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 December 31, 1999


                                       OR

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

                        For the Transition Period From to

                          Commission File No. 33-20432

                       MAGNITUDE INFORMATION SYSTEMS, INC.
              Exact Name of Registrant as Specified in its Charter

                            DELAWARE             75-2228828
                   State or Other Jurisdiction of IRS Employer
               Incorporation or Organization Identification Number

                  50 Tannery Road, Branchburg, New Jersey 08876
                 Address of Principal Executive Offices Zip Code

                                 (908) 534-6400
                Registrants Telephone Number, Including Area Code








           Securities Registered Pursuant to Section 12(b) of the Act:
                                      NONE

          Title of Each Class Name of Each Exchange on Which Registered
                    NONE                             NONE

                 Securities Registered pursuant to Section 12(g)
                              of the Exchange Act:
                                      NONE




<PAGE>


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

                                    Yes X No

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

          The  Registrant's  revenues for the fiscal year ended
December 31, 1999, were $263,553.

Common stock, par value $.0001 per share ("Common Stock"), was the only class of
voting  stock of the  Registrant  outstanding  on March 28,  2000.  Based on the
closing  price of the  Common  Stock  on the OTC  Electronic  Bulletin  Board as
reported  on  March  28,  2000,  ($2.44),  the  aggregate  market  value  of the
approximately  10,460,000  shares of the Common Stock held by persons other than
officers,  directors  and persons known to the  Registrant to be the  beneficial
owners (as the term is defined  under the rules of the  Securities  and Exchange
Commission) of more than five percent of the Common Stock on March 28, 2000, was
approximately $25,500,000.  By the foregoing statements, the Registrant does not
intend to imply that any of the officers,  directors,  or beneficial  owners are
affiliates of the  registrant or that the  aggregate  market value,  as computed
pursuant  to rules of the  Securities  and  Exchange  Commission,  is in any way
indicative  of the amount  which  could be  obtained  for such  shares of Common
Stock.

          As of March 28, 2000,  14,391,980  shares of Common  Stock,
$.0001 par value, were outstanding.

             DOCUMENTS INCORPORATED BY REFERENCE: SEE EXHIBIT INDEX

                                       2



<PAGE>



                       MAGNITUDE INFORMATION SYSTEMS, INC.

                                    CONTENTS


PART I.                                                                  Page
                                                                         ----

      Item  1.    Business...............................................  4

      Item  2.    Properties ............................................ 11

      Item  3.    Legal Proceedings ..................................... 11

      Item  4.    Submission of Matters to a Vote of Security Holders ... 11

PART II.

      Item  5.    Market for Registrant's Common Equity and
                  Related Shareholder Matters ............................12

      Item  6.    Management's' Discussion and Analysis of
                  Financial Condition and Results of Operations ..........14

      Item  7.    Financial Statements and Supplementary Data ............18

      Item  8.    Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure      ........... 18

PART III.

      Item  9.    Directors and Executive Officers of the Registrant .... 19

      Item 10.    Executive Compensation ................................ 22

      Item 11.    Security Ownership of Certain Beneficial Owners
                  and Management ........................................ 24

      Item 12.    Certain Relationships and Related Transactions ........ 25

      Item 13.    Exhibits and Reports on Form 8-K ...................... 26


                  Signatures ............................................ 27

                  Exhibit Index ......................................... 28

                                       3

<PAGE>



                                     PART I

ITEM     1:       BUSINESS

Background

         Magnitude Information Systems, Inc. (the "Company") was incorporated as
a Delaware  corporation  on April 19, 1988 under the name  Fortunistics  Inc. On
March 4, 1993, the Company  changed its name to Whitestone  Industries,  Inc. On
July 14, 1997, the Company changed its name to Proformix  Systems,  Inc., and on
November  18,  1998,  the  Company  changed  its name to  Magnitude  Information
Systems, Inc.

     On June 24,  1997,  the  Company,  extended a stock  exchange  offer to the
shareholders  of Proformix,  Inc., a Delaware  corporation  and  manufacturer of
ergonomic keyboarding systems. Proformix, Inc. in November 1998 changed its name
to  Magnitude,  Inc. and is now referred to as  Magnitude,  Inc.. At the time of
this submission,  holders of 98.5% of Magnitude, Inc. common stock have tendered
their  shares.  The  business  combination  which  took  the  form of a  reverse
acquisition has been accounted for as a purchase.  As a result,  the Company and
Magnitude,  Inc. remain as two separate legal entities whereby  Magnitude,  Inc.
operates as a subsidiary of Magnitude Information Systems,  Inc.. The operations
of the newly combined entity are currently comprised solely of the operations of
Magnitude, Inc.

         On February 2, 1998, the Company  entered into an Agreement and Plan of
Merger with Rolina Corporation,  a privately held New Jersey software developing
firm,  and on April 30,  1998,  into an Asset  Purchase  Agreement  with  Vanity
Software Publishing Co., a Canadian developer of specialized  software,  whereby
the  Company,  in return for  payments in form of cash and equity,  acquired the
rights to certain  software  products  and related  assets,  with such  software
products subsequently forming the basis for the further development,  during the
year, of the Company's proprietary ErgoManager(TM) software system.

         On November  18,  1998,  the Company  and its wholly  owned  subsidiary
Magnitude,  Inc.  entered into an Asset Purchase  Agreement and several  related
agreements  with  1320236  Ontario  Inc.  ("OS"),  a  publicly  traded  Canadian
designer,  manufacturer  and  distributor of office  furniture  based in Holland
Landing,  Ontario,  Canada,  pursuant  to which OS  acquired  Magnitude,  Inc.'s
hardware  product line comprised of the Company's  ergonomic  keyboard  platform
products and  accessories,  all related  inventory  and  production  tooling and
warehousing assets, and all intellectual property rights including the Proformix
name,  against a cash  consideration and an ongoing contingent stream of royalty
payments on OS' sales of the Proformix hardware products.

         The  Company is  currently  subject to the  reporting  requirements  of
Section  15(d) of the  Securities  Exchange  Act of 1934.  The  Company  has the
authority to issue an aggregate of Thirty  Million  (30,000,000)  Common Shares,
par value $.0001,  and Three Million  (3,000,000)  Preferred  Shares,  par value
$.01,  of which at December 31, 1999,  Two  Thousand  Five Hundred  (2,500) were
designated  as  Cumulative  Preferred  Shares,  par value $.001 . On January 31,
2000,  the  Company  filed  amendments  to  its  Certificate  of  Incorporation,
designating from its "blank check" preferred stock pool 200,000 shares as Series
A Senior Convertible Preferred Stock, par value $0.001; 350,000 shares as Series
B Senior  Convertible  Preferred Stock, par value $0.001;  and 120,000 shares as
Series C Senior Convertible Preferred Stock, par value $0.001.

         As of December  31,  1999,  there were  outstanding  10,340,261  Common
Shares and 10 Cumulative Preferred Shares.


                                       4
<PAGE>



Narrative Description of Business

       Until November 18, 1998, when the Company sold its hardware  product line
comprised  of  Magnitude,   Inc.'s  ergonomic  keyboard  platform  products  and
accessories, its business was primarily centered around the design, manufacture,
and marketing of accessory products for the computerized workplace. In parallel,
and  beginning  with the  February  1998  acquisition  by the  Company of Rolina
Corporation,  an early stage software  business which had developed an ergonomic
software  product that was being marketed under the name  "ErgoSentry",  and the
subsequent  acquisition in May 1998 of substantially all of the assets of Vanity
Software Publishing Corporation, a Canadian software firm, which also included a
certain ergonomic software package known as "ErgoBreak",  the Company engaged in
the  development  of a unique  suite of software  packages  designed to increase
productivity and prevent repetitive stress injury in the  computer-related  work
environment  which include the before  mentioned  "ErgoSentry"  and  "ErgoBreak"
products.  These efforts  resulted,  in November  1998, in the completion of the
initial  release  of  the  proprietary   ErgoManager(TM)  software  system.  The
Company's  business is now focused  exclusively on the further  development  and
promotion  of these and other  software  products.  The  Company has applied for
several  patents  for its  products,  and has  recently  received  a  Notice  of
Allowance from the U.S. Patent and Trademark Office on its application  relative
to certain core inventions within its  ErgoManager(TM)  system.  The Company has
not yet  realized  material  revenues  from  licensing  its  software.  With new
products  targeted at  relatively  new markets  the  Company  currently  must be
considered an enterprise in transition.

         As  the   utilization   of  computers  in  the  office  has   increased
significantly in the last decade, so has the rate of health problems believed to
be related to the use of computers.  Computer  ergonomics  focuses on optimizing
the design of technology involved in the utilization of computers in the office,
and also attempts to affect the manner in which people  interact with computers,
so as to minimize the associated health risks. A successful  technology delivery
system  positively  impacts the cost of doing business by improving the comfort,
productivity,  job  satisfaction and safety of the computer user, while reducing
the costs of absenteeism and work related disability.

         Repetitive  stress injury (RSI) is a classification  of diseases caused
by the excessive use of joints. It is a sub-classification  of Cumulative Trauma
Disorders  (CTDs).  One common form of RSI is Carpal Tunnel Syndrome (CTS) which
can be caused by excessive typing, among other activities, and can be aggravated
by deficient - in the ergonomic sense - equipment and inappropriate work habits.
The carpal  tunnel is a channel in the wrist where  tendons and the median nerve
connect the arm to the hand.  Through  excessive use, the tendons become swollen
and pinch the nerve. RSI accounts for a large portion of work-related illnesses,
and the  incidence of RSI is expected to grow as the number of people  operating
keyboards  increases.  The  impact of RSI is  measured  not only in the pain and
suffering of its victims, but also in time lost from work and medical costs.

         The  Company's  proprietary  software  products  are  designed  to help
businesses deal with potentially  preventable  repetitive  stress  injuries,  by
real-time monitoring of keyboarding  activities,  pro-active dialog with at-risk
employees,  and strategic profiling and management of computer use throughout an
organization.

         During 1996, the issues of repetitive stress injuries and the potential
of liability to employers  from the effects of carpal tunnel  syndrome and other
RSI's  on  employees  were  forcibly  brought  to  the  forefront  of  corporate
consciousness  through widely publicized suits involving a major computer maker.
The US Bureau of Labor  Statistics  reported  that  already in 1995,  there were
approximately 70,000 cases of carpal tunnel syndrome and associated  tendonitis,
and that 25% of all injuries that result in lost work time are due to repetitive


                                       5
<PAGE>


stress  problems.  They currently cost employers an estimated $20 billion a year
in workers'  compensation claims. The federal government estimates an additional
$80  billion  is  lost  in  related  costs  such  as  absenteeism   and  reduced
productivity.  Increased  awareness of the health risks and associated costs led
the State of California to pass OSHA Title 8 which directs qualifying  employers
to establish and implement a program  designed to minimize  RSI's.  Such program
shall  include  work-site  evaluation,  control of  exposures  which have caused
RSI's, and training of employees.  The Company's  proprietary  software products
deliver a  comprehensive  compliance  tool.  In a similar  pursuit,  the Clinton
Administration,  in January 2000,  proposed that on a federal level,  preventive
guidelines be established, and the Occupational Safety and Health Administration
plans to issue  pertinent  regulations  this year.  The RSI issues in the United
States are mirrored in the rest of the  developed  world.  The Company  believes
that the  growing  recognition  of these  trends  will  give  rise to a  rapidly
expanding market for the Company's products.


The Industry

         The Company  operates in only one business  segment:  the  development,
marketing,  and licensing of risk aversion and productivity enhancement software
products for the computerized  workplace  environment.  More  specifically,  the
Company  licenses highly  sophisticated  and proprietary  software that provides
computer based training, work pacing and monitoring tools, as well as a computer
workstation assessment tool.

         Potential  customers for the Company's  products are  businesses of all
sizes,  as well as  organizations  and government  departments and agencies that
employ  many staff in  computer-related  functions.  The  software  industry  in
general is comprised of a remarkable  variety of  providers,  ranging from small
boutique-type  designers to large  international  corporations.  The industry is
characterized by great dynamics, patterns of rapid growth and well-known success
stories,  but also by a high degree of volatility and risk. As such, the Company
with its recent  transition  from the more stable  environment  of a supplier of
ergonomic (hardware)  accessories,  to a software house addressing a specialized
market,  has entered new territory.  Nevertheless,  its chances for success,  in
management's opinion, are greatly enhanced by the timeliness of the introduction
of its product into an increasingly receptive market, as described above.

         The  Company  operates  primarily  in the  United  States  of  America,
however,  has introduced a Portuguese  language version of its software products
for the Brazilian market, and is preparing other language versions.  The Company
has not yet derived any  material  revenues  from the  licensing  or sale of its
software products, either domestically or in foreign markets.


Products,  Patents, Trademarks

         The Company's  current primary product is a suite of seven  proprietary
software modules marketed under the name  ErgoManager(TM)  which are designed to
help individual computer users and businesses deal with potentially  preventable
repetitive  stress  injury  (RSI).  The seven  software  modules  can be applied
individually  or together in a  comprehensive  ergonomic and early  intervention
program  that seeks to modify a user's  behavior by  monitoring  computer  usage
patterns  over  time and  warning  the user when to break a  dangerous  trend in
repetitive  usage of an input device,  such as a keyboard or mouse.  The product
was developed to train people working on computers, monitor computer-use related
activities and evaluate a user's risk exposure and propensity  towards injury or
loss of effectiveness in connection with his/her day-to-day work. Moreover,  the
package  enables  a  company  to not only  address  the  issue of  health  risks
involving  employees  and  to  minimize  resulting  potential  liabilities,  but
delivers a powerful tool to increase overall productivity.

                                       6

<PAGE>


         The system is highly customizable for management,  staff and employees.
All components  operate on any PC or workstation  running the Microsoft  Windows
operating  system.  The  ErgoManager(TM)  suite employs the  International  RULA
(Rapid Upper Limb Assessment) standard for compliance with California OSHA Title
8. The seven modules are described as follows:

ErgoSure : A postural  risk-assessment  tool that  records  how an  employee  is
working; it determines injury potential and suggests  improvements.  It also can
be used to evaluate workstation alternatives prior to purchase.

ErgoSentry(TM) : Employing  patent-pending  algorithms that measure rest against
work in real time,  the non intrusive  program  informs users when to break from
high-risk trends (thresholds  definable by the user or corporate safety officer)
when  keyboarding or using a mouse.  ErgoSentry also includes an "ErgoPak" video
or  slides  that  depict  correct  workstation  setup,  posture  and  repetitive
stress-reducing exercises.

Surveyor(TM)   :  An   electronic   surveyor   used  by   management  to  gather
macro-information  about employee  populations and to gain a clear understanding
of equipment usage, discomfort and comfort patterns,  workstation configurations
and employee habits.

UserNotes(TM)  : An easy,  effective  means for  employees  to report  workplace
discomfort so staff can address certain issues  earlier,  at lower cost and with
greater likelihood of success. UserNotes encourages a proactive approach.

Guardian : Captures the  frequency of mouse clicks and  activation of individual
keys,  over time. It also can be used in a review  process to assess  attributes
such  as  ease-of-use  among  competing  applications.  Guardian  also is a good
training tool. By measuring  before-and-after  results,  Guardian can be used to
determine  the  type  of  training   program  needed,   measure  each  program's
effectiveness and highlight needed improvements.

ErgoQuiz: An electronic testing system and awareness-building tool that measures
employees' understanding of ergonomic principles.

ErgoManager(TM)  Analyzer:  A comprehensive  report writer and analysis tool for
manipulating,  interpreting  and evaluating the data collected in the ErgoSentry
module - on the workstation-, department-, and company level.

         In  addition  to the  trademarks  shown  above  which  are owned by the
Company,  Magnitude  has applied for other  product  designators  to be afforded
trademark  protection,  and has filed US Patent  Application  for certain design
principles underlying several of its proprietary software products,  including a
patent  application  for its newest  product,  a new class of usage tracking and
data collection software that is directed towards e-commerce and a wide range of
other Internet related  applications.  There can be no assurance,  however, that
such patents will be granted or, if granted,  that a third party will not design
products which perform the same or similar functions as the Company's  products,
using technology other than that covered by the Company's patents.

                                       7

<PAGE>

Patents and New Products

ErgoSentry - Patent Allowed:

         A Notice of  Allowance  was received by the company on January 3, 2000.
The patent will cover various innovations including a proven approach that helps
computer users manage their activity to improve productivity and reduce the risk
of repetitive motion injuries

ErgoPal Introduced, Patent Pending:

         New  patent-pending  ErgoPal  software -- a work pacing tool that helps
users mitigate  health risks and improve their  productivity  by gently alerting
them to increases in stress and fatigue which are occurring  before they realize
it.

eFuel Announced, Patent Pending:

         New patent-pending  technology powering consumable software,  web-sites
and deliverable content. eFuel can be used as an e-Commerce currency provided in
exchange for user  information  on their computer usage both online and offline.
Users build up rewards to apply towards product and service purchases.

SmartErgonomics.Com Initiative:

         A  new  initiative  by  the  company  providing  a  new  and  complete,
community-based  ergonomics  web-site  portal for parents,  individuals and EH&S
professionals.  The advanced  underlying eFuel powered portal technology will be
resold to others.


Business Strategy

         The most important prospective customers for the Company's products are
medium and large  companies,  organizations,  and  governmental  departments and
agencies  that  have  a  relatively  large  staff  working  in  computer-related
functions.  These  entities not only are more  cognizant of the health risks and
negative effect on productivity associated with many of the traditional tools of
the  computerized  workplace  and  therefore  tend to be more  receptive  to new
remedial solutions and alternatives based on the science of Ergonomics, but also
have a significant  exposure in terms of legal  liabilities  if they fail to act
addressing  these potential risks. On an on-going basis, the increasing costs of
Work Comp  insurance  creates a growing  incentive  to deal with the  underlying
causes.

         With  its new  proprietary  ergonomic  software  the  Company  offers a
comprehensive  and  effective  tool for  corporate  clients to address the three
major  issues  involved:   (a)  employee  wellness,  (b)  cost  containment  and
productivity  enhancement,  and (c) potential legal  liabilities.  While certain
portions of the ErgoManager(TM)  software suite have been previously marketed as
individual  modules,  the release to the market, in November 1998, of an overall
integrated  solution in form of the  ErgoManager(TM)  system constituted a novel
approach.

