SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

    For the fiscal year ended June 30, 2000

                                       or

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

    For the transition period from ______________ to ______________

                         Commission file number 1-10196


                        DIMENSIONAL VISIONS INCORPORATED
            --------------------------------------------------------
           (Name of Small Business Issuer as specific in its Charter)

                     Delaware                                    23-2517953
         -------------------------------                      ----------------
         (State or Other Jurisdiction of                      (I.R.S. Employer
          Incorporation or Organization)                     Identification No.)

2301 W. Dunlap Avenue, Suite 207, Phoenix, Arizona                  85021
--------------------------------------------------                ----------
    (Address of Principal Executive Offices)                      (Zip Code)

         Issuer's telephone number, including area code: (602) 997-1990

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

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

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

     Indicate  by check  mark  whether  the  issuer  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months  (or for such  shorter  periods  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained herein,
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. Yes [X] No [ ]

     For the  fiscal  year  ended  June 30,  2000,  the  Company's  revenue  was
$1,008,862.

     As of September 8, 2000,  the number of shares of Common Stock  outstanding
was 9,459,913.  The aggregate market value of the Company's Common Stock held by
non-affiliates  of the  registrant  as of September 8, 2000,  was  approximately
$3,547,467 (based upon 9,459,913 shares at $.375 per share).

                       DOCUMENTS INCORPORATED BY REFERENCE

     The following  document is incorporated  herein by reference:  Registration
Statement  on Form SB-2  dated  June 19,  2000,  as  amended  (Registration  No.
333-30368), is incorporated in Part III, Item 13(a).
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

GENERAL

Dimensional   Visions  creates  and  delivers  Living  Image(TM)  Solutions  for
products, packaging and marketing communications.

Living  Image(TM)  Solutions  are  multi-dimensional  (commonly  known as "3-D")
and/or animated  visual effects.  These effects may be produced in varying sizes
to specified customer applications for companies who want to differentiate their
products  from the  competition.  The  visual  effects  are  created  by viewing
multiple  images  through a series of lenses  incorporated  into a plastic sheet
called lenticular.  These lenses work as a viewer which self adjusts to whatever
distance the viewer is from the image. Viewed in one direction, the lenses allow
the individual to see multiple views of an image simultaneously.  These multiple
views are seen as being in three dimensions.  Alternatively, viewed in the other
direction,  the lenses  restrict the view to a particular  image that changes as
the piece is moved, thus creating an animation effect (i.e., the picture appears
to be moving).

Our  objective is to become a dominant  marketer,  developer and producer of the
Living Image(TM) in the United States and internationally.

Our Living Image(TM)  Solutions offer  multi-dimensional  and/or animated images
for the promotion  marketing  industry,  advertising and graphic design industry
and original equipment manufacturers throughout the United States.

InfoPak,  Inc. is our one active subsidiary  company.  InfoPak  manufactures and
markets   a    hardware/software    packaged    product    line    called    the
"InfoPakSystem(TM)."  This  system was  designed to handle  substantial  offline
information and databases that may require frequent updating.

We have decided to focus all of our  resources on our Living  Image(TM)  product
line.  During Fiscal Year 1999, we retained  Chapman  Associates,  an investment
banking firm, to assist us in the sale of our InfoPak, Inc. subsidiary. To date,
we have not found a buyer. We will continue to support the operations of InfoPak
until  it is  sold  or  our  Board  of  Directors  decides  to  discontinue  its
operations.

Dimensional  Visions  office and principal  place of business is located at 2301
West Dunlap Avenue, Suite 207, Phoenix,  Arizona 85021, and its telephone number
is (602) 997-1990.

COMPANY HISTORY

FISCAL YEARS 1988-1994

In 1988 Dimensional  Visions Group, Ltd. (Bulletin Board: DVGL) was incorporated
in the state of Delaware. Dimensional Visions was headquartered in Philadelphia,
Pennsylvania.  At that time,  Dimensional Visions created its  three-dimensional
effects  by  building  model sets and  photographing  these sets using a robotic
controlled camera. These photographed images were then prepared for lithographic
printing.  The process  utilized  during this  timeframe was very  expensive and
extremely  difficult to consistently  reproduce quality images.  Throughout this
period  Dimensional  Visions tried  unsuccessfully to perfect the robotic camera
process.

FISCAL YEARS 1995-1997

In  1995  Dimensional  Visions  acquired  InfoPak,  Inc.  of  Phoenix,   Arizona
("InfoPak") which is currently our wholly owned subsidiary. InfoPak manufactures
and markets a  hardware/software  package called the  "InfoPakSystem(TM)".  This
system takes existing databases and prepares them for use on a palm-top computer
manufactured  by InfoPak.  It is  particularly  useful to  individuals  who need
access to  information  while away from a computer  terminal.  Therefore,  it is
marketed  to mobile  business  professionals  in the  automobile  appraisal  and
real-estate  businesses.  Automobile  appraisal  guides  are  available  on  the
palm-top  unit for access at  automobile  auctions  or at car  dealership  lots.
Multiple  listing data is similarly  available  for real estate agents for field
access to the home listings.

                                        2
<PAGE>
From  1995 to  1997,  Dimensional  Visions  utilized  the  software  development
resources  of InfoPak to develop  the  patent-pending  software  and  systematic
digital process for its Living Image(TM) Solutions.

FISCAL YEARS 1998-2000

In January 1998 we established  our current  headquarters  in Phoenix,  Arizona.
Under the leadership of a new executive management team, Dimensional Visions was
completely  restructured  including  changing our corporate  name to Dimensional
Visions Incorporated and changing our stock trading symbol from DVGL to DVUI. At
the end of 1997, the Company needed to complete  private  placements of debt and
equity to continue operations.  As a prerequisite,  our investment banking firm,
Capital West Investment  Group,  required the Company to replace the upper level
management and effect a 1 for 25 reverse stock split.

During this timeframe we sold all of the original robotic photographic equipment
to concentrate on the new Living Image(TM)  (utilizing very high-end Intel based
graphic design computers).  Our management team believes that the new process is
much more cost effective,  reproducable, and has a shorter production cycle than
the photographic  process formerly used by the Company.  We also believe that it
better meets the demands of today's  market which  requires quick turn around of
products from inception to delivery.

STRATEGY

MARKET & PENETRATION

Multi-dimensional and/or animated images are being utilized today by Dimensional
Visions' clients. The images are used because they combine depth and movement to
attract the consumer's attention and potentially increase their sales.

Living  Image(TM)  solutions have and will be (a) integrated  onto products (for
example:   affixed  to  yearbooks,   children's  portfolio  cover's,  etc),  (b)
integrated  onto product  packaging  (for example:  affixed to cereal boxes,  CD
packages,  etc), and (c) integrated onto marketing  communications  for products
and services (for example: affixed to annual reports, etc). We define the market
for our Living Image(TM) as the following major markets in the United States:

*    Specially selected Original Equipment Manufacturers
*    Specially selected Promotional Marketing Firms
*    Specially selected Advertising & Graphics Design Firms (less newspaper,
     radio and TV)

Dimensional  Visions  believes  that the market for Living  Image(TM)  is in its
infancy  particularly with the advent of new high-end Intel based graphic design
computers and improved  lenticular  plastic extrusion  capabilities.  With these
advances,  coupled with the best-integrated  software  methodology and marketing
strategy, we believe Dimensional Visions can be a market leader.

Dimensional  Visions estimates that the market universe for its Living Image(TM)
is as follows:

*    ORIGINAL  EQUIPMENT  MANUFACTURERS:  Our revenues for the fiscal year ended
     June 30, 1999, from the original  manufacturers  were  approximately 52% of
     our total revenue.
*    PROMOTION MARKETING INDUSTRY: According to PROMO MAGAZINE article titled
     The 1998 Annual Report, the estimated 1997 revenue for the promotion
     marketing industry was $79.5 billion. This article can be found archived on
     their website at WWW.PROMOMAGAZINE.COM. Dimensional Visions believes that
     the Premium/Incentives, Point of Purchase, Specialty Printing, and Agencies
     Net Revenues categories, which account for over $43.7 billion, are
     potential users of the Living Image(TM) Solutions. Our revenues for the
     fiscal year ended June 30, 1999 from this market were approximately 48%.
*    ADVERTISING INDUSTRY: According to ADVERTISING AGE article on May 18, 1998,
     the 1997 advertising revenue in the U.S. totaled over $187.6 billion. The
     article, titled 1997 U.S. ADVERTISING VOLUME (COEN/MCCANN-ERICKSON), can be
     found on their website at WWW.ADAGE.COM. We believe that newspapers,
     magazines, direct mail, business papers, and miscellaneous other
     advertising methods are potential users of the Living Image(TM) Solutions.
     These categories make up over $116.4 billion or 62% of total advertising
     revenues.

                                        3
<PAGE>
PRODUCTION

Dimensional  Visions  controls or supervises all phases of the production of its
Living   Image(TM)   products  from  the  image   development  and  computerized
enhancement phases through the color separation and printing phases.  Images are
provided to us by our clients in many  formats  including  digitally  in graphic
file formats and  photographically  in pictures or transparencies.  Photographic
images are scanned  into the  computer to be modified  and  enhanced.  Through a
proprietary process,  several images are composited together to generate a final
image that will appear as a three-dimensional and/or animation image when viewed
through a lenticular  material.  "Lenticular" is a plastic optical material that
allows the three-dimensional and/or animation image to be viewed without the use
of any  viewing  apparatus  such as  glasses  or hoods.  The  digital  files are
forwarded to Travel Tags,  our primary  printer,  or other  commercial  printer,
where,  through the  lithographic  process,  the images are printed on a polymer
based  lenticular  material  which  focuses the  multi-dimensional  or animation
images.  Printing is done under the  supervision  of  Dimensional  Visions.  The
lenticular  material is supplied by producers in the  petrochemical  and plastic
fabricating  industries  directly  to our  printer.  Dimensional  Visions has no
long-term contracts with its printers.

COMPETITION

Other  processes  currently  are  available  which allow a viewer to perceive an
image in three-dimensions, including those which employ stereoscopic glasses and
viewing hoods and other  processes,  and  holograms and other  three-dimensional
image  systems  which do not require the use of viewing  apparatus.  Dimensional
Visions is aware of at least two  companies,  Optigraphics,  Inc.  and  National
Graphics,  Inc.,  which  compete  with our  products.  Our  products may be more
expensive than conventional,  high quality,  two-dimensional prints and for this
reason,  high  quality,  conventional  processes  and methods may be favored for
many, if not most, illustration and promotion contexts.  Color lenticular images
are less expensive than other forms of three-dimensional prints.

PATENTS, TRADEMARKS AND PROPRIETARY PROTECTION

The  Company  filed a patent  application  on  February  15, 1999 for its Living
Image(TM)  software and print system.  The Company believes that the patent will
issue within two years.

Dimensional  Visions  has  received  trademark  registration  of DV3D(R) and has
submitted a trademark  application for  Animotion(TM) and Living Image(TM) which
we believe will issue within the next 24 months as well.

Dimensional Visions enters into confidentiality  agreements with all persons and
entities who or which may have access to our technology.  However,  no assurance
can be given that such agreements,  the patents,  or any additional patents that
may be issued to Dimensional  Visions will prevent third parties from developing
similar or  competitive  technology.  There can be no assurance that the patents
will provide us with any significant competitive advantages,  or that challenges
will not be instituted against the validity or enforceability of its patents, or
if  instituted  that any such  challenges  will not be  successful.  The cost of
litigation to uphold the validity and prevent  infringement  can be substantial.
In addition, no assurance can be given that we will have sufficient resources to
either  institute or defend any action,  suit or other  proceeding by or against
our  Company  with  respect  to any  claimed  infringement  of  patent  or other
proprietary  rights.  In the event that we should lose, in the near future,  the
protection afforded by the patents and any future patents, such event could have
a  material  adverse  effect  on our  operations.  Furthermore,  there can be no
assurance that our own technology will not infringe patent or other rights owned
by others or licenses to which may not be available to us.

