**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, 2000**

Commission File Number **0-8482******

**ASTROCOM CORPORATION**(Exact name of small business issuer as specified in its charter)****

**Minnesota                                         
                                          
            
41-0946755**(State or other jurisdiction of
incorporation                                        
       
(I.R.S. Employer Identification No.)
                                          
         
or organization)****

**3500 Holly Lane North, Suite 60,
Plymouth, Minnesota 55447**(Address and zip code of principal executive office)****

**(612) 378-7800**(Issuer's telephone number, including area code)

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

**Common Stock, par value $.10 per share**(Title of Class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes X********No ___

Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of the 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. [X]

Issuer's revenues for its most recent fiscal year were
$733,945.

As of March 19, 2001, the aggregate market value of the
voting stock held by non-affiliates was $4,484,096, computed by reference to the
average of the bid and asked prices on such date, as reported by the OTC
Bulletin Board.

As of March 19, 2001, there were outstanding 26,448,943
shares of the registrant's common stock, par value $.10 per share.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement for
the annual meeting of shareholders to be held on May 23, 2001, are incorporated
by reference into Part III.

Transitional Small Business Disclosure Format: Yes No X
 .

**TABLE OF CONTENTS******

**Form 10-KSB**

****

|        | Part I                                                                                                                | Page
|------- | --------------------------------------------------------------------------------------------------------------------- | ----
|Item 1  | Description of Business                                                                                               | 3   
|Item 2  | Description of Property                                                                                               | 6   
|Item 3  | Legal Proceedings                                                                                                     | 6   
|Item 4  | Submission of Matters to a Vote of Security Holders                                                                   | 7   
|        |                                                                                                                       |     
|        | Part II                                                                                                               |     
|Item 5  | Market for Common Equity and Related Stockholder Matters                                                              | 7   
|Item 6  | Management Discussion and Analysis of Financial Condition and Results of
      Operations                             | 7   
|Item 7  | Financial Statements                                                                                                  | 11  
|Item 8  | Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure                            | 23  
|        |                                                                                                                       |     
|        | Part III                                                                                                              |     
|Item 9  | Directors, Executive Officers, Promoters and Control Persons; Compliance
      with Section 16(A) of The Exchange Act | 24  
|Item 10 | Executive Compensation                                                                                                | 24  
|Item 11 | Security Ownership of Certain Beneficial Owners and Management                                                        | 24  
|Item 12 | Certain Relationships and Related Transactions                                                                        | 24  
|        |                                                                                                                       |     
|        | Part IV                                                                                                               |     
|Item 13 | Exhibits and Reports on Form 8-K                                                                                      | 24  

**PART I**

This Annual Report contains certain forward-looking statements that project
or estimate future events. For this purpose, any statements contained in this
Form 10-KSB that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "expects," "anticipates,"
"intends," and similar expressions are intended to identify
forward-looking statements. These statements involve various risks and
uncertainties that may cause actual results to differ materially from historical
results or those currently projected. Readers are cautioned not to place undue
reliance on these forward-looking statements.****

**ITEM 1. DESCRIPTION OF BUSINESS.******

**(a) Business Development**

Astrocom Corporation ("Astrocom" or the
"Company") was incorporated in the State of Minnesota on September 28,
1968. Astrocom has been engaged in the design, development, manufacture,
assembly and sale of electronic products used for data communications since it
commenced operations in 1968.****

**(b) Business of the Company**

**Products**

The Company develops, manufactures, markets and services
electronic devices which address key areas of wide area data, voice and video
communication networks. The Company's current products can be generally placed
in the following product categories: T1 and Fractional T1 CSU/DSU's and
Multiplexers, 56/64K Kbps DDS CSU/DSU's, DSL Aggregators, Inverse Multiplexers
and Statistical Multiplexers. These products contain all the features and
functionality of industry standard counterparts combined with application
specific added value features that address the requirements of the Internet,
Video Conferencing and Corporate Internetworking markets. Advanced features of
the Company's products help organizations make better use of their bandwidth and
reduce capital costs.

The Company's products are backed by 2-year, 5-year and
lifetime warranties which include its signature Customer Service program which
provides 24 hours a day, 7 days a week toll-free technical support and overnight
replacement of failed units.****

**Sales and Distribution**

The Company's customers include telephone companies,
Internet Service Providers (ISPs), corporate and institutional end-users,
integrators and distributors. The Company is also an original equipment
manufacturer (OEM) for a computer products catalog.

The sales activities for the Company's electronic products
are carried on by a combination of manufacturers representative firms, system
integrators, value added resellers (VARs) and distributors. In addition to
channel sales, the Company's sales force pursues direct business with sizable
service providers and end-user accounts. The Company provides marketing support
through participation in selected industry trade shows, through a comprehensive
corporate web site, through direct mail campaigns and through cooperative
marketing activities with distributors.****

**Manufacturing**

In 2000, the Company subcontracted approximately 80% of
its manufacturing operations to outside organizations specializing in
manufacturing. The Company believes that there are several outside organizations
that could provide the specialized manufacturing services required by the
Company.****

**Competition**

The business of the Company is highly competitive. Price
competition and service are the most significant features of the market in which
the Company participates. The Company competes on a nationwide basis with many
other firms. Almost all of these firms are larger and financially stronger than
the Company. Management believes that the Company accounts for only a very small
portion of the respective national and local markets.

**Sources and Availability of Raw Materials**

The Company uses both turnkey and consigned manufacturing
subcontractors. Under the turnkey approach, the subcontractor buys the material;
under the consigned approach, Astrocom buys and supplies the material to the
subcontractor. Components and raw materials are purchased from an assortment of
suppliers, manufacturers and distributors throughout the United States. The
Company believes that there are several sources of supply for the required
components and raw materials.****

**Significant Customers**

In 2000 and 1999, the Company had two customers that
accounted for approximately 47% and 38%, respectively, of the Company's net
sales. One company accounted for approximately 28% and 11% of the Company's net
sales in 2000 and 1999, respectively; the other accounted for approximately 20%
and 27% of net sales, respectively. No other customer accounted for more than
10% of the Company's net sales during this period.****

**Patents**

The Company has no patents, exclusive licenses, franchises
or concessions which are of material importance to its business.****

