to the  consolidated  financial  statements,  the Company
adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142") on January 1, 2002.

As discussed in Note B, the accompanying  consolidated  financial statements for
the year ended December 31, 2002 have been restated.

/s/ GRANT THORNTON LLP

New York, New York
March 21, 2003 (except for Note B, as to which
   the date is August 20, 2003)


                                      F-2
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                  December 31,

                    ASSETS                              2002           2001
                                                     -----------     -----------
                                                     (Restated -
                                                     See Note B)
Current assets

    Cash and cash equivalents                        $ 2,812,924     $ 4,225,756
    Accounts receivable, net of allowance
       for doubtful accounts of $113,960
       and $96,766 Respectively                        7,476,432       6,403,173
    Costs in excess of billings                        6,288,532       3,434,747
    Prepaid expenses and deferred charges                878,700         642,742
    Inventories                                        2,102,909       2,474,087
    Deferred income tax asset, net
       of valuation Allowance                                 --         104,489
    Assets of discontinued operations                         --      12,617,070
    Income tax receivable                                690,136              --
                                                     -----------     -----------

         Total current assets                         20,249,633      29,902,064
                                                     -----------     -----------

Property and equipment, net of accumulated
    Depreciation                                       1,600,415       1,355,540

Goodwill, net of accumulated amortization             24,271,969      24,271,969

Deferred financing costs                                 472,450         709,094

Other assets                                             270,349         448,629
                                                     -----------     -----------

         Total assets                                $46,864,816     $56,687,296
                                                     ===========     ===========

The accompanying notes are an integral part of these statements.


                                      F-3
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                  December 31,

         LIABILITIES AND STOCKHOLDERS' EQUITY          2002            2001
                                                   ------------    ------------
                                                   (Restated -
                                                   See Note B)

Current liabilities
   Revolving credit facility                       $  4,000,000    $  1,142,352
   Accounts payable and accrued expenses             14,837,277       8,356,557
   Billings in excess of costs                        1,116,360         393,298
   Current maturities of long-term debt               4,568,083       1,513,062
   Other current liabilities                          1,175,494         434,124
   Liabilities of discontinued operations                    --       3,447,485
                                                   ------------    ------------

         Total current liabilities                   25,697,214      15,286,878
                                                   ------------    ------------

Loan payable to bank                                         --       6,500,000
Notes and interest payable                           12,465,008      13,546,308
Capital lease obligations                                 2,445         104,495
Put warrant liability                                    56,295         440,438

Commitments and contingencies                                --              --

Stockholders' equity
    Preferred stock, $.01 par value;
       20,000,000 shares authorized;
       1,650,000 shares designated as
       Class A convertible preferred
       stock, issued and converted to
       common as of August 1, 2001                           --              --
    Common stock - 100,000,000 shares
       authorized, $.01 par value; 18,163,553
       and 17,857,462 shares issued as of
       December 31, 2002 and 2001, respectively         181,636         178,575
   Additional paid-in capital                        40,109,102      39,841,655
   Accumulated deficit                              (31,334,384)    (18,898,553)
   Treasury stock                                      (312,500)       (312,500)
                                                   ------------    ------------

         Total stockholders' equity                   8,643,854      20,809,177
                                                   ------------    ------------

         Total liabilities and
           stockholders' equity                    $ 46,864,816    $ 56,687,296
                                                   ============    ============

The accompanying notes are an integral part of these statements.


                                      F-4
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             Year ended December 31,

                                                      2002             2001
                                                  ------------     ------------
                                                  (Restated -
                                                   See Note B)

Revenues                                          $ 38,879,500     $ 39,693,427
                                                  ------------     ------------

Costs and expenses
    Cost of revenues                                29,725,975       27,257,861
    Selling, general and administrative             12,342,643       12,079,997
    Depreciation and amortization                      889,875        3,521,629
                                                  ------------     ------------

         Total expenses                             42,958,493       42,859,487
                                                  ------------     ------------

         Operating loss                             (4,078,993)      (3,166,060)

Interest expense                                    (2,461,632)      (1,965,037)

Other income (expenses)
    Interest income                                     71,100          236,335
    Management fee income                              332,160               --
    Other                                              348,138         (222,147)
                                                  ------------     ------------

        Total other income                             751,398           14,188
                                                  ------------     ------------

Loss from continuing operations before
  income taxes                                      (5,789,227)      (5,116,909)

        Income taxes (expense) benefit                 522,981         (186,890)
                                                  ------------     ------------

Loss from continuing operations                     (5,266,246)      (5,303,799)

Loss from discontinued operations                   (7,169,585)      (1,710,760)
                                                  ------------     ------------

                     NET LOSS                      (12,435,831)      (7,014,559)

Beneficial conversion on preferred stock                    --       (2,475,000)
                                                  ------------     ------------

Net loss applicable to common stockholders        $(12,435,831)    $ (9,489,559)
                                                  ============     ============

Basic and diluted (loss) per share
    Continuing operations                         $      (0.28)    $      (0.56)
    Discontinued operations                              (0.39)    $      (0.12)
                                                  ------------     ------------

    Basic and diluted                             $      (0.67)    $      (0.68)
                                                  ============     ============

    Weighted-average shares outstanding             18,437,942       13,951,398
                                                  ============     ============

The accompanying notes are an integral part of these statements.


                                      F-5
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (continued)

                     Years ended December 31, 2002 and 2001
                             (Restated - See Note B)

<TABLE>
<CAPTION>
                               Preferred stock        Common stock                                   Treasury stock
                            --------------------  --------------------   Additional                -------------------
                                                                          paid-in    Accumulated
                              Shares       $        Shares       $        capital      deficit      Shares       $         Total
                            ----------  --------  ----------  --------  -----------  ------------  --------  ---------  -----------

<S>                         <C>         <C>       <C>         <C>       <C>          <C>           <C>       <C>        <C>
Balance at
  December 31, 2000                               11,458,040  $114,580  $22,079,129  $ (9,408,994)                      $12,784,715

Shares issued in private
  placement                                        2,702,268    27,023    2,839,503                                       2,866,526

Issuance of preferred stock  1,650,000  $ 16,500                          3,974,125                                       3,990,625

Conversion of preferred
  stock                     (1,650,000)  (16,500)  1,650,000    16,500    2,475,000    (2,475,000)                               --

Issuance of shares for
  acquisition of
  Willey Brothers                                  1,512,500    15,125    6,034,875                                       6,050,000

Beneficial conversion on
  notes payable                                                             666,667                                         666,667

Exercise of options                                  150,000     1,500      148,500                                         150,000

Issuance of shares for
  services                                           384,654     3,847      673,918                                         677,765

Options issued for services                                                 787,000                                         787,000

Contribution of services
  - officer                                                                 150,000                                         150,000

Imputed interest on
  subsidiary notes                                                           12,938                                          12,938

Exchange of Company stock
  for IMapData.com, Inc.
  stock                                                                                            (100,000) $(312,500)    (312,500)

Net loss                                                                               (7,014,559)                       (7,014,559)
                            ----------  --------  ----------  --------  -----------  ------------  --------  ---------  -----------
Balance at
  December 31, 2001                 --  $     --  17,857,462  $178,575  $39,841,655  $(18,898,553) (100,000) $(312,500) $20,809,177
                            ==========  ========  ==========  ========  ===========  ============  ========  =========  ===========
</TABLE>

The accompanying notes are an integral part of this statement.


                                      F-6
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 2002 and 2001
                             (Restated - See Note B)

<TABLE>
<CAPTION>
                                           Common stock            Additional                     Treasury stock
                                     -------------------------      paid-in     Accumulated     -------------------
                                        Shares      Par value       capital       deficit      Shares        $           Total
                                     -----------    ----------    -----------   ------------    -------   ---------    -----------
<S>                                   <C>           <C>           <C>           <C>             <C>       <C>          <C>
Balance at December 31, 2001          17,857,462    $  178,575    $39,841,655   $(18,898,553)   100,000   $(312,500)   $20,809,177

Shares issued in private placement       285,258         2,853        242,655                                              245,508

Issuance of shares for services
   provided                               20,833           208         24,792                                               25,000

Net loss                                                                         (12,435,831)                          (12,435,831)
                                     -----------    ----------    -----------   ------------    -------   ---------    -----------

Balance at December 31, 2002          18,163,553    $  181,636    $40,109,102   $(31,334,384)   100,000   $(312,500)   $ 8,643,854
                                     ===========    ==========    ===========   ============    =======   =========    ===========
</TABLE>

The accompanying notes are an integral part of this statement.