EMPLOYEES

As of June 30, 2000,  Dimensional Visions had twelve employees,  including three
in  management,  one of whom is  involved  in  manufacturing  and  research  and
development,  one in marketing  and sales,  and one in  operations  and finance.
There are three employees engaged in administrative and clerical functions,  two
in sales,  and four in  production.  Dimensional  Visions  is not a party to any
collective  bargaining  agreements.  Dimensional Visions considers its relations
with employees to be good.

                                        4
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

Set  forth  below  is  selected   financial  data  derived  from  the  Company's
Consolidated  Financial  statements,  some of  which  appear  elsewhere  in this
Report. This data should be read in conjunction with the Consolidated  Financial
statements, included elsewhere in this Report.

<TABLE>
<CAPTION>
                                      Year Ended      Year Ended      Year Ended     Year Ended      Year Ended
                                     June 30, 2000   June 30, 1999   June 30, 1998  June 30, 1997   June 30, 1996
                                     -------------   -------------   -------------  -------------   -------------
<S>                                   <C>             <C>              <C>           <C>             <C>
Operation revenue                     $ 1,008,862     $   741,901      $ 609,392     $   551,517     $ 1,083,897
Net loss                              $(1,021,144)    $(1,465,812)     $(421,659)    $(2,162,134)    $(2,035,647)
Net loss per share of common stock    $      (.18)    $      (.39)     $    (.14)    $     (1.14)    $     (3.34)

Balance Sheet Data:
Working capital (deficit)             $   205,284     $  (603,946)     $(235,920)    $  (107,952)    $     9,528
Total assets                          $   885,033     $   530,973      $ 920,841     $   529,520     $ 1,408,919
Total liabilities                     $   519,112     $ 1,118,740      $ 713,539     $   613,947     $   673,058
Stockholders' equity (deficiency)     $   365,921     $  (721,555)     $ 207,302     $   (84,427)    $   735,861
</TABLE>

ITEM 2. DESCRIPTION OF PROPERTY.

We lease  approximately  4,364  square  feet of office  space at 2301 W.  Dunlap
Avenue,  Suites 207 and 201 in Phoenix,  Arizona.  This  location  serves as our
principal  executive  offices and our current design and production  facilities.
The lease  covering  this property  terminates  on December 31, 2000.  The total
lease   payments  for  the  first  six  months  of  fiscal  year  2001  will  be
approximately  $37,000.  The  lease  also  requires  us to  pay  all  taxes  and
insurance.

ITEM 3. LEGAL PROCEEDINGS.

In June 1999,  Electronic Pricing Guides,  Inc., an Arizona corporation ("EPG"),
filed a claim  against  InfoPak and  Dimensional  Visions,  Inc. at the American
Arbitration Association,  Dallas, Texas branch, arbitration file number 76 Y 181
00146 99. EPG claimed breach of contract and InfoPak, Inc. filed a counter-claim
on September  18, 1999 also seeking  breach of contract and breach of promissory
note.  EPG sought  money  damages for lost  business in an  undiscerned  amount.
InfoPak  sought money  damages in the amount of $85,500 plus interest from March
1, 1998 and $8,000.  Arbitration was scheduled to take place April 24-26,  2000.
However,  EPG, Inc. failed to make the necessary deposits,  so the hearings were
suspended  indefinitely.  The  matter  was  closed by the  American  Arbitration
Association  on July 25, 2000.  This matter is no longer  pending and no further
action has been threatened.

In July 2000, the Company settled a dispute with RCG Capital Markets Group, Inc.
for payment by the Company of $4,583 and 50,000 stock  warrants with an exercise
price of $0.843 per share.

In August  2000,  Richman  Group,  an Ohio  corporation,  filed a claim  against
Dimensional Visions at the American Arbitration Association, Dallas, Texas, with
an arbitration venue of Phoenix, Arizona. Richman group claims damages resulting
from a breach of  contract.  Richman  seeks  damages in the  amount of  $50,000.
Although no arbitration  date has been set, the Company  expects that it will be
set prior to December 31, 2000.

To the best knowledge of our management,  there are no other material litigation
matters pending or threatened against us.


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

No matters were submitted to a vote of security holders during the fourth fiscal
quarter of 2000.

                                        5
<PAGE>
                                     PART II

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

The  Company's  Common  Stock has been  quoted on the OTC  Bulletin  Board  (the
"Bulletin  Board")  under the symbol  "DVUI" since  January 12,  1998.  Prior to
January 12, 1998, the Company's Common Stock traded under the symbol "DVGL." The
following  table  sets  forth  the  quarterly  high  and low bid  prices  of the
Company's  Common Stock for the periods  indicated,  after adjusting such prices
for the  Company's  1-for-25  reverse  Common  Stock split  which was  effective
January 15, 1998. Bid quotations represent interdealer prices without adjustment
for retail markup, markdown and/or commissions and may not necessarily represent
actual transactions.

                                                       High         Low
                                                       ----         ---
FISCAL 1999
     First Quarter................................   1 11/32       27/64
     Second Quarter...............................     21/32         1/4
     Third Quarter................................      7/16        3/16
     Fourth Quarter...............................     27/32        3/16

FISCAL 2000
     First Quarter................................    2 3/16         3/8
     Second Quarter...............................   1 23/32       27/32
     Third Quarter................................    2 3/32       13/16
     Fourth Quarter...............................    2 9/32         3/8

FISCAL 2001
     First Quarter (through September 8, 2000)....     17/32       17/64

HOLDERS

As of  September  8, 2000,  the number of  stockholders  of record was 430,  not
including  beneficial  owners whose shares are held by banks,  brokers and other
nominees.  The Company estimates that it has approximately 3,000 stockholders in
total.

DIVIDENDS

The Company has paid no dividends on its Common  Stock since its  inception  and
does not  anticipate or  contemplate  paying cash  dividends in the  foreseeable
future.

Pursuant to the terms of the Company's  Series A Convertible  Preferred Stock, a
5% annual dividend is due and owing. Pursuant to the terms of the Company Series
B Convertible Preferred stock, a 8% annual dividend is due and owing. As of June
30,  2000,  the Company has not  declared  dividends  on Series A or B preferred
stock. The unpaid cumulative dividends totaled  approximately  $74,225. See Note
10 of Notes to Consolidated Financial Statements.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

FISCAL YEARS 1998 AND 1999

RESULTS OF OPERATIONS

The net loss for the fiscal year ended June 30, 1999,  was  $1,465,812  compared
with a net loss of  $421,659  for the  fiscal  year  ended  June 30,  1998.  The
substantial  increase of the net loss is the result of the gain  recognized from
the sale of the  product  line of  $410,000  for the fiscal  year ended June 30,
1998,  and the  subsequent  recognition  of bad debt  totaling  $402,006 for the
fiscal year ended June 30, 1999.  Interest expense and  administrative  expenses
were also significantly higher for the fiscal year ended June 30, 1999.

Revenue  for the fiscal  year ended June 30,  1999,  was  $741,901  compared  to
revenue of  $609,392  for the fiscal  year  ended June 30,  1998.  Approximately
$614,000  of total  revenue for the fiscal  year ended June 30,  1999,  was from
print  products  compared to $323,000 of total revenue for the fiscal year ended

                                        6
<PAGE>
June 30, 1998.  The Company is  continuing  to increase the  percentage of print
revenue as a part of total  revenue.  Sales of products and  licensing  fees for
InfoPak, Inc. are continuing to diminish.

On March 1, 1998, the Company sold computer  hardware through its InfoPak,  Inc.
subsidiary  to a customer  for  $100,000 and agreed to accept a note for $90,000
with interest at 10%  commencing on September 1, 1998.  The Company has not been
able to collect the required monthly payments due on this note. The customer has
filed for an arbitration hearing on the basis that the Company failed to provide
data to support their  customer base (see Note 3 to the  Consolidated  Financial
Statements). The Company has filed a counter-claim for full payment of the note.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1999,  the Company had a working  capital  deficiency of $603,946
compared with a working capital  deficiency of $235,920 as of June 30, 1998. The
decrease  in  working  capital is largely  the  result of  increased  short-term
borrowings used as operating funds, the write-off of certain bad debts (see Note
3 to the  Consolidated  Financial  Statements),  and the  reduction  of accounts
receivable. During the period ended June 30, 1999, the Company raised a total of
$720,000 before debt issuance costs of approximately $57,450 through the sale of
long and short term debentures.

As of June 30, 1999, the Company's  financial position is still precarious.  The
Company needs funding in order to maintain  current  operations.  The Company is
continuing  to  fund  its  operations  by  selling  its  securities  in  private
placements, through long-term and short-term borrowing, and from the sale of its
products.

The Company's  independent  auditors report  contained an explanatory  paragraph
regarding the ability of the Company to continue as a going concern.

FISCAL YEARS 1999 AND 2000

RESULTS OF OPERATIONS

The net loss for the fiscal year ended June 30, 2000,  was  $1,021,145  compared
with a net loss of $1,465,812 for the fiscal year ended June 30, 1999. The gross
margin increased from $179, 190,  representing 24% of fiscal year 1999 operating
revenue,  to $346,841,  representing 34% of fiscal year 2000 operating  revenue.
Approximately  $175,000 of the increase in general and  administrative  expenses
was the result of the amortization of one time consulting contracts paid through
the issuance of the  Company's  common stock.  Other general and  administrative
expense categories that increased  significantly were salary,  lease expense and
stock/proxy  related  expenses.  Marketing  expenses  decreased from $301,630 in
fiscal  year  1999,  to  $110,270  in fiscal  year  2000.  Marketing  salary and
commissions decreased by approximately  $110,000 and travel and entertainment by
$13,000. Management believes that marketing expenses will increase in the fiscal
year  2001,  as a result of hiring of new  sales  staff and the  beginning  of a
nationwide  marketing  campaign.  Of the $173,878 of interest expense for fiscal
year 2000,  approximately  $49,572 was paid with the  Company's  common stock on
June 19, 2000. An additional  $116,215 was the result of the amortization of the
discounted  value of the Company's  long and  short-term  debentures  which were
simultaneously converted with their associated interest.

Revenue  for the fiscal year ended June 30,  2000,  was  $1,008,862  compared to
revenue of  $741,901  for the fiscal  year  ended June 30,  1999.  Approximately
$980,000 or 97% of total  revenue for the fiscal year ended June 30,  2000,  was
from print products  compared to $614,000 or 83% of total revenue for the fiscal
year ended June 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2000, the Company had a working capital of $205,284 compared with
a working  capital  deficiency of $603,946 as of June 30, 1999.  The increase in
working capital is largely attributable to the increase in cash of approximately
$258,000,  an increase in account receivable of $270,000,  and the conversion of

                                        7
<PAGE>
short term debt and accrued  interest into shares of the Company's common stock.
During the period ended June 30, 2000,  the Company raised a total of $1,050,000
before  expenses  of  approximately  $94,500  through  the sale its Series D and
Series E Preferred Stock.

The Company extended an offer to its debenture  holders and certain creditors to
convert their debt to equity in the Company. The offer, which expired on October
15, 1999,  permitted the conversion of debt into shares of the Company's  common
stock at prices ranging from $.25 to $.375 per share. Interest on the debentures
accrued  at 12% per  annum  through  January  31,  2000.  Additionally,  certain
accounts payable were offered the opportunity to convert their  receivables into
shares of  Dimensional  Visions'  common  stock at $.375 per share.  On June 19,
2000,  following the effective date of the  registration  statement,  the entire
outstanding  balance of $720,000 of debentures  and $60,748 of accounts  payable
were converted  into shares of the Company's  common stock. A total of 2,601,021
shares were issued to convert the accounts payable and the debentures  including
accrued interest.

Dimensional  Visions plans to become  profitable  through increased sales of its
Living Image(TM) products while maintaining current or higher gross margins. The
Company has a strong  relationship with its printer which includes  preferential
treatment,  the ability to quickly produce products requested by customers,  and
the resources to significantly expand production without a commensurate increase
in expenses.  Our current  customers are reordering  products on a regular basis
which reduces our cost of sales.  For the fiscal year ended June 30, 1999, eight
customers ordered  additional  products compared to ten customers for the fiscal
year ended June 30,  2000.  These  customers  are also  increasing  their  order
quantities  indicating a growing  acceptance of our 3D/animated  products in the
market place. The Company's three largest customers ordered $64,940, $31,844 and
$175,574  worth of  products  in the  fiscal  year 1999  compared  to  $119,571,
$159,748 and $538,653 for the fiscal year ended June 30, 2000.