         Since that time,  the product has been  installed by a rapidly  growing
number  of  corporate  and  institutional  clients.  Typically,  in  view of the
new-ness of product and market,  such client initially purchases a license for a
"pilot version" of the software,  functionally complete but limited to a smaller
number of users.  After undergoing a process of  familiarization  and evaluation
the  client is  expected  to upgrade to the  intended  ultimate  number of users

                                       8

<PAGE>

which,  by  definition,  should  encompass  all  personnel  exposed to the above
described  risks.  Many tests and evaluations by third parties have confirmed to
the Company's satisfaction that its product is mature, stable, and effective. It
is with a high degree of confidence, therefore, that the Company expects many of
the  ongoing  trial  installations  to lead to  larger  enterprise  orders  and,
thereby,  to the targeted revenue stream.  The key to economic success therefore
lies in a comprehensive marketing approach that carries the Company's message to
the largest  possible  number of  prospective  clients.  Since its own financial
resources  are  limited,  the Company  embarked on a strategy to seek  marketing
partnerships with entities and individuals in the risk management  industry.  An
important  milestone  was reached when the Company,  in the fall of 1998 entered
into a joint venture agreement with AON Ergonomic  Services,  a division of AON,
one of the largest  insurance  services  companies  in the world,  to market the
ErgoManager(TM) system. This agreement was renewed and expanded in July 1999. In
January 2000,  Anderson Consulting LLP and the Company entered into an agreement
whereby Anderson will include the Company's products in their prestigious "Ideas
Exchange" showcase.  This agreement is of special  significance  because it will
introduce the Company to a potentially large audience of key corporate clients.

         The  Company  intends  to  continue   developing   strategic  marketing
relationships  with leading  business  consultants,  to broaden its distribution
channels to include tiered marketing arrangements,  and to strengthen its direct
sales force and support  organization,  thereby focusing on a marketing approach
which  emphasizes  the  advantages  that  accrue to a  business  from the unique
combination of risk management and  productivity  enhancement  tools provided by
ErgoManager(TM).


Research and Development

         Since early 1998 the Company has invested considerable resources in the
further development of the overall ErgoManager(TM) system and the integration of
certain  software  assets  acquired  pursuant  to  the  agreements  with  Rolina
Corporation  and  Vanity  Software   Publishing   Corporation   (see  "Narrative
Description of Business"),  and in further  enhancements  to the products.  Also
during  this  time,  a  complete  set of new  and  necessary  documentation  and
marketing  collateral was created. In late summer, the first official version of
ErgoManager(TM), Version 1.78, was released, followed in October 1998 by Version
2.12., and in April 1999 by Version 3.05.
The Company has scheduled Version 4.0 for release in April this year.

         The Company has expensed all expenditures related to the above efforts.
Such  expenses  totaled  $162,600  for the year ended  December  31,  1999,  and
$130,460 for the year ended December 31, 1998.

Competition

         The market  addressed by the Company's  software  products is presently
served by a number of  smaller  software  companies,  none of which  occupies  a
dominant  position.  These  competitors,  however,  typically  only  target task
complexes  that are  addressed by  individual  component  parts of the Company's
products,  such as the  ErgoSentry(TM)  module,  without  offering a  comparable
breadth of  function  and  integration  in such areas as  work-site  evaluation,
employee training and work pacing.

         The Company is not aware of any products that directly compete with its
integrated  software  product  suite that is marketed  by the Company  under the
trade name  ErgoManager(TM).  While the Company believes that it currently has a
strategic competitive advantage in ergonomic software, especially with regard to
its patent-pending  algorithms,  there can be no assurance that competitors will
not attempt to copy the Company's  products or develop and successfully  license
similar products, to the Company's detriment.

                                       9

<PAGE>

Seasonality and Dependency

         The  industry  segment  in  which  the  Company  does  business  is not
seasonal.  The Company's  software  related  revenues  until now have  consisted
primarily of smaller  orders for pilot  projects and field tests.  The Company's
future success is dependent upon its ability to follow up on such initial orders
with  enterprise-wide  contracts where corporate clients introduce the Company's
software products across the entire spectrum of computer  workplaces  throughout
their company or certain  divisions.  There can be no assurance that the Company
will succeed in doing so, or if it does succeed, that its business will generate
enough revenues during the coming periods,  in a timely manner and sufficient in
scope, to finance and support the Company's planned future growth as expected by
management.


License Agreements

         On  December  1, 1997,  the Company  entered  into a two year  Software
Distribution  and Option  Agreement  with  Cornell  Ergonomics  Inc., a Delaware
corporation,  pursuant  to  which  it is  licensed  on an  exclusive  basis,  to
distribute and sub-license a certain  software product known as "ErgoSure" which
the Company currently  markets in conjunction with its own proprietary  software
products.
On January 15,  2000,  the Company  acquired  full title and  ownership  to that
product.


Employees

         As of December 31, 1999, the Company employed 13 persons,  of whom four
were  primarily  engaged  in  research  and  development  and  software  support
activities,  five were  primarily  engaged in sales and  marketing,  and four in
general  administrative  and clerical  functions.  The Company has no collective
bargaining agreements with its employees.



                                       10



<PAGE>



ITEM 2:  PROPERTIES

         The Company leases  approximately  4,000 square feet of office space at
50 Tannery Road,  Branchburg,  New Jersey,  where it maintains its executive and
administrative  headquarters and product development and support operations. The
current lease  agreement ends on December 31, 2001, and calls for monthly rental
payments of $3,250 plus certain expenses. On March 15, 2000, the Company entered
a five year lease for  approximately  6,000  square feet of office  space at 401
Route 24, Chester,  New Jersey, to which address it will relocate its operations
during April 2000.  This lease  agreement  calls for monthly rental  payments of
$6,500 with nominal increases after years No. 2, 3, and 4.



ITEM 3:  LEGAL PROCEEDINGS

         The Company is not a party in any legal proceedings.



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

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













                                       11

<PAGE>



                                     PART II

ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         SHAREHOLDER MATTERS

         The Company's Common Stock currently trades on the Electronic  Bulletin
Board of the OTC market,  under the symbol MAGY. The following table sets forth,
for the calendar  quarters  indicated,  and for the last two years, the high and
low sales prices for the Company's Common Stock:


                                                       OTC-BB
                                            High/Ask            Low/Bid
1998
         First Quarter ....................  $5 7/8              $4 3/8
         Second Quarter ...................   5 7/8               3 3/4
         Third Quarter ....................   4 3/4               1 1/4
         Fourth Quarter ...................   2 5/8                 3/4

1999
         First Quarter.....................  $ 1.37               $0.41
         Second Quarter....................    0.81                0.53
         Third Quarter ....................    1.09                0.55
         Fourth Quarter ...................    0.76                0.42


         As of March 28, 2000,  there were  approximately  225  shareholders  of
record for the  Company's  Common Stock.  The number of record  holders does not
include shareholders whose securities are held in street name.

         The Company has not declared or paid, nor has it any present  intention
to pay,  cash  dividends  on its Common  Stock.  The Company is  obliged,  under
certain  circumstances,  to pay cash  dividends  on its  outstanding  Cumulative
Preferred Stock.

Recent Issues of  Unregistered Securities

         During the  fourth  quarter of 1999 the  Company  issued the  following
unregistered securities:

         (i)  1,250,332  shares  of  Common  Stock to seven  individual  foreign
investors pursuant to private placement  subscriptions under Section 4(2) of the
Securities  Act,  which  resulted  in the  receipt by the Company of $625,000 in
cash;

         (ii) 60,000  shares of Common Stock to an investor  who had  previously
subscribed for certain  convertible debt, pursuant to the terms of the pertinent
subscription  agreement,  issued in  reliance  upon  exemptions  provided  under
Section 4(2) of the Securities Act.

         During  the first  quarter  of 2000 and  through  March 28,  2000,  the
Company issued the following unregistered securities:

                                       12

<PAGE>


         (i) 118,000 shares of Common Stock in connection  with the  acquisition
by the Company of certain software products,  issued in reliance upon exemptions
provided under Section 4(2) of the Securities  Act.(see "License  Agreements" in
Part I, Item 1);


         (ii) 77,976  shares of Common Stock to three  outside  consultants  and
suppliers for services rendered;

         (iii) 14,445  shares of Common Stock to a director and  shareholder  of
the Company pursuant to a 1997 transaction approved by the Board of Directors of
the Company;

         (iv)  16,854  shares of Common  Stock to an employee in lieu of salary,
for services rendered;

         (v) 2,120,000  shares of Common Stock  pursuant to the conversion of an
aggregate  $1,060,000 in convertible  promissory notes,  issued in reliance upon
exemptions provided under Section 4(2) of the Securities Act;

         (vi) 160,000 shares of Common Stock to seven private  investors who had
previously  subscribed for certain convertible debt, such shares issued pursuant
to the terms of the  pertinent  subscription  agreement,  and in  reliance  upon
exemptions provided under Section 4(2) of the Securities Act;

         (vii)  400,000  shares  of  Common  Stock to two  individual  investors
pursuant  to  private  placement  subscriptions  under  Section  4  (2)  of  the
Securities  Act,  which  resulted  in the  receipt by the Company of $200,000 in
cash;

          (viii)  500,000  shares of Common  Stock to three  individual  foreign
investors pursuant to private placement subscriptions under Section 4 (2) of the
Securities  Act,  which  resulted  in the  receipt by the Company of $250,000 in
cash;

         (ix) 194,440 shares of Series B Senior  Convertible  Preferred Stock to
five individual  foreign investors  pursuant to private placement  subscriptions
under Section 4 (2) of the Securities  Act, which resulted in the receipt by the
Company of $1,750,000 in cash, whereby such shares, among other things, have the
following rights and privileges:  (i) 7% annual preferential  dividend,  payable
semi-annually,  (ii)  conversion  at the  holders'  option into shares of Common
Stock at a conversion rate equivalent to $0.90 per share,  and (iii) callable by
the Company  under  certain  terms and  conditions  (see  "Exhibit 4.2" attached
hereto);

         (x) 100,000 shares of Series C Senior  Convertible  Preferred  Stock to
the  former  chairman  of the  Company  pursuant  to the terms of a  Resignation
Agreement  entered  into between the Company and this  individual,  whereby such
shares,  among other things,  have the following  rights and privileges:  (i) 7%
annual preferential  dividend,  payable monthly, (ii) conversion at the holders'
option into 1,000,000 shares of Common,  and (iii) callable by the Company under
certain terms and conditions (see "Exhibits 4.3 and 10.2" attached hereto).


                                       13

<PAGE>



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

         The selected financial  information  presented below under the captions
"Statement of Operations"  and "Balance  Sheet" for the years ended December 31,
1999 and 1998 is derived from the financial statements of the Company and should
be read in conjunction with the financial statements and notes thereto.

         The  financial  data  are  those of  Magnitude  Information  Systems,
Inc.including  the  operations of  Magnitude,  Inc. and its wholly owned
subsidiary Corporate Ergonomic Solutions, Inc.. All inter-company accounts and
transactions have been eliminated in consolidation.

SELECTED FINANCIAL DATA

Balance Sheet                                             December 31,
                                                   1999               1998
                                                 -----------   -----------
         Total assets .......................$   2,220,223   $   2,098,207
         Current liabilities ................    4,465,413       2,718,240
         Long-term debt .....................       35,755       1,441,839
         Working capital (deficit) ..........   (3,541,257)     (2,145,611)
         Shareholders' Equity (deficit) .....$  (2,280,945)  $  (2,061,872)

Statement of Operations                      For The Year Ended December 31,
                                                1999               1998
                                            -------------      -----------
         Hardware revenues ...............   $     2,850     $   2,853,969
         Software revenues ...............       260,703            72,486
         Total revenues ..................   $   263,553     $   2,926,455
         Operating loss ..................    (2,642,989)       (2,588,762
         Loss before extraordinary items .    (2,882,322)       (3,130,621
         Net loss ........................    (2,391,948)       (2,530,909)

         Net loss per common share ........  $     (0.28)    $      (0.58)
         Number of shares used in computing
         per share data ...................     8,486,443        4,324,292

Summary

         Fiscal  Year  1999  was a  pivotal  year of  transition  - the  Company
focussed  its  efforts  and  resources  on several  key areas  which  management
considers  crucial with respect to the  strategic  positioning  of Magnitude for
future  growth:  (i) the further  expansion and  completion of its core software
product, the ErgoManager(TM)  software system, (ii) the development of strategic
partnerships  with  several  potential  resellers  and  influencers,  (iii)  the
introduction of key prospective clients to the ErgoManager(TM) product, (iv) the
urgently required restructuring of the Company's balance sheet and addition of a
substantial  amount  of  new  equity  capital  to  finance  ongoing  and  future
development and marketing  efforts,  and (v) the  conceptualization  and initial
design of new software  products  related to Internet and e-Commerce usage - two
important  growth markets.  Management  believes that it has succeeded in making
significant progress in all five areas.

                                       14

<PAGE>


     The ErgoManager(TM) System:

     During the year,  Version  3.05 was  released  and  Version  4.0, to be
released in April this year, was nearing completion.  Numerous important feature
enhancements  and a new report  writer  module were  finalized.  The system as a
whole has been  extensively  field tested during several dozen pilot programs at
prospective  customers' sites, and several customers have substantially expanded
their usage of the software.

     Key Strategic Partnerships:

     During the year,  the Company  negotiated  several  joint  venture-,  joint
marketing-,  and  distribution  agreements  with,  among  others,  AON Ergonomic
Services (a division of insurance  industry leader AON Corporation),  The Speech
Centre Training Group (U.K.) , CapitalReps  (organization  specializing in sales
of computer  products  to the federal  government).  In January  2000,  Anderson
Consulting LLP and the Company entered into an agreement  whereby  Anderson will
include the Company's products in their prestigious  "Ideas Exchange"  showcase.
This agreement is of special  significance because it will introduce the Company
to a potentially large audience of key corporate clients.

    These partners specialize in or have established  business  connections
to companies in certain industry segments which are deemed most receptive to the
Company's  products,  or cover certain  geographical  areas of importance to the
Company. As the legislative  environment changes in favor of a pro-active stance
by industry,  whether on a voluntary or on a  compliance-enforced  basis,  these
relationships  will gain critical  momentum.  This very significant  trend which
started several years ago with pioneering ergonomic  legislation in the State of
California,  has accelerated with the recently proposed Federal OSHA initiative.
With respect to the  Government  area, a GSA contract  award  completed in March
2000 is  expected to  facilitate  entry into a market  segment  that by its very
nature should be receptive to the Company's products.

    Key Prospective Clients:

    At this time the Company focuses on introducing its ergonomic  software
products  to the  market.  The most  promising  clients are medium size to large
companies  or  organizations  that (a) employ a large staff in the data entry or
general  computer related work  environment,  (b) are cognizant of the potential
gains in productivity  associated  with  preventive  action and sensitive to the
health  risks  and  liability  potential  arising  out of  unattended  workplace
deficiencies,  and (c) are  prepared  to make  the  necessary  investments  in a
remedial and preventive solution such as offered by the ErgoManager(TM)  System.
During the second half of 1999, the Company succeeded in gaining  acceptance for
larger pilot programs,  and in some cases the actual  deployment of the software
across  entire  departments,  at several  large  corporate  clients,  among them
well-known Fortune 500 companies.

    Recapitalization and Debt Restructuring:

    As explained in more detail below,  during the latter part of 1999 and,
especially,  during  the first  Quarter  2000,  management's  efforts  to retain
investor's  confidence  in the  Company's  future has resulted in a  significant
improvement of the balance sheet of the Company.  Since January 2000 the Company
has received new equity  capital in excess of $2 Million and  commitments  for a
further $1.2  Million,  and is in the process of  converting  debt  exceeding $2
Million in the aggregate, into equity capital.

                                       15

<PAGE>
    New Products:

    Several new  product  initiatives  started in 1999 and are  expected to
link the  Company's  future to the Internet and  e-Commerce  marketplace.  Among
these are ErgoPal,  eFuel(TM),  and  SmartErgonomics.com.  Recently obtained new
equity capital will fund initial development efforts, however,  management plans
to attract additional  funding dedicated  specifically  towards  development and
marketing efforts in these new areas.



Results of Operations for the Year Ended December 31, 1999

         For the year ended December 31, 1999, the Company had gross revenues of
$263,553 . While  modest,  this  figure  represents  a  significant  increase in
software-derived  revenues  (prior year $72,486),  all of which was generated by
the  Company's  wholly  owned  subsidiary  Magnitude,  Inc.  These  revenues are
primarily  composed of smaller orders for initial pilot projects.  Conversion to
enterprise-wide  contracts  is expected for several of these  pilots.  The sales
cycle for larger  projects  involving  software  related  products is relatively
long, and the Company does not expect to realize significant new revenues before
the second quarter of fiscal year 2000.

         Gross profits amounted to $92,732 for a 35% gross margin. Gross profits
are  burdened  with a fixed  charge for  amortization  of software  investments.
Software  assets  underlying  the  Company's  products are being  amortized on a
straight  line  over 10 years,  resulting  in a level  charge  of  approximately
$12,000  per  month  to  cost-of-goods-sold.  Owing to the  fact  that  variable
cost-of-goods-sold  expenses  are in the  vicinity of only 5%, the gross  margin
will sharply increase when revenues grow.  After deducting  selling expenses and
general and  administrative  expenses  of  $2,735,721  the  Company  realized an
operating  loss of  $2,642,989  (compared to an operating  loss of $2,588,762 in
1998). Non-operating expenses totaled $239,333 and include $293,553 net interest
expense and  non-operating  income of approximately  $133,520 for royalties from
the 1998 sale of the Company's hardware product line. A large extraordinary gain
of $490,374 from the sale of net loss  carry-forward tax credits pursuant to the
new New Jersey Emerging  Technology and Biotechnology  Financial  Assistance Act
more than offset the interest expense, and the year concluded with a net loss of
$2,391,948  or $0.28 per share,  compared to a loss of  $2,530,909  or $0.58 per
share ($3,130,621 or $0.72 per share before an extraordinary  gain from the sale
of the Company's hardware product line) for the previous year.