**Government Regulation**

Some of the Company's electronic products are used in
conjunction with the telephone network. Existing Federal Communications
Commission (FCC) regulations and local tariffs allow such products to be
interconnected with the telephone network. Certain of the products marketed by
the Company have been registered with the FCC and management believes they meet
all applicable FCC standards. Restrictive changes in interstate regulation (FCC
jurisdiction) or intrastate tariffs (state regulatory agency jurisdiction) could
limit the uses and hence the marketability of some of the Company's products.****

**Research and Development**

The Company spent $655,891 in 2000 and $496,877 in 1999
for research and development. The Company deducts internal research and
development costs as items of expense as they occur. The Company recognizes that
the sale of electronic products will require continuous development of new
products and refinement of established products.****

**Environmental Issues**

Management believes that compliance with federal, state
and local provisions which have been enacted or adopted regulating the discharge
of materials in the environment or otherwise relating to the protection of the
environment should have no material effect upon the capital expenditures,
earnings and competitive position of the Company's operations.****

**Employees**

As of March 19, 2001, the Company had a total of 15
employees. No employees are currently represented by labor organizations and
there are no collective bargaining agreements. The Company provides paid
holidays and vacations. In addition, the Company provides and partially funds
group medical and dental insurance.****

**Sale of Subsidiary and Lease Settlement Costs**

On May 29, 1990, a wholly-owned subsidiary of the Company
sold its business and substantially all its assets to Visi-Tour Vision, Inc.
(subsequently renamed Circuit Board One, Inc.). As a result of that transaction,
all of the subsidiary's right, title and interest in a real estate lease and
various equipment leases were assigned to Circuit Board One, Inc., but the
Company remained contingently liable to the respective lessors in the event of
default by Circuit Board One, Inc. Circuit Board One, Inc. ceased operations on
October 8, 1992.

The real estate lease assigned to Circuit Board One, Inc.
covered a 29,867 square foot office, manufacturing and warehouse facility at
4300 Peavey Road, Chaska, Minnesota. The Company's guaranty of the lease
remained in effect after the assignment to Circuit Board One, Inc. After Circuit
Board One, Inc. ceased operations, the landlord asserted a claim against the
Company. This matter was settled during 1993, and the landlord and the Company
agreed upon a settlement payment schedule. The Company continues to make
payments pursuant to such payment schedule. See Notes to Financial Statements.

**Preferred Stock**

On August 15, 2000, all 200,000 shares of Convertible
Preferred Stock of the Company, owned by Hanrow Fund Five, were converted into
434,782 shares of common stock of the Company at $.46 per common share.****

**Private Placements**

From December 27, 1999, through March 13, 2000, the
Company sold 11,000,000 shares of common stock to accredited investors in a
Regulation D private placement, resulting in net proceeds of $2,081,440. The
proceeds will be used primarily for working capital. Of said 11,000,000 shares,
4,560,000 shares were sold by R.J. Steichen Co. pursuant to the terms of an
Agency Agreement under which the Company paid R.J. Steichen Co. a commission of
$118,560 and issued to it an Agent's Warrant for 456,000 shares of the Company's
common stock.****

**ITEM 2. DESCRIPTION OF PROPERTY**

On June 1, 1992, the Company sold and assigned to The
Crepeau Company (Crepeau) all rights, duties and liabilities the Company had
under a lease from the St. Paul Port Authority which covered office and
manufacturing space and land at 120 West Plato Boulevard, St. Paul, Minnesota.
The lease from the Port Authority runs through August 31, 2007, and provides for
rental payments of $5,591 per month, with the lessee to pay all taxes,
insurance, utility, maintenance and other costs. On August 11, 2000, Crepeau
filed Chapter 11 bankruptcy. Crepeau is in the process of preparing and
submitting a plan of reorganization for approval of the Bankruptcy Court and
creditors which, according to Crepeau's counsel, is anticipated shortly. The
Company believes the plan of reorganization, if approved, will require Crepeau
to continue to fulfill its obligations under the Port Authority lease. However,
the Company remains contingently liable to the Port Authority in the event that
Crepeau defaults under the terms of such lease. In the event that Crepeau does
default under the Port Authority lease, the Company will remain liable for the
monthly rental payments and other costs. In such event, however, management
believes that the Company will be able to locate a replacement tenant within a
reasonable period of time.

The Company leases from the St. Paul Port Authority 81,568
square feet of undeveloped land. The lease runs through August 31, 2007 and
provides for rental payments of $626 per month. On August 16, 1993, the Company
subleased said undeveloped land to Rutzick-Sheehy Office Center, a Minnesota
general partnership. The sublease runs through August 31, 2007, and provides for
payments of $626 per month during the entire term of the sublease. Subtenant
also agreed to pay all taxes, special assessments and other charges and expenses
required to be paid by the Company pursuant to its lease with the Port
Authority.

On March 30, 1999, the Company entered into a five-year
lease agreement with Plymouth Ponds Development II, LLC, for 9,672 square feet
of office and manufacturing space at 3500 Holly Lane North, Suite 60, Plymouth,
Minnesota. The lease runs through March 31, 2004, and provides for rental
payments of $7,415 per month.****

**ITEM 3. LEGAL PROCEEDINGS**

On July 27, 1983, the Board of the Minnesota Pollution
Control Agency found the Company and 13 other corporations to be responsible
persons under the Minnesota Superfund Act and thereby secondarily liable for the
cleanup of hazardous wastes given to Ecolotech and Brian Carriere. Ecolotech
collected such waste materials from the Company during the period 1973 to 1978.
On January 25, 1984, the Company and the 13 other corporations entered into an
agreement to share the costs of cleanup and litigation in proportion to the
respective volumes of waste materials given by each to Ecolotech. As of March
28, 2001, the Company had paid approximately $171,000 pursuant to the agreement,
none of which was paid during 2000. The cleanup was completed on February 1,
1986. During February, 1987, a judgment was obtained in favor of the Company and
the 13 other corporations against Carriere Properties and others. No estimate
can be given as to the collectibility of said judgment. The Company believes
that any costs or liabilities that it may incur in connection with any latent
problems will not have a material effect on the financial condition of the
Company.