The Company's  independent  auditors report  contained an explanatory  paragraph
regarding the ability of the Company to continue as a going concern.

EVENTS SUBSEQUENT TO JUNE 30, 2000

On September  5, 2000,  the Company  entered into a Letter of Agreement  with an
investment  banking firm to establish a $20 million equity line.  This agreement
is subject to the Company  filing an effective  registration  statement and will
end 36 months from the effective  registration  date. The Company shall have the
right at its sole discretion to put common stock to the investment banking firm,
subject to certain amount  limitations and conditions  based upon trading volume
of the Company.

ITEM 7. FINANCIAL STATEMENTS.

The consolidated financial statements required to be filed pursuant to this Item
7 begin on page F-1 of this report.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

The  Company   terminated   Gitomer  &  Berenholz,   P.C.,   Huntingdon  Valley,
Pennsylvania,  as its principal  accountant  as of July 13, 2000.  The principal
accountant's report on the financial  statements of the Registrant  contained no
adverse opinion or a disclaimer of opinion, nor was qualified nor modified as to
uncertainty, audit scope, or accounting principles. The termination of Gitomer &
Berenholz, P.C. was approved by the Board of Directors.

During the  Company's two most recent  fiscal years and any  subsequent  interim
period preceding such  registration,  declination,  or dismissal,  there were no
disagreements with the former accountant on any matter of accounting  principles
or practices,  financial statement  disclosure,  or auditing scope or procedure.
There is nothing to report under Item 304(a)(1)(v)(A) through (D).

Upon the  disengagement  of Gitomer & Berenholz,  P.C., the Company  engaged the
firm of Kopple & Gottlieb, LLP, 420 Old York Road, Jenkintown,  PA 19046, as its
new accounting firm.

                                        8
<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT.

The directors and executive officers of the Company are as follows:

Name                      Age                         Position
----                      ---                         --------
John D. McPhilimy          57       Director, Chairman of the Board of Directors
                                    and Chief Executive Officer
Roy D. Pringle             32       Vice President and Director
Bruce D. Sandig            41       Senior Vice President and Director
Susan A. Gunther           50       Director

MR. JOHN MCPHILIMY was appointed as a Director,  President,  and Chief Executive
Officer of the Company in  November  1997.  In January  1998,  he was  appointed
Chairman of the Board.  From January 1995 until  November  1997,  Mr.  McPhilimy
served as President of Selah Information Systems, Inc., Mesa, Arizona, a company
involved in information systems. From March 1992 to December 1995, Mr. McPhilimy
served as President of Travel  Teller,  Inc. Mr.  McPhilimy has over 30 years of
executive  and  marketing  experience  in  high-technology  industries  such  as
aerospace, air transportation,  and electronic  telecommunication  networks with
Bell Helicopter  Textron,  Aerospatiale,  Executive Jet Aviation,  Travel Teller
Inc., Marketing Works, and Selah Information Systems.  Over the last 15 years he
has been responsible for implementing marketing strategies of NetJets and Travel
Teller, which created the new industries of "nationwide  fractional ownership of
business jets" and "electronic ticket delivery networks," respectively.

MR. ROY D. PRINGLE was appointed as Vice President, Chief Financial Officer, and
Chief Information Officer of the Company in November 1997, and provides overall
integrated enterprise-wide financial management systems for the Company. Mr.
Pringle has worked for InfoPak, Inc. for more than the past five years. Mr.
Pringle holds a master's degree from the American Graduate School of
International Management. Prior to joining InfoPak, he was President and founder
of a small software company, Signature Software.

MR. BRUCE D. SANDIG was appointed as a Director of the Company in January 1998
and as Senior-Vice President of Creative Design and Production Engineering of
the Company in November 1997 and provides overall development and integration of
the DV3D(R)and Animotion(TM) Multi-Dimensional Images systems. Mr. Sandig was a
co-founder of InfoPak in 1992. Mr. Sandig has over 15 years experience in
electro-mechanical and software engineering/design with such companies as
Universal Propulsion Company, Kroy, Inc., Dial Manufacturing, and Softie, Inc.,
where he also created several proprietary software games for Nintendo.

MS. SUSAN A. GUNTHER has served as Director of the Company since January 1998.
Since January 1998 she has served as Managing Principal Consultant for Oracle,
Inc. She served as Director of Business Processing from March 1995 to December
1997 for AmKor Electronics.

Currently, the Audit Committee, comprised of Mr. Pringle and Ms. Gunther, is the
only Committee of the Board of Directors.

Directors  serve until the next annual  meeting or until  their  successors  are
qualified  and  elected.  Officers  serve  at the  discretion  of the  Board  of
Directors.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Certificate of Incorporation and Bylaws of Dimensional  Visions provide that
Dimensional  Visions will indemnify and advance expenses,  to the fullest extent
permitted by the Delaware General  Corporation Law, to each person who is or was
a director, officer or agent of Dimensional Visions, or who serves or served any
other  enterprise  or  organization  at the request of  Dimensional  Visions (an
"Indemnitee").  Under  Delaware  law,  to  the  extent  that  an  Indemnitee  is
successful on the merits of a suit or proceeding  brought  against him or her by
reason  of  the  fact  that  he or she  was a  director,  officer  or  agent  of
Dimensional Visions, or serves or served any other enterprise or organization at
the request of Dimensional  Visions,  Dimensional  Visions will indemnify him or

                                        9
<PAGE>
her  against  expenses  (including  attorneys'  fees)  actually  and  reasonably
incurred  in  connection  with such  action.  If  unsuccessful  in  defense of a
third-party  civil suit or a criminal  suit,  or if such a suit is  settled,  an
Indemnitee  may be  indemnified  under  Delaware law against both (i)  expenses,
including  attorneys'  fees,  and (ii)  judgments,  fines  and  amounts  paid in
settlement if he or she acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of Dimensional Visions,
and, with respect to any criminal action, had no reasonable cause to believe his
other conduct was unlawful.  If  unsuccessful in defense of a suit brought by or
in the right of Dimensional  Visions,  where the suit is settled,  an Indemnitee
may  be  indemnified  under  Delaware  law  only  against  expenses   (including
attorneys'  fees) actually and reasonably  incurred in the defense or settlement
of the  suit  if he or she  acted  in  good  faith  and  in a  manner  he or she
reasonably  believed  to be  in,  or not  opposed  to,  the  best  interests  of
Dimensional  Visions  except that if the Indemnitee is adjudged to be liable for
negligence or misconduct in the  performance  of his or her duty to  Dimensional
Visions,  he or she  cannot  be made  whole  even  for  expenses  unless a court
determines  that he or she is fully and reasonably  entitled to  indemnification
for such expenses.  Also under Delaware law,  expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by Dimensional  Visions in advance of the final  disposition of the suit, action
or proceeding  upon receipt of an  undertaking by or on behalf of the officer or
director to repay such amount if it is ultimately  determined  that he or she is
not entitled to be indemnified by Dimensional  Visions.  Dimensional Visions may
also advance  expenses  incurred by other  employees  and agents of  Dimensional
Visions upon such terms and  conditions,  if any, that the Board of Directors of
Dimensional   Visions  deems  appropriate.   Insofar  as   indemnification   for
liabilities  arising  under the Act may be permitted to  directors,  officers or
persons controlling Dimensional Visions pursuant to the foregoing provisions, in
the opinion of the Commission,  such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended,  requires
directors and certain  officers of the Company,  as well as persons who own more
than 10% of a registered class of the Company's equity  securities,  ("Reporting
Persons") to file  reports of  ownership  and changes in ownership on Forms 3, 4
and 5 with the Securities and Exchange Commission. The Company believes that all
Reporting  Persons have complied on a timely basis with all filing  requirements
applicable to them.

ITEM 10. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

The following table sets forth the total  compensation  earned by or paid to the
Company's  Chief  Executive  Officer for the fiscal year ended June 30, 2000. No
officer of the Company  earned more than  $100,000 in the fiscal year ended June
30, 2000.

<TABLE>
<CAPTION>
                                  Annual Compensation                     Long Term Compensation
                         -------------------------------------  ---------------------------------------
                                                                           Awards             Payouts
                                                                ---------------------------  ----------
                                                  Other         Restricted     Securities
                                                  Annual          Stock        Underlying       LTIP        All Other
                   Year  Salary($)  Bonus($)  Compensation($)    Awards($)  Options/SARs(#)  Payouts($)  Compensation($)
                   ----  ---------  --------  ---------------   ----------  ---------------  ----------  ---------------
<S>                <C>   <C>         <C>            <C>              <C>        <C>             <C>            <C>
John D. Mcphilimy  1999  $89,250     $    0         $ 0              $0          --             $0             $0
                   2000  $90,000     $7,500         $ 0              $0                         $0             $0
</TABLE>

                                       10
<PAGE>
                   OPTIONS/SAR GRANTS IN THE FISCAL YEAR 2000

<TABLE>
<CAPTION>
                                               INDIVIDUAL GRANTS
                    -----------------------------------------------------------------
                            Number of     % of Total
                           Securities     Option/SARs
                           Underlying     Granted to
                           Option/SARs   Employees in   Exercise or Base   Expiration
      Name          Year   Granted(#)     Fiscal Year    Price ($/Share)      Date
      ----          ----   -----------    -----------    ---------------      ----
<S>                 <C>    <C>           <C>            <C>                <C>
John D. McPhilimy   2000     550,000         41.9              .25          1/27/05

       AGGREGATED OPTIONS/SAR EXERCISES IN THE FISCAL YEAR 2000 AND FY-END
                                OPTION/SAR VALUES

                                                        Number of Securities
                               Shares                   Underlying Exercised              Value of
                             Acquired on    Value     Options/SARs at FY-End(#)   Unexercised In-the-Money
     Name             Year   Exercise(#)   Realized   Exercisable/Unexercisable   Options/SARs at FY-End ($)
     ----             ----   -----------   --------   -------------------------   --------------------------

John D. McPhilimy     2000       --           0          1,000,000(E) / 0(U)               $147,500
</TABLE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain  information  regarding the shares of the
Company's  outstanding  Common Stock beneficially owned as of September 8, 2000,
by (i)  each  of the  Company's  directors  and  executive  officers,  (ii)  all
directors and executive  officers as a group, and (iii) each other person who is
known by the Company to own  beneficially  more than 5% of the Company's  Common
Stock.