         The fiscal year's results must be  interpreted  from the viewpoint of a
young company that pioneers new products for emerging markets. These markets are
now evolving and  management  believes that its "First to Market"  approach will
lead to a strong  competitive  advantage  and a sizable  market share during the
months and years to come.

         To some extent,  a severe capital shortage during the first nine months
of the  fiscal  year  affected  the  extent  and pace at which the new  software
products  could be introduced  to the market.  The working  capital  shortage in
particular  prohibited a more comprehensive  marketing campaign which would have
accelerated  the  education  of  potential  clients.  Education  is of  critical
importance.  This task will become easier for the Company as the general  public
becomes aware of the risks  associated  with poor posture and work habits in the
computer  work-place  environment,  and as the burden of informing the public is
taken up by certain State and Federal agencies. In addition, as described below,
the Company during the first quarter in 2000 has secured new capital investments
that will provide for the funding of a comprehensive marketing plan.

                                       16

<PAGE>



The Software Business

         (a) Target  Clientele:  The Company expects its client mix to gravitate
towards larger companies and  organizations.  A likely  consequence,  initially,
will be a  concentration  of sales into a smaller number of larger  projects and
increased volatility in its revenue stream.
         (b) Sales  Cycles:  Software  that has the  potential  of  affecting  a
company's  operations  especially with respect to utilization of human resources
is  subjected  to a possibly  larger  degree of test,  scrutiny,  and  committee
decision making than most other software products.  Management therefore expects
longer sales cycles which during the transition  period until a break-even sales
volume is achieved,  will put additional  strain on the Company's  liquidity and
financial resources.
         (c) Cost Structures:  The software business to a significant  degree is
less capital intensive than the Company's  traditional hardware business.  Also,
its overall cost  structure is less  sensitive to changes in volume.  While this
translates into improved predictability of future expenditures,  it also burdens
the Company with a certain level of quasi fixed expenses  during the period when
it is only beginning to realize cash flow from revenues.  However, after passing
the break-even  point the Company will be the  beneficiary  of significant  cash
flows from any further revenue increases.


Liquidity and Capital Resources

         At  December  31,  1999,  the  working  capital  deficit   amounted  to
$3,541,257 as compared to a deficit of $2,227,516 at December 31, 1998.  Current
liabilities  included  approximately  $3.7 Million short-term debt, the majority
maturing  during the second and third quarter of 2000.  During the year and as a
consequence  of the absence of revenues,  operations  consumed  $1,955,000  cash
flow,  financed  primarily by the issuance of convertible  debt with  maturities
averaging  14 months,  and  short-term  loans,  and to the extent of $525,000 by
direct equity  investments,  all of these under private  placement  arrangements
with accredited investors. The Company has no bank debt.

         Beginning in the fourth quarter of 1999 and during the first quarter in
2000,  management  has taken  measures to redress the balance  sheet and put the
Company on a more solid financial footing.  Since January 1, 2000, and until the
date of this  submission,  new net equity  investments in the form of cash under
private placement arrangements totaled $2,125,000.  In addition, the Company has
received a firm commitment for another  $1,000,000 to be invested before the end
of the second quarter.  Parallel to attracting new capital in the form of equity
investments,  the Company since  January 1, 2000,  has converted an aggregate of
$1,410,795  short-term  debt into equity and  restructured  $374,890  short-term
liabilities into long-term  convertible debt. Of the remaining  short-term debt,
holders of $711,750 current obligations have agreed to be convert their position
into equity during the second quarter 2000.

         At  time  of  this  submission,  these  financing  transactions  in the
aggregate  have added  $3,635,000 to equity and  $3,235,000 to working  capital,
thereby   significantly   improving  liquidity  and  providing  for  a  positive
shareholders'  equity  position.  During  the second  quarter  of 2000,  present
commitments  are  expected  to add  another  $2.2  Million to equity and working
capital.

         Management  believes  that  these  capital   transactions  provide  for
adequate  liquidity  and  financial  resources  sufficient  to fund  current and
anticipated future operations during the current fiscal year.

                                       17

<PAGE>


ITEM 7: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Company's  Financial  Statements and Notes to Financial  Statements
are attached hereto as Exhibit A and incorporated herein by reference.


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

         There have been no changes in or  disagreements  with the  Registrant's
independent auditors during the last two years.


                                       18


<PAGE>



                                    PART III

ITEM 9:           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS

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

      Name               Position                    Term(s) of Office
     ------              --------                    ------------------

Steven D. Rudnik    President, Chief Executive  Jan.8, 1999, until present
                    Officer, Director

Steven D. Rudnik    Chairman of the Board       Feb.11, 2000, until present

Michael G. Martin   Chairman of the Board       Jul.31, 1997, until Jan.28, 2000

Jerry Swon          President, Chief Executive  Jan.15, 1998, until Dec,23, 1998
                    Officer

Jerry Swon          Director                    Jan.15, 1998, until Jul.21, 1999

Joerg H. Klaube     Vice President, Secretary,  Jul.31, 1997, until present
                    Chief Financial Officer

John C. Duncan      Executive Vice President,   May 4, 1999, until present
                    Director

Peter J. Buscetto   Director                    Oct. 7, 1997, until present

Paul Chernis        Director                    Jul.31, 1997, until present

Bruce L. Deichl     Director                    Jan.8, 1999, until Jul.21, 1999

Seymour Kroll       Director                    May 4, 1999 until present

Joseph J. Tomasek   Director                    Feb.11, 2000 until present


         There are no family  relationships  among the  Company's  Officers  and
Directors.

         All Directors of the Company hold office until the next annual  meeting
of the  shareholders  and until  successors  have been  elected  and  qualified.
Executive  Officers of the Company are  appointed  by the Board of  Directors at
meetings of the Company 's  Directors  and hold office  until they resign or are
removed from office.

                                       19

<PAGE>

Resumes:

         Steven D. Rudnik , Age 40 - President,  CEO, and  Director.  Mr. Rudnik
joined the Company in February 1998 with the acquisition of Rolina  Corporation,
co-founded  by Mr.  Rudnik  in  1996,  and was  appointed  President  and  Chief
Executive  Officer,  and elected to the Board,  in January 1999.  Mr. Rudnik has
extensive   experience  in  software  product  development  and  an  operational
background  in software  companies  extending  over the past 20 years.  In 1983,
Mr.Rudnik joined  Randall-Helms  International,  Inc. Over the next 13 years, he
conceived  and  developed  four  independent  families of stock market  modeling
software  products aimed at the worldwide  Institutional  Investor market.  Over
this time, these product  families  generated over $25 million in sales, to more
than 400 clients in 23 countries.  Mr. Rudnik was Executive VP  Development  and
Partner at the time Randall-Helms was sold in 1995.

         Joerg H. Klaube , Age 58 - Chief Financial  Officer.  Joined Magnitude,
Inc. in December 1994 as Vice President Finance &  Administration.  From 1993 to
1994 he was  Vice  President  Administration  for  Comar  Technologies  Inc.,  a
computer  retail  firm,  and  from  1983 to 1993  Chief  Financial  Officer  for
Unitronix Corporation,  a publicly traded software design and computer marketing
firm. Prior to that, Mr.Klaube was employed for 16 years with Siemens Corp., the
US  subsidiary  of Siemens  AG,  where he served  most  recently  as Director of
Business  Administration for its Telecommunications  Division. He graduated from
the Banking  School in Berlin,  Germany,  and holds an MBA degree  from  Rutgers
University.

         John C. Duncan , Age 42 - Executive Vice President. Until January 1999,
Mr. Duncan was the Director of the Department of Industrial  Relations  (DIR) of
the State of  California.  In that  capacity,  he was the  principal  advisor to
Governor Pete Wilson on labor and  employment  issues and served in his cabinet.
Mr.  Duncan was  instrumental  in  California  becoming the first state to enact
ergonomic  regulations to help protect workers from repetitive  stress injuries.
As Director of the California  DIR, Mr. Duncan  supervised the Cal/OSHA  program
and  eleven  other  divisions  of the  State  government,  including  the  Labor
Commissioner's  Office  and  the  Division  of  Workers  Compensation.   He  was
responsible for the supervision of 3,000 State employees and an annual budget of
$220 Million.

         Peter J.  Buscetto , Age 52 -  Director.  Mr.  Buscetto  was  appointed
director of the Company in October 1997. He is President /CEO of PJB Associates,
Inc., a Georgia consulting and investment company. Mr. Buscetto has an extensive
marketing and operational  background that extends over twenty-five years in the
retail  field.  He was involved with the expansion of CompUSA where he served as
Senior VP of Operations,  CCO, and President of CompUSA East.  Prior to that, he
served  fifteen years with the Hechinger  Company,  a Landover based Home Center
company. He held various operational  positions with the Hechinger Company,  the
last of which was Senior VP  Operations  for Home  Quarters  and a wholly  owned
subsidiary.  PJB Associates is actively  involved with several companies both as
an investor and consultant, throughout the US and Europe.

     Paul Chernis , Age 65 - Director.  Mr.  Chernis was appointed a director of
the  Company  in July  1997.  Mr.  Chernis  has been a  partner  in the law firm
Silverman,  Collura,  Chernis & Balzano, P.C. since June 1990 and specializes in
corporate and  securities  law. The aforesaid law firm renders legal services to
the Company. Mr. Chernis is a graduate of New York University School of Law, and
prior to entering  private  practice in 1972,  he served as  Assistant  Regional
Administrator  of the New York  Regional  Office  the  Securities  and  Exchange
Commission.

                                       20


<PAGE>

     Seymour  Kroll , Age 73 - Director.  Mr. Kroll was appointed a director
in May 1999. His wide-ranging  business  expertise  covered several  turn-around
situations, primarily in the Construction industry. Recently he served as CEO of
Grossman's,  a major retail  building  material firm, and as President of SNE, a
large  millwork  company.  He also was  President  of Acorn  Window  Systems and
Sugarcreek  Window & Door,  and was retained to reorganize  Wickes  Lumber,  the
large building  materials chain.  Prior to these offices,  Mr. Kroll founded and
headed  Seymour  Kroll & Associates,  Inc., at that time the largest  management
consulting firm for the construction industry in the country. Mr. Kroll received
his BBA  degree  from  the  University  of  Michigan  and  his MS from  Columbia
University.


     Joseph J. Tomasek , Age 53 - Director. Mr. Tomasek was appointed a director
in February  2000. He has been engaged in the private  practice of corporate and
securities  law in his own law  firm for the last ten  years.  Mr.  Tomasek  was
appointed  to serve as general  counsel for the Company in 1999.  In addition to
his work with the Company,  Mr. Tomasek  represents several other clients in the
United States and Europe in corporate finance matters.




Compliance with Section 16(a) of the Securities Exchange Act of 1934

         The Company is not  subject to the  reporting  requirements  of Section
16(a) of the Securities Exchange Act of 1934.

                                       21

<PAGE>



ITEM 10: EXECUTIVE COMPENSATION

         The  following  table sets forth the cash  compensation  and  executive
capacities  for the fiscal year ended  December  31,  1999,  for each  executive
officer  whose  aggregate  cash  remuneration  exceeded  $100,000,  and  for all
executive officers as a group:

                                          Restricted              Securities
                                             Stock                Underlying
Name                      Salary (1)       Awards (FMV)            Options
----                     ----------       -------------           -------
Capacity in which served
Steven D. Rudnik           $  44,144        $66,667 (4)           (2) (3)
President and CEO

Joerg H. Klaube            $ 100,025
Vice President, CFO

Michael G. Martin          $  46,382        $66,667 (4)
Chairman

All executive officers
as a group (4 persons)     $ 279,051
-----------------------
(1)  The value of other non-cash compensation, except for the items listed under
     (2) and (4), that was extended to or paid for  individuals  named above did
     not exceed 10% of the aggregate cash  compensation paid to such individual,
     or to all executive officers as a group.
(2) See table for "Stock Options" below.
(3)  During 1999,  the Board of  Directors  approved a reduction in the exercise
     price of  options  previously  granted  to  S.Rudnik,  from $5.25 per share
     (95,235 shares) and $4.0385 per share (154,765 shares) to $1.00 per share.

(4) The Board of Directors of the Company  awarded  several stock grants as
    additional  compensation  for services during 1999, as follows:

Beneficiary                Position             No. of Shares )*
-----------                --------             ----------------
Michael G. Martin          Chairman                 150,000
Steven D. Rudnik           President, CEO           150,000
Jerry Swon                 Director                 150,000
Bruce L. Deichl            Director                 100,000

All such shares,  with the exception of the shares  granted to Steven D. Rudnik,
were registered  under the Securities Act on Form S-8. The shares for Mr. Rudnik
have not yet been issued. The Company has recognized a liability in its books of
$66,667 for future issuance of such shares.

)*  the closing price for the Company's common stock at the time of the grants
    was approximately $0.70 per share.



                                       22

<PAGE>


Stock Options:

         The  following  table sets forth  stock  options  granted  during  1999
pursuant  to the  Company's  1997 Stock  Option  Plan,  to  executive  officers,
directors,  and beneficial owners of more than 10 percent of any class of equity
securities of the Company:

-------------------------------------------------------------------------------
              Number of Common    % of Total Options
              Shares Underlyin    Granted to Employees   Exercise   Expiration
Name          Options Granted      in Fiscal Year        Price ($/Sh.)  Date
-------------------------------------------------------------------------------
J. Duncan     100,000                13.4%                1.00          7/1/04
J. Klaube      50,000                 6.7%                1.00        12/22/04


         The  following  table sets forth  stock  options  granted  during  1999
outside  of  the  Company's  1997  Stock  Option  Plan  to  executive  officers,
directors,  and beneficial owners of more than 10 percent of any class of equity
securities of the Company:
-------------------------------------------------------------------------------
              Number of Common    % of Total Options
              Shares Underlying   Granted to Employees   Exercise    Expiration
Name          Options Granted     in Fiscal Year         Price ($/Sh.)   Date
-------------------------------------------------------------------------------
S. Rudnik )*  200,000                26.8%                1.00         11/19/08
J. Duncan      40,000                 5.4%                1.00          4/23/06
S. Kroll       40,000                  n/a                1.00           5/4/06

)*  does  not  include   options  for  125,000  shares  issued  pursuant  to  an
anti-dilution  clause in the Agreement and Plan of Merger for the acquisition of
Rolina Corporation dated February 2, 1998.




1997 Stock Option Plan:

         The  Company's  1997  Stock  Option  Plan,  as filed  with  Information
Statement  pursuant to Section 14(c) with the  Commission  on July 1, 1997,  and
with  Registration  Statement  on Form S-8 with the  Commission  on September 8,
1997, is hereby incorporated by reference.


Compensation of Directors:

         The  Company  currently  pays  no  outside   directors'  fees.  Outside
directors are awarded stock options for 40,000 shares each.

                                       23


<PAGE>



ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

         The following  table sets forth,  as of March 28, 2000,  the record and
beneficial  ownership  of  Common  stock  of the  Company  by each  officer  and
director,  all officers and  directors as a group,  and each person known to the
Company  to  own  beneficially,  or of  record,  five  percent  or  more  of the
outstanding shares of the Company:

Title             Name and Address of     Amount and Nature of      Percent
of Class          Beneficial Owner        Beneficial Ownership (1)  of Class
--------          ----------------       ------------------------   --------
Common            Steven D. Rudnik        2, 302,778 (2)            13.98%
Stock             John C. Duncan             110,000 (3)              **
                  Joerg H. Klaube            100,100 (4)              **
                  Peter J. Buscetto           56,667 (5)              **
                  Paul Chernis                30,000 (3)              **
                  Seymour Kroll              618,792 (6)              4.17%
                  Howard G. Siegel           831,000 (7)              5.61%
                  Joseph J. Tomasek           50,000 (3)               **

                  Address of all persons above:  c/o the Company.

                  All Directors and Officers   3,774,411              21.78%
                  as a Group (8 persons)

                  Michael G. Martin            1,750,000 (8)          10.91%
                  12 Tillman Ct.
                  Bridgewater, New Jersey
                  Schuerch Asset Management    1,533,900 (9)          10.06%
                  Tellstrasse 21, St.Gallen,
                  Switzerland
                  Viviana Partners, L.P.       1,260,000 (10)          8.40%
                  1 Sansome Str.,
                  San Francisco, CA

** less than 1%
----------------------------

     (1) For  purposes of this table,  a person or group of persons is deemed to
have "beneficial  ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of March 28, 2000. For purposes of computing
the  percentage  of  outstanding  shares of Common  Stock held by each person or
group of persons named above,  any security  which such person or persons has or
have the right to acquire  within such date is deemed to be  outstanding  but is
not  deemed to be  outstanding  for the  purpose  of  computing  the  percentage
ownership of any other person. Except as indicated in the footnote to this table
and pursuant to applicable  community  property laws, the Company believes based
on  information  supplied by such persons,  that the persons named in this table
have sole voting and investment power with respect to all shares of Common Stock
which they beneficially own.
     (2) Includes  deferred  compensation of 150,000 shares,  options to acquire
         1,325,000 shares and conversion rights for appr.750,000 shares.
     (3)  Represents  options to acquire  the same  number of  shares.
     (4)  Includes options to acquire 100,000 shares.
     (5)  Includes  22,222  shares held by an  affiliate  and options to acquire
          20,000 shares.
     (6)  Includes options to acquire 129,866 shares and conversion rights for
          approx. 325,000 shares.
     (7)  Includes warrants for 424,000 shares.
     (8)  Includes options for 750,000 shares and preferred stock convertible
          into 1,000,000 shares.
     (9)  Includes options and warrants for 1,023,900 shares.
     (10) Includes warrants for 600,000 shares.



                                       24

<PAGE>



ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         In January  2000 the former  Chairman  and the Company  entered into an
agreement pursuant to which he resigned as a director and officer. The agreement
provided,  among  other  things,  for  (i)  the  termination  of his  employment
agreement;  (ii) the conversion of cumulative  preferred stock with a face value
of $900,000 and a convertible promissory note in the amount of $351,060 into (a)
900,000 shares of common stock of the Company and (b) 100,000 shares of Series C
Senior  Convertible  Preferred  Stock  with a face  value of  $900,000;  (iii) a
restrictive  covenant for which the Company will pay a monthly fee in the amount
of $5,555 over a 36-months term; and (iv) certain redemption privileges relating
to the Series C Senior Convertible Preferred Stock (see Exhibit 10.2).