In June 1988, the Company was informed by Mibco, the owner
and lessor of the Minnetonka facility where the Company's wholly-owned
subsidiary was located until March 6, 1989, that there were soil and groundwater
contamination problems at the facility. There currently appear to be seven
companies (including Mibco) which are potentially responsible parties. The
Company's alleged involvement occurred during the period March 1972 through
September 1973. The matter has been reported to the Minnesota Pollution Control
Agency (MPCA) which has made a preliminary assessment, conducted a follow-up
site investigation and included the site on Minnesota's permanent list of
priorities. The Company will continue to monitor the site testing required by
the MPCA. The Company believes that any costs or liabilities that it may incur
in connection with the proceedings before the MPCA or any lawsuit commenced by
MPCA or the present owner will not have a material effect on the financial
condition of the Company.****

**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS**

None.****

**PART II******

**ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS******

**(a) Market Information**

The Company's Common Stock is traded on the
Over-the-Counter Bulletin Board system under the symbol ATCC. The following
table sets forth the high and low selling prices for the Company's Common Stock
for 2000 and 1999:

2000                                        
   
1999                                         
                                          
      
High          Low                           
High        Low

First
Quarter                                         
                   
$2-5/8       
$3/16                         
$37/64    $1/4
        Second
Quarter                                         
                
1-3/4       
11/32                             
7/16      1/4
        Third
Quarter                                         
                   
1-9/16       
3/8                               
9/32      1/8
        Fourth
Quarter                                         
                     
1/2        
1/8                              
19/64     3/32****

**(b) Holders**

On March 19, 2001 the Company had approximately 628
shareholders of record.****

**(c) Dividends**

The Company intends to retain any earnings to finance the
development of its business and, accordingly, does not anticipate payment of a
cash dividend in the foreseeable future.****

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

**Overview**

Astrocom Corporation, a public company (O.T.C, ATCC), was
incorporated in 1968 to design, manufacture and distribute telecommunications
products to serve the short-haul communication market by providing line drivers
and other equipment for local area networks (LANs). Since 1989, the Company has
developed several high speed digital access communications products linking
facilities through wide area networks (WANs). Astrocom's CSU/DSUs (Channel
Service Unit/Digital Service Unit) function as an interface to high bandwidth
telephone company services for such applications as high-speed Internet access,
video conferencing, and corporate internetworking. Astrocom multiplexers reduce
telecommunications costs by combining up to seven separate data paths into a
single communication line. In 1999, the Company began development of a line of
Inverse Multiplexers that enable the user to bundle multiple WAN lines into a
single data path. A streamlined derivative of one of the offerings in this line
of Inverse Multiplexers was developed in 2000; the PowerLinkTM DSL
Aggregator was introduced in 2000 and is now being expanded into a separate
family of products. These Inverse Multiplexers and Aggregators allow customers
to increase WAN bandwidth in increments of slower speed, lower cost, more
readily available lines; thus, reducing costs, affording redundancy and
providing increased bandwidth where high speed lines may not be available or are
too expensive. Astrocom products are used by Internet service providers,
telephone service providers, government and educational entities, private
enterprises and others. Astrocom sells its products through a direct sales
force, manufacturer's representatives and a network of distributors and
value-added resellers (VARs). The Company is also an original equipment
manufacturer (OEM) for a major computer networking products catalog.****

**Results of Operation**

The following table presents selected financial
information derived from the Company's statements of operations expressed as a
percentage of net sales for the years indicated.

Percentage of Net Sales for Years Ended December 31,

|                           | 2000     | 1999    | 1998   
|-------------------------- | -------- | ------- | -------
|Net Sales                  | 100.0%   | 100.0%  | 100.0% 
|Cost of Sales              | 88.7     | 75.2    | 67.9   
|Gross Profit               | 11.3     | 24.8    | 32.1   
|Selling and Administrative | 154.3    | 64.4    | 34.3   
|Research and Development   | 89.4     | 34.0    | 11.2   
|Operating Loss             | (232.4)  | (73.6)  | (13.4) 
|Other Income (Expense)     | 6.1      | (2.1)   | (4.5)  
|Net Loss                   | (226.5)% | (75.7)% | (17.9)%

***Years ended December 31, 2000 Compared to 1999*******

*Net Sales*. Net sales for the year ended December
31, 2000 decreased by 50% to $733,945 compared to $1,461,831 for the same period
ended December 31, 1999. The decline in sales is the result of a continued
slowdown from customers for our CSU/DSU products. The Company continues to
invest in development of its WAN line aggregation products. The recently
announced PowerLinkTM DSL Aggregator is now available for evaluation
with revenues beginning late in the first quarter of 2001. The PowerLinkTMis
a streamlined derivative of one of the Company's offerings in its family of
Inverse Multiplexer (IMUX) products. IMUX revenues, however, have not met
projections due to a number of factors including redirection of limited
resources to the PowerLinkTM and to the technological skills needed
to sell the product line; nevertheless, the IMUX family is expected to generate
revenues in 2001. The Company continues to hire and train manufacturers'
representatives and has recently added two firms with experience in selling
products to Internet Service Providers (ISPs). Astrocom believes that these
efforts, coupled with our new product offerings, will result in increased
revenues.**

*Gross Profit.* Gross profit for the year ended
December 31, 2000 was $82,979 compared to $362,681 in 1999 (11% and 25% of net
sales, respectively). The decrease in gross profit is primarily attributable to
reduced sales volume; the resultant increase in labor and overhead dollars as a
percentage of sales has driven down gross margins. Gross profits and margins are
expected to improve as revenues increase in 2001.**

*Operating Expenses*. Selling and administrative
expenses increased by 20% in 2000 over that of 1999. In 2000, the Company
increased its investment in sales and marketing by 93%; administrative expenses
remained relatively flat. The increase in sales and marketing is due to the
hiring of additional sales staff, increased sales activity and the expenses
associated with training the Company's network of Manufacturers'
Representatives.**

*Research and Development Expenses*. Research and
development expenses increased by 32% to $655,891 in 2000 from $496,877 in 1999.
The increase was due to a larger engineering staff and increased costs
associated with new product development. The Company has hired additional staff
and expects to increase its investment in new product development in future
periods.**

*Other Income (Expense)*. Other income, net, was
$45,050 for the period ending December 31, 2000 compared to ($30,404) for the
same period in 1999. Interest expense decreased to $2,094 from $6,005 in 1999.
Other expenses in 1999 included the disposal of $1,424,111 of obsolete equipment
in the second quarter; most of this equipment was fully depreciated, so the
resultant loss for this disposal amounted to $35,979.**

*Net Loss*. Net loss increased to $1,662,212 in
2000 from $1,107,305 in 1999. The increased loss is attributable to the lower
gross profit and increased expenditures in product development and sales.******