  Name and Address                     Amount and Nature of        Percent
of Beneficial Owners(1)               Beneficial Ownership(2)    Ownership(2)
-----------------------               -----------------------    ------------
John D. McPhilimy (3)                          395,000               4.01
127 W. Fellars Drive
Phoenix, AZ 85023

Bruce D. Sandig (4)                            700,000               6.90
5801 N. 14th Street
Phoenix, AZ 85014

Roy D. Pringle (5)                             506,047               5.08
4915 W. Marco Polo Road
Glendale, AZ 85308

Susan A. Gunther (6)                            75,000               0.79
26210 S. Lime Drive
Queen Creek, AZ 85242

Robert J. Kelly (7)                            603,580               6.15
8300 N. Hayden Road, #202
Scottsdale, AZ 85258

Dale Riker (8)                                 699,634               7.22
10040 E. Happy Valley Road
Scottsdale, AZ 85255

Robert H. Kite (9)                           1,202,760              11.85
6200 E. Huntress Drive
Paradise Valley, AZ 85253

All executive officers and directors         1,676,047              15.07
 as a group (4 persons) (10)

                                       11
<PAGE>
----------
(1)  Each person  named in the table has sole voting and  investment  power with
     respect to all Common Stock  beneficially  owned by him or her,  subject to
     applicable community property law, except as otherwise indicated. Except as
     otherwise  indicated,  each of such  persons  may be  reached  through  the
     Company at 2301 W. Dunlap Avenue, Suite 207, Phoenix, Arizona 85021.
(2)  The  percentages  shown are calculated  based upon the 9,459,913  shares of
     Common Stock  outstanding on September 8, 2000. The numbers and percentages
     shown include the shares of Common Stock  actually owned as of September 8,
     2000 and the shares of Common Stock that the identified person or group had
     the  right to  acquire  within 60 days of such  date.  In  calculating  the
     percentage  of  ownership,  all shares of Common Stock that the  identified
     person or group had the right to  acquire  within 60 days of  September  8,
     2000 upon the  exercise  of options  and  warrants,  or the  conversion  of
     Preferred  Stock, are deemed to be outstanding for the purpose of computing
     the percentage of the shares of Common Stock owned by such person or group,
     but are not  deemed to be  outstanding  for the  purpose of  computing  the
     percentage of the shares of Common Stock owned by any other person.
(3)  Mr.  McPhilimy  has  warrants to  purchase  395,000  shares of  Dimensional
     Visions' common stock at an exercise price of $.20 until October 28, 2003.
(4)  Mr. Sandig owns 10,000 shares of Dimensional  Visions'  common stock.  Also
     included  in the amount are common  stock  purchase  warrants  to  purchase
     230,000 shares of Dimensional Visions' common stock at an exercise price of
     $.20 until  October 28, 2003 and  warrants  to purchase  460,000  shares of
     common stock at an exercise price of $.25 until January 27, 2005.
(5)  Mr. Pringle owns 6,047 shares of Dimensional  Visions'  common stock.  Also
     included  in the amount are common  stock  purchase  warrants  to  purchase
     210,000 shares of Dimensional Visions' common stock at an exercise price of
     $.20 until  October 28, 2003 and  warrants  to purchase  290,000  shares of
     common stock at an exercise price of $.25 until January 27, 2005.
(6)  Ms. Gunther has warrants to purchase 40,000 shares of Dimensional  Visions'
     common  stock at an  exercise  price of $.50  until  October  28,  2003 and
     warrants to purchase  35,000 shares of common stock at an exercise price of
     $.25 until January 27, 2005.
(7)  Mr. Kelly owns 247,875 shares of Dimensional  Visions'  common stock.  Also
     included  in the amount are common  stock  purchase  warrants  to  purchase
     305,705  shares of common stock and preferred  stock which can be converted
     into 50,000 shares of common stock.
(8)  Mr. Riker owns 464,634 shares of Dimensional  Visions'  common stock.  Also
     included  in the amount are common  stock  purchase  warrants  to  purchase
     235,000 shares of common stock.
(9)  Mr. Kite owns 512,760 shares of  Dimensional  Visions'  common stock.  Also
     included  in the amount are common  stock  purchase  warrants  to  purchase
     380,000  shares of common stock and preferred  stock which can be converted
     into 310,000 shares of common stock.
(10) Includes  common  stock  purchase  warrants to  purchase  in the  aggregate
     1,660,000 shares of the Company's Common Stock.

1996 EQUITY INCENTIVE PLAN

The Company,  in June 1996,  adopted the 1996 Equity  Incentive  Plan (the "1996
Plan")  covering  10,000,000  shares of the Company's  Common Stock  pursuant to
which employees, consultants and other persons or entities who are in a position
to make a significant contribution to the success of the Company are eligible to
receive  awards  in the  form  of  incentive  or  non-incentive  options,  stock
appreciation  rights,  restricted  stock or deferred  stock.  The 1996 Plan will
terminate  ten (10) years after June 12, 1996,  the  effective  date of the 1996
Plan.  The  1996  Plan  is  administered  by  the  Board  of  Directors.  In its
discretion,  the Board of  Directors  may  elect to  administer  the 1996  Plan.
Restricted  stock  entitles the  recipients  to receive  shares of the Company's
Common Stock  subject to such  restriction  and  condition  as the  Compensation
Committee  may  determine  for  no  consideration  or  such   considerations  as
determined by the Compensation Committee. Deferred stock entitles the recipients
to receive shares of the Company's Common Stock in the future.

As of June 30, 2000, 5,002,978 shares have been issued pursuant to this plan.

                                       12
<PAGE>
1999 STOCK OPTION PLAN

On November 15, 1999, the Board of Directors of Dimensional  Visions adopted the
1999 Stock Option Plan (the "1999  Plan").  This plan was approved by a majority
of our stockholders at our January 28, 2000,  stockholders' meeting. The purpose
of the 1999 Plan is to advance the interests of the Company by  encouraging  and
enabling  acquisition of a financial interest in the Company by its officers and
other  key  individuals.  The  1999  Plan  is  intended  to aid the  Company  in
attracting  and  retaining  key  employees,  to  stimulate  the  efforts of such
individuals and to strengthen their desire to remain with the Company. A maximum
of 1,500,000  shares of the  Company's  common stock are  available to be issued
under the 1999 Plan.  The option  exercise price will be 100% of the fair market
value of the  Company's  common stock on the date the option is granted and will
be exercisable for a period not to exceed 10 years from the date of grant.

As of June 30, 2000, no shares have been issued pursuant to this plan.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

John D. McPhilimy has an employment  agreement with the Company. The term of the
agreement  is  three  years  ending  in  November  2000.  Mr.  McPhilimy's  base
compensation is $90,000 per year. The agreement renews by mutual written consent
on the thirtieth  month of its term for a two year period without further action
by either party by either the Company or Mr.  McPhilimy.  The  agreement  may be
terminated by the Company for cause.

Roy D. Pringle has an employment agreement with the Company. The term of the
agreement is three years ending in November 2000. Mr. Pringle's base
compensation is $72,000 per year.

Bruce D. Sandig has an employment agreement with the Company. The term of the
agreement is three years ending in November 2000. Mr. Sandig's base compensation
is $84,000 per year.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits

     3.1(a)  Articles of Incorporation, dated May 12, 1988
     3.2(a)  Bylaws
     4.1(a)  Certificate of Designation of Series A Convertible Preferred Stock,
             dated December 12, 1992
     4.2(a)  Certificate of Designation of Series B Convertible Preferred Stock,
             dated December 22, 1993
     4.3(a)  Certificate of Designation of Series P Convertible Preferred Stock,
             dated September 11, 1995
     4.4(a)  Certificate of Designation of Series S Convertible Preferred Stock,
             dated August 28, 1995
     4.5(a)  Certificate of Designation of Series C Convertible Preferred Stock,
             dated November 2, 1995
     4.6(a)  Certificate  of  Designation  of Series D and Series E  Convertible
             Preferred Stock dated August 25, 1999
     4.7(a)  Form of Warrant Agreement to debt holders, dated January 15, 1998
     4.8(a)  Form of Warrant Agreement to debt holders, dated April 8, 1998
     4.9(a)  Form of Warrant Agreement to participants in Private Placement
             dated April 8, 1998
     4.10(a) Series A Convertible Secured Debenture
     4.11(a) Security Agreement for Series A Convertible Secured Debentures
     10.1(a) 1996 Equity Incentive Plan
     10.2(a) 1999 Stock Option Plan
     10.3(a) Agreement  dated September 25, 1997 by and between  InfoPak,  Inc.,
             DataNet  Enterprises,  LLC, and David and Staci Noles 10.4(a) Lease
             Agreement, dated October 27, 1997
     10.5(a) Employment Agreement dated August 1, 1998, with John D. McPhilimy
     10.6(a) Employment Agreement dated November 1, 1997, with Bruce D. Sandig
     10.7(a) Employment Agreement dated November 1, 1997, with Roy D. Pringle
     10.8    Letter of Agreement with Swartz Private Equity LLC, dated
             September 5, 2000
     21.1    Subsidiaries of the Registrant
     27.1    Financial Data Schedule

(b) Reports on Form 8-K.

     None.

----------
(a)  Incorporated by reference from the Registrant's Registration Statement on
     Form SB-2 dated June 19, 2000, as amended (Registration No. 333-30368).

                                       13
<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,  duly
authorized.

                                        DIMENSIONAL VISIONS INCORPORATED

DATED: September 28, 2000               By: /s/ John D. Mcphilimy
                                            ------------------------------------
                                            John D. McPhilimy, Chairman and
                                            Chief Executive Officer

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed  by  the  following  persons  on  behalf  of  the  registrant  and in the
capacities and on the dates indicated.

     Signature                            Title                      Date
     ---------                            -----                      ----

/s/ John D. Mcphilimy           Chairman, Chief Executive     September 28, 2000
--------------------------      Officer
John D. McPhilimy


/s/ Bruce D. Sandig             Vice President, Director      September 28, 2000
--------------------------
Bruce D. Sandig


/s/ Roy D. Pringle              Vice President, Director      September 28, 2000
--------------------------
Roy D. Pringle


/s/ Susan A. Gunther            Director                      September 28, 2000
--------------------------
Susan A. Gunther

                                       14
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                       YEARS ENDED JUNE 30, 2000 AND 1999


            Index to Consolidated Financial Statements and Schedules

                                                                            Page
                                                                            ----

Independent Auditors' Report                                                F-2

Consolidated Financial Statements

     Balance Sheet                                                          F-6

     Statements of Operations                                               F-7

     Statements of Stockholders'Equity (Deficiency)                         F-8

     Statements of Cash Flows                                               F-12

     Notes to Consolidated Financial Statements                             F-15

Schedules

     Independent Auditors' Report                                           F-29

     Schedule IV - Property and Equipment                                   F-31

     Schedule V - Accumulated Depreciation and
       Amortization of Property and Equipment                               F-32

                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary
Phoenix, Arizona

We have  audited the  accompanying  consolidated  balance  sheet of  Dimensional
Visions Incorporated and Subsidiary (the "Company") as of June 30, 2000, and the
related consolidated statement of operations, stockholders' equity (deficiency),
and cash flows for the year ended June 30, 2000. 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 audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by management,  as well as evaluating  the overall  consolidated
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial position of Dimensional  Visions  Incorporated
and Subsidiary as of June 30, 2000 and the results of their operations and their
cash  flows  for the year  ended  June 30,  2000 in  conformity  with  generally
accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company has financed its
operations primarily through the sale of its securities.  As described in Note 1
to the consolidated  financial  statements,  the Company has suffered  recurring
losses from  operations  and has limited  sales of its  products,  which  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
The future of the Company as an operating business will depend on its ability to

                                       F-2
<PAGE>
To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary


(1)   successfully   market  its  products,   (2)  obtain   sufficient   capital
contributions  and/or  financing  as may be  required  to  sustain  its  current
operations and fulfill its sales and marketing  activities,  (3) achieve a level
of sales  adequate to support the Company's cost  structure,  and (4) ultimately
achieve a level of profitability. Management's plan concerning these matters are
also described in Note 1. The consolidated  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/ Kopple & Gottlieb, LLP

KOPPLE & GOTTLIEB, LLP

Jenkintown, Pennsylvania
September 1, 2000

                                       F-3
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary
Phoenix, Arizona

We have  audited the  accompanying  consolidated  balance  sheet of  Dimensional
Visions  Incorporated  and Subsidiary  (the  "Company") as of June 30, 1999 (not
presented  herein),  and  the  related  consolidated  statement  of  operations,
stockholders'  equity  (deficiency),  and cash flows for the year ended June 30,
1999.  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 audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by management,  as well as evaluating  the overall  consolidated
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial position of Dimensional  Visions  Incorporated
and Subsidiary as of June 30, 2000 and the results of their operations and their
cash  flows  for the year  ended  June 30,  1999 in  conformity  with  generally
accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company has financed its
operations primarily through the sale of its securities.  As described in Note 1
to the consolidated  financial  statements,  the Company has suffered  recurring
losses from  operations  and has limited  sales of its  products,  which  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
The future of the Company as an operating business will depend on its ability to

                                       F-4
<PAGE>
To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary


(1)   successfully   market  its  products,   (2)  obtain   sufficient   capital
contributions  and/or  financing  as may be  required  to  sustain  its  current
operations and fulfill its sales and marketing  activities,  (3) achieve a level
of sales  adequate to support the Company's cost  structure,  and (4) ultimately
achieve a level of profitability. Management's plan concerning these matters are
also described in Note 1. The consolidated  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


                                             /s/ GITOMER & BERENHOLZ, P.C.