                                      F-7
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended December 31,

<TABLE>
<CAPTION>
                                                                                                     2002                  2001
                                                                                                  -----------          ------------
                                                                                                 (Restated -
                                                                                                  See Note B)
<S>                                                                                               <C>                  <C>
Cash flows from operating activities of continuing operations
  Net loss from continuing operations                                                             $(5,266,246)         $ (5,303,799)
  Adjustments to reconcile net loss from continuing operations
     to cash provided by (used in) operating activities
      Depreciation and amortization                                                                   889,875             3,521,629
      Amortization of discount on notes payable                                                       410,646               294,608
      Loss on disposal of fixed assets                                                                     --                13,691
      Bad debt provision (recovery)                                                                    17,194               (63,562)
      Noncash compensation                                                                            310,000             1,114,557
      Put warrant (gain) loss                                                                        (384,143)              102,147
      Allowance for obsolete inventory                                                                 (7,575)              (15,934)
      Loss on write-down of securities                                                                     --               120,000
      Loss on sale of assets                                                                           36,005                    --

      Changes in operating assets and liabilities, net of effects from
        acquisitions
         Accounts receivable                                                                       (1,090,453)            2,338,074
         Costs and estimated earnings in excess of billings                                        (2,853,785)           (2,313,011)
         Inventories                                                                                  378,753               872,943
         Prepaid expenses and other current assets                                                   (529,158)              (58,758)
         Other assets                                                                                (164,092)             (766,925)
         Accounts payable and accrued expenses                                                      6,480,720            (2,104,333)
         Other liabilities                                                                            741,370               401,974
         Billings in excess of costs                                                                  723,062            (1,492,721)
         Interest payable - long term                                                                  (9,707)              256,658
         Income taxes                                                                                (585,647)              573,337
                                                                                                  -----------          ------------

       Net cash used in operating activities of continuing operations                                (903,181)           (2,509,425)
                                                                                                  -----------          ------------

Cash flows from investing activities of continuing operations
  Acquisition of equipment                                                                           (545,734)             (574,741)
  Proceeds from sale of assets                                                                      2,008,995             2,000,000
  Acquisition of Willey Brothers, net of cash acquired                                                     --           (14,694,926)
  Loan to officers                                                                                    (78,000)                   --
  Proceeds from sale of fixed assets                                                                       --                75,350
  Purchase of marketable securities                                                                        --               (90,000)
                                                                                                  -----------          ------------

       Net cash provided by (used in) investing activities
           of continuing operations                                                                 1,385,261           (13,284,317)
                                                                                                  -----------          ------------

Cash flows from financing activities of continuing operations
  Borrowings on credit facility                                                                     2,857,648             1,142,352
  Proceeds from long-term debt                                                                             --            13,000,000
  Proceeds from sale of common stock                                                                  245,508             2,866,526
  Proceeds from exercise of options/warrants                                                               --               150,000
  Proceeds from sale of preferred stock                                                                    --             4,125,000
  Repayment of long-term debt                                                                      (5,029,268)           (1,267,651)
  Repayment on loan to officers                                                                        31,200                    --
                                                                                                  -----------          ------------

       Net cash (used in) provided by financing activities
           of continuing operations                                                                (1,894,912)           20,016,227
                                                                                                  -----------          ------------

       NET INCREASE (DECREASE) IN CASH                                                             (1,412,832)            4,222,485

Cash and cash equivalents, at beginning of year                                                     4,225,756                 3,271
                                                                                                  -----------          ------------

Cash and cash equivalents, at end of year                                                         $ 2,812,924          $  4,225,756
                                                                                                  ===========          ============

Supplemental disclosures of cash flow information:
  Cash paid during the year for
      Interest                                                                                    $ 1,251,352          $  1,063,873
                                                                                                  ===========          ============
      Taxes                                                                                       $   263,888          $    481,424
                                                                                                  ===========          ============
</TABLE>

The accompanying notes are an integral part of these statements.


                                      F-8
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2002 and 2001

NOTE A - NATURE OF BUSINESS AND BASIS OF PRESENTATION

      BrandPartners  Group, Inc.  operates through its wholly-owned  subsidiary,
      Willey Brothers,  Inc. ("Willey Brothers"),  acquired on January 16, 2001.
      Through Willey Brothers, the Company provides services and products to the
      financial services industry consisting of strategic retail positioning and
      branding,  environmental  design and store construction  services,  retail
      merchandising  analysis,  display systems and signage,  and  point-of-sale
      communications and marketing programs.

      The Company has  experienced  recurring  net losses  applicable  to common
      stockholders of $12,435,831 and $9,489,559 during the years ended December
      31,  2002  and  2001,  respectively.  Additionally,  the  Company  has had
      negative cash flows from operations for the years ending December 31, 2002
      and 2001.

      Our ability to satisfy our working capital  requirements depends on, among
      other things,  whether we are successful in generating revenues and income
      from  Willey  Brothers  and the  cost  and  availability  of  third  party
      financing.  We have been  impacted by the economic  downturn in the United
      States,  which has resulted in a decline in revenues and  profitability at
      Willey  Brothers  for the twelve  months ended  December 31, 2002,  and by
      limitations  and  restrictions  placed upon Willey  Brothers by its lender
      with respect to availability under its revolving credit facility (see Note
      H). The revolving credit facility and term loan (the "Facility") at Willey
      Brothers expires in August 2003.

      The Company has signed a commitment  letter with a  commercial  bank for a
      $6,000,000 credit facility with annual renewals,  subject to the execution
      of  definitive  agreements.  The  commitment  expires June 12,  2003.  The
      Company intends to refinance its debt with a commercial lender under terms
      and  conditions  acceptable to the Company but no assurances  can be given
      that the  Company  will be  successful  in  concluding  this or any  other
      financing  transaction.  If for  any  reason  the  Company  is  unable  to
      refinance the Facility upon maturity, and the amount outstanding under the
      Facility  becomes  due and  payable,  the  lender has the right to proceed
      against the collateral  granted to it to secure the indebtedness under the
      Facility,  including the Company's  ownership interest in Willey Brothers.
      The Company has guaranteed 100% of the loan. Should that foreclosure occur
      the Company would have no further operations.

      In  response  to current  market  conditions  and as a part of its ongoing
      corporate strategy,  the Company is pursuing several initiatives  intended
      to increase  liquidity and better position the Company in the marketplace.
      These  initiatives  include  vigorously  pursuing new sales and customers,
      continually  reviewing  costs and  expenses  and  aggressively  collecting
      accounts  receivable.   In  addition,  the  Company  is  pursuing  various
      financing  arrangements to allow the execution of its business plan. While
      no assurances can be given,  management  believes that  implementation  of
      these initiatives, the proceeds received from the sale of iMapData and the
      refinancing of the facility will provide sufficient cash flow for the next
      twelve months.

      We may in the future  continue to  experience  fluctuations  in  quarterly
      operating results.  Factors that may cause our quarterly operating results
      to vary include the number of active customer  projects,  the requirements
      of customer projects, the termination of major customer projects, the loss
      of major customers and the timing of new engagements.


                                      F-9
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE B - RESTATEMENT

      At December  31, 2002 the Company was  eligible  for a federal  income tax
      refund, the effect of which was not reflected in the financial  statements
      contained in its Annual Report on Form 10-KSB for the year ended  December
      31, 2002.  The error was  discovered  during the second quarter of 2003 in
      the course of  preparing  federal  income tax  returns  for the year ended
      December  31,  2002,  when  the  Company  learned  that  its  wholly-owned
      subsidiary,  Willey  Brothers,  Inc.,  could take advantage of a five-year
      carryback  rule  effective for the tax years ending  December 31, 2001 and
      December 31, 2002. This Amendment  Number 2 to the Company's Annual Report
      on Form 10-KSB for the year ended December 31, 2002 restates the Company's
      2002 financial statements to reflect the effect of the federal tax refund.
      The tables  below show the effect of the  correction  on the  Consolidated
      Balance  Sheets,  Consolidated  Statements  of  Operations,   Consolidated
      Statement of  Stockholders'  Equity and  Consolidated  Statements  of Cash
      Flows for the year ended December 31, 2002.

Consolidated Balance Sheets
---------------------------
                                                 Previously
                                                  Reported         As Restated
                                                ------------      -------------

Income tax receivable                                     --       $    690,136
Total current assets                            $ 19,559,497         20,249,633
Total assets                                      46,174,680         46,864,816
Accumulated deficit                              (32,024,520)       (31,334,384)
Total stockholders' equity                         7,953,718          8,643,854
Total liabilities and stockholders' equity        46,174,680         46,864,816

Consolidated Statements of Operations
-------------------------------------
                                                 Previously
                                                  Reported         As Restated
                                                ------------      -------------
Income tax expense [benefit]                    $    167,155       $   (522,981)
Loss from continuing operations                    5,956,382          5,266,246
Net Loss                                          13,125,967         12,435,831
Net loss applicable to common
  stockholders                                   (13,125,967)       (12,435,831)
Basic and diluted loss per share from
  Continuing operations                                (0.32)             (0.28)
Basic and diluted loss per share                       (0.71)             (0.67)


                                      F-10
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE B (continued)

Consolidated Statements of Cash Flows
-------------------------------------
                                                 Previously
                                                  Reported         As Restated
                                                ------------      -------------
Net loss from continuing operations             $ (5,956,382)      $ (5,266,246)
Changes in operating assets, net of
   effects from acquisitions
      Income taxes                                   104,489           (585,647)

<TABLE>
<CAPTION>
Consolidated Statement of Stockholders' Equity
----------------------------------------------
                                                                 Accumulated Deficit                            Total
                                                            -------------------------------         ------------------------------
                                                            Previously                              Previously
                                                             Reported          As Restated           Reported          As Restated
                                                           ------------        ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Net loss                                                    (13,125,967)        (12,435,831)        (13,125,967)        (12,435,831)
Balance at December 31, 2002                               $(32,024,520)       $(31,334,384)       $  7,953,718        $  8,643,854
</TABLE>


                                      F-11
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2002 and 2001

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.    Principles of Consolidation

      The   consolidated   financial   statements   include   the   accounts  of
      BrandPartners Group, Inc., its wholly-owned  subsidiary,  Willey Brothers,
      from  January  16,  2001,  and  iMapData  through  October 31,  2002.  All
      significant  inter-company  accounts and transactions have been eliminated
      in consolidation.

2.    Revenue Recognition

      Willey   Brothers   records  sales  on  its   long-term   contracts  on  a
      percentage-of-completion  basis,  based upon current estimates of costs to
      complete such  contracts.  Contract  costs  include all direct  materials,
      labor and subcontractor  costs.  General and  administrative  expenses are
      accounted for as period  charges and,  therefore,  are not included in the
      calculation of the estimates to complete.  Anticipated losses are provided
      for in their entirety without  reference to the  percentage-of-completion.
      Costs and  estimated  earnings  in excess of billings  represent  unbilled
      charges on long-term  contracts  consisting of amounts  recognized but not
      billed at December 31. Such billings are  generally  made and collected in
      the subsequent  year.  Billings in excess of costs and estimated  earnings
      represent billed charges on long-term contracts  consisting of amounts not
      recognized but billed at December 31.