***Years ended December 31, 1999 Compared to 1998*******

*Net Sales*. Net sales for the year ended December
31, 1999 decreased by 50% to $1,461,831 compared to $2,896,563 for the same
period ended December 31, 1998. The decrease in sales was due to a significant
decrease in orders from the top three customers in 1998 and a general slowdown
from all customers. Management attributed the decrease in sales to the Company's
limited product line competing against much larger companies with broader
product lines. New product development is targeted at a product strategy that
repositions the Company in niche markets where manufacturing and sales channel
size are less important factors. In addition, the Company has expanded its sales
force and signed up Manufacturer's Representatives to increase product
visibility.**

*Gross Profit.* Gross profit for the year ended
December 31, 1999 was $362,681 compared to $930,724 in 1998 (25% and 32% of net
sales, respectively). The decrease in gross margin percentage was due to an
increase in inventory reserve. In the fourth quarter of 1999, the Company
recorded a $107,397 net increase in inventory reserves against cost of sales for
slow moving inventory. Without the increased inventory reserve the gross margin
percentage remained constant even with the lower sales volume due to a decrease
in labor and burden in manufacturing.**

*Selling and Administrative Expenses.* Selling and
administrative expenses in total decreased to $941,766 in 1999 from $992,972 in
1998. Selling and marketing expenses, however, increased by 20% for the year;
the increase was primarily in the fourth quarter due to increased sales activity
and additional salary expenses. Administration expenses decreased compared to
1998 due to a lower reliance on outside services and reduced staff .**

*Research and Development Expenses*. Research and
development expenses increased by 53% to $496,877 in 1999 from $325,067 in 1998.
These increases were due to a larger engineering staff and increased costs
associated with new product development.

*Other Income and Expense*. Other expense, net, was
$30,404 for the period ending December 31, 1999 compared to $127,776 for the
same period in 1998. Interest expense decreased to $6,005 from $147,877 in 1998.
The higher interest expense in 1998 was associated with the bridge financing
that was repaid in September 1998. The increase in other expenses in 1999
included the disposal of $1,424,111 of obsolete equipment in the second quarter;
most of this equipment was fully depreciated, so the resultant loss for this
disposal amounted to $35,979.**

*Net Loss*. Net loss increased 114% to $1,107,305
in 1999 from $517,094 in 1998. The increased loss was attributable to the lower
gross profit, with the increased expenditures in product development and sales
being offset by the reduction in administrative and other income expenses.****

**Liquidity and Capital Resources******

Net working capital decreased to $610,770 on December 31,
2000 from $655,048 on December 31, 1999. Cash decreased to $294,472 on December
31, 2000 from $557,637 on December 31, 1999.

The Company is actively pursuing a 12-month bridge loan
for between $300,000 and $1,000,000; as of March 28, 2001, $525,000 has been
received. The Company believes that, while the additional funds could be
adequate to finance operations for the next twelve months, it is imperative to
raise additional capital to take full advantage of the market opportunity
created by the PowerLinkTM and IMUX; the
Company is evaluating other alternatives to raise additional capital.****

**ITEM 7. FINANCIAL STATEMENTS**

**** Astrocom Corporation

Financial Statements

Years ended December 31, 2000 and 1999

**Contents**

Report of Independent
        Auditors...........................................................................................................
        Audited Financial Statements
        Balance
        Sheets.....................................................................................................................................
        Statements of
        Operations......................................................................................................................
        Statements of Shareholders'
        Equity.......................................................................................................
        Statements of Cash
        Flows....................................................................................................................
        Notes to Financial
        Statements...............................................................................................................
      12
        
        13
        14
        15
        16
        17




Report of Independent Auditors

Board of Directors
Astrocom Corporation

We have audited the accompanying balance sheets of Astrocom Corporation as of
December 31, 2000 and 1999, and the related statements of operations,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Astrocom Corporation at
December 31, 2000 and 1999, and the results of its operations and its cash flows
for each of the years then ended, in conformity with accounting principles
generally accepted in the United States.

The accompanying financial statements have been prepared assuming Astrocom Corporation
will continue as a going concern. As more fully described in Note 10, the
Company has experienced recurring operating losses and is dependent upon raising
additional capital to continue its operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

/s/ Ernst & Young

Minneapolis, Minnesota
February 23, 2001
Except for Note 12, as to
which the date is March 28, 2001



Astrocom Corporation
Balance Sheets



|                                                                                          | **December 31**      
|----------------------------------------------------------------------------------------- | ---------------------
|                                                                                          | **2000**             
|**Assets**                                                                                |                      
|Current
      assets:                                                                     |                      
|Cash and cash equivalents                                                                 | **$
      294,472**  
|Accounts receivable, less allowance of $6,000 in 2000 and $5,000 in 1999                  | **57,080**           
|Inventories                                                                               | **555,751**          
|Prepaid expenses                                                                          | **77,812**           
|Total
      current assets                                                                | **985,115**          
|                                                                                          |                      
|Building,
      machinery and equipment:                                                  |                      
|Leasehold improvements                                                                    | **1,070**            
|Machinery and equipment                                                                   | **378,420**          
|Office furniture and fixtures                                                             | **368,886**          
|Total building, machinery and equipment                                                   | **748,376**          
|Less accumulated depreciation                                                             | **654,571**          
|                                                                                          | **93,805**           
|                                                                                          |                      
|Other
      assets                                                                        | **10,000**           
|                                                                                          |                      
|License
      agreements, less amortization of $130,000 in 2000 and $73,000 in
      1999 | **42,991**           
|                                                                                          |                      
|Total
      assets                                                                        | **$1,131,911**       
|                                                                                          |                      
|**Liabilities
      and shareholders' equity**                                            |                      
|Current
      liabilities:                                                                |                      
|Accounts payable                                                                          | **$
      121,885**  
|Accrued compensation                                                                      | **167,214**          
|Other accrued expenses                                                                    | **74,411**           
|Current portion of lease settlement costs                                                 | **10,835**           
|Total
      current liabilities                                                           | **374,345**          
|                                                                                          |                      
|Lease
      settlement costs                                                              | **-**                
|                                                                                          |                      
|Shareholders'
      equity:                                                               |                      
|Preferred stock, $1.00 par value:                                                         |                      
|Authorized shares - 5,000,000                                                             |                      
|Issued and outstanding shares - -0- in 2000 (200,000 in 1999)                             | **-**                
|Common stock, $.10 par value:                                                             |                      
|Authorized shares - 50,000,000                                                            |                      
|Issued and outstanding shares - 26,448,943 (17,524,161 in 1999)                           | **2,644,498**        
|Additional paid-in capital                                                                | **9,223,398**        
|Accumulated deficit                                                                       | **(11,110,330)**     
|Total
      shareholders' equity                                                          | **757,566**          
|Total
      liabilities and shareholders' equity                                          | **$
      1,131,911**