Huntingdon Valley, Pennsylvania
October 7, 1999

                                       F-5
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2000
<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                      <C>
Current assets
  Cash                                                                   $    276,333
  Notes receivable, net of allowance for bad debts of $443,669                     --
  Accounts receivable, trade                                                  350,493
  Prepaid expenses                                                              9,226
                                                                         ------------
       Total current assets                                                   636,053
                                                                         ------------
Equipment
  Equipment                                                                   479,372
  Furniture and fixtures                                                       46,944
                                                                         ------------
                                                                              526,316
  Less accumulated depreciation                                               308,963
                                                                         ------------
                                                                              217,353
                                                                         ------------
Other assets
  Patent rights and other assets                                               31,627
                                                                         ------------
                                                                               31,627
                                                                         ------------
       Total assets                                                      $    885,033
                                                                         ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Current portion of obligations under capital leases                    $     50,962
  Accounts payable, accrued expenses and other liabilities                    379,807
                                                                         ------------
       Total current liabilities                                              430,769
                                                                         ------------
Obligations under capital leases, net of current portion                       88,343
                                                                         ------------
       Total liabilities                                                      519,112
                                                                         ------------
Commitments and contingencies                                                      --

Stockholders' equity
  Preferred stock - $.001 par value, authorized
    10,000,000 shares; issued and outstanding 1,146,044                         1,146
  Additional paid-in capital                                                1,474,295
                                                                         ------------
                                                                            1,475,441
  Common stock - $.001 par value, authorized
    100,000,000 shares; issued and outstanding 8,934,916                        8,935
  Additional paid-in capital                                               20,885,581
  Deficit                                                                 (21,828,753)
                                                                         ------------
  Total stockholders' equity before deferred consulting contracts             541,204
  Deferred consulting contracts                                              (175,283)
                                                                         ------------

       Total stockholders' equity                                             365,921
                                                                         ------------

       Total liabilities and stockholders' equity                        $    885,033
                                                                         ============
</TABLE>
                 See notes to consolidated financial statements.

                                       F-6
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED JUNE 30, 2000 AND 1999


                                                      2000              1999
                                                   -----------      -----------
Operating revenue                                  $ 1,008,862      $   741,901
Cost of sales                                          662,021          562,711
                                                   -----------      -----------

Gross profit                                           346,841          179,190
Operating expenses
  Engineering and development costs                    169,895          146,480
  Marketing expenses                                   129,520          301,630
  General and administrative expenses                  852,140          605,347
                                                   -----------      -----------

    Total operating expenses                         1,151,555        1,053,457
                                                   -----------      -----------

Loss before other income (expenses)                   (804,714)        (874,267)
                                                   -----------      -----------
Other income (expenses)
  Interest expense                                    (173,878)        (207,727)
  Interest income                                       14,779           18,188
  Bad debt expense on notes receivable                 (57,332)        (402,006)
                                                   -----------      -----------

                                                      (216,431)        (591,545)
                                                   -----------      -----------

Net loss                                            (1,021,145)      (1,465,812)

Dividends in arrears on preferred stock                (74,225)         (88,050)
                                                   -----------      -----------

Net Loss available to common shareholders          $(1,095,370)     $(1,553,862)
                                                   ===========      ===========
Loss per share
  Basic and diluted loss per common share          $      (.18)     $      (.39)
                                                   ===========      ===========

Shares used in computing net loss per share          6,052,835        3,973,118
                                                   ===========      ===========

                 See notes to consolidated financial statements.

                                       F-7
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                       YEARS ENDED JUNE 30, 2000 AND 1999

<TABLE>
<CAPTION>
                                  Preferred Stock                   Common Stock
                                 ($.001 Par Value)   Additional   ($.001 Par Value)   Additional
                                ------------------    Paid-in    ------------------     Paid-in
                                 Shares     Amount    Capital     Shares     Amount     Capital      Deficit         Total
                                 ------     ------    -------     ------     ------     -------      -------         -----
<S>                             <C>         <C>      <C>         <C>         <C>      <C>          <C>            <C>
Balance, July 1, 1998           133,321    $  133   $ 683,278   3,612,101   $3,612   $18,862,075  $(19,341,796)  $   207,302

Conversion   of  1,500   shares
Series B convertible  preferred
stock  valued at  $15,000  into
6,000  shares of the  Company's
common stock                     (1,500)       (1)    (14,999)      6,000        6        14,994            --            --

Conversion   of  1,011   shares
Series C convertible  preferred
stock  valued at  $10,110  into
47,390  shares of the Company's
common stock                     (1,011)       (1)    (10,109)        403       --        10,110            --            --

Issuance of 1,519,688 shares of
the  Company's  common stock to
consultants for services valued
at $320,593                          --        --          --   1,519,688    1,520       319,073            --       320,593

Issuance of 485,000 warrants to
purchase  485,000 shares of the
Company's  common stock at $.50
per  share  for a  three  and a
half  year  period   commencing
January 16, 1998 in  connection
with    the     issuance     of
convertible debentures due July
31, 2001.  Black Scholes option
pricing model was used to value
the warrants                         --        --          --          --       --       310,850            --       310,850

Issuance of 85,000  warrants to
purchase  85,000  shares of the
Company's  common stock at $.25
per  share  and   issuance   of
150,000  warrants  to  purchase
150,000 shares of the Company's
common  stock at $.10 per share
for   a   three   year   period
commencing  January 25, 1999 in
connection with the issuance of
convertible debentures due July
1999 through  October 1999. The
Black  Scholes  option  pricing
model  was  used to  value  the
warrants                             --        --          --          --       --        39,300            --        39,300

Net loss                             --        --          --          --       --            --    (1,465,812)   (1,465,812)
                                -------    ------   ---------   ---------   ------   -----------  ------------   -----------
Balance, June 30, 1999          130,810    $  131   $ 658,170   5,138,192   $5,138   $19,556,402  $(20,807,608)  $  (587,767)
                                =======    ======   =========   =========   ======   ===========  ============   ===========
</TABLE>

                                       F-8
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                       YEARS ENDED JUNE 30, 2000 AND 1999

<TABLE>
<CAPTION>
                                  Preferred Stock                   Common Stock
                                 ($.001 Par Value)    Additional  ($.001 Par Value)    Additional
                                 ------------------    Paid-in    ------------------    Paid-in
                                  Shares     Amount    Capital     Shares     Amount    Capital      Deficit        Total
                                  ------     ------    -------     ------     ------    -------      -------        -----
<S>                              <C>         <C>      <C>         <C>         <C>     <C>          <C>            <C>
Balance, June 30 1999             130,810    $  131   $ 658,170   5,138,192   $5,138  $19,556,402  $(20,807,608)  $(587,767)

Conversion   of  4,266   shares
Series C convertible  preferred
stock  valued at  $42,660  into
1,703  shares of the  Company's
common stock                      (4,266)       (4)    (42,656)      1,703        2       42,658            --          --

Exercise of 135,000 warrants to
purchase  135,000 shares of the
Company's  common stock at $.20
per share                             --        --          --     135,000      135       26,865            --      27,000

Exercise of 355,000 warrants to
purchase  355,000 shares of the
Company's  common stock at $.10
per share                             --        --          --     355,000      355       35,145            --      35,500

Exercise of 30,000  warrants to
purchase  30,000  shares of the
Company's  common stock at $.50
per share                             --        --          --      30,000       30       14,970            --      15,000

Exercise of 32,000  warrants to
purchase  32,000  shares of the
Company's  common stock at $.25
per share                             --        --          --      32,000       32        7,968            --       8,000

Issuance  of 166,730  shares of
the  Company's  common stock to
settle accounts  payable valued
at $62,398                            --        --          --     166,730      167       62,231            --      62,398

Issuance  of 544,000  shares of
the  Company's  common stock to
consultants for services valued
at $341,250                           --        --          --     544,000      544      340,706            --     341,250

Issuance  of 375,000  shares of
the    Company's    Series    D
Preferred Stock                  375,000       375     337,125          --       --           --            --     337,500

Issuance  of 675,000  shares of
the    Company's    Series    E
Preferred Stock                  675,000       675     617,325          --       --           --            --     618,000

Conversion   of  7,500   shares
Series A convertible  preferred
stock  valued at  $75,000  into
12,000  shares of the Company's
common stock                      (7,500)       (8)    (74,992)     12,000       12      74,988            --          --
</TABLE>

                                       F-9
<PAGE>
<TABLE>
<CAPTION>
                                    Preferred Stock                   Common Stock
                                   ($.001 Par Value)   Additional   ($.001 Par Value)  Additional
                                   -----------------    Paid-in     -----------------   Paid-in
                                   Shares     Amount    Capital     Shares     Amount   Capital   Deficit   Total
                                   ------     ------    -------     ------     ------   -------   -------   -----
<S>                                <C>        <C>       <C>         <C>          <C>      <C>       <C>      <C>
Conversion   of  23,000  shares
Series D convertible  preferred
stock  valued at  $20,700  into
46,000  shares of the Company's
common stock                      (23,000)     (23)    (20,677)     46,000      46      20,654       --         --

Issuance  of  40,000  shares of
Company's   common   stock   as
payment of a $20,000 commission
owed  from the sale of Series D
Preferred  Stock  in  lieu of a
cash payment                           --       --          --      40,000      40      19,960       --     20,000

Conversion  of debt of $570,000
and related interest of $97,387
at  $.375   pursuant   to  SB-2
registration statement                 --       --          --   1,779,691    1779     665,608       --    667,387

Conversion  of debt of $150,000
and related interest of $13,650
at   $.25   pursuant   to  SB-2
registration statement                 --       --          --     654,600     655     162,995       --    163,650

Professional  fees  incurred in
connection       with      SB-2
registration statement                 --       --          --          --      --     (15,698)            (15,698)

Adjustment  for long  term debt
discount   of  which  debt  was
converted  into equity with the
SB-2 registration                      --       --          --          --      --    (116,622)      --   (116,622)

Adjustment     for     deferred
offering costs  associated with
the SB-2 registration                  --       --          --          --      --     (13,249)      --    (13,249)

Issuance of 323,293 warrants to
purchase the  Company's  common
stock   at   $.10   per   share
commencing   January   2001  in
connection with the issuance of
convertible debentures                 --       --          --          --      --          --       --         --

Issuance of 395,000 warrants to
purchase the  Company's  common
stock   at   $.25   per   share
commencing   October   2000  in
connection     with     private
placement   of  the   Company's
securities                             --       --          --          --      --          --       --         --

Issuance of 1,397,500  warrants
to   purchase   the   Company's
common  stock at $.25 per share
commencing     December    2000
through   February   2005   for
employee     incentives     and
consultants                            --       --          --          --      --          --       --         --
</TABLE>
                                                                        F-10
<PAGE>
<TABLE>
<CAPTION>
                                 Preferred Stock                  Common Stock
                                ($.001 Par Value)   Additional  ($.001 Par Value)    Additional
                                ------------------   Paid-in    ------------------    Paid-in
                                 Shares     Amount   Capital     Shares     Amount    Capital       Deficit        Total
                                 ------     ------   -------     ------     ------    -------       -------        -----
<S>                             <C>         <C>     <C>         <C>         <C>      <C>          <C>           <C>
Issuance of 917,500 warrants to
purchase the  Company's  common
stock   at   $.50   per   share
commencing October 2000 through
January 2003 in connection with
private    placement   of   the
Company's securities                   --       --          --          --      --            --            --           --

Issuance of 57,000  warrants to
purchase the  Company's  common
stock   at  $1.20   per   share
commencing   October   2000  in
connection     with     private
placement commissions                  --       --          --         --       --            --            --           --