         In February 2000, the President and Chief Executive Officer exercised a
put option for 155,556 shares of common stock issued in connection with the 1998
acquisition by the Company of Rolina  Corporation  which exercise  resulted in a
$375,000  current  liability to the Company.  Subsequently,  such  liability was
converted into convertible long-term debt.

         Between  July and  November  1999,  an  individual  who in January 2000
joined the Company in the capacity of Vice President for Shareholder  Relations,
invested an aggregate  $450,000 in the Company  against  issuance of convertible
promissory  notes and  warrants for the purchase of 900,000  common  shares.  In
February 2000, these promissory notes were converted into 900,000 common shares.


                                       25

<PAGE>


ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         The Exhibits  that are filed with this report or that are  incorporated
by reference are set forth in the Exhibit Index attached hereto.


(b)      Reports on Form 8-K

         There  were no  reports  filed on Form 8-K  during  the  quarter  ended
December 31, 1999.


                                       26

<PAGE>



                                   SIGNATURES


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



 MAGNITUDE INFORMATION SYSTEMS, INC.



 By:      /s/ Steven D. Rudnik                     Date:    March 30, 2000
          Steven D. Rudnik
          President, Chief Executive Officer
         (Principal Executive Officer),
          Chairman of the Board


 By:      /s/ Joerg H. Klaube                      Date:    March 30, 2000
          Joerg H. Klaube
          Secretary, Chief Financial Officer
          (Principal Financial Officer)


In accordance with the requirements of the Securities  Exchange Act, this Report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


 Name                                                    Date


 /s/ Peter J. Buscetto                              March 30, 2000
 ---------------------
 Peter J. Buscetto, Director


                                                    March __, 2000
 ----------------
 Paul Chernis, Director


 /s/ John C. Duncan                                 March 30, 2000
 ------------------
 John C. Duncan, Director


 /s/ Seymour Kroll                                  March 30, 2000
 -----------------
 Seymour Kroll, Director


 /s/ Joseph J. Tomasek                              March 30, 2000
 ---------------------
 Joseph J. Tomasek, Director


                                       27


<PAGE>



EXHIBIT INDEX

(A)      Financial Statements and Notes to Financial Statements

(2.2)    Agreement  and Plan of Merger  with  Rolina  Corporation  and Steven D.
         Rudnik,  and Employment  Agreement  with Steven D. Rudnik,  both of the
         date February 2 , 1998, as filed as Exhibit to the Company's  report on
         Form 10-KSB for the year ended December 31, 1998.  Incorporated  herein
         by reference.

(3)      (i) Articles of  Incorporation  and  Amendments  thereto,  incorporated
         herein  by  reference   to  Exhibits  of  previous   filings  with  the
         Commission.

(3)      (ii)  Bylaws  of the  Company,  incorporated  herein  by  reference  to
         Exhibits of previous filings with the Commission.

(4.1)    Amendment to the Company's  Certificate of  Incorporation as filed with
         the State of  Delaware on January  31,  2000,  and amended on March 20,
         2000,  designating a new class of Series A Senior Convertible Preferred
         Stock.

(4.2)    Amendment to the Company's  Certificate of  Incorporation as filed with
         the State of  Delaware on January  31,  2000,  and amended on March 20,
         2000,  designating a new class of Series B Senior Convertible Preferred
         Stock.

(4.3)    Amendment to the Company's  Certificate of  Incorporation as filed with
         the State of  Delaware on January  31,  2000,  and amended on March 20,
         2000,  designating a new class of Series C Senior Convertible Preferred
         Stock.

(10.1)   Resignation Agreement dated July 21, 1999, between J. Swon and
         B. Deichl and the Company, incorporated  herein by  reference to the
         Exhibit of Form S-8 filed with the Commission on August 3, 1999.

(10.2)   Resignation Agreement dated January 28, 2000, between M. Martin and the
         Company,  incorporated  herein by  reference to the Exhibit of Form S-8
         filed with the Commission on January 31, 2000.

 (21)    Subsidiaries of the Company:

         (i)  Magnitude, Inc. is a corporation formed under the laws of the
         State of Delaware and is the name under which it conducts business.

         (ii)  Corporate Ergonomic Systems Inc. - a wholly owned subsidiary of
         Magnitude, Inc. -  is a corporation formed under the laws of the State
         of New Jersey and is the name under which it conducts business.

(23)     Independent Auditors' Consent - attached to Exhibit A.

(27)     Financial Data Schedule  - attached to Exhibit A.





                                       28

<PAGE>


OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE



(a)      The  Company's  Quarterly  Reports on Form 10-QSB for the periods ended
         March 31, 1999, June 30, 1999, and September 30, 1999.

(b)      All other  reports  filed by the Company  pursuant to Section  13(a) or
         15(d) of the  Exchange  Act  since  the  Company's  fiscal  year  ended
         December 31, 1998.























                                       29


<PAGE>

                                                                   EXHIBIT  A
                                                                   ----------











              Magnitude Information Systems, Inc. and Subsidiaries

                        Consolidated Financial Statements

                                December 31, 1999















<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                 Index to the Consolidated Financial Statements
                                December 31, 1999





                                                                    Page
                                                                    ----


Independent Auditors' Report.....................................     1

Financial Statements

     Consolidated Balance Sheet..................................     2

     Consolidated Statements of Operations.......................     3

     Consolidated Statement of Stockholders Equity (Deficit).....    4-5

     Consolidated Statements of Cash Flows.......................    6-7

     Notes to the Consolidated Financial Statements..............   8-17



<PAGE>



                                 [Letterhead of
                     Rosenberg Rich Baker Berman & Company ]








                          Independent Auditors' Report


To the Board of Directors and Stockholders of
Magnitude Information Systems, Inc. and Subsidiaries


We have  audited  the  accompanying  consolidated  balance  sheet  of  Magnitude
Information  Systems,  Inc.  and  Subsidiaries  as of December  31, 1999 and the
related consolidated  statements of operations,  stockholders' equity (deficit),
and cash  flows for the two  years  ended  December  31,  1999 and  1998.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated  financial  position  of  Magnitude
Information  Systems,  Inc.  and  Subsidiaries  as of December  31, 1999 and the
consolidated  results  of their  operations  and their  cash flows for the years
ended  December  31,  1999 and  1998,  in  conformity  with  generally  accepted
accounting principles.

/s/Rosenberg Rich Baker Berman & Company
Rosenberg Rich Baker Berman & Company

Bridgewater, New Jersey
March 24, 2000


                                        1

<PAGE>






              Magnitude Information Systems, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                December 31, 1999


<TABLE>
<CAPTION>

        Assets
Current Assets
<S>                                                                                                         <C>
     Cash                                                                                                   $       249,569
     Accounts receivable net of allowance for doubtful accounts of $78,301                                           58,724
     Inventories                                                                                                      8,885
     Miscellaneous receivables                                                                                      16,627
     Deferred tax asset                                                                                             201,470
     Prepaid expenses                                                                                               388,881
                                                                                                                --------------
           Total Current Assets                                                                                     924,156

Property, plant and equipment, net of accumulated depreciation of $145,579                                           99,880
Software, net of accumulated amortization of $261,662                                                             1,193,728
Other assets                                                                                                          2,459
                                                                                                              ==============
           Total Assets                                                                                           2,220,223
                                                                                                              ==============
           Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
     Accounts payable and accrued expenses                                                                          806,265
     Accrued contingent liability                                                                                   374,890
     Dividends payable                                                                                                9,000
     Loans payable                                                                                                  754,541
     Notes payable                                                                                                1,475,000
     Current maturities of long-term debt                                                                         1,038,779
     Current maturities of capitalized lease obligations                                                              6,938
                                                                                                             --------------
           Total Current Liabilities                                                                              4,465,413
Long term debt, less current portion                                                                                 22,750
Obligations under capital leases, excluding current maturities                                                       13,005
                                                                                                             --------------
           Total Liabilities                                                                                      4,501,168
                                                                                                             --------------
Minority Interest                                                                                                         -

Stockholders' Equity (Deficit)
     Preferred stock Series A, $.01 par value, authorized 3,000,000 shares; issued and
       outstanding, 0 shares                                                                                              -
     Cumulative preferred stock, $.001 par value; 2,500 shares authorized, 10 shares
       issued and outstanding                                                                                             -
     Common stock, $.0001 par value, 30,000,000 shares authorized; 10,340,261 shares issued
       and outstanding                                                                                                1,034
     Contributed capital                                                                                             81,000
     Additional paid in capital                                                                                   8,935,034
     Accumulated deficit                                                                                       (11,298,013)
                                                                                                             --------------
           Total Stockholders' Equity (Deficit)                                                                 (2,280,945)
                                                                                                             --------------
           Total Liabilities and Stockholders' Equity (Deficit)                                             $     2,220,223


                                                                                                             ==============
</TABLE>

See notes to the consolidated financial statements.

                                       2


<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>


                                                                                             Year Ended December 31,
                                                                                          ----------------------------------


                                                                                             1999               1998
                                                                                          ---------------     --------------




Net Sales

<S>                                                                                     <C>                 <C>
     Hardware Products                                                                  $          2,850    $     2,853,969
     Software                                                                                    260,703             72,486
                                                                                          ---------------     --------------
       Total Net Sales                                                                           263,553          2,926,455
                                                                                          ---------------     --------------
Cost of Good Sold
     Hardware Products                                                                             2,850          1,450,367
     Software                                                                                    167,971            140,073
                                                                                          ---------------     --------------
       Total Cost of Goods Sold                                                                  170,821          1,590,440

Gross Profit                                                                                      92,732          1,336,015
Selling, general and administrative expenses                                                   2,735,721          3,924,777
                                                                                          ---------------     --------------

(Loss) From Operations                                                                       (2,642,989)        (2,588,762)
                                                                                          ---------------     --------------
Other Income (Expense)
     Miscellaneous income                                                                        133,520             86,872
     Interest income                                                                                  -              1,384
     Miscellaneous expense                                                                      (40,542)          (182,385)
     Interest expense                                                                          (293,553)          (343,394)
     Loss on disposition of assets                                                              (38,758)          (104,336)
                                                                                          ---------------     --------------
       Total Other (Expense)                                                                   (239,333)          (541,859)
                                                                                         ---------------     --------------
(Loss) From Continuing Operations Before Provision for Income Taxes                          (2,882,322)        (3,130,621)

Provision for (Benefit from) Income Taxes                                                        490,374                  -
                                                                                          ---------------     --------------
(Loss) From Continuing Operations                                                            (2,391,948)        (3,130,621)
Discontinued Operations
    Gain on disposal of hardware line of business (net of $0 income tax
effect)                                                                                               -            599,712
                                                                                          ===============     ==============
Net (Loss)                                                                              $    (2,391,948)    $   (2,530,909)
                                                                                          ===============     ==============

Net (Loss) Per Common Share:
     (Loss) From Continuing Operations                                                  $          (.28)    $         (.72)
      Discontinued Operations                                                                          -                .14

     Net (Loss)                                                                         $          (.28)    $         (.58)
                                                                                          ---------------     --------------
Weighted Average of Common Shares Outstanding                                                  8,486,443          4,324,292
                                                                                          ===============     ==============
</TABLE>

See notes to the consolidated financial statements.

                                       3

<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
            Consolidated Statement of Stockholders' Equity (Deficit)
                     Years Ended December 31, 1999 and 1998


<TABLE>
<CAPTION>
                                                      Convertible       Cumulative
                                                    Preferred Shares Preferred Shares  Common Stock



                                                     ------------  ---------------  ------------------
                                                     Shares Amount Shares   Amount   Shares    Amount
                                                     ------------- ----- ---------  ------------------


<S>                 <C>                                    <C>        <C> <C>       <C>       <C>
  Balances, January 1, 1999                            -   $    -     10  $     -   6,431,113 $  643
  Issuances of common stock granted for
  services performed                                   -        -      -        -   1,404,328    140
  Issuances of common stock pursuant to stock option
  exercise loan agreement                              -        -      -        -     535,000     53

  Issuance of common stock for conversion of loans
  and accrued interest                                 -        -      -        -     767,332     77

  Issuance of common stock pursuant to note penalty
  clause                                               -        -      -        -      60,000      6

  Contingent liability pursuant to put option
  agreement                                            -        -      -        -           -      -

  Exchange of the Company's common stock, one common
  share for 3.4676 common shares of Magnitude, Inc.    -        -      -        -       7,210      1

  Issuance of common shares pursuant to private
  equity placements                                    -        -      -        -   1,050,000    105

  Cancellation of previously issued common stock       -        -      -        -      (7,500)    (1)

  Issuance of common stock pursuant to anti-dilution
  clause                                               -        -      -        -      77,778      8

  Issuance of common stock to suppliers pursuant to
  grant                                                -        -      -        -      15,000      2

  Issuance of convertible debt with attached warrants  -        -      -        -           -      -

  Net loss, year ended December 31, 1999               -        -      -        -           -      -
                                                     ---- -------  -----  --------  ---------- ------
  Balances, December 31, 1999                          -  $     -     10  $     -   10,340,261 $1,034
                                                     ==== =======  =====  ========  ========== ======
</TABLE>




See notes to the consolidated financial statements

                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                                                                     Total
                                                     Contributed    Additional     Accumulated      Stockholder
                                                       Capital       Paid in         Deficit         Equity





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

<S>                 <C>                              <C>          <C>            <C>             <C>
  Balances, January 1, 1999                          $  81,000    $  6,832,728   $(8,906,065)    $ (1,991,694)
  Issuances of common stock granted for
  services performed                                         -       1,224,030             -        1,224,170
  Issuances of common stock pursuant to stock option
  exercise loan agreement                                    -         267,446             -          267,499

  Issuance of common stock for conversion of loans
  and accrued interest                                       -         383,590             -          383,667

  Issuance of common stock pursuant to note penalty
  clause                                                     -             (6)             -                -

  Contingent liability pursuant to put option
  agreement                                                  -       (374,890)             -        (374,890)

  Exchange of the Company's common stock, one common
  share for 3.4676 common shares of Magnitude, Inc.          -             (1)             -               -

  Issuance of common shares pursuant to private
  equity placements                                          -         524,895             -         525,000

  Cancellation of previously issued common stock             -               1             -               -

  Issuance of common stock pursuant to anti-dilution
  clause                                                     -              (8)            -               -

  Issuance of common stock to suppliers pursuant to
  grant                                                      -           5,249             -            5,251

  Issuance of convertible debt with attached warrants        -          72,000             -           72,000

  Net loss, year ended December 31, 1999                     -               -     (2,391,948)     (2,391,948)
                                                       --------     ----------   --------------  --------------
  Balances, December 31, 1999                        $  81,000      $8,935,034   $(11,298,013)     $2,280,945)
                                                      =========     ===========  ==============  ==============

</TABLE>



See notes to the consolidated financial statements



                                       4A
<PAGE>

              Magnitude Information Systems, Inc. and Subsidiaries
            Consolidated Statement of Stockholders' Equity (Deficit)
                     Years Ended December 31, 1999 and 1998


<TABLE>
<CAPTION>
                                                        Convertible            Cumulative
                                                     Preferred Shares       Preferred Shares          Common Stock


                                                    Shares       Amount     Shares     Amount       Shares       Amount
                                                    --------    ---------   --------  ---------  -------------   --------


<S>                                                       <C>                <C> <C>             <C>        <C>
Balances, January 1, 1998                                 -  $        -         10  $        -      2,898,507  $     290

Accrued Dividends on cumulative preferred shares
reversed                                                  -           -          -           -              -          -

Dividends on cumulative preferred shares waiver
reversed                                                  -           -          -           -              -          -

Issuances of common stock to domestic private
individuals pursuant to an exemption under Rule           -           -          -           -         79,722          8
506

Issuances of common stock to foreign investors
pursuant to Reg. S.                                       -           -          -           -      1,453,644        145

Exchange of the Company's common stock, one
common share for 3.4676 common shares of                  -           -          -           -         22,061          2
Magnitude, Inc.

Issuance of common stock for conversion of
accrued interest on private placement notes               -           -          -           -         10,411          1

Issuance of common stock in exchange for prepaid
advertising                                               -           -          -           -        150,000         15

Issuance of common stock pursuant to Rolina
Corporation merger                                        -           -          -           -        155,556         16

Issuance of common stock pursuant to Vanity
Software Publishing Corporation acquisition               -           -          -           -        224,000         22

Issuance of common stock granted for services
performed                                                 -           -          -           -      1,080,177        108

Issuance of common stock for conversion of loan
and accrued interest                                      -           -          -           -        342,000         34

Issuance of common stock pursuant to sales
incentive awards                                          -           -          -           -          5,035          1

Issuance of common stock in exchange for product
rights                                                    -           -          -           -         10,000          1


Net loss, year ended December 31, 1998                    -           -          -           -              -          -
                                                    --------   ---------   --------   ---------  -------------   --------


Balances, December 31, 1998                               -  $        -         10  $        -      6,431,113  $     643
                                                    ========   =========   ========   =========  =============   ========
</TABLE>

See notes to the consolidated financial statement

                                       5

<PAGE>

<TABLE>
<CAPTION>
                                                                                                          Total
                                                      Contributed     Additional      Accumulated       Stockholders
                                                        Capital         Paid in         Deficit            Equity
                                                                        Capital                          (Deficit)


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


<S>               <C>                               <C>             <C>            <C>               <C>
Balances, January 1, 1998                           $     243,000   $   2,314,856  $    (6,555,156)  $    (3,997,010)

Accrued Dividends on cumulative preferred shares
reversed                                                        -               -            18,000            18,000

Dividends on cumulative preferred shares waiver
reversed                                                (162,000)               -           162,000                 -

Issuances of common stock to domestic private
individuals pursuant to an exemption under Rule                 -         199,992                 -           200,000
506

Issuances of common stock to foreign investors
pursuant to Reg. S.                                             -       2,586,855                 -         2,587,000

Exchange of the Company's common stock, one
common share for 3.4676 common shares of                        -             (2)                 -                 -
Magnitude, Inc.