      Revenue  from  short-term  contracts  is  recognized  when the  product is
      shipped and/or the service is rendered.

3.    Cash and Cash Equivalents

      The Company considers all highly liquid investments with maturity of three
      months or less when purchased to be cash equivalents.

4.    Inventories

      Inventories   are  priced  at  the  lower  of  cost   (determined  by  the
      weighted-average  method,  which  approximates  first-in,   first-out)  or
      market. All inventories are considered to be finished goods inventory.

      Uncompleted contracts are included in inventory at the accumulated cost of
      component units within each contract,  not in excess of realizable  value.
      At December  31,  2002 and 2001,  the Company  recorded an  allowance  for
      obsolete inventory of approximately $43,000 and $50,000, respectively.


                                      F-12
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

5.    Property and Equipment

      Property  and  equipment  are recorded at cost.  Depreciation  is computed
      principally on a  straight-line  basis over the estimated  useful lives of
      the applicable assets ranging from three to seven years.

      Leasehold  improvements  are amortized over the term of the related lease,
      or the  estimated  useful  life of the  improvement,  whichever  is  less.
      Significant   improvements  extending  the  useful  lives  of  assets  are
      capitalized.  When assets are retired or  otherwise  disposed of, the cost
      and related accumulated depreciation are removed from the accounts and any
      resulting  gain  or  loss  is  reflected  in  current  operating  results.
      Maintenance and repairs are charged to expense,  while significant repairs
      and  betterments  are  capitalized.  When  property  is sold or  otherwise
      disposed  of,  the cost and  related  depreciation  are  removed  from the
      accounts, and any gain or loss is reflected in operations for the period.

6.    Goodwill and Deferred Financing Costs

      Goodwill  represents  the excess of the purchase price over the fair value
      of the net assets  acquired and has been  amortized  on the  straight-line
      basis over ten years through December 31, 2001. Beginning January 1, 2002,
      the Company adopted Statement of Financial  Accounting  Standards ("SFAS")
      No. 142, "Goodwill and Other Intangible Assets" (see Note D).

      Deferred financing costs are being amortized on a straight-line basis over
      5 - 7 years, the life of the related debt.

7.    Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

      The Company evaluates its long-lived assets for impairment whenever events
      or changes in  circumstances  indicate  that the  carrying  amount of such
      assets or intangibles may not be recoverable.  Recoverability of assets to
      be held and used is measured by a comparison of the carrying  amount of an
      asset to future net cash flows  expected to be generated by the asset.  If
      such  an  asset  is  considered  to  be  impaired,  the  impairment  to be
      recognized  is measured by the amount by which the carrying  amount of the
      asset  exceeds 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. (See Note C-17)

8.    Warranty Costs

      Estimated future warranty costs are provided for in the period of sale for
      products under warranty based upon past experience. Accrued warranty costs
      at December  31, 2002 and 2001 were  approximately  $47,000 and  $102,000,
      respectively, and are included in accrued expenses.


                                      F-13
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

9.    Income Taxes

      As  part  of the  process  of  preparing  the  BrandPartners  consolidated
      financial statements, the Company is required to estimate its income taxes
      in each of the  jurisdictions in which it operates.  This process involves
      estimating  the  Company's  actual  current  tax  exposure  together  with
      assessing  temporary  differences  resulting from  different  treatment of
      items.  These  differences  result in deferred tax assets and liabilities,
      which are included within the Company's  consolidated  balance sheets. The
      Company must then look at the likelihood that its deferred tax assets will
      be recovered from future taxable income and to the extent it believes that
      recovery is not likely, the Company must establish a valuation allowance.

10.   Fair Value of Financial Instruments

      The  following  methods  and  assumptions  were  used  in  estimating  the
      indicated fair values of financial instruments:

            Cash and cash  equivalents:  The carrying  value  approximates  fair
            value due to the short maturity of these instruments.

            Short-term debt: The carrying value  approximates  fair value due to
            the short maturity of these instruments.

            Long-term debt: The carrying value  approximates fair value based on
            current rates offered to the Company for similar debt.

            Derivative financial instruments:  The carrying value is re-measured
            at each  balance  sheet  date  based  on the  fair  value  of  these
            instruments.

11.   Leases

      Leases which meet certain  criteria are capitalized as capital leases.  In
      such leases,  assets and obligations are recorded initially at the present
      value of the leased assets. The capitalized leases are amortized using the
      straight-line  method over the assets' estimated economic lines.  Interest
      expense  relating to the liabilities is recorded to affect a constant rate
      of  interest   over  the  terms  and   obligations.   Leases  not  meeting
      capitalization  criteria are  classified  as operating  leases and related
      rentals are charged to expense as incurred.


                                      F-14
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

12.   Loss Per Share

      Basic and diluted loss per share are computed  using the  weighted-average
      number of shares of common stock  outstanding  during the period.  Diluted
      loss per share is computed using the weighted-average  number of shares of
      common stock,  adjusted for the dilutive effect of potential common shares
      issued or issuable pursuant to stock options,  stock appreciation  rights,
      warrants and convertible  securities.  Potential  common shares issued are
      calculated  using the treasury stock method.  All potential  common shares
      have been excluded from the computation of diluted loss per share as their
      effect would be antidilutive.

      Potential common shares which would be antidilutive and therefore excluded
      from the  computation  of  diluted  loss per  share,  consisting  of stock
      options,  warrants and convertible  debt, were 2,650,000 and 7,055,764 for
      the years ended December 31, 2002 and 2001, respectively.

13.   Derivative Instruments and Hedging Activities

      In June 1998, the Financial  Accounting  Standards  Board ("FASB")  issued
      Statement of Financial  Accounting Standards ("SFAS") No. 133, "Accounting
      for  Derivative   Instruments  and  Hedging   Activities."  SFAS  No.  133
      establishes  accounting  and  reporting  standards  requiring  that  every
      derivative instrument  (including certain derivative  instruments embedded
      in other contracts) be recorded in the balance sheet as either an asset or
      liability  at  its  fair  value.  Changes  in  the  fair  value  of  those
      instruments  are  reported  in  earnings  or  other  comprehensive  income
      depending on the use of the  derivative and whether it qualifies for hedge
      accounting. The accounting for gains and losses associated with changes in
      the  fair  value  of a  derivative  and  the  effect  on the  consolidated
      financial  statements will depend on its hedge designation and whether the
      hedge is highly  effective  in  achieving  offsetting  changes in the fair
      value of cash flows of the instrument hedged.

      On April 23, 2001, and in conjunction  with obtaining the Company's credit
      facility,  the Company entered into an interest rate cap agreement,  which
      limits the  Company's  exposure if the LIBOR  interest  rate exceeds 6.5%.
      Accordingly,  the  Company  designated  the  interest  rate cap  having an
      aggregate  notional  amount of $4  million as a cash flow hedge as defined
      under SFAS No.  133.  The  contract  matures on January  22,  2004.  As of
      December  31,  2002  and  2001,  the  fair  value  of  the  agreement  was
      immaterial.

14.   Concentration of Credit Risk

      Financial  instruments  that subject the Company to credit risk  primarily
      consist of accounts  receivable  and costs in excess of billings (see Note
      G). Willey  Brothers  customer base primarily  consists of U.S.  financial
      institutions.  Management  does not believe that  significant  credit risk
      exists  in  connection  with the  Company's  concentration  of  credit  at
      December 31, 2002.


                                      F-15
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

15.   Stock-Based Compensation

      The Company has elected to follow Accounting  Principles Board Opinion No.
      25 ("APB No. 25"), "Accounting for Stock Issued to Employees," and related
      interpretations  in accounting for its employee  stock options.  Under APB
      No. 25, when the  exercise  price of  employee  stock  options  equals the
      market price of the underlying  stock on the date of grant no compensation
      expense is recorded.  The Company  discloses  information  relating to the
      fair value of stock-based compensation awards in accordance with Statement
      of Financial  Accounting  Standards No. 123 ("SFAS No. 123"),  "Accounting
      for Stock-Based  Compensation." The following table illustrates the effect
      on net loss and loss per  share as if the  Company  had  applied  the fair
      value  recognition  provision  of SFAS  No.  123,  using  the  assumptions
      described in Note L: Year ended December 31,

                                                       2002             2001
                                                   ------------     ------------
                                                   (Restated -
                                                    See Note B)

      Net loss applicable to common stockholders
          As reported                              $(12,435,831)   $ (9,489,559)
          Pro forma                                 (13,232,534)     (9,704,336)

      Weighted-average shares outstanding
          Basic and diluted                          18,437,942      13,951,398

      Net loss per share
          As reported                              $      (0.67)   $      (0.68)
          Pro forma                                       (0.72)   $      (0.70)

      Non-employee  stock-based  compensation  arrangements are accounted for in
      accordance  with the  provisions of SFAS No. 123 and Emerging  Issues Task
      Force  ("EITF") No. 96-18,  "Accounting  for Equity  Instruments  That Are
      Issued to Other Than  Employees  for  Acquiring,  or in  Conjunction  with
      Selling,  Goods or Services." Under EITF No. 96-18, as amended by EITF No.
      00-23, "Issues Related to the Accounting for Stock Compensation" under APB
      No. 25 and FASB  Interpretation No. 44. Where the fair value of the equity
      instrument  is more  reliably  measurable  than the fair value of services
      received,  such  services  will be valued  based on the fair  value of the
      equity instrument.

16.   Use of Estimates

      In preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management is required
      to make certain estimates and assumptions that affect the reported amounts
      of  assets  and  liabilities  and  disclosure  of  contingent  assets  and
      liabilities  at the date of the  financial  statements  and  revenues  and
      expenses  during the reporting  period.  Actual  results could differ from
      those estimates.