Net loss                               --       --          --         --       --            --    (1,021,145)  (1,021,145)
                                ---------   ------  ----------  ---------   ------   -----------  ------------  -----------
Balance, June 30, 2000          1,146,044   $1,146  $1,474,295  8,934,916   $8,935   $20,885,581  $(21,828,753) $   541,204
                                =========   ======  ==========  =========   ======   ===========  ============  ===========
</TABLE>
                                      F-11
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED JUNE 30, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                        2000              1999
                                                                    -----------       -----------
<S>                                                                 <C>               <C>
Operating activities
  Net loss                                                          $(1,021,145)      $(1,465,812)
  Adjustments to reconcile net loss to net
   cash used in operating activities
   Allowance for bad debts on notes receivable                           41,663           402,006
   Consulting service paid through issuance of
    warrants and common stock                                            22,500            65,593
   Depreciation and amortization of property and equipment               42,299            46,172
   Amortization of debt discount                                        121,396           112,132
   Amortization of other assets and deferred costs                      262,858            36,811
   Interest expense paid through issuance of common stock                50,400                --
  Changes in assets and liabilities which provided (used) cash
   Accounts receivable, trade                                          (272,425)           66,552
   Inventory                                                              4,822            62,464
   Prepaid supplies and expenses                                         10,748             7,782
   Accounts payable, accrued expenses and other liabilities             (31,332)           94,196
                                                                    -----------       -----------
  Net cash used in operating activities                                (768,216)         (572,104)
                                                                    -----------       -----------
Investing activities
  Payment of obligations under capital lease                            (49,702)          (16,477)
  Purchase of equipment                                                  (1,071)          (57,279)
  Proceeds from payments on notes receivable                                 --            18,169
                                                                    -----------       -----------
  Net cash used in investing activities
                                                                        (50,773)          (55,587)
                                                                    -----------       -----------
</TABLE>

                                      F-12
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999

<TABLE>
<CAPTION>
                                                              2000              1999
                                                          -----------       -----------
<S>                                                      <C>                 <C>
Financing activities
  Proceeds from Sale of Preferred stock net of
   offering costs of $74,500                                  975,500                --
  Short-term borrowings                                            --           235,000
  Long-term debt                                                   --           485,000
  Reduction in deferred consulting fee contract
   originally paid in common stock                             30,000           100,000
  Borrowings from factor                                           --           195,560
  Payment of debt obligations                                      --          (350,060)
  Disbursement of debt issuance costs                              --           (33,700)
  Professional fees incurred in connection with SB-2
   registration statement                                     (15,697)               --
                                                          -----------       -----------

Net cash provided by financing activities                   1,075,303           631,800
                                                          -----------       -----------

Net increase in cash and cash equivalents                     256,314             4,109
Cash and cash equivalents, beginning of year                   20,019            15,910
                                                          -----------       -----------

Cash, end of year                                         $   276,333       $    20,019
                                                          ===========       ===========

Supplemental disclosure of cash flow information:

  Cash paid during the year for interest                  $    24,677       $    34,957
                                                          ===========       ===========
  Issuance of common stock in connection with
   consulting services                                    $   341,250       $   320,593
                                                          ===========       ===========
</TABLE>

Supplemental  disclosure  of non-cash  investing and  financing  activities  for
fiscal year 2000:

     The Company recorded  capital lease  obligations of $86,422 relating to the
     acquisition of equipment.

     The  Company  issued  12,000  shares  of  the  Company's  common  stock  in
     connection  with the  conversion  of Series A Convertible  Preferred  Stock
     valued at $75,000.

                                      F-13
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Supplemental  disclosure  of non-cash  investing and  financing  activities  for
fiscal year 2000 (continued):

     The  Company  issued  40,000  shares of its  common  stock as  payment of a
     $20,000  commission owed from the sale of Series D Preferred Stock offering
     in lieu of a cash payment.

     The Company issued 1,707 shares of the Company's common stock in connection
     with the  conversion  of Series C  Convertible  Preferred  Stock  valued at
     $42,660.

     The  Company  issued  46,000  shares  of  the  Company's  common  stock  in
     connection  with the  conversion  of Series D Convertible  Preferred  Stock
     valued at $20,700.

     The Company issued 544,000 of the Company's common stock to consultants for
     services valued at $341,250.

     The Company issued 166,730 of the Company's  common stock,  in lieu of cash
     to settle $62,398 of accounts payable.

     The  Company  issued  2,434,291  shares of the  Company's  common  stock in
     connection  with the  conversion  of $720,000  in debt and related  accrued
     interest of $111,037.

Supplemental  disclosure  of non-cash  investing and  financing  activities  for
fiscal year 1999:

     The Company issued 6,403 shares of the Company's common stock in connection
     with the  conversion of  convertible  preferred  stock valued at $25,110 as
     follows:

                                                               Converted to
                                                    Value      Common Stock
                                                 ----------    ------------
     Series B Convertible Preferred Stock        $   15,000          6,000
     Series C Convertible Preferred Stock            10,110            403
                                                 ----------     ----------

                                                 $   25,110          6,403
                                                 ==========     ==========

     The  Company  issued  1,519,688  shares of the  Company's  common  stock to
     consultants for services valued at $320,593.

     The  Company  recorded  additional  paid-in  capital of  $350,150  with the
     issuance of warrants to purchase  920,000  shares of the  Company's  common
     stock in connection with the short and long-term debenture financing.

                                      F-14
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 1: Summary of Significant Accounting Policies

     DESCRIPTION  OF  BUSINESS,  FINANCING  AND  BASIS  OF  FINANCIAL  STATEMENT
     PRESENTATION

     Dimensional Visions  Incorporated (the "Company" or "DVI") was incorporated
     in  Delaware  on  May  12,   1988.   The  Company   produces   and  markets
     lithographically printed stereoscopic and animation print products.

     The  Company,  through a  wholly-owned  subsidiary  of  InfoPak,  Inc.  has
     developed a data  delivery  system that  provides  end users with  specific
     industry printed materials by way of a portable  hand-held reader.  Data is
     acquired  electronically  from the data  provided by mainframe  systems and
     distributed through a computer network to all subscribers.

     The Company has financed its operations  primarily  through the sale of its
     securities.  The Company has had limited  sales of its products  during the
     years ended June 30, 2000 and 1999.  Even though the sales  during the past
     two years have significantly  increased over the prior years, the volume of
     business is not nearly sufficient to support the Company's cost structure.

     LIQUIDITY AND CAPITAL RESOURCES

     The Company has incurred  losses since  inception of $21,828,753  and has a
     working  capital of $206,544 as of June 30, 2000. The future of the Company
     as an  operating  business  will depend on its ability to (1)  successfully
     market and sell its products,  (2) obtain sufficient capital  contributions
     and/or  financing as may be required to sustain its current  operations and
     to fulfill its sales and marketing activities, (3) achieve a level of sales
     adequate  to support  the  Company's  cost  structure,  and (4)  ultimately
     achieve a level of profitability. Management's plan to address these issues
     includes (a)  redirecting its marketing  efforts of the Company's  products
     and substantially increasing sales results, (b) continued exercise of tight
     cost controls to conserve cash, (c) raising additional long term financing.

     The consolidated financial statements have been prepared on a going concern
     basis which  contemplates the realization and settlement of liabilities and
     commitments in the normal course of business.  The available  funds at June
     30, 2000, plus the limited revenue is not sufficient to satisfy the present
     cost  structure.  Management  recognizes  that the  Company  must  generate
     additional resources to enable it to continue operations.  Management plans
     include the continued expansion of the sale of its products and the sale of
     additional securities.

                                      F-15
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999

Note 1: Summary of Significant Accounting Policies (Continued)

     LIQUIDITY AND CAPITAL RESOURCES (Continued)

     Further,  there can be no  assurances,  assuming  the Company  successfully
     raises  additional  funds that the Company  will achieve  profitability  or
     positive cash flow from the sale of its products.  In the event the Company
     is not able to  secure  sufficient  funds on a timely  basis  necessary  to
     maintain its current  operations,  it may cease all or part of its existing
     operations and/or seek protection under the bankruptcy laws.

     CONSOLIDATION POLICY

     The consolidated  financial  statements include the accounts of DVI and its
     wholly-owned   subsidiary,   InfoPak,  Inc.  All  significant  intercompany
     balances and transactions have been eliminated in consolidation.

     EQUIPMENT, DEPRECIATION AND AMORTIZATION

     Equipment is stated at cost.  Depreciation,  which includes amortization of
     assets  under  capital  lease is provided  by the use of the  straight-line
     method over the estimated useful lives of the assets as follows:

          Equipment                             5-7 years
          Furniture and fixtures                  5 years

     PATENT RIGHTS

     Costs  incurred to acquire  patent  rights and the related  technology  are
     amortized  over the shorter of the  estimated  useful life or the remaining
     term of the patent  rights.  In the event  that the costs of patent  rights
     and/or acquired technology are abandoned,  the write-off will be charged to
     expenses in the period the determination is made to abandon them.

     ENGINEERING AND DEVELOPMENT COSTS

     The Company  charges to engineering  and  development  costs all items of a
     non-capital  nature  related to bringing  "significant"  improvement to its
     product.  Such  costs  include  salaries  and  expenses  of  employees  and
     consultants,  the  conceptual  formulation,  design,  and  testing  of  the
     products and creation of prototypes. All such costs of a capital nature are
     capitalized.

                                      F-16
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999

Note 1: Summary of Significant Accounting Policies (Continued)

     INCOME TAXES

     The Company accounts for income taxes under the liability method.  Deferred
     tax assets and liabilities are determined based on differences  between the
     financial  reporting  and tax bases of assets  and are  measured  using the
     enacted tax rates and laws that will be in effect when the  differences are
     expected to reverse.

     LOSS PER SHARE

     The Company adopted Statement of Financial  Accounting  Standards Statement
     No. 128,  "Earnings  Per Share" (FAS 128"),  which is effective  for fiscal
     years ending after December 15, 1997.  FAS 128 replaced the  calculation of
     primary  and fully  diluted  earnings  per  share  with  basic and  diluted
     earnings per share.  Unlike primary earnings per share,  basic earnings per
     share excludes any dilutive  effects of options,  warrants and  convertible
     securities.  Dilutive  earnings per share is very similar to the previously
     reported fully diluted earnings per share.

     USE OF ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at the  dates  of the
     financial  statements  and the  reported  amounts of revenue  and  expenses
     during the  reporting  periods.  Actual  results  could  differ  from those
     estimates.

     CONCENTRATION OF CREDIT RISK

     The  Company is subject  to credit  risk  through  trade  receivables.  The
     Company relies on a limited number of customers for its sales.  The Company
     is in the  process  of  building  a  customer  base for its  products  and,
     therefore, the degree of risk is substantially higher until the base grows.

     The  Company  also relies on several  key  vendors to supply  plastics  and
     printing  services.  Although there are a limited number of vendors capable
     of fulfilling the Company's  needs, the Company believes that other vendors
     could provide for the Company's needs on comparable  terms.  Abrupt changes
     could,  however,  cause a delay in processing  and a possible  inability to
     meet sales  commitments  on schedule,  or a possible  loss of sales,  which
     would affect operating results adversely.

                                      F-17
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 1: Summary of Significant Accounting Policies (Continued)

     STOCK-BASED COMPENSATION

     The Company accounts for stock-based awards to employees

     in accordance with Accounting  Principles Board Opinion No. 25, "Accounting
     for Stock Issued to  Employees"  ("APB Opinion No. 25") and has adopted the
     disclosure-only  alternative of Statement of Financial Accounting Standards
     No. 123, "Accounting for Stock-Based Compensation" ("FAS 123").

Note 2: Cash

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

     The Company maintains its cash in banks located in Arizona.  The total cash
     balances are insured by the FDIC up to $100,000 per financial  institution.
     As of June 30, 2000, the uninsured  balance was $8,696. As of June 30, 2000
     $166,155 was held in a brokerage account which is fully insured.

Note 3: Notes Receivable

     Notes receivable consists of the following:

                                   Interest
                                    Rate         Amount          Maturity
                                    ----        --------         --------
     Product Line (1)                11%        $360,506       September 2001
     InfoReaders  (2)                10%          83,163       August 2001
                                                --------
                                                 443,669
     Less allowance for bad debts                443,669
                                                --------
                                                $     --
                                                ========

     (1)  Effective  September  1998, the modified terms provide for payments to
          be $11,533  per month.  The  Company  has been  unable to collect  the
          required  monthly  payments.  During the year ended June 30, 1999, the
          Company  received  three  installments  and a fee of $10,000 which was
          included as interest  income.  Management has determined that they are
          currently unable to collect the amounts due on the note.  Accordingly,
          management  has  established a 100%  allowance  against this note. The
          Company has  determined  that it does not make economic  sense to take
          back this product line and operate  this aspect of the  business.  The
          Company will  continue to pursue the  collection  of this note.  As of
          June 30, 2000 no additional funds have been collected.