Issuance of common stock for conversion of
accrued interest on private placement notes                     -          36,101                 -            36,102

Issuance of common stock in exchange for prepaid
advertising                                                     -         374,985                 -           375,000

Issuance of common stock pursuant to Rolina
Corporation merger                                              -         388,874                 -           388,890

Issuance of common stock pursuant to Vanity
Software Publishing Corporation acquisition                     -         559,978                 -           560,000

Issuance of common stock granted for services
performed                                                       -          29,892                 -            30,000

Issuance of common stock for conversion of loan
and accrued interest                                            -         341,199                 -           341,233

Issuance of common stock pursuant to sales
incentive awards                                                -             (1)                 -                 -

Issuance of common stock in exchange for product
rights                                                          -             (1)                 -                 -


Net loss, year ended December 31, 1998                          -               -       (2,530,909)       (2,530,909)
                                                      ------------    ------------   ---------------   ---------------

Balances, December 31, 1998                         $      81,000   $   6,832,728  $    (8,906,065)  $    (1,991,694)
                                                      ============    ============   ===============   ===============

</TABLE>

See notes to the consolidated financial statement

                                       5A

<PAGE>

              Magnitude Information Systems, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                              ----------------------------------
                                                                                                   1999               1998
                                                                                              ---------------    ---------------

     Cash Flows From Operating Activities
<S>                                                                                         <C>                <C>
             Net Income (Loss)                                                              $    (2,391,948)   $    (2,530,909)

             Adjustments to Reconcile Net (Loss) to Net Cash (Used) by Operating
          Activities
                Depreciation and amortization                                                        183,053            266,589
                Common stock issued for various expenses                                             474,119                  -
                Loss on disposition of assets                                                         38,758            112,112
                Bad debt provision                                                                     4,109             94,287
                Forgiveness of debt                                                                        -           (32,893)

                New debt issued for interest expense                                                   5,400                  -

                Deferred tax (benefit)                                                             (201,470)                  -

                Inventory variance                                                                         -            132,890

                  Inventory writeoff                                                                  16,770                  -

                Return reserve provision                                                                   -             30,000

             Decreases (Increases) in Assets
                  Accounts receivable                                                                 46,416             50,956
                Miscellaneous receivables                                                             58,951           (54,743)
                  Inventories                                                                          1,134          (317,650)
                Prepaid expenses                                                                     (3,273)             36,996
                Other assets                                                                           2,652                414

             Increases (Decreases) in Liabilities

                Accounts payable and accrued expenses                                              (189,975)            403,405

                Trade acceptance payable                                                                   -           (44,860)
                                                                                              ---------------    ---------------
                  Net Cash (Used) by Operating Activities                                        (1,955,304)        (1,853,406)
                                                                                              ---------------    ---------------
     Cash Flows From Investing Activities
             Purchases of equipment, fixtures, and software                                          (6,486)          (569,857)

          Sales of property and equipment                                                                250            716,926
                                                                                              ---------------    ---------------
                  Net Cash Provided (Used) by Investing Activities                                   (6,236)            147,069
                                                                                              ---------------    ---------------
     Cash Flows From Financing Activities
             Repayment of notes payable                                                                    -           (25,000)
             Proceeds from long-term debt                                                            300,000            342,000
             Proceeds from long-term debt with detachable warrants                                   800,000                  -
             Repayment of long-term debt                                                            (50,474)          (750,577)
             Repayment of capital lease obligations                                                  (7,747)            (7,229)
             Repayment of officer loans payable                                                            -           (85,000)
             Proceeds from loans payable                                                             726,181                  -
             Repayment of loans payable                                                             (91,254)          (275,000)
             Proceeds from issuance of common stock                                                  525,000          2,512,000
                                                                                              ---------------    ---------------
                  Net Cash Provided by Financing Activities                                        2,201,706          1,711,194
                                                                                              ---------------    ---------------
     Net increase in Cash                                                                            240,166              4,857
     Cash at beginning of period                                                                       9,403              4,546
                                                                                               ===============    ===============
     Cash at end of period                                                                  $        249,569   $          9,403
                                                                                              ===============    ===============
     SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
             Interest Paid                                                                  $        153,313   $        245,916
                                                                                              ===============    ===============
             Taxes Paid                                                                     $          6,600   $          4,320
                                                                                              ===============    ===============
</TABLE>

See notes to the consolidated financial statements.

                                       6
<PAGE>

              Magnitude Information Systems, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                                      Year Ended December 31,
                                                                                               ----------------------------------

                                                                                                   1999                1998
                                                                                               --------------     ---------------

 Schedule of non-cash investing and financing activities
 In connection with the retirement of $36,102 of accrued  interest on a promissory
<S>                                                                                                       <C>
    note, 10,411 common shares were issued                                                                 $         36,102
                                                                                                             ===============

 Capitalized lease obligations incurred for use of equipment                                               $         26,376
                                                                                                             ===============
 In  connection   with  the   acquisition  of  a  20%  equity  interest  in  Input
 Technologies LLC, $60,000 of accounts receivable were written off                                         $         60,000
                                                                                                             ===============

 In connection with the Rolina  Corporation  merger,  secured payment  obligation
    Incurred                                                                                               $        100,000
                                                                                                             ===============
 In connection  with the obtaining of prepaid  advertising,  150,000 common shares
    were issued                                                                                            $        375,000
                                                                                                             ===============
 In connection  with the Rolina  Corporation  merger,  155,556  common shares were
    issued                                                                                                 $        388,890
                                                                                                             ===============
 In  connection  with the  Vanity  Software  Publishing  Corporation  acquisition,
    224,000 common shares were issued                                                                      $        560,000
                                                                                                             ===============
 In  connection  with the issuance of common  stock,  72,677 shares were issued as
    consideration for past services                                                                        $         30,000
                                                                                                             ===============
 In  connection  with the  retirement  of a $316,849  promissory  note and accrued
    interest thereon, 342,000 common shares were issued                                                    $        341,233
                                                                                                             ===============
 In  connection   with  the   disposition  of  a  20%  equity  interest  in  Input
    Technologies  LLC,  $20,392 of  accounts  payable and  accrued  expenses  were      <C>
    written off                                                                         $        20,392
                                                                                          ==============
 In connection  with  the  trade-in  of  capitalized  lease  equipment  for
    operating lease  equipment,  $17,975 of capitalized  lease  obligations
    were written off $ 17,975
                                                                                          ==============
 In  connection  with the Rolina  Corporation  merger  agreement,  a put option on
    155,556 shares at $2.41 was set up as an accrued contingent liability               $       374,890
                                                                                          ==============
 In  connection  with the  retirement  of a $100,000  promissory  note and accrued
    interest thereon, 202,332 common shares were issued                                 $       101,166
                                                                                          ==============
 In connection  with a stock option  exercise,  535,000  common shares were issued
    against  the  cancellation  of loans and notes  totaling  $261,604  along with
    accrued interest thereon.                                                           $       267,500
                                                                                          ==============
 In connection  with the  retirement of promissory  notes  totaling  $256,959 plus
    accrued interest thereon, 565,000 common shares were issued                         $       282,500
                                                                                          ==============
 In connection with the issuance of a promissory note totaling  $119,735 , $29,735
    of accrued interest on various notes was incorporated into a new note.              $        29,735
                                                                                          ==============
 In  connection  with the issuance of common stock,  1,419,328  common shares were
    issued for past services                                                            $       721,619
                                                                                          ==============
 In connection with the issuance of 1,000,000  common shares during the year ended
    December 31, 1998,  $276,230 for past  services was relieved;  notes  totaling
    $134,295  with  accrued  interest  of  $19,692  were  retired,  and  loans and
    advances of $77,585 were retired during the year ended December 31, 1999.           $       507,802
                                                                                          ==============
</TABLE>

See notes to the consolidated financial statements.

                                       7


<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Organization
         Magnitude Information Systems, Inc. (the "Company") was incorporated as
         a Delaware  corporation  on April 19, 1988 under the name  Fortunistics
         Inc.  On March 4, 1993,  the  Company  changed  its name to  Whitestone
         Industries,  Inc. On July 14,  1997,  the  Company  changed its name to
         Proformix Systems,  Inc., and on November 18, 1998, the Company changed
         its name to Magnitude Information Systems, Inc.

         The Company and  Magnitude,  Inc.  remain as two  separate  legal
         entities whereby Magnitude,  Inc. operates as a subsidiary of the
         Company.  However,  the operations of the newly combined  entity are
         currently  comprised  solely of the operations of Magnitude,  Inc.
         The remaining 1% of Magnitude,  Inc. stockholders hold a minority
         interest which is valued at $0.

         On February 2, 1998, the Company  entered into an Agreement and Plan of
         Merger with Rolina  Corporation,  a privately held New Jersey  software
         developing  firm,  and on  April  30,  1998,  into  an  Asset  Purchase
         Agreement with Vanity Software  Publishing Co., a Canadian developer of
         specialized  software,  whereby the Company,  in return for payments in
         the form of cash and equity,  acquired  the rights to certain  software
         products and related assets,  with such software products  subsequently
         forming the basis for the further development,  during the year, of the
         Company's proprietary EMS Software System.

         On November  18,  1998,  the Company  and its wholly  owned  subsidiary
         Magnitude,  Inc.  entered into an Asset Purchase  Agreement and several
         related  agreements with 1320236 Ontario Inc. ("OS"), a publicly traded
         Canadian  designer,  manufacturer  and distributor of office  furniture
         based  in  Holland  Landing,  Ontario,  Canada,  pursuant  to  which OS
         acquired  Magnitude,  Inc.'s  hardware  product  line  comprised of the
         Company's ergonomic keyboard platform products and accessories, and all
         related inventory and production  tooling and warehousing  assets,  and
         all intellectual  property rights including the Proformix name, against
         a cash  consideration  and on  ongoing  contingent  stream  of  royalty
         payments on OS' sales of the Magnitude hardware products. The Agreement
         with OS also provided for the retirement of the Company's then existing
         bank debt out of the proceeds of the transaction.

         Until  November  18, 1998,  when the Company sold its hardware  product
         line  comprised  of  Magnitude,   Inc.'s  ergonomic  keyboard  platform
         products and  accessories,  its business was primarily  centered around
         the design, development,  manufacture,  and marketing of research-based
         ergonomic  accessory  products  for  the  computerized   workplace.  In
         parallel,  and  beginning  with the February  1998  acquisition  by the
         Company of Rolina  Corporation,  an early stage software business which
         had developed an ergonomic  software  product.  that was being marketed
         under the name "ErgoSentry", and the subsequent acquisition in May 1998
         of  substantially  all of the  assets  of  Vanity  Software  Publishing
         Corporation,  a Canadian  software firm,  which also included a certain
         ergonomic software package known as "ErgoBreak", the Company engaged in
         the  development  of a unique  suite of software  packages  designed to
         increase  productivity in the computer related work  environment  which
         include the before  mentioned  "ErgoSentry"  and "ErgoBreak"  products.
         These efforts resulted,  in November 1998, in the release to the market
         of the proprietary "EMS (Ergonomic Management System)" software system.
         With the sale of the hardware  product line, the Company's  business is
         now focused  exclusively  on the further  development  and marketing of
         these  software  products.  As  such,  the  Company  currently  must be
         considered an enterprise in transition, because it has not yet realized
         material revenues from licensing its software.


                                       8


<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continuted)
     Nature of Organization - (continued)
         Magnitude   Inc.'s  wholly  owned   subsidiary,   Corporate   Ergonomic
         Solutions,  Inc.  (Ergonomics)  was  incorporated  in the  State of New
         Jersey during October 1992.  Ergonomics,  which commenced operations in
         September  1998, was formed  primarily to market  Proformix's  hardware
         products  which  has  since  been  disposed  of.  Prior  to  that,  its
         operations had not been  significant.  It's operations  during 1998 and
         1999 have not been significant.

     Principles of Consolidation
         The consolidated  financial  statements include the accounts of
         Magnitude  Information  Systems,  Inc. and its subsidiaries,
         Magnitude,  Inc. and Corporate Ergonomic Solutions,  Inc. All
         significant  intercompany balances and transactions have been
         eliminated.

     Inventories
         Inventory  consists of finished  goods related to the Company's  former
         hardware product line which are stated at the lower of cost (determined
         by the first-in, first out method) or market. The sale of the Company's
         hardware  product  line  resulted in a loss on disposal of inventory of
         $74,736 in 1998.

     Depreciation and Amortization
         Property,  plant and  equipment are recorded at cost.  Depreciation  on
         equipment,   furniture  and  fixtures  and  leasehold  improvements  is
         computed on the straight line method over the estimated useful lives of
         such assets between 5-10 years.  Maintenance and repairs are charged to
         operations as incurred. Software assets acquired pursuant to the Rolina
         and Vanity agreements are amortized on the straight line method over 10
         years.  Repairs and maintenance which do not extend the useful lives of
         the related assets are expensed as incurred.

     Securities Issued for Services
         The Company accounts for stock, stock options and stock warrants issued
         for services and  compensation  by employees  under the intrinsic value
         method. For non-employees, the fair market value of the Company's stock
         on the date of  stock  issuance  or  option  grant  is used.  Effective
         January 1, 1996, the Company adopted Statement of Financial  Accounting
         Standard (SFAS) No. 123, "Accounting for Stock-based Compensation". The
         statement   generally   suggests,   but  does  not  require,   employee
         stock-based  compensation  transactions  be accounted  for based on the
         fair  value of the  services  rendered  or the fair value of the equity
         instruments issued, whichever is more reliably measurable. As permitted
         by the  statement,  the  Company  has elected to continue to follow the
         requirements of Accounting Principles Board Opinion No. 25, "Accounting
         for Stock Issued to Employees' for employees  under the intrinsic value
         method. The adoption of SFAS No. 123 does not have a material impact on
         the financial statements.

     Income Taxes
         The  Company  provides  for income  taxes  based on enacted tax law and
         statutory  tax rates at which items of income and expenses are expected
         to be settled in the  Company's  income tax  return.  Certain  items of
         revenue and expense are  reported  for Federal  income tax  purposes in
         different  periods  than  for  financial  reporting  purposes,  thereby
         resulting in deferred income taxes.  Deferred taxes are also recognized
         for  operating  losses  that are  available  to offset  future  taxable
         income.  Valuation  allowances are established when necessary to reduce
         deferred tax assets to the amount expected to be realized.  The Company
         has  incurred  net  operating   losses  for   financial-reporting   and
         tax-reporting purposes.  Accordingly,  for Federal income tax purposes,
         the  benefit for income  taxes has been offset  entirely by a valuation
         allowance  against the related federal  deferred tax asset for the year
         ended  December 31,  1999.  For state  income tax  purposes,  a partial
         valuation  allowance has been offset against the related state deferred
         tax asset for the year ended December 31, 1999.


                                       9

<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continuted)

     Net Loss Per Share
         Net loss per share,  in  accordance  with the  provisions  of Financial
         Accounting  Standards Board No. 128,  "Earnings Per Share," is computed
         by dividing net loss by the weighted average number of shares of Common
         Stock outstanding during the period.  Common Stock equivalents have not
         been   included  in  this   computation   since  the  effect  would  be
         anti-dilutive.

     Revenue Recognition
         Revenue  from  hardware  product  sales  is  recognized  at the time of
         shipment  provided that the resulting  receivable is deemed probable of
         collection.  Revenue from  software  sales is recognized at the time of
         licensing provided that the resulting  receivable is deemed probable of
         collection.

     Use of Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted   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 date of the
         financial  statements and the reported amounts of revenues and expenses
         during the  reporting  period.  Actual  results could differ from those
         estimates.

CONCENTRATIONS OF BUSINESS AND CREDIT RISK
     The Company maintains cash balances in several financial institutions which
     are insured by the Federal  Deposit  Insurance  Corporation up to $100,000.
     Balances in these  accounts  may, at times,  exceed the  federally  insured
     limits.

     The Company  provides  credit in the normal course of business to customers
     located throughout the U.S. The Company performs ongoing credit evaluations
     of its customers and maintains  allowances  for doubtful  accounts based on
     factors  surrounding  the credit  risk of  specific  customers,  historical
     trends, and other information.

INVENTORIES
     Inventories consisted of the following at December 31, 1999:

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
              Finished goods                                                                                    $          8,885
                                                                                                                  ---------------

                                                                                                                $          8,885
                                                                                                                  ===============

PROPERTY, PLANT AND EQUIPMENT
     Property,  plant and  equipment  consist of the  following  at December 31,
1999:

              Equipment                                                                                        $         134,619
              Furniture and fixtures                                                                                      65,070
              Leasehold improvements                                                                                      45,770
                                                                                                                 ----------------

                                                                                                                         245,459

              Less accumulated depreciation                                                                              145,579

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

                                                                                                               $          99,880
                                                                                                                 ================
</TABLE>

 Depreciation expense charged to operations was $37,514  and $107,928 in 1999
 and 1998, respectively.