                                      F-16
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

      These estimates and assumptions  relate to estimates of  collectibility of
      accounts receivable and costs in excess of billings,  the realizability of
      goodwill  and other  intangible  assets,  costs to  complete  engagements,
      accruals,  income taxes and other factors.  Management has used reasonable
      assumptions in deriving  these  estimates;  however,  actual results could
      differ from these estimates. Consequently, an adverse change in conditions
      could affect the Company's estimate.

17.   Long-Lived Assets

      In 2002, the Company  adopted SFAS 144,  "Accounting for the Impairment or
      Disposal of Long-Lived Assets",  which addresses financial  accounting and
      reporting for the  impairment or disposal of long-lived  assets.  Although
      SFAS 144 supersedes SFAS 121, "Accounting for the Impairment of Long-Lived
      Assets To Be Disposed Of", it retains many of the  fundamental  provisions
      of SFAS  121.  SFAS 144  also  supersedes  the  accounting  and  reporting
      provisions of APB 30, "Reporting the Results of  Operations-Reporting  the
      Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
      and Infrequently  Occurring Events and Transactions" for the disposal of a
      segment of a business.  However,  it retains the  requirement of ABP 30 to
      report separately  discontinued operations and extends that reporting to a
      component  of an  entity  that  either  has  been  disposed  of,  by sale,
      abandonment,  or in a distribution to owners, or is classified as held for
      sale.  The  adoption  of SFAS 144 did not have a  material  effect  on the
      Company's consolidated financial statements.

18.   Recently Issued Accounting Standards

      In June 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
      Statement of Financial  Accounting Standard No. 143, "Accounting for Asset
      Retirement  Obligations."  SFAS No. 143 provides  accounting and reporting
      guidance  for  legal   obligations   associated  with  the  retirement  of
      long-lived assets that result from the acquisition, construction or normal
      operation of long-lived assets. The standard is effective for fiscal years
      beginning  after June 30, 2002. The Company is reviewing the provisions of
      this standard.  Its adoption is not expected to have a material  effect on
      the financial statements.

      On April  30,  2002 the FASB  issued  Statement  of  Financial  Accounting
      Standard  No.  145,  "Rescission  of FASB  Statements  No. 4, 44,  and 64,
      Amendment of FASB  Statement No. 13, and Technical  Corrections.  SFAS No.
      145  rescinds  Statement  No. 4, which  required all gains and losses from
      extinguishments  of debt to be aggregated and, if material,  classified as
      an extraordinary  item, net of related income tax effect. Upon adoption of
      SFAS No. 145,  companies  will be  required  to apply the  criteria in APB
      Opinion No. 30,  "Reporting  the  Results of  Operations  - Reporting  the
      Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
      and  Infrequently  Occurring  Events and  Transactions" in determining the
      classification  of gains and losses resulting from the  extinguishment  of
      debt.  SFAS No. 145 is effective for fiscal years  beginning after May 15,
      2002.  We are currently  evaluating  the  requirements  and impact of this
      statement  on  our  consolidated   results  of  operations  and  financial
      position.


                                      F-17
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

      On July 30,  2002,  the FASB  issued  Statement  of  Financial  Accounting
      Standard No. 146,  "Accounting for Costs  Associated with Exit or Disposal
      Activities". The standard requires companies to recognize costs associated
      with exit or disposal activities when they are incurred rather than at the
      date of a  commitment  to an exit or  disposal  plan.  Examples  of  costs
      covered  by the  standard  include  lease  termination  costs and  certain
      employee  severance  costs  that  are  associated  with  a  restructuring,
      discontinued operation, plant closing, or other exit or disposal activity.
      SFAS No. 146 is to be applied prospectively to exit or disposal activities
      initiated   after   December  31,  2002.   The  Company  will  follow  the
      requirements  of the statement for any applicable  transactions  initiated
      after December 31, 2002.

      In November 2002,  FASB  Interpretation  45,  "Guarantor's  Accounting and
      Disclosure  Requirements for Guarantees,  Including Indirect Guarantees of
      Indebtedness of Others," (FIN 45), was issued. FIN 45 requires a guarantor
      entity,  at the  inception  of a  guarantee  covered  by  the  measurement
      provisions of the interpretation, to record a liability for the fair value
      of the  obligation  undertaken  in  issuing  the  guarantee.  The  Company
      previously did not record a liability when guaranteeing obligations unless
      it became  probable  that the  Company  would  have to  perform  under the
      guarantee.  FIN 45 applies  prospectively to guarantees the Company issues
      or modifies  subsequent to December 31, 2002,  but has certain  disclosure
      requirements  effective  for  interim  and  annual  periods  ending  after
      December 15, 2002. The Company has historically  issued guarantees only on
      a limited basis and does not anticipate FIN 45 will have a material effect
      on its  2003  financial  statements.  Disclosures  required  by FIN 45 are
      included in the accompanying financial statements.

      In November  2002,  the  Emerging  Issues  Task Force  reached a consensus
      opinion on EITF 00-21, "Revenue Arrangements with Multiple  Deliverables."
      The   consensus   provides   that  revenue   arrangements   with  multiple
      deliverables  should be  divided  into  separate  units of  accounting  if
      certain criteria are met. The consideration for the arrangement  should be
      allocated to the separate units of accounting based on their relative fair
      values,  with different  provisions if the fair value of all  deliverables
      are not known or if the fair value is  contingent on delivery of specified
      items or performance  conditions.  Applicable revenue recognition criteria
      should be considered separately for each separate unit of accounting. EITF
      00-21 is effective for revenue arrangements entered into in fiscal periods
      beginning after June 15, 2003.  Entities may elect to report the change as
      a  cumulative  effect  adjustment  in  accordance  with  APB  Opinion  20,
      "Accounting  Changes."  The  Company  has not  determined  the  effect  of
      adoption  of EITF  00-21 on its  financial  statements  or the  method  of
      adoption it will use.

19.   Reclassifications

      Certain  amounts in prior years have been  reclassified  to conform to the
      classifications used in 2002.


                                      F-18
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE C (continued)

20.   Accounts Receivable

      The majority of the Company's  accounts  receivable are due from companies
      in the financial services industry. Credit is extended based on evaluation
      of a customer's  financial  condition  and,  generally,  collateral is not
      required.  Accounts  receivable  are due  within 30 days and are stated at
      amounts due from  customers  net of an allowance  for  doubtful  accounts.
      Periodically  the Company  reviews  accounts  receivable  to reassess  its
      estimates of  collectibility.  The Company provides valuation reserves for
      bad debts based on specific  identification of likely and probable losses.
      In addition, the Company provides valuation reserves for estimates of aged
      receivables that may be written off, based upon historical evidence. These
      valuation  reserves  are  periodically  re-evaluated  and adjusted as more
      information  about the  ultimate  collectibility  of  accounts  receivable
      becomes available.  Circumstances that could cause the Company's valuation
      reserves to increase include changes in its clients'  liquidity and credit
      quality,  other factors negatively impacting clients' ability to pay their
      obligations as they come due, and the quality of its  collection  efforts.
      The Company writes off accounts receivable when they become uncollectible,
      and payments subsequently received on such receivables are credited to the
      allowance  for  doubtful  accounts.  Interest  income  related  to finance
      charges  is  subsequently  recognized  only  to the  extent  that  cash is
      received.

NOTE D - ADOPTION OF SFAS No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS"

      On July 20, 2001, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial  Accounting  Standards  ("SFAS") No. 141, "Business
      Combinations," and SFAS No. 142,  "Goodwill and Other Intangible  Assets."
      SFAS No. 141 is effective for all business  combinations  completed  after
      June 30, 2001.  SFAS No. 142 is effective for fiscal years beginning after
      December 15, 2001; however,  certain provisions of this Statement apply to
      goodwill and other intangible assets acquired between July 1, 2001 and the
      effective date of SFAS No. 142. Major  provisions of these  Statements and
      their effective dates for the Company are as follows:

      o     All business combinations initiated after June 30, 2001 must use the
            purchase  method of  accounting.  The pooling of interest  method of
            accounting is prohibited  except for  transactions  initiated before
            July 1, 2001;

      o     Intangible  assets  acquired  in  a  business  combination  must  be
            recorded  separately from goodwill if they arise from contractual or
            other legal rights or are separable from the acquired entity and can
            be  sold,  transferred,   licensed,  rented  or  exchanged,   either
            individually or as part of a related contract, asset or liability;

      o     Goodwill,  as well  as  intangible  assets  with  indefinite  lives,
            acquired  after  June 30,  2001,  will not be  amortized.  Effective
            January 1, 2002, all previously  recognized  goodwill and intangible
            assets  with   indefinite   lives  will  no  longer  be  subject  to
            amortization;

      o     Effective  January 1, 2002,  goodwill  and  intangible  assets  with
            indefinite lives will be tested for impairment annually and whenever
            there is an impairment indicator; and,

      o     All  acquired  goodwill  must be  assigned  to  reporting  units for
            purposes of impairment testing and segment reporting.


                                      F-19
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE D - (continued)

      On January 1, 2002,  the Company  adopted SFAS No. 142,  and  accordingly,
      stopped amortizing goodwill.  During the first quarter of 2002 the Company
      had an evaluation of its goodwill  performed,  under SFAS No. 142, with no
      resulting impairment indicated.

      Net loss and basic and  diluted  (loss)  per share for the  twelve  months
      ended  December  31, 2002 and 2001 are set forth below as if goodwill  and
      other intangible  assets had been accounted for in the same manner for all
      periods presented.  The adjustment of the previously reported net loss and
      (loss) per share represents the amortization of goodwill.