                                      F-18
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 3: Notes Receivable (Continued)

     (2)  On March  1,  1998,  the  Company  sold  InfoReaders  (hardware)  to a
          customer  for  $100,000  and  agreed to accept a note for  $90,000with
          payments  commencing on September 1, 1998. The monthly  installment is
          $2,904, including interest at 10% per annum for thirty-six months. The
          Company has not been able to collect the required monthly payments due
          on this note. The customer has filed for an arbitration hearing on the
          basis  that the  Company  failed  to  provide  data to  support  their
          customer  base and is requesting  payment of  $1,000,000  for the lost
          business.  The  Company  made  provisions  to acquire the data for the
          customer.   However,  the  customer  was  unwilling  to  pay  for  the
          acquisition  cost  of  the  data  and  bring  their  account  current.
          Accordingly,   without  the  updated  data  and  failure  to  pay  the
          outstanding balance due the Company, there is no reason to support the
          system. No date has been set for the arbitration hearings. The Company
          has filed a  counter-claim  on September 18, 1999, for full payment of
          the note. During the year ended June 30, 2000 the Company has provided
          an  additional  allowance of $41,663  against this note.  The customer
          failed to make the  necessary  deposits so the hearing  scheduled  for
          April 24-26, 2000 was suspended  indefinitely.  This matter was closed
          by the American Arbitration Association on July 25, 2000.

Note 4: Deferred Costs

     Deferred costs as of June 30, 2000,  consist of three consulting  contracts
     totaling $175,283. These costs are accounted for in the equity section as a
     contra equity account.

     On April 5, 1999,  the Company  entered into a contract  with a consultant.
     The fee for services for 36 months is $287,668 ($7,991 per month),  or upon
     signing of the contract,  the Company will issue  $255,000 of the Company's
     common  stock.  The market  value of the common  stock on April 5, 1999 was
     $.1875 per share and 1,360,000 shares of registered common stock was issued
     (registered  under Form S-8). In addition,  the warrant price on previously
     issued 500,000 warrants was reduced to $.10 per share.

     In accordance with the terms of the agreement either party may terminate or
     change the terms of this agreement with 30 days written notice.  On May 28,
     1999 the term of this agreement was modified and the term was reduced to 22
     months. Under the provisions of the contract, the consultant is required to
     either  return  the  shares  or the  cash  equivalency  of  the  reduction.
     Accordingly on May 28, 1999, the Company  received a $100,000  payment from
     the consultant.

                                      F-19
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 4: Deferred Costs (Continued)

     On July 29, 1999 and August 10, 1999, the Company entered into two separate
     contracts with consultants.  The fee for services for 36 months is $211,520
     ($5,876 per month), or upon signing of the contract, the Company will issue
     $187,500 of the Company's  common stock.  The market of the common stock on
     July 29,  1999 was  $0.375  and on August  10,  1999 was $0.50 and  400,000
     shares of registered common stock was issued (registered under Form S-8).

     In accordance with the terms of the agreement either party may terminate or
     change the terms of this  agreement  with 30 days  written  notice.  During
     August 1999 the term of one of the  contracts was modified and the term was
     reduced  to  seven  months.  Under  the  provisions  of the  contract,  the
     consultant is required to either return the shares or the cash  equivalency
     of the reduction.  Accordingly  on August 24, 1999, the Company  received a
     $30,000 payment from the consultant.

     The  Company  incurred  debt  issuance  costs of  $33,700  which were being
     amortized over 34 months, the term of the Series A convertible  debentures.
     The  balance as of June 30, 1999 was $24,779 and during the year ended June
     30,  2000,   $11,530  was  amortized   through  June  19,  2000.  Upon  the
     effectiveness  of  the  SB-2  registration  statement  and  the  subsequent
     conversion of the  associated  debt on June 19, 2000,  the remainder of the
     deferred costs, $13,249, was taken against additional paid in capital.

Note 5: Patent Rights and Other Assets

     Patent rights                                                 $ 58,426
     Deposits                                                         4,100
     Trademark                                                          225
                                                                   --------
                                                                     62,751
     Less accumulated amortization                                   31,125
                                                                   --------

       Total                                                       $ 31,626
                                                                   ========

Note 6: Accounts Payable, Accrued Expenses and Other Liabilities

     Accounts payable                                              $353,927
     Accrued expense
       Salaries                                                      18,523
                                                                   --------
     Payroll taxes payable                                            7,357
                                                                   --------

       Total                                                       $379,807
                                                                   ========

                                      F-20
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 7: Short-Term Borrowings

     During  January  through  April  1999,  the  Company  received   short-term
     borrowings of $235,000. The loans were 12% convertible debentures, with due
     dates ranging from July 25, 1999 through October 29, 1999. The terms of the
     debenture  provide for a three month extension if the debenture is not paid
     on the  original  due  date.  During  the  extension  period,  interest  is
     calculated at the stated rate plus 3% through the extended due date (15%).

     On June 19, 2000 the  debentures  were converted into 826,667 shares of the
     Company's  common  stock.  The related  accrued  interest on the short term
     borrowings  were also converted unto 80,885 shares of the Company's  common
     stock calculated at a 12% interest rate.

Note 8: Long-Term Debt

     During July through September 1998, the Company through a private placement
     was  able  to  borrow  $485,000  through  the  issuance  of  Series  A  12%
     convertible  secured  debentures.  The  debentures  are due July 31,  2001.
     Interest  is  accrued  and  payable  on July 31 of each  year and the first
     interest  payment is due July 31, 1999.  In the event the Company  fails to
     pay the  debenture  holders any accrued  interest or principal  the default
     rate is 16% from the due date through the date paid.

     On June 19,  2000 all the  Series A  convertible  secured  debentures  were
     converted  into  1,293,327  of the  Company's  common stock and the related
     accrued  interest was converted into 233,412 shares of the Company's common
     stock.

Note 9: Leases

     The company leases certain equipment under a master lease agreement,  which
     are  classified as capital  leases.  The equipment  leases have a five year
     term with an option to acquire the equipment for $1 at the end of the lease
     term.  Leased capital assets included in equipment as of June 30, 2000, was
     as follows:

     Equipment                                $255,334
     Less accumulated amortization              47,092
                                              --------

                                              $208,242
                                              ========

     Future minimum payments, by year and in the aggregate, under noncancellable
     capital leases and operating  leases with terms of one year or more consist
     of the following as of June 30, 2000:

                                      F-21
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 9: Leases (Continued)

       Years Ending                                  Capital     Operating
         June 30,                                    Leases        Leases
         --------                                   --------      --------
           2001                                     $ 72,463      $ 37,000
           2002                                       72,417            --
           2003                                       30,527            --
                                                    --------      --------
                                                     175,407      $ 37,000
                                                                  ========

     Amounts representing interest                    36,102
                                                    --------
     Present value of net minimum payments           139,305
     Current portion                                  50,962
                                                    --------

     Long-term portion                              $ 88,343
                                                    ========

     The Company's rental expense for operating leases was approximately $74,948
     and  $69,100  for the years  ended  approximately  June 30,  2000 and 1999,
     respectively.

     The Company is  currently  negotiating  a new lease for its  facility,  the
     current lease expires on December 31, 2000.

Note 10: Commitments and Contingencies

     The  Company  has   outstanding   employment   and   consulting   contracts
     approximately $103,000 that expire in November, 2000.

     There are no legal  proceedings  which  the  Company  believes  will have a
     material adverse effect on its financial position.

     The  Company  has not  declared  dividends  on  Series  A or B  Convertible
     Preferred Stock. The cumulative  dividends in arrears through June 30, 2000
     was approximately $74,225.

Note 11: Common Stock

     As of June 30, 2000, there are outstanding 6,808,910 of non-public warrants
     and options to purchase the Company's  common stock at prices  ranging from
     $.10 to $12.50 with a weighted average price of $.55 per share.

     As of June 30,  2000,  there were  1,146,044  shares of various  classes of
     Convertible Preferred Stock outstanding which can be converted to 1,457,818
     shares of common stock (see Note 12).

                                      F-22
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 11: Common Stock (Continued)

     During June 2000,  there were  $485,000 of secured  debentures  and related
     interest that were converted into 1,526,739  shares of the Company's common
     stock and $235,000 of short-term  borrowings and related interest that were
     converted into 907,552 shares of the Company's common stock.

     The total  number of shares of the  Company's  common stock that would have
     been issuable  upon  conversion of the  outstanding  warrants,  options and
     preferred stock equaled  8,266,728 shares as of June 30, 2000, and would be
     in addition to the 8,934,916 shares of common stock  outstanding as of June
     30, 2000.

     The Company issued during August 1999,  September  1999, and February 2000,
     1,707  shares of its common  stock as a result of the  conversion  of 4,266
     shares of Series C Convertible Preferred Stock.

     During  February 2000, the Company issued 12,000 shares of its common stock
     as a result of the  conversion  of 7,500  shares  of  Series A  Convertible
     Preferred Stock.

     The  Company  issued  40,000  shares of its  common  stock as  payment of a
     $20,000  commission  owed from the sale of Series D Preferred Stock in lieu
     of a cash payment.

     The Company issued  544,000  shares of its common stock to consultants  for
     services valued at $341,250.

     During August 1999,  the Company  issued 166,730 shares of its common stock
     in lieu of cash to settle $62,398 of accounts payable.

     The Company issued  552,000  shares of its common stock in connection  with
     the exercise of warrants.

     The Company issued during the year ended June 30, 1999, 1,519,688 shares of
     the Company's common stock to consultants for services  (including $133,788
     as deferred) valued at $320,593 (average price per share $.21).

                                      F-23
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 12: Preferred Stock

     The Company has authorized  10,000,000  shares of $.001 par value per share
     Preferred Stock, of which the following were issued outstanding:

                                         Allocated      Outstanding
                                         ---------       ---------
     Series A Preferred                    100,000          15,500
     Series B Preferred                    200,000           3,500
     Series C Preferred                  1,000,000          13,404
     Series D Preferred                    375,000         352,000
     Series E Preferred                  1,000,000         675,000
     Series P Preferred                    600,000          86,640
                                         ---------       ---------

       Total Preferred Stock             1,900,000       1,146,044
                                         =========       =========

     The  Company's   Series  A  Convertible  5%  Preferred   Stock  ("Series  A
     Preferred"), 100,000 shares authorized, is convertible into common stock at
     the rate of 1.6  shares of  common  stock  for each  share of the  Series A
     Preferred.  Dividends  from  date  of  issue,  are  payable  from  retained
     earnings, and have been accumulated on June 30 each year, but have not been
     declared or paid (see Note 10).

     The  Company's   Series  B  Convertible  8%  Preferred   Stock  ("Series  B
     Preferred"),  is  convertible  at the rate of 4 shares of common  stock for
     each share of Series B Preferred.  Dividends from date of issue are payable
     on June 30 from retained  earnings at the rate of 8% per annum and have not
     been declared or paid (see Note 10).

     The Company's  Series C Convertible  Preferred Stock ("Series C Preferred")
     is convertible at a rate of .4 shares of common stock per share of Series C
     Preferred.

     The Company's  Series D Convertible  Preferred Stock ("Series D Preferred")
     is  convertible at a rate of 2 shares of Common stock per share of Series D
     Preferred.

     The Company's  Series E Convertible  Preferred Stock ("Series E Preferred")
     is  convertible at a rate of 2 shares of Common stock per share of Series E
     Preferred.

     The Company's Series P Convertible  Preferred Stock ("Series P Preferred"),
     is  convertible  at a rate of .4 shares of common  stock for each  share of
     Series P Preferred.

                                      F-24
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 12: Preferred Stock (Continued)

     The Company's  Series A Preferred,  Series B Preferred,  Series D Preferred
     and Series E Preferred  were  issued for the  purpose of raising  operating
     funds.  The  Series C  Preferred  was  issued  to  certain  holders  of the
     Company's  10% Secured  Notes in lieu of accrued  interest and also will be
     held for future investment purposes.

     The Series P Preferred was issued to InfoPak  shareholders  in exchange for
     (1) all of the outstanding capital stock of InfoPak, (2) as signing bonuses
     for certain  employees  and a  consultant  of  InfoPak,  and (3) to satisfy
     InfoPak's outstanding debt obligations to certain shareholders.