                                       10




<PAGE>


              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements


ACCOUNTS PAYABLE AND ACCRUED EXPENSES
     Accounts  payable  and  accrued  expenses  consisted  of the  following  at
December 31, 1999:
<TABLE>
<CAPTION>
<S>                                                                                                        <C>
         Accounts payable                                                                                  $              154,103
         Accrued interest                                                                                                 342,994
         Accrued commissions                                                                                               43,222
         Accrued returns                                                                                                   35,718
         Accrued legal settlement                                                                                          20,000
         Accrued professional fees                                                                                         72,698
         Accrued taxes                                                                                                      4,300
         Accrued payroll                                                                                                   98,268
         Miscellaneous accruals                                                                                            14,962
         Accrued warranties                                                                                                20,000
                                                                                                              --------------------

                                                                                                           $              806,265
                                                                                                              ====================

LOANS PAYABLE
     The Company and Magnitude, Inc. had borrowings under short term loan  agreements with the following terms and
     conditions at December 31, 1999:

         Pursuant  to  three  promissory  notes  signed  throughout  1995 and  1996,  an  investor  advanced
               Magnitude,  Inc. a total of $90,000  payable upon demand with  interest at 12% per annum.  In
               July, 1999 these  obligations and accrued  interest  thereon  totaling $29,735 were converted
               into a new  promissory  note for  $119,735  dated August 9, 1999 payable upon 30 days written
               notice not to begin before  January 2, 2000 of which  $60,000 has been  repaid.  The note has
               been subsequently converted into common shares.                                                  $         59,735

         On December 4, 1996,  Magnitude,  Inc.  repurchased  500,000 shares of its common stock and retired
               same  against  issuance of a promissory  note  maturing  twelve  months  thereafter  accruing
               interest  at 5% per annum and due  December  4, 1998.  This note is overdue at  December  31,
               1999 and no demand for payment has been made through the date of our report.                               75,000

          Note dated February 11, 1999 issued to the board  chairman,  principal due May 31, 2000,  accruing
              interest at a rate of 10% per annum resulting from advances  totaling $351,060 during February
              and March 1999.  This note is secured by all of  Magnitude  Inc.'s  assets and property and is
              guaranteed by the Company.  The note has been subsequently converted into common shares.                   351,060

          Pursuant to a  promissory  note dated April 26,  1999,  a member of the Board of  Directors of the
              Company  advanced the sum of $200,000 which is due June 26, 2000 and accruing  interest at the
              rate of 12% per annum,  convertible  at the holders  option into shares of the common stock of
              the Company at the rate of .50(cent)per share.  Repayments of $31,254 have been made on the note.          168,746

         Pursuant to the Rolina  Corporation  Agreement & Plan of Merger dated  February 2, 1998 the Company
               was to deliver to its current  Chairman  and CEO of the Company,  $100,000  eight months from
               the closing date. This  indebtedness  has been recast as a promissory  note maturing  October
               1, 1999 and accruing  interest at 10% per annum. In  consideration of the  indebtedness,  the
               current  Chairman and CEO has a lien on certain software  products owned by the Company.  The
               note has been subsequently repaid by the Company in full.                                                 100,000
                                                                                                                  ---------------


                  Total                                                                                         $        754,541

                                                                                                                 ===============
</TABLE>

                                       11


<PAGE>


              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements

NOTES PAYABLE

       Private Placement Offering

         A private  offering was completed in June 1995  resulting in Magnitude,
         Inc.  selling a total of sixteen (16) units and  receiving net proceeds
         of $1,364,061 after deducting private placement agent's  commission and
         legal fees amounting of $235,939. In connection  therewith,  Magnitude,
         Inc.  issued 160,000 shares of its $.001 common stock at par. The total
         amount of such  current  notes  outstanding  at  December  31, 1999 was
         $1,475,000.  The Company has subsequently  extended an offer to convert
         such  notes into a portion of common  shares or  convertible  preferred
         shares.  As of March 24, 2000, the holders of $1,050,000 worth of notes
         have agreed to accept  partial  repayment of  approximately  30% of the
         note balance on April 30, 2000 and convert the  remaining  balance into
         common shares or convertible preferred shares.

LONG-TERM DEBT

<TABLE>
<CAPTION>
       Long-term debt as of December 31, 1999 is comprised of the following:

             Convertible  promissory  notes  issued  to  seven  individual  private  accredited  investors
             accruing  interest at 7% and maturing from June 23, 2000 through  January 20, 2001. The notes
<S>                                                                                                          <C>
             provide  the  holders  with the option to convert  part or all of the  outstanding  principal   $     1,028,000
             amounts into shares of the common stock of the Company at the rate of $0.50 per share.


             Discounted present value of a non-interest  bearing $70,000 settlement with a former investor
             of  Magnitude,  Inc. to be paid in 24 equal monthly  payments  commencing  July 1, 1997.  The
             imputed interest rate used to discount the note is 8% per annum.                                         33,529
                                                                                                               --------------
                                                                                                                   1,061,529
               Total
                   Less current maturities                                                                         1,038,779
                                                                                                               --------------
                   Long-term debt, net of current maturities                                                 $        22,750
                                                                                                               ==============

        Total maturities of long-term debt are as follows:

          Year Ending December 31,

                    2000                                                                     $      1,038,779

                    2001                                                                               22,750
                                                                                               ---------------

                                                                                             $      1,061,529
                                                                                               ===============
</TABLE>

  ACCRUED CONTINGENT LIABILITY

        Pursuant  to the  February  2, 1998,  Agreement  and Plan of Merger with
        Rolina Corporation (see "Nature of Organization), the Company has issued
        155,556   shares  of  its  common  stock  to  the  principal  of  Rolina
        Corporation  who currently  serves as the Company's  President and Chief
        Executive  Officer,  and has issued a put  option  for such  shares at a
        price of $2.41 per share in  accordance  with the  provisions  contained
        therein, with notice for exercise eligible to be given at any time after
        February 1, 2000,  and before 5:00 p.m. on the 90th day  thereafter.  In
        view of the relative  proximity of the exercise period of the option and
        the fact that the market  price for the  Company's  shares  currently is
        significantly  lower than the option  put price,  the entire  amount has
        been recognized as an accrued contingent liability.

                                       12

<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements

CAPITALIZED LEASE OBLIGATIONS

       The Company leases office  equipment under  non-cancelable  capital lease
       agreements  expiring  between  October 26, 2002 and October 27, 2002. The
       capital  lease  obligations  have been  recorded at the present  value of
       future minimum lease  payments,  discounted at an interest rate of 7.00%.
       The  capitalized  cost of  equipment  at December  31,  1999  amounted to
       $18,023 net of accumulated depreciation of $8,353.

       The following is a schedule of minimum  lease  payments due under capital
leases at December 31, 1999:


  Year Ending December 31,
  2000                                                      $          8,211
  2001                                                                 7,579
  2002                                                                 6,316
                                                              ---------------
  Total minimum capital lease payments                                22,106
  Less amounts representing interest                                   2,163
                                                              ---------------
  Present value of net minimum capital lease payments                 19,943
  Less current maturities of capital lease obligations                 6,938
                                                              ---------------
  Obligations under capital leases, excluding current
  maturities                                                $         13,005
                                                              ===============

INCOME TAXES

  The income tax provision is comprised of the following:

                                               Year Ended December 31,
                                           -----------------------------------
                                                 1999                1998
                                           ---------------     ---------------
  State current provision                 $        490,374    $              -
  State deferred provision                      -                   -
                                           ---------------     ---------------
                                          $        490,374    $              -
                                           ===============     ===============

  In 1998, the State of New Jersey enacted  legislation  allowing  emerging
  technology and/or biotechnology companies to sell their unused New Jersey
  Net Operating  Loss ("NOL")  Carryover and Research and  Development  Tax
  Credits ("R&D Credits) to corporate taxpayers in New Jersey. During 1999,
  the Company  entered  into an  agreement  under which it retained a third
  party  broker  to  identify  a buyer  for its NOL  Carryover.  The  total
  anticipated net proceeds of this transaction  ($497,238) were recorded as
  a current  deferred tax asset ($201,470) and a tax benefit of $295,768 in
  the accompanying financial statements.

  Due to limitations  placed by the State of New Jersey on the total amount
  of NOL Carryover and R&D Credits eligible to be sold in any one year, the
  sale of only a portion  of the  Company's  NOL  Carryover  ($295,768  was
  completed  in  1999).  The  receipt  of these  funds  was  recorded  as a
  reduction  to the  non-current  deferred  tax  asset in the  accompanying
  financial statements.  The sale of the remaining balance of the Company's
  NOL Carryover is anticipated by the end of the third quarter of 2000.

  The Company's total deferred tax asset and valuation allowance are as follows:
                                                         December 31,
                                              ---------------------------------
                                                   1999                1998
                                              ----------------    -------------
     Total deferred tax asset, noncurrent  $     4,240,000     $    (3,560,000)
     Less valuation allowance                   (4,240,000)         (3,560,000)
                                              ----------------    -------------
     Net deferred tax asset, noncurrent    $         -         $         -
     -----------------------------------------================    -------------


                                       13
<PAGE>






              Magnitude Information Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements

INCOME TAXES - (Continued)
       The differences  between income tax benefits in the financial  statements
       and the tax  benefit  computed  at the  combined  state and U.S.  Federal
       statutory rate of 40% are as follows:

                                                Year Ended December 31,
                                          ------------------------------------
                                                1999                1998
                                          ----------------    ----------------
   Tax benefit                                 (40%)               (40%)
   Valuation allowance                          40%                 40%
                                          ----------------    ----------------
   Effective tax rate                            -                   -
                                          ================    ----------------

       At December 31, 1999, the Company has available approximately $10,600,000
       of net operating  losses to carryforward  and which may be used to reduce
       future federal  taxable  income and expire between  December 31, 2007 and
       2019.

       At December 31, 1999, the Company has available approximately  $2,800,000
       of net operating  losses to carryforward  and which may be used to reduce
       future state taxable  income which begin to expire  through  December 31,
       2006.

401(k) PLAN

       The Company adopted the qualified  Magnitude,  Inc. sponsored 401(k) plan
       covering  substantially  all full time  employees  under  which  eligible
       employees may elect to contribute,  within statutory limits, a percentage
       of  their  annual  compensation.  The  Company  matches  up to 50% of the
       employee's  contribution  of which  the  match  may not  exceed 3% of the
       employee's  total  compensation  for the plan year.  Contributions to the
       plan were $9,592 and $16,095  for the years ended  December  31, 1999 and
       1998, respectively.

STOCK OPTION PLANS

       In April 1996,  Magnitude,  Inc.  adopted its 1996 Stock  Incentive  Plan
       ("the 1996 Plan").  The 1996 Plan provides that certain  options  granted
       thereunder  are intended to qualify as "incentive  stock  options"  (ISO)
       within the meaning of Section 422A of the United States Internal  Revenue
       Code of 1986, while  non-qualified  options may also be granted under the
       Plan.   The  initial  plan  and   subsequent   amendments   provided  for
       authorization  of up to 480,000  shares.  Pursuant to the above described
       stock  exchange  offer on July 2, 1997,  all options  under the 1996 Plan
       were  converted  into shares of the Company at a rate of 3.4676 shares of
       Magnitude, Inc. to 1 share of the Company.

       In September  1997,  the Company  adopted its 1997 Stock  Incentive  Plan
       ("the 1997 Plan").  The 1997 Plan provides that certain  options  granted
       thereunder  are intended to qualify as "incentive  stock  options"  (ISO)
       within the meaning of Section 422A of the United States Internal  Revenue
       Code of 1986, while  non-qualified  options may also be granted under the
       Plan. The initial plan and subsequent  amendments  provided for the grant
       of options for up to 1,000,000  shares.  The purchase  price per share of
       common stock deliverable upon exercise of each ISO shall not be less than
       100% of the fair market value of the common stock on the date such option
       is granted. If an ISO is issued to an individual who owns, at the time of
       grant, more than 10% of the total combined voting power of all classes of
       the Company's common stock, the exercise price of such option shall be at
       least 110% of the fair  market  value of the common  stock on the date of
       grant and the term of the  option  shall not  exceed  five years from the
       date of grant.  The  purchase  price of shares  subject to  non-qualified
       stock options shall be determined by a committee established by the Board
       of Directors  with the condition  that such prices shall not be less than
       85% of the fair market value of the common stock at the time of grant.

                                       14

<PAGE>




              Magnitude Information Systems, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>
STOCK OPTION PLANS - (Continued)
                                                                                        Qualified and Non-Qualified
                                                                                       Shares Under Option December 31,
                                                                                      ----------------------------------
                                                                                      ---------------
                                                                                             1999               1998
                                                                                      ---------------    ---------------
<S>                                                                                         <C>                <C>
Outstanding, beginning of year                                                              981,468            586,144
Granted during the year                                                                     605,000            501,162
 Forfeited during the year                                                                (791,468)          (105,838)
                                                                                     ===============    ===============
Outstanding, end of year (at prices ranging from $1.00 to $4.50                             795,000            981,468
    per share)
                                                                                     ===============    ===============
 Eligible, end of year for exercise (at prices ranging from $1.00 to                        470,000            292,597
    $4.50 per share)
                                                                                     ===============    ===============

</TABLE>

     At December 31, 1999 and 1998,  the  weighted  average  exercise  price and
     weighted  average  remaining  contractual life is $1.13 and $2.56 per share
     and 4 years 9 months and 5 years 4 months, respectively.

     At December 31, 1999, there were 343,424 shares reserved for future grants.

WARRANTS

     The Company issued common stock purchase warrants as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                               Exercise
          Date of Grant          No. of        Price Per               Exercise Term Vesting Rights
                                 Shares          Share
                                                                                        Start                   Expiration

<S>      <C>                        <C>    <C>               <C>                       <C>                       <C>
     May 1, 1997                    10,000 $          5.00   May 1, 1997               April 30, 2000            Upon Issue
     May 1, 1998                   224,000            5.00   May 1, 1998               April 30, 2003            Upon Issue
     June 10, 1999                 200,000            1.00   June 10, 1999             June 10, 2003             Upon Issue
     June 21, 1999                 200,000            1.00   June 21, 1999             June 21, 2003             Upon Issue
     June 23, 1999                 300,000            1.00   June 23, 1999             June 23, 2003             Upon Issue
     June 25, 1999                 200,000            1.00   June 25, 1999             June 25, 2003             Upon Issue
     July 13, 1999                 100,000            1.00   July 13, 1999             July 13, 2003             Upon Issue
     July 20, 1999                 100,000            1.00   July 20, 1999             July 20, 2003             Upon Issue
     July 22, 1999                 150,000            1.00   July 22, 1999             July 22, 2002             Upon Issue
     July 28, 1999                 150,000            1.00   July 28, 1999             July 28, 2006             Upon Issue
     August 19, 1999               100,000            1.00   August 19, 1999           October 4, 2003           Upon Issue
     August 30, 1999               100,000            1.00   August 30, 1999           October 4, 2003           Upon Issue
     September 7, 1999             100,000            1.00   September 7, 1999         October 4, 2003           Upon Issue
     September 21, 1999             50,000            1.00   September 21, 1999        October 4, 2003           Upon Issue
     October 4, 1999                50,000            1.00   October 4, 1999           October 4, 2003           Upon Issue
     October 8, 1999               400,000            1.00   October 8, 1999           October 8, 2004           Upon Issue
     November 8, 1999               50,000            1.00   November 8, 1999          November 8, 2003          Upon Issue
     November 16, 1999             100,000            1.00   November 16, 1999         November 16, 2003         Upon Issue
     November 20, 1999             100,000            1.00   November 20, 1999         November 20, 2003         Upon Issue
     December 28, 1999             100,000            1.00   December 28, 1999         December 28, 2004         Upon Issue
     December 30, 1999             602,332            1.00   December 30, 1999         December 30, 2004         Upon Issue

</TABLE>

     At December 31, 1999,  there were 3,386,332 shares eligible for exercise at
     prices ranging from $1.00 to $5.00 per share, of which  1,600,000  eligible
     shares are callable at $2.00 per share.

                                       15

<PAGE>



              Magnitude Information Systems, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements


COMMITMENTS AND CONTINGENCIES
     Lease Agreement
         Magnitude,  Inc. leases its administrative  offices pursuant to a lease
         agreement  dated December 9, 1998.  Such lease  commenced  December 16,
         1998 and expires on December 31, 2001 and requires  monthly payments of
         $3,700  from  December  16,  1998 to October  31,  1999 and $3,250 from
         November  1, 1999 to  December  31,  2001.  Under the lease  agreement,
         Magnitude,  Inc. is required to make future  minimum lease  payments as
         follows in addition to a pro-rata share of certain operating expenses:


                                      Year Ending December 31,

                                           2000       $       39,000

                                           2001               39,000
                                                      ---------------

                                               Total   $      78,000
                                                       ===============

         In March 2000, the Company entered into a five year lease agreement and
         will  be  relocating  its  administrative   offices.   The  Company  is
         attempting to identify a subtenant  with respect to its existing  lease
         obligation.  The new lease payment will be $6,500 payable  monthly with
         nominal increases to the base rent in years three through five.

         Included in general and  administrative  expenses is rent expense which
         amounted to $64,125 and $103,580 for the years ended  December 31, 1999
         and 1998, respectively.

       Licensing Agreement
         On August 29,  1997,  the Company  signed a letter of intent to acquire
         Cornell  Ergonomics  ("Cornell")  a  software  developer  of  a  unique
         ergonomic  assessment tool. This agreement was subsequently  revised on
         December 1, 1997 through a Software  Distribution  and Option Agreement
         whereby the Company obtained a two-year exclusive license to distribute
         and sub-license a certain  software  product.  The Company also has the
         exclusive right,  under certain  circumstances,  to purchase either the
         assets of Cornell or all of the issued and outstanding capital stock of
         Cornell.  In January 2000 the Company  purchased  all of the issued and
         outstanding capital stock of Cornell.

       Employment Agreements
         The Company has entered  into  employment  agreements  with certain key
         personnel  which  provide for a base salary,  yearly  bonuses in common
         stock and/or options of the Company and other benefits.  Termination of
         the agreements may be made by either party with advance notice.

RELATED PARTY TRANSACTIONS

         In November 1998, the Company entered into a consulting  agreement with
         an individual who  subsequently,  in January 1999, joined the Company's
         board of directors,  and pursuant to which the Company issued 1,000,000
         shares of common  stock.  Such  shares were  registered  on Form S-8 on
         December 22, 1998.  During the first quarter of 1999, this  individual,
         pursuant  to  the  consulting   agreement,   obtained  the  release  of
         approximately $436,000 of the Company's liabilities.

         Between December 30, 1998, and March 31, 1999, a director and principal
         shareholder  extended working capital loans aggregating $395,560 to the
         Company, of which a portion of $351,060 was the subject of a promissory
         note  bearing  interest  at the rate of 10% per annum  During  the same
         time,  this  director  and  shareholder  exercised  options to purchase
         450,000  shares of the common stock of the  Company,  and was issued an
         additional  565,000 shares,  against a combination of cash payments and
         cancellation  of debt owed by the  Company in the  aggregate  amount of
         $507,500.