*See accompanying
notes.*

Astrocom Corporation

Statements of Operations



|                                                     | **Year ended December 31**
|---------------------------------------------------- | --------------------------
|                                                     | **2000**                  
|                                                     |                           
|Net sales                                            | **$ 733,945**             
|Cost of products sold                                | **650,966**               
|Gross profit                                         | **82,979**                
|                                                     |                           
|Selling and administrative expenses                  | **1,132,449**             
|Research and development expenses                    | **655,891**               
|Operating expenses                                   | **1,788,340**             
|Operating loss                                       | **(1,705,361)**           
|                                                     |                           
|Other income (expense):                              |                           
|Interest income                                      | **47,443**                
|Other expense                                        | **(299)**                 
|Interest expense                                     | **(2,094)**               
|Net loss before income taxes                         | **(1,660,311)**           
|                                                     |                           
|Income taxes                                         | **1,901**                 
|Net loss                                             | **(1,662,212)**           
|                                                     |                           
|Less preferred stock dividends                       | **7,500**                 
|Loss applicable to common shares                     | **$(1,669,712)**          
|                                                     |                           
|Net loss per common share - basic and diluted        | **$(.07)**                
|Weighted average number of common shares outstanding | **24,760,800**            

**     *See
accompanying notes.*

Astrocom Corporation

Statements of Shareholders' Equity



|                                              | **Preferred
      Stock** | **Common
      Stock
      Shares       Amount** | **Additional
      Paid-In
      Capital** | **Accumulated
      Deficit** | **Total**        
|--------------------------------------------- | ------------------------- | ------------------------------------------------ | ------------------------------------------ | ----------------------------- | -----------------
|                                              |                           |                                                  |                                            |                               |                  
|Balance, December 31, 1998                    | $200,000                  | 14,999,161                                       | $1,499,520                                 | $8,079,387                    | $ (8,321,313)    
|Issuance of common stock private placement    | -                         | 2,525,000                                        | 252,500                                    | 252,500                       | -                
|Dividends on preferred stock                  | -                         | -                                                | -                                          | -                             | (12,000)         
|Net loss                                      | -                         | -                                                | -                                          | -                             | (1,107,305)      
|Balance, December 31, 1999                    | 200,000                   | 17,524,161                                       | 1,752,020                                  | 8,331,887                     | (9,440,618)      
|Issuance of common stock private placement    | **-**                     | **8,475,000**                                    | **847,500**                                | **728,989**                   | **-**            
|Conversion of preferred stock to common stock | **(200,000)**             | **434,782**                                      | **43,478**                                 | **156,522**                   | **-**            
|Exercise of warrants                          |                           | **15,000**                                       | **1,500**                                  | **6,000**                     | **-**            
|Dividends on preferred stock                  | **-**                     | **-**                                            | **-**                                      | **-**                         | **(7,500)**      
|Net loss                                      | **-**                     | **-**                                            | **-**                                      | **-**                         | **(1,662,212)**  
|Balance at December 31, 2000                  | **$             
    -**  | **26,448,943**                                   | **$2,644,498**                             | **$9,223,398**                | **$(11,110,330)**

*See accompanying notes.*

Astrocom Corporation

Statements of Cash Flows



|                                                                                  | **Year ended December 31**
|--------------------------------------------------------------------------------- | --------------------------
|                                                                                  | **2000**                  
|**Cash flows from operating activities**                                          |                           
|Net loss                                                                          | **$(1,662,212)**          
|Adjustments to reconcile net loss to net cash used in
      operating activities: |                           
|Depreciation and amortization                                                     | **114,464**               
|Net losses on disposal of equipment                                               | **299**                   
|Changes in assets and liabilities:                                                |                           
|Accounts receivable                                                               | **559**                   
|Inventories                                                                       | **(265,766)**             
|Prepaid expenses                                                                  | **(49,032)**              
|Other assets                                                                      | **-**                     
|Accounts payable                                                                  | **(6,221)**               
|Accrued expenses                                                                  | **117,119**               
|Net cash used in operating activities                                             | **(1,750,790)**           
|                                                                                  |                           
|**Cash flows from investing activities**                                          |                           
|Purchases of equipment                                                            | **(28,032)**              
|Purchase of license agreements                                                    | **(37,379)**              
|Net cash used in investing activities                                             | **(65,411)**              
|                                                                                  |                           
|**Cash flows from financing activities**                                          |                           
|Proceeds from sale of stock                                                       | **1,576,489**             
|Cash received from exercise of warrants and options                               | **7,500**                 
|Payments on notes payable and lease settlement obligations                        | **(30,953)**              
|Net cash provided by financing activities                                         | **1,553,036**             
|                                                                                  |                           
|(Decrease) increase in cash                                                       | **(263,165)**             
|Cash at beginning of year                                                         | **557,637**               
|Cash at end of year                                                               | **$    
      294,472**   
|                                                                                  |                           
|**Supplemental cash flow information**                                            |                           
|Interest paid                                                                     | **$        
      2,166** 
|Income taxes paid                                                                 | **1,901**                 
|Non-cash transactions:                                                            |                           
|Conversion of preferred stock to common stock                                     | **$     200,000**         

*See accompanying notes.*****

**Astrocom Corporation**

**Notes to Financial Statements**

**December 31, 2000**

**1. Nature of Business and Significant Accounting Policies******

**Nature of Business and Operations**

Astrocom Corporation (the Company) designs, manufactures and markets advanced
digital communications equipment for the data transmission needs of corporations
and other large organizations. Primary sales for the Company's products are
based in the domestic and Canadian markets.****

**Cash and Cash Equivalents**

For purposes of reporting cash flows, the Company considers all investments
with a maturity of three months or less when purchased to be cash equivalents.
All cash equivalents are classified as available for sale and are carried at
cost which approximates market value.****

**Revenue Recognition**

The Company recognizes revenue upon shipment of the product to the customer.****

**Inventories**

Inventories are stated at the lower of cost or market, determined on an
average cost basis.****

**Building, Machinery and Equipment**

Leasehold improvements, machinery and equipment, are carried at cost and
depreciated over five to ten years using the straight-line or
double-declining-balance methods.****