Reconciliation of net loss and (loss) per share (Restated - See Note B)

Net Loss

<TABLE>
<CAPTION>
                                                                                                     Twelve Months
                                                                                     December 31, 2002         December 31, 2001
                                                                                     -----------------         -----------------
<S>                                                                                     <C>                       <C>
Reported loss from continuing operations                                                $ (5,266,000)             $ (5,304,000)
Beneficial conversion on preferred stock                                                          --                (2,475,000)
Add back goodwill amortization, net of tax                                                        --                 2,738,000
Reported loss from discounted operations                                                  (7,170,000)               (1,711,000)
                                                                                        ------------              ------------

Adjusted net loss applicable to common stockholders                                     $(12,436,000)             $ (6,752,000)
                                                                                        ============              ============

(Loss) per share - basic and diluted:

Reported loss from continuing operations, per share                                     $      (0.28)             $      (0.38)
Beneficial conversion on preferred stock, per share                                               --              $      (0.18)
Add back goodwill amortization, net of tax, per share                                             --              $       0.20
Reported loss from discontinued operations, per share                                   $      (0.39)             $      (0.12)
                                                                                        ------------              ------------

Adjusted net loss per share applicable to common stockholders                           $      (0.67)             $      (0.48)
                                                                                        ============              ============

Weighted average shares - basic and diluted                                               18,438,000                13,951,000
                                                                                        ============              ============
</TABLE>


                                      F-20
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE E - ACQUISITIONS

      Acquisitions are accounted for as purchases and, accordingly, are included
      in the  Company's  consolidated  results  of  operations  from the date of
      acquisition.  The purchase price is allocated  based on the estimated fair
      values  of  assets  acquired  and  liabilities  assumed.   Purchase  price
      allocations  are subject to  refinement  until all  pertinent  information
      regarding the acquisition is obtained.

      WILLEY BROTHERS, INC.

      On January 16, 2001, the Company acquired the stock of Willey Brothers for
      a  combination  of cash,  common  stock  of the  Company,  options  in the
      Company's   stock  and  notes  payable.   The  total  purchase  price  was
      $33,144,938. The acquisition was made with cash of $17,069,938,  1,512,500
      shares of common  stock of the  Company  valued at  $6,050,000  ($4.00 per
      share),  stock options issued with a fair market valuation of $525,000 and
      notes payable of $9,500,000.

      The  following  table  provides  an  analysis  of the  purchase  of Willey
      Brothers.  The excess of the purchase price over the book value of the net
      assets acquired has been allocated to goodwill, as follows:

      Total purchase cost                                      $33,144,938
      Fair value of net assets acquired                          6,134,704
                                                               -----------
            Excess of cost over fair value of net
              assets acquired allocated to goodwill            $27,010,234
                                                               ===========

      Accumulated amortization at December 31, 2002 and 2001 was $2,738,265 (see
      Note D).


                                      F-21
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE E (continued)

      The terms of the acquisition also provide for additional  consideration to
      be paid if the earnings of Willey Brothers exceed certain  targeted levels
      through  the  year  2005.  The  aggregate  maximum  amount  of  contingent
      consideration  is $1,800,000.  The additional  consideration is payable in
      cash at the end of each fiscal year  subject to Willey's  compliance  with
      certain  reporting  and  covenant  requirements.   The  amounts  paid  for
      contingent  consideration  will increase expense rather than goodwill,  in
      the years earned, since payments are automatically forfeited if employment
      of the former  shareholders  of Willey  Brothers  terminates.  The Company
      recorded a liability as of December 31, 2001 of $500,000.  A liability for
      2002 has not been  recorded as the  requirements  of the earn-out were not
      met. A liability for the remaining  contingent  consideration has not been
      recorded as the outcome of the  contingency is not  determinable  beyond a
      reasonable doubt.  Pursuant to an agreement with the Company's  commercial
      lender, and consented to by the former shareholders of Willey Brothers, no
      payments  in  respect  of  the  earn-out  can  be  made  until  all of the
      obligations are repaid, in full, to the commercial lender (see Note I).

      Unaudited pro forma operating results for twelve months ended December 31,
      2001,  for the  Company,  assuming  the  acquisition  of  Willey  Brothers
      occurred on January 1, 2001, are as follows:

                                                                  2001
                                                             ------------

      Revenues                                               $ 40,750,000
      Loss from continuing operations                           5,687,000
      Beneficial conversion on preferred stock
          (see Note L)                                          2,475,000
      Loss from discontinued operations                         1,711,000

      Basic and diluted loss per share:
          Continuing operations                              $      (0.59)
          Discontinued operations                                   (0.12)
                                                             ------------

                                                             $      (0.71)
                                                             ============

      In 2001  goodwill was amortized on a  straight-line  basis over a ten-year
      period for Willey Brothers (see Note C-6).  Beginning  January 1, 2002 the
      Company  stopped  amortizing  goodwill in  conformance  with SFAS No. 142,
      "Goodwill and Other Intangible Assets" (see Note D).


                                      F-22
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE E (continued)

      ACQUISITION OF COMMONWEALTH ASSETS

      On September 10, 2001 the Company's subsidiary,  Willey Brothers, acquired
      certain  assets,  consisting  of computer  hardware and  software,  of the
      Strategic Market Intelligence  Division of the Commonwealth Group for cash
      of  $153,370  and stock of the Company  valued at $80,834.  The net assets
      acquired are being amortized on the straight-line  basis over a three-year
      period. The pro forma effect on operations is not material.

NOTE F - PROPERTY AND EQUIPMENT

      Property  and  equipment  and  related  accumulated  depreciation  are  as
      follows:

                                                      2002              2001
                                                   -----------      -----------
      Computer equipment and software              $   515,688      $   836,840
      Furniture, fixtures and other equipment        1,251,424          462,946
      Leasehold improvements                           405,256          437,584
      Construction in Progress                         325,423          -0-
                                                   -----------      -----------
                                                     2,497,791        1,737,370
      Less accumulated depreciation                   (897,376)        (381,830)
                                                   -----------      -----------

                                                   $ 1,600,415      $ 1,355,540
                                                   ===========      ===========

      Depreciation  expense  was  $515,546  and  $415,712  for the  years  ended
      December 31, 2002 and 2001, respectively.


                                      F-23
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE G - COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS

      The following is a summary of costs and estimated  earnings on uncompleted
      contracts in comparison to billings at December 31 2002 and 2001:

                                                        2002            2001
                                                    -----------     -----------
Branch planning, design and construction costs
    Costs and estimated earnings to date            $ 4,936,612     $ 2,625,338
    Billings to date                                   (112,659)        (90,087)
                                                    -----------     -----------

                                                      4,823,953       2,535,251
                                                    -----------     -----------

Fixture sale and installment contracts
    Costs and estimated earnings to date              1,351,919         809,409
    Billings to date                                 (1,003,700)       (303,211)
                                                    -----------     -----------

                                                        348,219         506,198
                                                    -----------     -----------

                                                    $ 5,172,172     $ 3,041,449
                                                    ===========     ===========

      The  accompanying   consolidated  balance  sheets  include  the  following
      captions at December 31:

                                                          2002          2001
                                                      -----------   -----------

 Costs and estimated earnings in excess of billings   $ 6,288,532   $ 3,434,747
 Billings in excess of costs and estimated earnings    (1,116,360)     (393,298)
                                                      -----------   -----------

                                                      $ 5,172,172   $ 3,041,449
                                                      ===========   ===========


                                      F-24
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE H - LOAN PAYABLE TO BANK AND REVOLVING CREDIT FACILITY

      On January 11, 2001,  Willey Brothers entered into a credit agreement with
      a  commercial  lender,  consisting  of an $8  million  term  loan and a $6
      million  revolving  credit  facility.  All  borrowings  are repayable with
      interest, which accrues, at the borrower's option, at the bank's base rate
      plus the  applicable  margin  or LIBOR  plus the  applicable  margin.  The
      weighted  average  interest  rate in effect on December 31, 2002 was 6.00%
      for the term loan and 4.3156% for the  revolving  credit  facility.  As of
      December 31, 2002,  the  outstanding  balances under the term loan and the
      revolving  credit facility were  $2,499,045 and $4,000,000,  respectively.
      The Facility has been amended by Amendment and Waiver Agreements dated May
      21,  2001,  October 22, 2001 and March 29, 2002,  by Amendment  Agreements
      dated  September  25, 2002,  December 20, 2002 and March 18, 2003 and by a
      letter  agreement  dated  February 12, 2003.  The March 18, 2003 Amendment
      extends the  expiration  of the facility to August 22,  2003,  extends the
      payment terms for the amendment fee and requires  additional  pre-payments
      of principal.  The various  amendment and waivers waive certain  financial
      covenants for the remainder of the term,  require the payment of amendment
      fees,  limit the  availability  under the credit facility and restrict the
      payments of certain other  obligations.  The September 25, 2002  Amendment
      increased  the  availability  under  the  revolving  credit  facility  and
      extended the payment  terms for the  amendment  fee. The December 20, 2002
      Amendment  permanently applied $4,000,000 of cash, restricted by the March
      29, 2002 Amendment and Waiver Agreement, to the term loan and extended the
      payment  terms  for the  amendment  fee.  The  February  12,  2003  letter
      agreement  re-extended the payment terms for the amendment fee. Borrowings
      under the credit facility are secured by  substantially  all of the assets
      of  Willey  Brothers  and a pledge by the  Company  of its stock in Willey
      Brothers.  The  facility is  guaranteed  by the  Company.  The Company has
      signed a  commitment  letter  with a  commercial  bank for a $6.0  million
      credit  facility  subject to the execution of definitive  agreements.  The
      commitment expires June 12 2003. The Company intends to refinance its debt
      with a commercial  lender  under terms and  conditions  acceptable  to the
      Company. No assurances can be given that the Company will be successful in
      concluding  this or any other  financing  transaction.  If for any  reason
      Willey Brothers is unable to refinance the Facility upon maturity, and the
      amount outstanding under the Facility becomes due and payable,  the lender
      has the right to proceed  against the  collateral  granted to it to secure
      the indebtedness under the Facility,  including the Company's ownership in
      Willey  Brothers.  Total  amendment  fees and  expenses  of  approximately
      $857,000 have been expensed as incurred.  At December 31, 2002 the Company
      had a liability for such fees of $580,000.