                                       16

<PAGE>





              Magnitude Information Systems, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

MAJOR CUSTOMERS

       For the year ended December 31, 1998,  the Company had a major  customer,
       sales of hardware products to which represented  approximately 38% of the
       Company's  revenues.  The Company had an accounts  receivable balance due
       from this customer of $35,730 at December 31, 1998.  With the sale of the
       hardware product line, the Company's business is now focused  exclusively
       on the further  development and marketing of these software products.  As
       such,  the  Company   currently  must  be  considered  an  enterprise  in
       transition,  because  it has  not yet  realized  material  revenues  from
       licensing its software.

FAIR VALUE OF FINANCIAL INSTRUMENTS

       Cash,  accounts  receivable,  accounts payable,  accrued expenses,  notes
       payable, long-term debt and capitalized lease obligations:
           The carrying amount approximates fair value because of the short term
maturity of these instruments.

       Limitations
           Fair value  estimates are made at a specific point in time,  based on
           relevant information and information about the financial  instrument.
           These  estimates are  subjective in nature and involve  uncertainties
           and  matters  of  significant   judgment  and  therefore   cannot  be
           determined with precision.
           Changes in assumptions could significantly affect the estimates.

SUBSEQUENT EVENTS

       Changes in Key Personnel
         In January 1999,  the Chairman of the Board of Directors  resigned.  In
         connection with this individual's resignation, $350,000 of the $900,000
         principal  amount  cumulative  preferred shares held by this individual
         were exchanged for 700,000  shares of common stock of the Company.  The
         remaining  principal  balance of $550,000 along with a promissory  note
         totalling  $351,060 were exchanged for a $900,000 principal amount of a
         new series of convertible  preferred shares which have rights of 7% per
         annum  dividend  payments  to be made  monthly.  In  connection  with a
         termination agreement dated January 28, 2000 a restrictive covenant and
         confidentiality  agreement was executed  whereby the Company  agreed to
         pay this  individual  a monthly fee in the amount of $5,555 over the 36
         month term of that agreement  along with this  individual's  health and
         term life insurance for an 18 month period.

         Conversion of Debt

         As of March 24, 2000, the Company converted approximately $1,643,235 of
         debt into 2,777,116  common shares and 90,287  preferred  shares of the
         Company.

         Equity Placements

         As of March 24,  2000,  the Company had received  $200,000  pursuant to
         private  equity  placements  under which 400,000 shares of common stock
         was issued. In addition the Company received  $1,990,900  pursuant to a
         firm  commitment  equity  financing  transaction  under which shares of
         common  stock and a new series of  convertible  preferred  shares  with
         detachable common stock purchase warrants will be issued.

                                       17

<PAGE>



                                                                EXHIBIT 4.1

                      CERTIFICATE OF POWERS, DESIGNATIONS,
                      PREFERENCES AND RIGHTS OF THE SHARES
                            OF THE PREFERRED STOCK OF
                       MAGNITUDE INFORMATION SYSTEMS, INC.

                                To Be Designated
                   Series A Senior Convertible Preferred Stock


         Magnitude  Information  Systems,  Inc.,  a  Delaware  corporation  (the
"Corporation"), in accordance with Section 103 of the General Corporation Law of
the State of Delaware  ("DGCL"),  by its  President,  does hereby  certify  that
during a meeting on Jabuary 28, 2000, the Board of Directors of the  Corporation
duly adopted the following resolutions providing for the issuance of a series of
Preferred Stock to be designated  Series A Senior  Convertible  Preferred Stock,
par value $.001, and to consist of 300,000 shares:

             RESOLVED,  that the Corporation is hereby  authorized to amend
             its Certificate of Incorporation  and to file a Certificate of
             Designations  of Preferred Stock to provide for 300,000 shares
             of  Series A Senior  Convertible  Preferred  Stock,  $.001 par
             value ("Series A Senior Preferred"), pursuant to the terms and
             conditions set forth in the Certificate of Designations;

             RESOLVED, that the rights,  privileges and limitations of each
             share of Series A Senior Preferred shall be as follows:

         1.  Issuance.  The series of Preferred  Stock  designated  as
Series A Senior  Preferred  shall consist of 300,000 shares.

         2. Dividends.  The holders of said shares of Series A Senior  Preferred
shall be entitled to receive  cumulative  dividends thereon at the rate of seven
percent (7%) per annum during the first annual period after issuance, increasing
by  increments  of one half of one percent for every year  thereafter  until the
rate  reaches  ten  percent  (10%) per annum at which time it will remain at 10%
(the  "Dividend  rate"),  payable  semi-annually  when  declared by the Board of
Directors,  before any dividend  shall be declared,  set apart for, or paid upon
the Common  Stock of the  Corporation.  The  Dividend  Rate shall  accrue on the
Liquidation Price (as hereinafter  defined) of each share of the Series A Senior
Preferred.  The  dividends  on the Series A Senior  Preferred,  payable in cash,
shall be cumulative,  so that if the Corporation fails in any fiscal year to pay
such dividends on all the issued and outstanding Series A Senior Preferred, such
deficiency in the dividends  shall be fully paid, but without  interest,  before
any dividends  shall be paid on or set apart for the Cumulative  Preferred Stock
or the Common Stock.

         3.  Priority.  The  Series A Senior  Preferred  shall  with  respect to
dividend rights and  liquidation  rights rank prior to all classes and series of
Common Stock and the Cumulative  Preferred Stock, and on a par with the Series B
and C Senior Convertible Preferred Stock.

         4.  Voting.  Except as  required by the DGCL and as provided in Section
(7) below,  the holders of said shares of Series A Senior Preferred shall not be
entitled to any voting rights.

         5.  Cancellation.  Shares of Series A Senior  Preferred which have been
issued and  reacquired in any manner,  including  shares  purchased or converted
into Common Stock, exchanged or redeemed,  shall be canceled on the books of the
Corporation and shall not be considered outstanding for any purpose.

                                       1

<PAGE>


         6.  Liquidation.  In the  event  of any  liquidation,  dissolution,  or
winding up of the affairs of the  Corporation,  whether  voluntary or otherwise,
after payment or provision for payment of the debts and other liabilities of the
Corporation,  the holders of the Series A Senior  Preferred shall be entitled to
receive, out of the remaining net assets of the Corporation,  the amount of Five
($5.00)  Dollars for each share of Series A Senior  Preferred (the  "Liquidation
Price")  held of record by such  holder,  payable in cash or in shares of stock,
securities or other consideration, the value of which stock, securities or other
consideration  shall be fixed by the Board of Directors,  plus the amount of all
dividends  in arrears on each such share up to the date fixed for  distribution,
provided,  however,  that such  remaining net assets are sufficient to cover all
the before mentioned  payments and also like payments to holders of Series B and
C Senior  Preferred,  before any  distribution  shall be made to the  holders of
Common Stock or  Cumulative  Preferred  Stock of the  Corporation.  In case such
remaining net assets are  insufficient  to cover all such payments to holders of
Series A, B and C Senior  Preferred,  the holders of these series shall  receive
payments on a pro rata basis.

         7.  Cumulative  Dividends.  During  such  time as  there  exist  unpaid
cumulative  dividends due on the Series A Senior Preferred,  no reclassification
of the shares of the Corporation or capital reorganization of the Corporation in
any manner  provided by law shall be valid  unless (a) the holders of a majority
of all the Series A Senior Preferred approve,  and (b) provision is made for the
payment of the aggregate unpaid cumulative dividends then in arrears.

         8.   Redemption.

         (i) The Corporation  shall have the right to redeem pro rata any or all
of its Series A Senior  Preferred  issued and  outstanding at any time, with the
Board of Directors of the Corporation in its sole  discretion  deciding how many
shares to redeem, provided,  however, that any such shares called for redemption
have been issued and outstanding for a minimum of three (3) years at the time of
notice of  redemption  to the holders of such  shares,  by paying to the holders
thereof the Liquidation  Price for each share of Series A Senior  Preferred held
by such holder plus a "call premium" of 15% of the Liquidation  Price,  together
with the amount of any  accrued  and unpaid  dividends  as may have  accumulated
thereon at the time of redemption (the "Redemption Price").

         (ii) At least 10 days but not more than 30 days prior to the date fixed
by the Board of Directors of the Corporation for the redemption of any shares of
the Series A Senior Preferred pursuant to subsection (i) above, a written notice
shall be  mailed  to the  holder  of  record  of such  shares of Series A Senior
Preferred to be redeemed,  at the address of such holder as shown on the records
of the Corporation,  notifying such holder of the election of the Corporation to
redeem such shares,  stating the date fixed for redemption thereof  (hereinafter
referred to as the "Redemption Date"), and calling upon such holder to surrender
to the Corporation on the Redemption Date at the place designated in such notice
such holder's  certificate or certificates  representing the number of shares of
Series A Senior  Preferred  specified in such notice of redemption.  On or after
the Redemption  Date,  each holder of shares of Series A Senior  Preferred to be
redeemed shall present and surrender such holder's  certificate or  certificates
for such shares to the  Corporation  at the place  designated in such notice and
thereupon the  Redemption  Price of such shares shall be paid to or to the order
of the person  whose name appears on such  certificate  or  certificates  as the
owner thereof and each surrendered certificate shall be canceled. From and after
the Redemption  Date (unless default shall be made by the Corporation in payment
if the Redemption  Price),  all dividends on the Series A Senior Preferred shall
cease to accrue and all rights of the  holders  thereof as  stockholders  of the
Corporation,  except the right to receive the Redemption  Price thereof upon the
surrender of certificates representing the same, without interest thereon, shall
cease and terminate and such shares shall not thereafter be transferred  (except
with the consent of the  Corporation)  on the books of the  Corporation and such
shares shall not be deemed to be outstanding for any purpose whatsoever.

         (iii) The holder of any shares of Series A Senior Preferred notified by
the  Corporation  of the redemption of such shares  pursuant to subsection  (ii)
above  shall have the right to  exercise  his option to convert  such  shares of
Series A Senior  Preferred  into  Common  Stock of the  Corporation  pursuant to
Section (9) below,  by notifying  the  Corporation  in writing or via  facsimile
prior to the Redemption Date of his election to convert,  in the form prescribed
therefore.  The  Corporation,  after  receipt of such notice  shall  remove such
shares from the shares to be redeemed.

                                       2

<PAGE>


         9.  Conversion.  Each  share  of  Series A  Senior  Preferred  shall be
convertible  at any time prior to the Redemption  Date, at the holder's  option,
into such number (the  "Conversion  Ratio") of shares of the Common Stock of the
Corporation as arrived at by dividing the Liquidation Price by one hundred fifty
(150)  percent  of the  market  price of the  Common  Stock  of the  Corporation
("Market  Price")  on the  earlier  of the dates  such  share of Series A Senior
Preferred is subscribed for or issued (the "Effective  Date"),  which Conversion
Rate shall be noted in the stock  certificate  for such share of Series A Senior
Preferred.  "Market Price" shall mean the average daily bid and asked prices for
the Company's  Common Stock as reported on the Electronic  Bulletin Board, or on
the primary  stock  exchange on which the Common Stock is listed,  during the 20
consecutive  trading day period  immediately  preceding the Effective  Date. The
holder of any shares of Series A Senior  Preferred  who elects to convert his or
her  Series A Senior  Preferred  into  Common  Stock  of the  Corporation  shall
surrender, at the principal office of the Corporation or at such other office or
agency  maintained by the  Corporation  for that  purpose,  the  certificate  or
certificates  representing  the  shares  of  Series  A  Senior  Preferred  to be
converted, together with a written affidavit informing the Corporation of his or
her  election  to  convert  such  shares,  whereby  the date of  receipt  by the
Corporation of such  certificates and affidavit shall constitute the "Conversion
Date".  As promptly as  practicable,  and in any event within ten business  days
after surrender of such certificates,  the Corporation shall deliver or cause to
be delivered certificates  representing the number of validly issued, fully paid
and  non-assessable  shares of Common  Stock of the  Corporation  to which  such
holder  of  Series A Senior  Preferred  so  converted  shall be  entitled,  with
fractional  shares  to be paid  for in cash  based on the  closing  price of the
Common Stock of the Corporation on the Conversion Date. Such conversion shall be
deemed to have been made at the close of business  on the  Conversion  Date,  so
that the rights of the holders of the Series A Senior Preferred shall thereafter
cease  except  for the  right to  receive  Common  Stock of the  Corporation  in
accordance  herewith,  and such converting  holder of Series A Senior  Preferred
shall be treated  for all  purposes as having  become the record  holder of such
Common Stock of the Corporation at such time.

         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series A Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  A Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series A Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive, upon such conversion,  the same number of shares of Common Stock of the
Corporation  that he would have  received had he  converted  his Series A Senior
Preferred Stock to Common Stock prior to such change in the  outstanding  shares
of Common Stock of the Corporation.

         IN WITNESS WHEREOF,  we, the undersigned,  have executed and subscribed
this certificate on January 28, 2000.





                                     ___/s/ Steven D. Rudnik________
                                     Steven D. Rudnik, President


ATTEST:


__/s/ Joerg H. Klaube_______
Joerg H. Klaube, Secretary



                                       3
<PAGE>



                                  Amendment to
 Certificate of Powers, Designations, Preferences and Rights of the Preferred
      Stock of Magnitude Information Systems, Inc. in re: To Be Designated
               Series A Senior Preferred Stock
      As filed with the Secretary of the State of Delaware on March 20, 2000.



Section 10 "Anti-Dilution" is being replaced in its entirety, as follows:


         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series A Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  A Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series A Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive,  upon such  conversion,  a number  of  shares  of  Common  Stock of the
Corporation  representing  the same  percentage of common shares  outstanding as
represented  by the shares  that he would have  received  had he  converted  his
Series A Senior  Preferred  Stock to Common  Stock  prior to such  change in the
outstanding shares of Common Stock of the Corporation.


                                       4
<PAGE>



                                                                 EXHIBIT 4.2

                      CERTIFICATE OF POWERS, DESIGNATIONS,
                      PREFERENCES AND RIGHTS OF THE SHARES
                            OF THE PREFERRED STOCK OF
                       MAGNITUDE INFORMATION SYSTEMS, INC.

                                To Be Designated
                   Series B Senior Convertible Preferred Stock


         Magnitude  Information  Systems,  Inc.,  a  Delaware  corporation  (the
"Corporation"), in accordance with Section 103 of the General Corporation Law of
the State of Delaware  ("DGCL"),  by its  President,  does hereby  certify  that
during a meeting on January 28, 2000, the Board of Directors of the  Corporation
duly adopted the following resolutions providing for the issuance of a series of
Preferred Stock to be designated  Series B Senior  Convertible  Preferred Stock,
par value $.001, and to consist of 350,000 shares:

          RESOLVED,  that the Corporation is hereby  authorized to amend
          its Certificate of Incorporation  and to file a Certificate of
          Designations  of Preferred Stock to provide for 350,000 shares
          of  Series B Senior  Convertible  Preferred  Stock,  $.001 par
          value ("Series B Senior Preferred"), pursuant to the terms and
          conditions set forth in the Certificate of Designations;

          RESOLVED, that the rights,  privileges and limitations of each
          share of Series B Senior Preferred shall be as follows:

         1.  Issuance.  The series of Preferred  Stock  designated  as
 Series B Senior  Preferred  shall consist of 350,000 shares.

         2. Dividends.  The holders of said shares of Series B Senior  Preferred
shall be entitled to receive  cumulative  dividends thereon at the rate of seven
percent  (7%) per annum,  payable  semi-annually  when  declared by the Board of
Directors,  before any dividend  shall be declared,  set apart for, or paid upon
the Common  Stock of the  Corporation.  The  Dividend  Rate shall  accrue on the
Liquidation Price (as hereinafter  defined) of each share of the Series B Senior
Preferred.  The  dividends  on the Series B Senior  Preferred,  payable in cash,
shall be cumulative,  so that if the Corporation fails in any fiscal year to pay
such dividends on all the issued and outstanding Series B Senior Preferred, such
deficiency in the dividends  shall be fully paid, but without  interest,  before
any dividends  shall be paid on or set apart for the Cumulative  Preferred Stock
or the Common Stock.

         3.  Priority.  The  Series B Senior  Preferred  shall  with  respect to
dividend rights and  liquidation  rights rank prior to all classes and series of
Common Stock and the Cumulative  Preferred Stock, and on a par with the Series A
and C Senior Convertible Preferred Stock.

         4.  Voting.  Except as  required by the DGCL and as provided in Section
(7) below,  the holders of said shares of Series B Senior Preferred shall not be
entitled to any voting rights.

         5.  Cancellation.  Shares of Series B Senior  Preferred which have been
issued and  reacquired in any manner,  including  shares  purchased or converted
into Common Stock, exchanged or redeemed,  shall be canceled on the books of the
Corporation and shall not be considered outstanding for any purpose.

         6.  Liquidation.  In the  event  of any  liquidation,  dissolution,  or
winding up of the affairs of the  Corporation,  whether  voluntary or otherwise,
after payment or provision for payment of the debts and other liabilities of the
Corporation,  the holders of the Series B Senior  Preferred shall be entitled to
receive, out of the remaining net assets of the Corporation,  the amount of nine


                                       1

<PAGE>

($9.00)  Dollars for each share of Series B Senior  Preferred (the  "Liquidation
Price")  held of record by such  holder,  payable in cash or in shares of stock,
securities or other consideration, the value of which stock, securities or other
consideration  shall be fixed by the Board of Directors,  plus the amount of all
dividends  in arrears on each such share up to the date fixed for  distribution,
provided,  however,  that such  remaining net assets are sufficient to cover all
the before mentioned  payments and also like payments to holders of Series A and
C Senior  Preferred,  before any  distribution  shall be made to the  holders of
Common Stock or  Cumulative  Preferred  Stock of the  Corporation.  In case such
remaining net assets are  insufficient  to cover all such payments to holders of
Series A, B and C Senior  Preferred,  the holders of these series shall  receive
payments on a pro rata basis.

         7.  Cumulative  Dividends.  During  such  time as  there  exist  unpaid
cumulative  dividends due on the Series B Senior Preferred,  no reclassification
of the shares of the Corporation or capital reorganization of the Corporation in
any manner  provided by law shall be valid  unless (a) the holders of a majority
of all the Series B Senior Preferred approve,  and (b) provision is made for the
payment of the aggregate unpaid cumulative dividends then in arrears.