**Licenses Acquired**

The cost of licenses acquired is capitalized and amortized over their
estimated two- to four-year useful life.****

**Income Taxes**

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective tax
bases.****

**Stock-Based Compensation**

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, *Accounting for Stock-Based
Compensation* (Statement 123), but applies Accounting Principles Board
Opinion No. 25 (APB 25) and related interpretations in accounting for its plans.
Under APB 25, when the exercise price of employee stock options equals the
market price of the underlying stock on the date of grant, no compensation is
recognized.****

**Use of Estimates**

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.****

**Net Loss Per Share**

Basic loss per share is based on the weighted average common shares
outstanding and excludes the dilutive effect of options, warrants and
convertible securities, while diluted loss per share includes such effects if
dilutive. For all years presented, the Company's basic and diluted loss per
share is the same because the effects of all options, warrants and convertible
securities were antidilutive.****

**2. Inventories**

Inventories consisted of the following:

|                                        | **2000**      | **1999** 
|--------------------------------------- | ------------- | ---------
|                                        |               |          
|Purchased parts, materials and supplies | **$503,059**  | $228,430 
|Work in process                         | **184,037**   | 208,144  
|Finished products                       | **109,905**   | 98,962   
|Less obsolescence reserve               | **(241,250)** | (245,551)
|                                        | **$555,751**  | $289,985 

**3. Debt**

Lease Settlement Costs:****

During 1993, the Company assumed lease guarantees for certain operations sold
in 1990 when the buyer filed bankruptcy. The settlement with lessors was
recorded at its present value of $125,000 using an 8% interest rate. During
1997, the Company renegotiated the settlement agreement extending the payment
terms through 2001. Final settlement payments of $10,835 are due in 2001.****

**4. Operating Leases**

The Company moved offices and signed a new lease agreement which expires
March 2004. Rental expense included in operations for the leases for the years
ended December 31, 2000 and 1999 totaled $119,826 and $119,540, respectively. A
$10,000 deposit is maintained in connection with the lease. Future minimum
rentals under the operating lease agreement are as follows:

|Year ending: |         
|------------ | --------
|2001         | $ 89,518
|2002         | 88,982  
|2003         | 88,982  
|Thereafter   | 22,246  
|             | $289,728

**5. Shareholders' Equity**

**Preferred Stock**

On April 5, 2000, each share of the preferred stock was callable at the
option of the Company at a price of $2.00 per share. In August 2000, the 200,000
preferred shares were converted to common stock at $.46 per share. Cumulative
dividends in arrears at December 31, 2000, were $39,861 and are included in
accrued expenses.****

**Common Stock**

In 1996, the Company sold 3,501,000 units in a private placement of its
common stock, resulting in net proceeds to the Company of $3,046,000. Each unit
sold in the private placement consisted of one share of common stock and one
redeemable warrant. Each redeemable warrant entitled the holder to purchase one
share of common stock at $1.50 per share. During 1999, the Company extended the
expiration date of the redeemable warrants from September 1999 to September 2004
and reduced the exercise price to $.75 per share. The Company may redeem the
warrants at $.01 per warrant at any time subsequent to 180 days after the
issuance of the redeemable warrant if the closing price of the Company's common
stock is above $2.00 per share for 20 consecutive days subsequent to the date
the redeemable warrants are first redeemable. In connection with the private
placement, the Company granted the selling agent a warrant to purchase
350,100 shares of common stock at an exercise price of $1.00 per share. The
warrant expires in 2002.

In 1999, the Company commenced a private placement for the sale of 11,000,000
shares of common stock. During 1999, the Company received $505,000 in proceeds
for 2,525,000 shares. The remaining net proceeds of $1,576,000 were received
during 2000. In connection with the private placement, the Company granted the
selling agent a warrant to purchase 456,000 shares of common stock at an
exercise price of $.20 per share, expiring in 2005.****

**6. Stock Options and Warrants**

The Company's stock option plans authorize the granting of incentive and
non-qualified stock options generally at exercise prices equal to the grant date
market value of the underlying stock. Options granted generally vest over a
period of 48 months with a five-year term.****

A summary of outstanding options is as follows:

|                                      | **Shares Reserved for Grant** | **Options Outstanding** | **Weighted Average Exercise Price Per
      Share**
|------------------------------------- | ----------------------------- | ----------------------- | ---------------------------------------------------
|                                      |                               |                         |                                                    
|Balance, December 31, 1998            | 1,191,833                     | 892,667                 | $ .54                                              
|Granted                               | (700,000)                     | 700,000                 | .21                                                
|Canceled                              | 316,500                       | (316,500)               | .53                                                
|Balance, December 31, 1999            | 808,333                       | 1,276,167               | .36                                                
|Granted                               | **(760,000)**                 | **760,000**             | **.25**                                            
|Canceled                              | **494,500**                   | **(494,500)**           | **.40**                                            
|Increase in shares reserved for grant | **2,500,000**                 | **--**                  | **--**                                             
|Balance, December 31, 2000            | **3,042,833**                 | **1,541,667**           | **$.29**                                           

As of December 31, 2000, there were 1,390,000 options outstanding with
exercise prices between $.20 and $.50, and 151,667 options outstanding with
exercise prices between $.53 and $3.53. At December 31, 2000, outstanding
options had a weighted average remaining contractual life of four years.

The number of options exercisable as of December 31, 2000 and 1999 was
840,417 and 448,667, respectively, at weighted average exercise prices of $.31
and $.54 per share, respectively.

The weighted average fair value of options granted during the years ended
December 31, 2000 and 1999 was $.23 and $.19 per share, respectively.****

**Pro Forma Disclosures**

Pro forma information regarding net income and earnings per share is required
by Statement 123, and has been determined as if the Company had accounted for
its employee stock options under the fair value method of that Statement. The
fair value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted average assumptions for 2000
and 1999, respectively: risk-free interest rate of 6.01% and 5.5%; no dividend
yield; and volatility factor of the expected market price of the Company's
common stock of 3.081 and 1.829.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions, including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

|                                                    | **2000**         | **1999**    
|--------------------------------------------------- | ---------------- | ------------
|                                                    |                  |             
|Pro forma loss applicable to common shares          | **$(1,931,379)** | $(1,133,446)
|Pro forma loss per common share - basic and diluted | **$(.08)**       | $(.08)      