      The  maturities  on the term loan  payable  at  December  31,  2002 are as
      follows:

          Year Ending December 31,
          ------------------------
                  2003                                         $   2,499,045
                                                                   =========


                                      F-25
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE I - NOTES AND INTEREST PAYABLE

      Notes and interest  payable  consist of the following at December 31, 2002
      and 2001:

                                                     2002            2001
                                                 ------------    ------------

      Notes payable (1) (2)                      $ 14,500,000    $ 14,500,000
      Discount on notes payable                      (299,704)       (710,350)
      Interest payable                                246,951         256,658
      Less current maturities, net of discount     (1,982,239)       (500,000)
                                                 ------------    ------------
                                                 $ 12,465,008    $ 13,546,308
                                                 ============    ============

      Notes  payable of $14.5  million  consist of the  following at December 31
      2002:

      (1) Two subordinated convertible promissory notes totaling $7,500,000, and
      two convertible  promissory notes,  totaling $2,000,000  (collectively the
      "Seller  Notes").  The $7.5 million  notes bear interest at LIBOR plus 150
      basis points and provide for  quarterly  interest  payments and  quarterly
      interest reset dates.  The notes are convertible  into common stock of the
      Company incrementally on the first four anniversaries of the issuance date
      at $4.00 per share at the  option of the  Company or the  noteholder.  The
      principal  and any accrued  interest are due in one payment on October 11,
      2007.  The interest rate in effect for these notes as of December 31, 2002
      was  3.27%.  The $2.0  million  notes bear  interest  at 11% per annum and
      provide for quarterly  principal  payments.  The  remaining  principal and
      accrued interest are due in one payment on October 11, 2003. The notes are
      convertible  into  common  stock  of the  Company,  at the  option  of the
      noteholder, at $3.00 per share. The aggregate beneficial conversion of the
      $2.0 million  notes of $666,667 has been  accounted for as a debt discount
      and is being  recorded  as  interest  expense  over the term of the notes.
      Pursuant to an agreement with the noteholders, all payments required to be
      made under each of the Seller  Notes for the first three  quarters of 2001
      were  deferred  until the end of the term,  the maturity  date on the $2.0
      million  notes was  extended to October 11, 2003 from January 11, 2003 and
      the maturity  date on the $7.5  million  notes was extended to October 11,
      2007 from January 11, 2007.  Pursuant to an Amendment and Waiver Agreement
      dated  March  29,  2002,  with  the  commercial  lender  (see  Note H) and
      consented  to by the  noteholders,  no  payments  in respect of the Seller
      Notes can be made until all of the obligations are repaid, in full, to the
      commercial lender.

      Current maturities consist of the following at December 31, 2002 and 2001:

                                                  2002             2001
                                               ----------       ----------

      Seller Notes                             $1,982,239       $  500,000
      Term Loan (Note H)                        2,499,045          937,500
      Capital Lease Liability                      86,779           75,562
                                               ----------       ----------
                                               $4,568,083       $1,513,062
                                               ==========       ==========


                                      F-26
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE I (continued)

      (2) A subordinated  promissory note in the principal  amount of $5,000,000
      issued to a third  party.  The note bears  interest at 16% per annum,  12%
      payable  quarterly in cash and 4% added to the unpaid principal  quarterly
      (PIK  amount).  The note  matures on October 22,  2008,  at which time the
      principal  and all PIK amounts are due.  Under the terms of the note,  the
      Company is required to maintain certain financial  covenants.  The Company
      has received a waiver from such certain financial  covenants through March
      31, 2003.

      Concurrently   and  in   connection   with  the   issuance  of  the  note,
      BrandPartners Group, Inc. issued 405,000 warrants to purchase common stock
      of the Company at $0.01 per share.  The warrants  expire  October 22, 2011
      and can be put to Willey  Brothers  after the fifth year, or earlier under
      certain  conditions,  based on certain  criteria  set forth in the warrant
      agreement.  The relative fair value of the warrants  totaling  $338,000 on
      the date of the  transaction  has been  treated as a debt  discount and is
      being  amortized  to  interest  expense  over  the  term of the note and a
      liability  for the put  warrant has been  recorded.  Changes to the future
      fair value of the put warrants  will be recorded in  accordance  with SFAS
      No. 133 and charged to other  income or loss.  At December  31, 2002 a put
      warrant  gain in the amount of $384,000  was  recorded and the put warrant
      liability  reduced.  At December 31, 2001 a put warrant loss in the amount
      of $102,000 was recorded and the put warrant liability increased.

      Pursuant  to  a  letter  agreement  dated  October  9,  2002  between  the
      noteholder and Willey Brothers, the noteholder waived its rights to demand
      immediate  payment  of the  subordinated  promissory  note  and to put the
      warrants to Willey Brothers, which rights had been triggered by the change
      in control  resulting from the death of the Company's  former Chairman and
      Chief  Executive  Officer.  The Company has received  waivers from certain
      financial  covenants  through  March 31, 2003.  At December 31, 2002,  the
      Company  had a  liability  of  approximately  $56,000  related  to the put
      warrants.

NOTE J - INCOME TAXES (BENEFIT)  (RESTATED - SEE NOTE B)

      The provision  (benefit) for income taxes for the year ended  December 31,
      2002 and 2001 is as follows:

                                                 2002               2001
                                              ---------           --------
      Current
          Federal                             $(690,136)          $     --
          State                                  63,155            186,890
                                              ---------           --------
                                               (626,981)           186,890
                                              ---------           --------
      Deferred
          Federal                                80,600                 --
          State                                  23,400                 --
                                              ---------           --------
                                                104,000                 --
                                              ---------           --------
                                              $(522,981)          $186,890
                                              =========           ========


                                      F-27
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE J (continued)

      The  following  table  presents the principal  reasons for the  difference
      between  the  effective  income  tax rate and the U.S.  federal  statutory
      income tax rates.

                                               Year Ended         Year Ended
                                            December 31, 2002  December 31, 2001
                                            -----------------  -----------------
      U.S. federal statutory rate                (34.0)%           (34.0)%
      Permanent differences                       23.1              15.3
      Change in valuation allowance                7.5              22.0
      State taxes, net of federal benefit         (1.5)             (1.3)
      Other                                         .9               1.0
                                                 -----             -----
                                                  (4.0)%             3.0%
                                                 =====             =====

      The Company and its subsidiary generated losses for income tax purposes of
      approximately  $4,666,000  and $1,364,000 for the years ended December 31,
      2002 and 2001,  respectively,  and capital losses of $487,000 for the year
      ended December 31, 2001.

      Significant  components of the  Company's  deferred tax assets at December
      31, 2002 and 2001 are as follows:

                                                          2002          2001
                                                      -----------   -----------
      Deferred tax assets
          Net operating loss carryfowards             $ 3,040,000   $ 2,553,600
          Capital loss carryfowards                            --       194,800
          Accumulated depreciation and amortization       105,200        70,800
           Warranty Reserve                                18,800            --
           Stock Options                                  314,800       200,800
          Allowances for receivables                       45,600        38,720
          Inventory Allowance                              17,200        20,000
          Bonus Accrual                                      -0-        100,000
          Vacation Reserve                                 90,700       103,000
                                                      -----------   -----------

                                                        3,632,300    (3,281,720)
      Deferred tax liabilities
          Deferred state tax liability                       -0-        (14,850)
          Valuation allowance                          (3,632,300)   (3,162,381)
                                                      -----------   -----------

                                                       (3,632,300)   (3,177,231)
                                                      -----------   -----------

      Deferred income tax asset, net                  $      -0-    $   104,489
                                                      ===========   ===========


                                      F-28
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE J (continued)

      At December 31, 2002, the Company has net operating loss  carryforwards of
      approximately  $7.6  million,  which expire at various dates through 2022,
      available to offset  future  taxable  income.  At December  31, 2002,  the
      Company had a deferred tax asset amounting to approximately  $3.0 million.
      The  deferred  tax  asset   consists   primarily  of  net  operating  loss
      carryforwards  and has been fully  offset by a valuation  allowance of the
      same amount, due to the uncertainty of the recognition of certain deferred
      income tax assets, primarily the net operating loss carryforwards. Certain
      provisions of the tax law may limit the net operating  loss  carryforwards
      available for use in any given year in the event of a  significant  change
      in ownership  interest.  The balance of the deferred tax asset at December
      31, 2002  represents  timing  differences  between book income and taxable
      income.  Approximately  $193,000  of  the  estimated  net  operating  loss
      carryforward available at December 31, 2002 will expire in 2003.

NOTE K - CONCENTRATIONS

      Significant Customers

      For the twelve months ended  December 31, 2002 one customer  accounted for
      approximately 14% of the Company's  revenues.  For the twelve months ended
      December 31, 2001, three customers  accounted for  approximately  15%, 11%
      and 10% of the Company's revenues.

      Concentration of Credit Risk

      The Company  maintains its cash and cash  equivalents with major financial
      institutions.  The balances at December 31, 2002 exceed federally  insured
      limits.  The Company performs periodic  evaluations of the relevant credit
      standings of these financial  institutions in order to limit the amount of
      credit exposure.

NOTE L - STOCKHOLDERS' EQUITY

      The Company is authorized to issue a maximum of 20,000,000  shares of $.01
      preferred stock.