         8.   Redemption.

         (i) The Corporation  shall have the right to redeem pro rata any or all
of its Series B Senior  Preferred  issued and  outstanding at any time, with the
Board of Directors of the Corporation in its sole  discretion  deciding how many
shares to redeem, provided,  however, that any such shares called for redemption
have been issued and outstanding for a minimum of three (3) years at the time of
notice of  redemption  to the holders of such  shares,  by paying to the holders
thereof the Liquidation  Price for each share of Series B Senior  Preferred held
by such holder plus a "call premium" of 10% of the Liquidation  Price,  together
with the amount of any  accrued  and unpaid  dividends  as may have  accumulated
thereon at the time of redemption (the "Redemption Price").

         (ii) At least 10 days but not more than 30 days prior to the date fixed
by the Board of Directors of the Corporation for the redemption of any shares of
the Series B Senior Preferred pursuant to subsection (i) above, a written notice
shall be  mailed  to the  holder  of  record  of such  shares of Series B Senior
Preferred to be redeemed,  at the address of such holder as shown on the records
of the Corporation,  notifying such holder of the election of the Corporation to
redeem such shares,  stating the date fixed for redemption thereof  (hereinafter
referred to as the "Redemption Date"), and calling upon such holder to surrender
to the Corporation on the Redemption Date at the place designated in such notice
such holder's  certificate or certificates  representing the number of shares of
Series B Senior  Preferred  specified in such notice of redemption.  On or after
the Redemption  Date,  each holder of shares of Series B Senior  Preferred to be
redeemed shall present and surrender such holder's  certificate or  certificates
for such shares to the  Corporation  at the place  designated in such notice and
thereupon the  Redemption  Price of such shares shall be paid to or to the order
of the person  whose name appears on such  certificate  or  certificates  as the
owner thereof and each surrendered certificate shall be canceled. From and after
the Redemption  Date (unless default shall be made by the Corporation in payment
if the Redemption  Price),  all dividends on the Series B Senior Preferred shall
cease to accrue and all rights of the  holders  thereof as  stockholders  of the
Corporation,  except the right to receive the Redemption  Price thereof upon the
surrender of certificates representing the same, without interest thereon, shall
cease and terminate and such shares shall not thereafter be transferred  (except
with the consent of the  Corporation)  on the books of the  Corporation and such
shares shall not be deemed to be outstanding for any purpose whatsoever.

         (iii) The holder of any shares of Series B Senior Preferred notified by
the  Corporation  of the redemption of such shares  pursuant to subsection  (ii)
above  shall have the right to  exercise  his option to convert  such  shares of
Series B Senior  Preferred  into  Common  Stock of the  Corporation  pursuant to
Section (9) below,  by notifying  the  Corporation  in writing or via  facsimile
prior to the Redemption Date of his election to convert,  in the form prescribed
therefore.  The  Corporation,  after  receipt of such notice  shall  remove such
shares from the shares to be redeemed.

                                       2

<PAGE>


         9.  Conversion.  Each  share  of  Series B  Senior  Preferred  shall be
convertible  at any time prior to the Redemption  Date, at the holder's  option,
into shares of Common Stock of the  Corporation  on the basis of ten (10) shares
of  Common  Stock for 1 share of Series B Senior  Preferred.  The  holder of any
shares of Series B Senior  Preferred  who elects to convert  his or her Series B
Senior Preferred into Common Stock of the Corporation  shall  surrender,  at the
principal office of the Corporation or at such other office or agency maintained
by  the   Corporation   for  that  purpose,   the  certificate  or  certificates
representing the shares of Series B Senior  Preferred to be converted,  together
with a written  affidavit  informing the  Corporation  of his or her election to
convert  such  shares,  whereby the date of receipt by the  Corporation  of such
certificates  and affidavit shall  constitute the "Conversion  Date",  and which
affidavit,  in case the  Conversion  Date precedes the first  anniversary of the
date of issue of such  certificate or  certificates  representing  the shares of
Series B Senior  Preferred  to be  converted,  includes  an  agreement  with the
Corporation  not to sell or  transfer  the  shares of Common  Stock to be issued
pursuant to this conversion,  before the first  anniversary of the date of issue
of the  certificate or certificates  representing  the shares of Series B Senior
Preferred being converted.  As promptly as practicable,  and in any event within
ten business days after surrender of such  certificates,  the Corporation  shall
deliver or cause to be delivered certificates representing the number of validly
issued, fully paid and non-assessable  shares of Common Stock of the Corporation
to which  such  holder  of  Series  B Senior  Preferred  so  converted  shall be
entitled,  and where the Conversion  Date precedes the first  anniversary of the
date of issue of the certificates for Series B Senior Preferred to be converted,
the agreed upon  restriction  against  sales or transfer  shall be duly noted on
such  certificates.  Such  conversion  shall be  deemed to have been made at the
close of business on the  Conversion  Date, so that the rights of the holders of
the Series B Senior  Preferred  shall  thereafter  cease except for the right to
receive  Common  Stock  of the  Corporation  in  accordance  herewith,  and such
converting holder of Series B Senior Preferred shall be treated for all purposes
as having  become the record holder of such Common Stock of the  Corporation  at
such time.

         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series B Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  B Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series B Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive, upon such conversion,  the same number of shares of Common Stock of the
Corporation  that he would have  received had he  converted  his Series B Senior
Preferred Stock to Common Stock prior to such change in the  outstanding  shares
of Common Stock of the Corporation.

         IN WITNESS  WHEREOF,  we, the  undersigned,  have executed and
subscribed this  certificate on January 28, 2000.





                                    ___/s/ Steven D. Rudnik________
                                    Steven D. Rudnik, President


ATTEST:


__/s/ Joerg H. Klaube_______
Joerg H. Klaube, Secretary

                                       3


<PAGE>



                                  Amendment to
 Certificate of Powers, Designations, Preferences and Rights of the Shares of
      the Preferred Stock of Magnitude Information Systems, Inc. in re:
           To Be Designated Series B Senior Preferred Stock
      As filed with the  Secretary 4of the State of  Delaware on March 20, 2000.



Section 10 "Anti-Dilution" is being replaced in its entirety, as follows:


         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series B Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  B Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series B Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive,  upon such  conversion,  a number  of  shares  of  Common  Stock of the
Corporation  representing  the same  percentage of common shares  outstanding as
represented  by the shares  that he would have  received  had he  converted  his
Series B Senior  Preferred  Stock to Common  Stock  prior to such  change in the
outstanding shares of Common Stock of the Corporation.


                                       4

<PAGE>



                                                                 EXHIBIT 4.3

                      CERTIFICATE OF POWERS, DESIGNATIONS,
                      PREFERENCES AND RIGHTS OF THE SHARES
                            OF THE PREFERRED STOCK OF
                       MAGNITUDE INFORMATION SYSTEMS, INC.

                                To Be Designated
                   Series C Senior Convertible Preferred Stock


         Magnitude  Information  Systems,  Inc.,  a  Delaware  corporation  (the
"Corporation"), in accordance with Section 103 of the General Corporation Law of
the State of Delaware  ("DGCL"),  by its  President,  does hereby  certify  that
during a meeting on January 28, 2000, the Board of Directors of the  Corporation
duly adopted the following resolutions providing for the issuance of a series of
Preferred Stock to be designated  Series C Senior  Convertible  Preferred Stock,
par value $.001, and to consist of 120,000 shares:

         RESOLVED,  that the Corporation is hereby  authorized to amend
         its Certificate of Incorporation  and to file a Certificate of
         Designations  of Preferred Stock to provide for 120,000 shares
         of  Series C Senior  Convertible  Preferred  Stock,  $.001 par
         value ("Series C Senior Preferred"), pursuant to the terms and
         conditions set forth in the Certificate of Designations;

         RESOLVED, that the rights,  privileges and limitations of each
         share of Series C Senior Preferred shall be as follows:

         1.  Issuance.  The series of Preferred  Stock  designated  as
Series C Senior  Preferred  shall consist of 120,000 shares.

         2. Dividends.  The holders of said shares of Series C Senior  Preferred
shall be entitled to receive  cumulative  dividends thereon at the rate of seven
percent (7%) per annum, payable monthly,  before any dividend shall be declared,
set apart for, or paid upon the Common  Stock of the  Corporation.  The Dividend
Rate shall  accrue on the  Liquidation  Price (as  hereinafter  defined) of each
share of the Series C Senior  Preferred.  The  dividends  on the Series C Senior
Preferred,  payable in cash,  shall be  cumulative,  so that if the  Corporation
fails in any fiscal year to pay such dividends on all the issued and outstanding
Series C Senior Preferred, such deficiency in the dividends shall be fully paid,
but without interest, before any dividends shall be paid on or set apart for the
Cumulative Preferred Stock or the Common Stock.

         3.  Priority.  The  Series C Senior  Preferred  shall  with  respect to
dividend rights and  liquidation  rights rank prior to all classes and series of
Common Stock and the Cumulative  Preferred Stock, and on a par with the Series A
and B Senior Convertible Preferred Stock.

         4.  Voting.  Except as  required by the DGCL and as provided in Section
(7) below,  the holders of said shares of Series C Senior Preferred shall not be
entitled to any voting rights.

         5.  Cancellation.  Shares of Series C Senior  Preferred which have been
issued and  reacquired in any manner,  including  shares  purchased or converted
into Common Stock, exchanged or redeemed,  shall be canceled on the books of the
Corporation and shall not be considered outstanding for any purpose.

         6.  Liquidation.  In the  event  of any  liquidation,  dissolution,  or
winding up of the affairs of the  Corporation,  whether  voluntary or otherwise,
after payment or provision for payment of the debts and other liabilities of the
Corporation,  the holders of the Series C Senior  Preferred shall be entitled to
receive, out of the remaining net assets of the Corporation,  the amount of nine

                                       1

<PAGE>

($9.00)  Dollars for each share of Series C Senior  Preferred (the  "Liquidation
Price")  held of record by such  holder,  payable in cash or in shares of stock,
securities or other consideration, the value of which stock, securities or other
consideration  shall be fixed by the Board of Directors,  plus the amount of all
dividends  in arrears on each such share up to the date fixed for  distribution,
provided,  however,  that such  remaining net assets are sufficient to cover all
the before mentioned  payments and also like payments to holders of Series A and
B Senior  Preferred,  before any  distribution  shall be made to the  holders of
Common Stock or  Cumulative  Preferred  Stock of the  Corporation.  In case such
remaining net assets are  insufficient  to cover all such payments to holders of
Series A, B and C Senior  Preferred,  the holders of these series shall  receive
payments on a pro rata basis.

         7.  Cumulative  Dividends.  During  such  time as  there  exist  unpaid
cumulative  dividends due on the Series C Senior Preferred,  no reclassification
of the shares of the Corporation or capital reorganization of the Corporation in
any manner  provided by law shall be valid  unless (a) the holders of a majority
of all the Series C Senior Preferred approve,  and (b) provision is made for the
payment of the aggregate unpaid cumulative dividends then in arrears.

         8.   Redemption.

         (i) The Corporation  shall have the right to redeem pro rata any or all
of its Series C Senior  Preferred  issued and  outstanding at any time, with the
Board of Directors of the Corporation in its sole  discretion  deciding how many
shares to redeem, provided,  however, that any such shares called for redemption
have been issued and outstanding for a minimum of three (3) years at the time of
notice of  redemption  to the holders of such  shares,  by paying to the holders
thereof the Liquidation  Price for each share of Series C Senior  Preferred held
by such holder plus a "call premium" of 10% of the Liquidation  Price,  together
with the amount of any  accrued  and unpaid  dividends  as may have  accumulated
thereon at the time of redemption (the "Redemption Price").

         (ii) At least 10 days but not more than 30 days prior to the date fixed
by the Board of Directors of the Corporation for the redemption of any shares of
the Series C Senior Preferred pursuant to subsection (i) above, a written notice
shall be  mailed  to the  holder  of  record  of such  shares of Series C Senior
Preferred to be redeemed,  at the address of such holder as shown on the records
of the Corporation,  notifying such holder of the election of the Corporation to
redeem such shares,  stating the date fixed for redemption thereof  (hereinafter
referred to as the "Redemption Date"), and calling upon such holder to surrender
to the Corporation on the Redemption Date at the place designated in such notice
such holder's  certificate or certificates  representing the number of shares of
Series C Senior  Preferred  specified in such notice of redemption.  On or after
the Redemption  Date,  each holder of shares of Series C Senior  Preferred to be
redeemed shall present and surrender such holder's  certificate or  certificates
for such shares to the  Corporation  at the place  designated in such notice and
thereupon the  Redemption  Price of such shares shall be paid to or to the order
of the person  whose name appears on such  certificate  or  certificates  as the
owner thereof and each surrendered certificate shall be canceled. From and after
the Redemption  Date (unless default shall be made by the Corporation in payment
if the Redemption  Price),  all dividends on the Series C Senior Preferred shall
cease to accrue and all rights of the  holders  thereof as  stockholders  of the
Corporation,  except the right to receive the Redemption  Price thereof upon the
surrender of certificates representing the same, without interest thereon, shall
cease and terminate and such shares shall not thereafter be transferred  (except
with the consent of the  Corporation)  on the books of the  Corporation and such
shares shall not be deemed to be outstanding for any purpose whatsoever.

         (iii) The holder of any shares of Series C Senior Preferred notified by
the  Corporation  of the redemption of such shares  pursuant to subsection  (ii)
above  shall have the right to  exercise  his option to convert  such  shares of
Series C Senior  Preferred  into  Common  Stock of the  Corporation  pursuant to
Section (9) below,  by notifying  the  Corporation  in writing or via  facsimile
prior to the Redemption Date of his election to convert,  in the form prescribed
therefore.  The  Corporation,  after  receipt of such notice  shall  remove such
shares from the shares to be redeemed.

                                       2

<PAGE>

         9.  Conversion.  Each  share  of  Series C  Senior  Preferred  shall be
convertible  at any time prior to the Redemption  Date, at the holder's  option,
into shares of Common Stock of the  Corporation  on the basis of ten (10) shares
of  Common  Stock for 1 share of Series C Senior  Preferred.  The  holder of any
shares of Series B Senior  Preferred  who elects to convert  his or her Series C
Senior Preferred into Common Stock of the Corporation  shall  surrender,  at the
principal office of the Corporation or at such other office or agency maintained
by  the   Corporation   for  that  purpose,   the  certificate  or  certificates
representing the shares of Series C Senior  Preferred to be converted,  together
with a written  affidavit  informing the  Corporation  of his or her election to
convert  such  shares,  whereby the date of receipt by the  Corporation  of such
certificates  and affidavit shall  constitute the "Conversion  Date",  and which
affidavit,  in case the  Conversion  Date precedes the first  anniversary of the
date of issue of such  certificate or  certificates  representing  the shares of
Series C Senior  Preferred  to be  converted,  includes  an  agreement  with the
Corporation  not to sell or  transfer  the  shares of Common  Stock to be issued
pursuant to this conversion,  before the first  anniversary of the date of issue
of the  certificate or certificates  representing  the shares of Series C Senior
Preferred being converted.  As promptly as practicable,  and in any event within
ten business days after surrender of such  certificates,  the Corporation  shall
deliver or cause to be delivered certificates representing the number of validly
issued, fully paid and non-assessable  shares of Common Stock of the Corporation
to which  such  holder  of  Series  C Senior  Preferred  so  converted  shall be
entitled,  and where the Conversion  Date precedes the first  anniversary of the
date of issue of the certificates for Series C Senior Preferred to be converted,
the agreed upon  restriction  against  sales or transfer  shall be duly noted on
such  certificates.  Such  conversion  shall be  deemed to have been made at the
close of business on the  Conversion  Date, so that the rights of the holders of
the Series C Senior  Preferred  shall  thereafter  cease except for the right to
receive  Common  Stock  of the  Corporation  in  accordance  herewith,  and such
converting holder of Series C Senior Preferred shall be treated for all purposes
as having  become the record holder of such Common Stock of the  Corporation  at
such time.

         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series C Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  C Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series C Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive, upon such conversion,  the same number of shares of Common Stock of the
Corporation  that he would have  received had he  converted  his Series C Senior
Preferred Stock to Common Stock prior to such change in the  outstanding  shares
of Common Stock of the Corporation.

         IN WITNESS  WHEREOF,  we, the  undersigned,  have executed and
subscribed this  certificate on January 28,2000 .





                                              ___/s/ Steven D. Rudnik________
                                              Steven D. Rudnik, President


ATTEST:


__/s/ Joerg H. Klaube_______
Joerg H. Klaube, Secretary






                                       3
<PAGE>



                                  Amendment to
 Certificate of Powers, Designations, Preferences and Rights of the Shares
     of the Preferred Stock of Magnitude  Information Systems, Inc.
           in re: To Be Designated Series C Senior Preferred Stock
     As filed with the  Secretary  of the State of  Delaware on March 20, 2000.



Section 10 "Anti-Dilution" is being replaced in its entirety, as follows:


         10.  Anti-Dilution.  In the event that,  prior to the conversion of the
Series C Senior  Preferred  Stock by the holder thereof into Common Stock of the
Corporation,  there shall occur any change in the  outstanding  shares of Common
Stock of the  Corporation by reason of the  declaration of stock  dividends,  or
through a recapitalization resulting from stock splits or combinations,  without
the receipt by the  Corporation  of fair  consideration  therefor in the form of
cash,  services  or  property,  the  conversion  ratio  of the  Series  C Senior
Preferred Stock into Common Stock of the Corporation provided for in Section (9)
above shall be adjusted such that any holder of Series C Senior  Preferred Stock
converting  such  stock  into  Common  Stock  subsequent  to such  change in the
outstanding  shares of Common  Stock of the  Corporation  shall be  entitled  to
receive,  upon such  conversion,  a number  of  shares  of  Common  Stock of the
Corporation  representing  the same  percentage of common shares  outstanding as
represented  by the shares  that he would have  received  had he  converted  his
Series C Senior  Preferred  Stock to Common  Stock  prior to such  change in the
outstanding shares of Common Stock of the Corporation.

                                        4