**Warrants**

The Company has granted warrants for the purchase of shares of the Company's
common stock to officers, directors and certain debt and equity holders. With
the exception of warrants granted to certain officers, the warrants are fully
vested upon issuance and expire in varying amounts through 2008. Information
with respect to warrants granted as of December 31, 2000 and 1999 is summarized
as follows:

|                                 | **Shares**    | **Warrant Price Per
      Share**
|-------------------------------- | ------------- | ---------------------------------
|                                 |               |                                  
|Outstanding at December 31, 1998 | 9,339,686     | $.29 to $1.94                    
|Granted                          | 764,000       | .19 to .20                       
|Canceled                         | (711,570)     | .50 to 1.00                      
|Outstanding at December 31, 1999 | 9,392,116     | .19 to 1.94                      
|Granted                          | **456,000**   | **.20**                          
|Exercised                        | **(15,000)**  | **.50**                          
|Outstanding at December 31, 2000 | **9,833,116** | **$.19 to $1.94**                

In September 1999, the Company issued a warrant to its Vice President of
Sales and Marketing for the purchase of 64,000 shares of common stock at $.19
per share. The warrant vested immediately and expires September 1, 2004.

In November 1999, the Company issued another warrant to its Vice President of
Sales and Marketing for the purchase of 700,000 shares of common stock at $.20
per share. The warrants vest 25% semiannually beginning on May 1, 2000 and
expire November 1, 2006.****

**7. Income Taxes**

Deferred tax assets and liabilities consisted of the following:

|                                 | **2000**                        | **1999**                      
|-------------------------------- | ------------------------------- | ------------------------------
|                                 |                                 |                               
|Net operating loss carryforwards | **$3,745,000**                  | $3,278,000                    
|Inventory                        | **82,000**                      | 83,000                        
|Accrued salaries                 | **41,000**                      | -                             
|Other                            | **47,000**                      | 49,000                        
|Deferred tax assets              | **3,915,000**                   | 3,410,000                     
|                                 |                                 |                               
|Depreciation                     | **21,000**                      | 35,000                        
|Deferred tax liability           | **21,000**                      | 35,000                        
|                                 | **3,894,000**                   | 3,375,000                     
|Less valuation allowance         | **(3,894,000)**                 | (3,375,000)                   
|Net deferred tax assets          | **$                  
      -** | $                     
      -

The Company has net operating loss carryforwards at December 31, 2000 of
approximately $11,000,000, which are available to reduce income taxes payable in
future years. These carryforwards will expire at various times through the year
2021. Carryforwards of approximately $115,000 expired in 2000.

The annual usage of the Company's net operating loss carryforwards may be
limited by provisions of the Tax Reform Act of 1986 (TRA). Under TRA, if a
company experiences a change in ownership of more than 50% (by value) of its
outstanding stock over a three-year period, the use of its pre-change in
ownership net operating loss carryforwards may be limited each year until the
loss is exhausted or the carryover period expires.

Income tax expense relates to state taxes.****

**8. Retirement Plan**

The Company has a Retirement Savings Plan for its employees which allows
participants to make contributions by salary reduction pursuant to section
401(k) of the Internal Revenue Code. The Company may match up to 25% of the
employees' contributions to a maximum of 3% of the employee's annual salary.
Employees vest immediately in their contribution and vest in the Company's
contribution after one year of service. There were no matching contributions to
the Plan during 2000 and 1999.****

**9. Major Customers**

For the year ended December 31, 2000, the Company had net sales to two
customers which totaled 47% of the total net sales for the year. There were no
receivables due from these customers at December 31, 2000.

For the year ended December 31, 1999, the Company had sales to two customers
which totaled 37.9% of net sales and which customers had $17,384 in outstanding
receivables at December 31, 1999.****

**10. Going Concern**

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
Company has experienced recurring operating losses, depleting most of its
available capital. The Company is dependent on obtaining future financing to
continue as a going concern. Management is actively pursuing a 12-month bridge
loan and evaluating other alternatives, including a private placement. However,
there can be no assurance that the Company will be successful in obtaining
financing on terms favorable to the Company.****

**11. Contingent Liability**

On June 1, 1992, the Company sold and assigned to The Crepeau Company (Crepeau)
all rights, duties and liabilities the Company had under a lease from the St.
Paul Port Authority which covered office and manufacturing space and land at 120
West Plato Boulevard, St. Paul, Minnesota. The lease from the Port Authority
runs through August 31, 2007, and provides for rental payments of $5,591
per month, with the lessee to pay all taxes, insurance, utility, maintenance and
other costs. On August 11, 2000, Crepeau filed Chapter 11 bankruptcy. Crepeau is
in the process of preparing and submitting a plan of reorganization for approval
of the Bankruptcy Court and creditors which, according to Crepeau's counsel, is
anticipated shortly. The Company believes the plan of reorganization, if
approved, will require Crepeau to continue to fulfill its obligations under the
Port Authority lease. However, the Company remains contingently liable to the
Port Authority in the event that Crepeau defaults under the terms of such lease.
In the event that Crepeau does default under the Port Authority lease, the
Company will remain liable for the monthly rental payments and other costs. In
such event, however, management believes that the Company will be able to locate
a replacement tenant within a reasonable period of time.****

**12. Subsequent Events**

During the first quarter of 2001, the Company began actively pursuing
financing of between $300,000 and $1,000,000 to fund initial PowerLinkTM
production and for general working capital purposes. The funds are being raised
through use of twelve-month convertible bridge loan agreements bearing an annual
interest rate of 12% and granting of five-year non-callable warrant to purchase
2-1/2 shares of common stock of the Company, at a price of $.40 per share for
each $1 invested in the notes. The notes and accrued interest are convertible to
common stock at a conversion price per share equal to the lower of $.20 per
share or 80% of the lowest price per share for which the Company may sell shares
of its common stock (in a minimum offering amount of 100,000 shares) during the
term of the note. As of March 28, 2001, $525,000 has been raised, including
$100,000 each from Perkins Capital Management, John E. Rogers, a private
investor, and Ronald B. Thomas, President and CEO, Astrocom Corporation.