      Class A Convertible Preferred Stock

      On August 1, 2001, the  shareholders  ratified the conversion of 1,650,000
      shares of Class A Convertible  Preferred  Stock of the Company into common
      stock.  Accordingly,  the shares were  converted  into  common  stock on a
      one-to-one  basis.  The  Company  recorded  a  beneficial   conversion  of
      $2,475,000,  in August 2001, for the difference between the carrying value
      of the preferred stock and the fair value of the shares of common stock at
      the time of issuance of the preferred stock.


                                      F-29
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE L (continued)

      Private Placement of Equity

      During the  fourth  quarter  of 2001 and the first  quarter  of 2002,  the
      Company issued shares and warrants in a private  placement  offering.  The
      offering was completed on February 5, 2002. During the year ended December
      31,  2001,  the Company  received net  proceeds of  $2,976,250  and issued
      2,702,268  shares of common  stock and common stock  purchase  warrants to
      acquire an additional  4,728,959  shares of the Company's  common stock at
      various  prices  ranging from $1.056 to $3.00 per share.  During 2002, the
      Company received additional net proceeds from the offering of $311,800 and
      issued 285,258  shares of common stock and common stock purchase  warrants
      to acquire an additional  474,198 shares of the Company's  common stock at
      various  prices  ranging from $1.152 to $3.00 per share.  The warrants are
      exercisable  until  November 30, 2006.  The proceeds were used for working
      capital purposes.

      Stock Options

      During 2001, the shareholders  approved the Company's 2001 Incentive Stock
      Plan.  The plan provides for the  reservation  and  availability  of up to
      5,000,000  shares of common stock,  subject to future stock splits,  stock
      dividends,  reorganizations  and similar  events.  The  exercise  price of
      incentive  stock options may not be less than the fair market value on the
      date of grant.  The plan  provides  for options to be granted to officers,
      directors,  and employees of the Company.  During the years ended December
      31, 2002 and 2001, the Company granted  2,017,815,  net of  cancellations,
      and  50,000  stock  options,  respectively,  to  officers,  directors  and
      employees under the plan.

      The Company  has also  issued  stock  options to certain  individuals  and
      companies  under  letter  agreements.  During the year ended  December 31,
      2001,   567,045   options  to  purchase  shares  were  issued  under  such
      agreements.

      The  options  granted  have an  exercise  price at least equal to the fair
      value of the  Company's  stock,  and expire at various times through 2010.
      The options granted vest immediately, after one year or over a two or five
      year period.


                                      F-30
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE L (continued)

      A summary of the activity at December 31 is as follows:

                                            2002                   2001
                                   ---------------------  ---------------------
                                               Weighted-              Weighted-
                                               average                average
                                   Warrants/   exercise    Warrants/  exercise
                                    options     price      options     price
                                   ---------   ---------  ---------   ---------

Outstanding - January 1             6,850,545    $5.80     6,383,500    $6.02
Granted                             2,333,228     1.06       617,045     2.14
Exercised                                                   (150,000)    1.00
Cancelled                            (317,913)   (1.09)           (0)      (0)
                                   ----------    -----    ----------    -----

Outstanding - December 31           8,865,860    $4.72     6,850,545    $5.80
                                   ==========    =====    ==========    =====

Weighted-average fair value of
    options and warrants granted
    During the year                              $0.92                  $2.08
                                                 =====                  =====

      The fair  value of each  option  grant is  estimated  on the date of grant
      using  the   Black-Scholes   option-pricing   model  with  the   following
      assumptions  used for grants in 2002 and 2001,  respectively:  (1) average
      expected  volatility  of  125.88%  and  119.045%,  (2)  average  risk-free
      interest  rates of 4.69% and  3.77%,  and (3)  expected  lives of five and
      eight years for year ended December 31, 2002 and five years for 2001.

      The following  table  summarizes  information  concerning  outstanding and
      exercisable  options  and  warrants  that were  granted at the fair market
      value on the date of grant, at December 31, 2002.

<TABLE>
<CAPTION>
                                                          Outstanding    Outstanding                         Exercisable
                                       Outstanding         weighted-      weighted-        Exercisable        weighted-
                                           as of             average        average            as of           average
     Range of                          December 31,         remaining      exercise        December 31,       exercise
 exercise price                            2002           life (years)       price             2002             price
 --------------                        ------------       ------------   -----------       ------------      -----------
<S>                                     <C>                    <C>          <C>             <C>                 <C>
$0.43 - $6.06                           3,033,500              2.06         $ 0.68          3,033,500           $ 0.68
$2.75 - $14.50                          3,200,000              2.28          11.35          3,200,000            11.35
$0.92 - $4.63                             614,545              2.49           2.13            536,945             2.11
$0.76 - $1.07                           2,017,815              4.44           1.06            700,000             1.07
                                        ---------                                           ---------

                                        8,865,860                                           7,470,445
                                        =========                                           =========
</TABLE>


                                      F-31
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE M - EMPLOYEE BENEFIT PLANS

      The  Company  maintains  a 401(k)  profit-sharing  plan  for all  eligible
      employees.  Through a salary reduction  program,  the plan allows employee
      contributions  on  a  pretax  basis.   There  are  no  minimum   corporate
      contributions   required   under  the  plan.   The   Company  may  make  a
      discretionary matching contribution based on a percentage of participants'
      contributions.  The Company may also make a  discretionary  profit-sharing
      contribution  for the benefit of all eligible  employees.  Participants in
      the  plan  vest in  Company  contributions  on a  graduated  scale  over a
      five-year  period.  For the years ended  December  31, 2002 and 2001,  the
      Company  did not  accrue  any  discretionary  matching  or  profit-sharing
      contributions.

NOTE N - COMMITMENTS AND CONTINGENCIES

      The Company  provides  accruals for all direct costs  associated  with the
      estimated  resolution of contingencies at the earliest date at which it is
      deemed  probable that a liability has been incurred and the amount of such
      liability can be reasonably estimated.


                                      F-32
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE N (continued)

      Employment Agreements

      The  Company  maintains  employment   agreements  with  certain  executive
      officers and  employees,  expiring at various  dates  through  2006,  with
      automatic one-year extensions  thereafter.  All such employment agreements
      provide,  among other  things,  that in the event there is a change in the
      control of the Company,  as defined therein,  or in any person directly or
      indirectly  controlling the Company, as also defined therein, the employee
      has the option,  exercisable  within six months of becoming  aware of such
      event, to terminate the employment agreement.  Upon such termination,  the
      employee  has  the  right  to  receive,  as a  lump-sum  payment,  certain
      compensation  remaining  to be paid  for the  balance  of the  term of the
      agreement.

      Litigation

            A Verified  Amended  Complaint  (the  "Complaint")  was filed in the
      Supreme Court of the State of New York, County of New York, on January 15,
      2002,  in  connection  with an action  entitled  Marvin M. Reiss and Rebot
      Corporation  v.  BrandPartners  Group,  Inc.,  formerly known as Financial
      Performance  Corporation  (Index No.  111385/98).  The Complaint  sought a
      declaration  that plaintiffs were entitled to exercise  warrants issued to
      them by the Company in 1993 to purchase an aggregate  of 1,698,904  shares
      of the common  stock of the Company at $.10 per share in  accordance  with
      their terms,  without  adjustment for a  one-for-five  reverse stock split
      declared  by  the   Company  in  1996,   and  damages  in  the  amount  of
      approximately  $28  million.  The  Complaint  was  filed  subsequent  to a
      decision  of the Court of  Appeals  of the  State of New York  reinstating
      Plaintiffs'  claim for a  declaration  that they were entitled to exercise
      the warrants in accordance  with their terms,  which claim had  previously
      been dismissed by the New York County Supreme Court,  whose  dismissal was
      affirmed by the Appellate Division, First Department. The Company served a
      Verified Answer to the Complaint, including affirmative defenses, on March
      8, 2002.  On January  30, 2003 the New York County  Supreme  Court  denied
      summary judgment motions made by both the plaintiffs and the Company,  and
      on  February  27,  2003 the court set a June  discovery  cut-off  date and
      deadline for filing of a note of issue. Although the Company believes that
      it has  substantial  defenses  to the claims and damages  sought,  at this
      time, no assurance  can be made as to what effect,  if any, the outcome of
      this  matter  will have on the Company or its  financial  position,  which
      effect  could be  material.  Accordingly,  the Company  has  entered  into
      settlement  negotiations  with the plaintiffs.  No assurances can be given
      that the Company will be able to negotiate a settlement  of this matter at
      all or on terms favorable to the Company. In the event that the Company is
      unable to arrive at an  acceptable  settlement  with the  plaintiffs,  the
      Company  intends  to  litigate  this  matter  vigorously.   Management  is
      currently  unable  to  estimate  the  amount of any  potential  settlement
      relating to this matter.

      Leases

      The Company has entered into various  operating and capital leases for the
      use of office  space and  equipment  expiring  at  various  dates  through
      December 2009. The rental leases include provisions  requiring the Company
      to pay a  proportionate  share  of  increases  in real  estate  taxes  and
      operating expenses over base period amounts.


                                      F-33
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE N (continued)

      Future minimum rental commitments under all  non-cancelable  leases are as
      follows:

                                                    Commitments
                                                    -----------
        Years ending December 31,
            2003                                    $1,032,000
            2004                                       882,000
            2005                                       903,000
            2006                                       837,000
            2007                                       671,000
            Thereafter                               1,342,000
                                                    ----------
                                                     5,667,000

            Amounts representing interest               (7,000)
                                                    ----------
                                                    $5,660,000
                                                    ==========

      During the fourth quarter of 2002 the Company's  licensee defaulted on its
      license  agreement  with the Company for the rental of office space at 777
      Third  Avenue.  After  taking all  measures  available  to it, the Company
      executed its right to terminate the license agreement on January 18, 2003.
      The  terminated  agreement  provided  for annual  rental of  $200,000  and
      expired on December 31, 2004. The Company has engaged a collection  agency
      to pursue its claims against the licensee.  The Company has not recorded a
      receivable,  as  the  outcome  of  the  collection  proceedings  is  still
      uncertain.