Note 13: Stock Option Plan and Equity Incentive Plan

     On November 15, 1999, the Board of Directors of Dimensional Visions adopted
     the 1999 Stock Option Plan (the "1999  Plan").  This plan was approved by a
     majority  of  our  stockholders  at our  January  28,  2000,  stockholders'
     meeting.  The purpose of the 1999 Plan is to advance the  interests  of the
     Company by encouraging and enabling  acquisition of a financial interest in
     the company by its  officers  and other key  individuals.  The 1999 Plan is
     intended to aid the company in attracting and retaining key  employees,  to
     stimulate the efforts of such individuals and to strengthen their desire to
     remain with the  company.  A maximum of 1,500,000  shares of the  company's
     common stock are  available  to be issued  under the 1999 Plan.  The option
     exercise  price  will be 100% of the fair  market  value  of the  company's
     common stock on the date the option is granted and will be exercisable  for
     a period not to exceed 10 years from the date of grant.

     As of June 30, 2000, no stock options have been granted under this plan.

     The Company on June 13, 1996  adopted the 1996 Equity  Incentive  Plan (the
     "Plan") covering  10,000,000 shares of the Company's common stock $.001 par
     value, pursuant to which officers, directors, key employees and consultants
     of the Company are eligible to receive incentive,  as well as non-qualified
     stock options,  SAR's,  and Restricted  Stock and Deferred Stock. The Plan,
     which expires in June 2006, will be administered by the Compensation

     Committee of the Board of Directors.  Incentive stock options granted under
     the Plan are  exercisable  for a period of up to 10 years  from the date of
     grant at an exercise price, which is not less than the fair market value of
     the  common  stock on the date of the  grant,  except  that the terms of an
     incentive stock option granted under the Plan to a stockholder  owning more
     than

                                      F-25
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 13: Stock Option Plan and Equity Incentive Plan (Continued)

     10% of the  outstanding  common  stock may not  exceed  five  years and the
     exercise  price of an incentive  stock option granted to such a stockholder
     may not be less than 110% of the fair market  value of common  stock on the
     date of the  grant.  Non-qualified  stock  options  may be granted on terms
     determined by the Compensation  Committee of the Board of Directors.  SAR's
     which give the holder the  privilege  of  surrendering  such rights for the
     appreciation  in the  Company's  common stock between the time of grant and
     the surrender,  may be granted on any terms  determined by the Compensation
     Committee of the Board of Directors.

     Restricted stock awards entitle the recipient to acquire shares for no cash
     consideration   or  for   consideration   determined  by  the  Compensation
     Committee.  The  award  may be  subject  to  restrictions,  conditions  and
     forfeiture as the Committee may  determine.  Deferred  stock award entitles
     recipient to receive shares in the future.  Since inception of this plan in
     1996  through  June 30,  2000,  5,102,978  shares of common stock have been
     issued.  For the year ended June 30, 2000,  544,000  shares of common stock
     have been  issued  at prices  ranging  from  $.37 to $.625  per  share.  In
     addition,  as of June 30,  2000,  no options  or SAR's  have been  granted.
     During the year ended June 30, 1999,  1,519,688 shares of common stock have
     been  issued  under this plan at prices  ranging  from $.1875 to $.6562 per
     share.  In  addition,  as of June 30,  1999,  no options or SAR's have been
     granted.

     If the Company had elected to recognize  compensation  expense based on the
     fair value of stock plans as  prescribed  by FAS No. 123, the Company's net
     loss and net loss per  share  would  have been  increased  to the pro forma
     amounts indicated below:

                                                       2000            1999
                                                    -----------     -----------
     Net Loss available to common shareholders      $(1,095,370)    $(1,553,862)
     Net Loss - pro forma                           $(1,261,573)    $(1,553,862)
     Net Loss per share - as reported               $      (.18)    $      (.39)
     Net Loss per share - pro forma                 $      (.21)    $      (.39)

     The weighted-average fair value at the date of grant for options granted in
     2000 was $.25. The fair value of each option grant is estimated on the date
     of grant  using the  Black-Scholes  Option  Pricing  Model.  The  following
     weighted average  assumptions were used: no dividends;  expected volatility
     factor of 140%;  risk-free  interest  of 5%; and an  expected  life of five
     years.  The  compensation  expense  and  pro  forma  net  loss  may  not be
     indicative of amounts to be included in future periods.

                                      F-26
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 14: Income Taxes

     The tax effects of significant  items comprising the Company's net deferred
     taxes as of June 30, 2000 were as follows:

     Deferred tax assets:
       Goodwill                                                $   284,000
       Net operating loss carryforwards                          6,769,000
                                                               -----------

                                                                 7,053,000
                                                               -----------
     Deferred tax liabilities
       Allowance for bad debts                                     191,000
       Equipment                                                    26,000
       Patent rights                                                 3,000
                                                               -----------

                                                                   220,000
                                                               -----------
     Net deferred tax asset                                      6,833,000
     Valuation allowance                                        (6,833,000)
                                                               -----------

     Net deferred tax asset reported                           $        --
                                                               ===========

     The change in  valuation  allowance  for the year  ended June 30,  1999 was
     increased by approximately $571,000.

     There was no  provision  for current  income taxes for the years ended June
     30, 2000 and 1999.

     The federal net operating loss  carryforwards of approximately  $19,070,000
     expires in various  years  through  2020. In addition the Company has state
     carryforwards of approximately $3,175,000.

     The  Company  has had  numerous  transactions  in its  common  stock.  Such
     transactions may have resulted in a change in the Company's  ownership,  as
     defined in the Internal Revenue Code Section 382. Such change may result in
     an annual  limitation on the amount of the Company's  taxable  income which
     may be offset with its net operating  loss  carryforwards.  The Company has
     not  evaluated the impact of Section 382, if any, on its ability to utilize
     its net operating loss carryforwards in future years.

                                      F-27
<PAGE>
                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED JUNE 30, 2000 AND 1999


Note 15: Segment of Business Reporting

     The  operations  of the  Company are divided  into the  following  business
     segments for financial reporting purposes.

     *    Lithographically  printed  stereoscopic prints commonly referred to as
          three-dimensional prints and lithographically printed animation.

     *    Hardware  and  software  information  and audio  playback  systems and
          method products and programs.

     There are no  intersegment or foreign sales.  Three  customers  account for
     approximately  82% of the lithographic  sales and two customers account for
     approximately  98% of the hardware and  software  information  and playback
     systems.

     Financial information by business segments is as follows:

                                                      Hardware
                                                        and
                                      Lithographic    Software    Consolidated
                                      ------------    --------    ------------
     Net customer sales                $  983,731     $ 25,131     $ 1,008,862
     Interest income                       14,182       -               14,182
     Interest expense                     173,878            -         173,878
     Operating loss                      (705,603)    (139,132)       (844,735)
     Segment assets                     1,051,323       60,893       1,112,216
     Depreciation and amortization         42,097          202          42,299

Note 16: Subsequent Events

     On September 5, 2000,  the Company  entered into a Letter of Agreement with
     an  investment  banking firm to establish a $20 million  equity line.  This
     agreement  is  subject  to the  Company  filing an  effective  registration
     statement and will end 36 months from the effective  registration date. The
     Company shall have the right at its sole  discretion to put common stock to
     the  investment  banking firm,  subject to certain amount  limitations  and
     conditions based upon trading volume of the Company.

                                      F-28
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary
Phoenix, Arizona

We have audited, in accordance with generally accepted auditing  standards,  the
consolidated  financial  statements  of  DIMENSIONAL  VISIONS  INCORPORATED  AND
SUBSIDIARY  included  in this  annual  report on Form 10-KSB and have issued our
report  thereon dated  September 1, 2000.  Our audit was made for the purpose of
forming an opinion on the basic  consolidated  financial  statements  taken as a
whole. The schedules listed in the preceding index are the responsibility of the
Company's  management  and are  presented  for  purposes of  complying  with the
Securities  and  Exchange  Commission's  rules  and  are not  part of the  basic
consolidated  financial  statements.  These schedules have been subjected to the
auditing  procedures  applied in the audit of the basic  consolidated  financial
statements  and, in our  opinion,  fairly  state in all  material  respects  the
consolidated  financial  data  required to be set forth in relation to the basic
consolidated financial statements taken as a whole.

/s/ Kopple & Gottlieb, LLP

KOPPLE & GOTTLIEB, LLP

Jenkintown, Pennsylvania
September 1, 2000

                                      F-29
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Dimensional Visions Incorporated and Subsidiary
Phoenix, Arizona

We have audited, in accordance with generally accepted auditing  standards,  the
consolidated  financial  statements  of  DIMENSIONAL  VISIONS  INCORPORATED  AND
SUBSIDIARY  included  in this  annual  report on Form 10-KSB and have issued our
report  thereon  dated  October 7, 1999.  Our audit was made for the  purpose of
forming an opinion on the basic  consolidated  financial  statements  taken as a
whole. The schedules listed in the preceding index are the responsibility of the
Company's  management  and are  presented  for  purposes of  complying  with the
Securities  and  Exchange  Commission's  rules  and  are not  part of the  basic
consolidated  financial  statements.  These schedules have been subjected to the
auditing  procedures  applied in the audit of the basic  consolidated  financial
statements  and, in our  opinion,  fairly  state in all  material  respects  the
consolidated  financial  data  required to be set forth in relation to the basic
consolidated financial statements taken as a whole.

                                        GITOMER & BERENHOLZ, P.C.

Huntingdon Valley, Pennsylvania
October 7, 1999

                                      F-30
<PAGE>
                                                                     Schedule IV

                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
                     SCHEDULE IV - PROPERTY AND EQUIPMENT(1)

<TABLE>
<CAPTION>
                                                                        Other
                           Balance at                                  Changes -
                           Beginning     Additions                       Add          Balance at
  Classification           of Period      at Cost    Retirements(2)   (Deduct)(3)   End of Period
  --------------           ---------      -------    --------------   -----------   -------------
<S>                         <C>           <C>          <C>             <C>             <C>
Year Ended
June 30, 2000
  Equipment                 $401,678      $ 87,493     $ 10,999        $   1200        $479,372
  Furniture and fixtures      50,162            --        2,016           (1200)         46,944
                            --------      --------     --------        --------        --------
                            $394,561      $ 57,279     $     --        $     --        $526,316
                            ========      ========     ========        ========        ========
Year Ended
June 30, 1999
  Equipment                 $370,344      $ 31,334     $     --        $     --        $401,678
  Furniture and fixtures      24,217        25,945           --              --          50,162
                            --------      --------     --------        --------        --------
                            $398,561      $ 57,279     $     --        $     --        $451,840
                            ========      ========     ========        ========        ========
</TABLE>
----------
(1)  Depreciation and amortization is computed by the straight-line  method over
     the estimated useful lives of the related assets as follows:

     Equipment                                 5-7 years
     Furniture and fixtures                      5 years

(2)  Represents equipment and leasehold improvements abandoned or sold

(3)  Represents a reclassification

                                      F-31
<PAGE>
                                                                      Schedule V

                 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
             SCHEDULE V - ACCUMULATED DEPRECIATION AND AMORTIZATION
                            OF PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                         Other
                            Balance at                                  Changes -
                            Beginning     Additions                       Add          Balance at
  Classification            of Period       at Cost    Retirements(1)   (Deduct)     End of Period
  --------------            ---------       -------    --------------   --------     -------------
<S>                          <C>           <C>          <C>             <C>             <C>
Year Ended
June 30, 2000
  Equipment                  $251,060      $ 36,972     $ 10,999        $     --        $277,033
  Furniture and fixtures       28,621         5,326        2,017              --          31,930
                             --------      --------     --------        --------        --------
                             $279,681      $ 42,298     $ 13,016        $     --        $308,963
                             ========      ========     ========        ========        ========
Year Ended
June 30, 1999
  Equipment                  $209,819      $ 41,241     $     --        $     --        $251,060
  Furniture and fixtures       23,690         4,931           --              --          28,621
                             --------      --------     --------        --------        --------
                             $233,509      $ 46,172     $     --        $     --        $279,681
                             ========      ========     ========        ========        ========
</TABLE>
----------
(1)  Represents  accumulated  depreciation  and  amortization  written  off as a
     result of abandonment or sale

                                      F-32