      Rent and equipment  leasing  expense for the years ended December 31, 2002
      and 2001 was $1,394,952 and $1,222,160, respectively.

NOTE O - TRANSACTIONS WITH SIGNIFICANT STOCKHOLDERS

      For the year ended December 31, 2002 the Company  granted stock options to
      purchase  1,500,000  shares of the  Company's  common stock at an exercise
      price of $1.07 and  recorded  cash  compensation  of $369,000  paid to its
      deceased,  former, Chief Executive Officer. Of the options granted 500,000
      were  vested on the date of grant,  500,000  vested on January 1, 2003 and
      500,000  vest  January 1, 2004.  For the year ended  December 31, 2001 the
      Company recorded  compensation  expense and additional  paid-in capital of
      $150,000 for services contributed by such deceased, former Chief Executive
      Officer.

      During December 2001, the Company repaid two stockholders'  notes totaling
      $490,000.


                                      F-34
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE P - REDUCTION IN WORKFORCE

      During the twelve months ended  December 31, 2002,  the  Company's  Willey
      Brothers  subsidiary  recorded  a  charge,  primarily  for  severance  and
      termination benefits, of approximately $430,000 relating to a reduction in
      workforce  of 53  employees  which  was  the  result  of  aligning  Willey
      Brothers' workforce with market demands for its services and products. All
      of the affected  employees have been terminated and are no longer employed
      by Willey Brothers. The charge of $430,000 is included in selling, general
      and  administrative  expense at December 31,  2002.  There is no remaining
      liability at December 31, 2002.

NOTE Q - DISCONTINUED OPERATIONS

      On October 31, 2002, the Company disposed of its majority  interest in its
      subsidiary,   iMapData.com,  Inc.,  for  $2,000,000,  through  a  sale  to
      iMapData's minority shareholders. In connection with the sale, the Company
      recorded an impairment of $6,603,000 at September 30, 2002.

      The amounts of the net assets held for sale as of December 31, 2001 are as
      follows:

      Assets
          Cash and cash equivalents                            $ 1,443,000
           Goodwill                                              10,286,000
          Accounts receivable                                      465,000
          Other current assets                                     150,000
          Property and equipment, net                              174,000
          Other assets                                              99,000
                                                               -----------

               Total assets                                     12,617,000
                                                               -----------

      Liabilities
          Accounts payable and accrued expenses                    399,000
          Notes payable to shareholders                            100,000
          Minority interest                                      2,948,000
                                                               -----------

               Total liabilities                                 3,447,000
                                                               -----------

               Net assets held for sale                        $ 9,170,000
                                                               ===========


                                      F-35
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE Q (continued)

      A summary of operating  results for iMapData,  from the period  January 1,
      2002 through October 31, 2002 and for the year ended December 31, 2001, is
      as follows:

                                                            2002         2001
                                                         ----------   ----------

Revenues                                                 $2,091,000   $1,971,000
                                                         ----------   ----------

Cost and expenses
     Cost of revenues                                     1,467,000    1,558,000
     Selling, general and administrative expenses         1,254,000    1,709,000
     Impairment of goodwill                               6,603,000       -0-
     Depreciation and amortization                           82,000      808,000
                                                         ----------   ----------

                                                          9,406,000    4,075,000
                                                         ----------   ----------

Operating loss                                            7,315,000    2,104,000
                                                         ----------   ----------

Other income (expense)
     Interest income                                          8,000       36,000
     Minority interest                                      323,000      365,000
                                                         ----------   ----------

                                                            331,000      401,000
                                                         ----------   ----------

Loss before income taxes and change in
     accounting principle                                 6,984,000    1,703,000

Income taxes                                                     --        8,000
                                                         ----------   ----------

Loss before change in accounting
     Principle                                            6,984,000   $1,711,000

Change in accounting principle                              186,000           --
                                                         ----------   ----------

Net loss from discontinued operations                    $7,170,000   $1,711,000
                                                         ==========   ==========

      In the fourth quarter ended December 31, 2001, the deferred rent liability
      recorded on the books of the Company  totaling  $336,000  was reversed and
      taken into income due to the  assignment of the lease to MKP as of October
      1, 2001.  This is  reflected in the  selling,  general and  administrative
      expense line. MKP was  classified as a discontinued  operation in the year
      ended December 31, 2000.


                                      F-36
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE R - SUPPLEMENTAL DISCLOSURES FOR STATEMENTS OF CASH FLOWS

      On January 17, 2002 the Company issued 20,833 shares of common stock to an
      officer of the  Company  in  accordance  with the terms of his  employment
      agreement with the Company.  The shares were valued at $25,000,  the value
      of    the    compensation.    Salary    expense,    common    stock    and
      additional-paid-in-capital were increased for the transaction.

      On January 16, 2001, the Company  issued an aggregate of 1,512,500  shares
      of common stock to Thomas P. Willey and James M. Willey in connection with
      the  purchase  of Willey  Brothers.  The shares  were  valued at $4.00 per
      share.

      On January 16, 2001, in connection  with the purchase of Willey  Brothers,
      the Company  issued 50,000  shares of common stock to two Willey  Brothers
      employees.  The shares  were  valued at $4.00 per share.  Salary  expense,
      common  stock  and  additional  paid-in  capital  were  increased  for the
      transaction.

      On February 12, 2001,  the Company issued 43,000 shares of common stock to
      a consultant  who  provided  services in  connection  with the sale of the
      Company's Class A Convertible  Preferred  Stock. The shares were valued at
      $3.125 per share (the closing  price of the stock on February  12,  2001).
      Common  stock was  increased  and a net  decrease  to  additional  paid-in
      capital recorded.

      On April 6, 2001,  the Company  issued  25,000 shares of common stock to a
      consultant who provides services to the Company. The shares were valued at
      $2.50  per  share  (the  closing  price of the  stock  on March 1,  2001).
      Consulting  expense,  common stock,  and additional  paid-in  capital were
      increased for the transaction.


                                      F-37
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE R (continued)

      On July 2, 2001,  the Company  issued  10,000  shares of common stock to a
      consultant who provides services to the Company. The shares were valued at
      $2.50  per  share  (the  closing  price of the  stock  on March 1,  2001).
      Consulting  expense,  common  stock and  additional  paid-in  capital were
      increased for the transaction.

      On July 3, 2001,  the Company  issued  100,000  options to a consultant in
      connection with a consulting agreement that expired December 31, 2001. The
      options  have  a  Black-Scholes   valuation  of  approximately   $190,000.
      Consulting  expense,  common  stock and  additional  paid-in  capital were
      increased for the transaction.

      On July 3, 2001,  the Company  issued  300,000  options to a consultant in
      connection  with a  consulting  agreement  with a term  of one  year.  The
      options have a Black-Scholes valuation of approximately $570,000.  Prepaid
      expense,  common stock and additional  paid-in  capital were increased for
      the  transaction.  The prepaid  expense was amortized over the term of the
      agreement.

      On September 26, 2001,  the Company  issued 112,500 shares of common stock
      to an  officer  of  the  Company  in  accordance  with  the  terms  of his
      employment agreement with the Company. The shares were valued at $0.97 per
      share (the  closing  price of the stock on  September  26,  2001).  Salary
      expense,  common stock and additional  paid-in  capital were increased for
      the transaction.

      On September 26, 2001, the Company issued an aggregate of 83,334 shares of
      common stock in partial  consideration  for the purchase of various assets
      of the Commonwealth  Group by Willey  Brothers.  The shares were valued at
      $.97 per share (the  closing  price of the stock on September  26,  2001).
      Other assets,  common stock and additional  paid-in capital were increased
      for the transaction.

      On October 22, 2001,  the Company  issued 55,556 shares of common stock to
      an officer of the Company in accordance  with the terms of his  employment
      agreement with the Company.  The shares were valued at $.90 per share (the
      closing price of the stock on October 22, 2001).  Salary  expense,  common
      stock and additional paid-in capital were increased for the transaction.

      On November 6, 2001,  the Company issued 5,264 shares of common stock to a
      law firm that  provides  legal  services to the  Company.  The shares were
      valued  at the fair  market  value at the time of  grant.  Legal  expense,
      common  stock  and  additional  paid-in  capital  were  increased  for the
      transaction.


                                      F-38
<PAGE>

                   BrandPartners Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 2002 and 2001

NOTE S - FOURTH QUARTER ADJUSTMENT

      During the fourth quarter of 2001, the Company  recorded  post-acquisition
      adjustments,  relating  to  pre-acquisition  contingencies  and  accruals,
      applicable to its acquisition of Willey Brothers,  on January 16, 2001, of
      approximately  $948,000. All prior quarterly amounts have been restated in
      the Company's Reports on Form 10-QSB for 2002.

NOTE T - RELATED PARTY TRANSACTIONS

      On February 1, 2002, a subsidiary of the Company  advanced  $78,000 to two
      officers  of the  subsidiary.  The  original  terms of the note called for
      payment in two  installments  on September 30, 2002 and December 31, 2002.
      The  notes  bear  interest  at  the  rate  for  Federal   short-term  debt
      instruments. At December 31, 2002, this interest rate was 2.66%.

      On April 3, 2002,  the note of one of the officers was repaid in full with
      interest.  The due date on the remaining note was extended to December 31,
      2003.


                                      F-39
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     BRANDPARTNERS GROUP, INC.
                                     (Registrant)

                                     By:  /s/ Edward T. Stolarski
                                          ------------------------------------
                                          Edward T. Stolarski
                                          Chairman and Chief Executive Officer

                                     Date: August 25, 2003


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