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

No disagreements with accountants have occurred within the
two-year period ended December 31, 2000, which required reporting on Form 8-K.****

**PART III******

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

The information required by Item 9 is incorporated herein
by reference to the proxy statement to be filed within 120 days after year end.****

**ITEM 10. EXECUTIVE COMPENSATION**

The information required by Item 10 is incorporated herein
by reference to the proxy statement to be filed within 120 days after year end.****

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

The information required by Item 11 is incorporated herein
by reference to the proxy statement to be filed within 120 days after year end.****

**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

The information required by Item 12 is incorporated herein
by reference to the proxy statement to be filed within 120 days after year end.****

**PART IV******

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

**(a) Listing of Exhibits:**

> 3(i) Restated Articles of Incorporation of the Company [incorporated by
>   reference to Exhibit 19 to Form 10-Q for the quarter ended June 30, 1984 (File
>   No.0-8482)].
>   3(ii) Restated Bylaws of the Company [incorporated by reference to Exhibit
>   3(ii) to Form 10-K for the year ended December 31, 1984 (File No. 0-8482)].
>   3(iii) Amendment to Restated Bylaws of the Company adopted by the directors
>   on June 25, 1985 [incorporated by reference to Exhibit 3(iii) to Form 10-K for
>   the year ended December 31, 1986 (File No. 0-8482)].
>   3(iv) Amendment to Restated Articles of Incorporation of the Company
>   approved by shareholders at May 20, 1987 meeting [incorporated by reference to
>   Exhibit 3(iv) to Form 10-K for the year ended December 31, 1987 (File No.
>   0-8482)].
>   3(v) Amendment to Restated Bylaws of the Company adopted by the directors
>   on February 21,1988 [incorporated by reference to Exhibit 3(iv) to Form 10-K
>   for the year ended December 31, 1988 (File 0-8482)].
>   3(vi) Amendment to Restated Bylaws of the Company adopted by the directors
>   on July 31, 1989 [incorporated by reference to Exhibit 3(vi) to Form 10-K for
>   the year ended December 31,1989
>   (File 0-8482)].
>   3(vii) Amendment to Restated Articles of Incorporation of the Company
>   approved by shareholders at December 20, 1996 meeting [incorporated by
>   reference to Exhibit 3(vii) to Form 10-KSB for the year ended December 31,
>   1996 (File 0-8482)].
>   10(i) 1988 Stock Option Plan of the Company as approved by shareholders at
>   May 25, 1988 meeting [incorporated by reference to Exhibit 10(iv) to Form 10-K
>   for the year ended December 31, 1988 (File No. 0-8482)].
>   10(ii) Amendment to 1988 Stock Option Plan of the Company adopted by the
>   directors on October 17, 1988 [incorporated by reference to Exhibit 10(v) to
>   Form 10-K for the year ended December 31, 1989 (File No. 0-8482)].
>   10(iii) Amendment to 1988 Stock Option Plan of the Company adopted by the
>   directors on January 25, 1996 and approved by the shareholders on May 23, 1996
>   [incorporated by reference to Exhibit 10(iii) to Form 10-KSB Report for the
>   year ended December 31, 1996 (File No. O-8482)].
>   10(iv) Lease Agreement between the Company and Port Authority of the City
>   of St. Paul, dated September 1, 1977 [incorporated by reference to Exhibit 1
>   to Form 8-K Report for September 27, 1977 (File No. 0-8482)].
>   10(v) Asset Sale Agreement between the Company's subsidiary, Circuit Board
>   One, Inc. and Visi-Tour Vision, Inc., dated March 16, 1990 [incorporated by
>   reference to Exhibit 10(viii) to Form 10-K Report for the year ended December
>   31, 1989 (File No. 0-8482)].
>   10(vi) Agreement for Assignment and Assumption of Lease between the Company
>   and the Crepeau Company, dated January 16, 1992 [incorporated by reference to
>   Exhibit 10(xi) to Form 10-K Report for the year ended December 31, 1991 (File
>   0-8482)].
>   10(vii) Lease Agreement between the Company and Plymouth Ponds Development
>   II, LLC, dated March 30, 1999 (incorporated by reference to Exhibit 10 to Form
>   10-QSB Report for the quarter ended March 31, 1999 (File 0-8482)]
>   10(viii) Warrant issued to Ronald B. Thomas, dated July 2, 1999
>   [incorporated by reference to Exhibit 10(xv) to Form 10-KSB Report for the
>   year ended December 31, 1997 (File 0-8482)].
>   10(ix) Warrant issued to Ronald B. Thomas, dated August 27, 1998
>   [incorporated by reference to Exhibit 10(i) to Form 10-QSB Report for the
>   quarter ended September 30, 1998 (File 0-8482)].
>   10(x) 1998 Stock Option Plan of the Company as approved by Shareholders at
>   May 28, 1998 meeting [incorporated by reference to Exhibit 10(xv) to Form
>   10-KSB Report for the year ended December 31, 1998 (File 0-8482)].
>   10(xi) Amendment to 1998 Stock Option Plan of the Company adapted by the
>   directors on March 6, 2000 and approved by the Shareholders on May 24, 2000.
>   23 Consent of Independent Auditors.

**(b) Reports on Form 8-K:**

The registrant did not file any reports of Form 8-K during
the fourth quarter of the fiscal year ended December 31, 2000.



**SIGNATURES**

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

**ASTROCOM CORPORATION**

Dated: March 30,
2001.                                         
                         
By: s/ Ronald B. Thomas                                         
                                          
                    
Ronald B. Thomas,
                                          
                                          
                   
President and Chief Executive Officer

Pursuant to the requirements of the Exchange Act, this
report has been signed below by the following persons, on behalf of the
registrant on March 30, 2001 in the capacities indicated.

s/ Ronald B. Thomas                                     
                                   
President, Chief Executive Officer and Director
Ronald B. Thomas

s/ John M. Bucher                                      
                                      
Director of Operations and Corporate Controller
John M. Bucher

s/ Duane S. Carlson                                     
                                    
Director
Duane S. Carlson

s/ Gary L. Deaner                                      
                                      
Director
Gary L. Deaner

s/ S. Albert D. Hanser                                     
                                 
Director
S. Albert D. Hanser

s/ Douglas M. Pihl                                     
                                       
Director
Douglas M. Pihl





Exhibit 10(xi)

Amendment to 1998 Stock Option Plan

RESOLVED, that the shareholders of Astrocom Corporation approved
the amendment of the 1998 Stock Option Plan of Astrocom Corporation to increase
to 4,000,000 the number of shares of common stock authorized for issuance
thereunder.













**Exhibit 23******

**Consent of Independent Auditors**

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-299184) pertaining to the 1988 Incentive Stock Option Plan of
Astrocom Corporation our report dated February 23, 2001 (except for Note 12, as
to which the date is March 28, 2001), with respect to the financial statements
of Astrocom Corporation included in this Annual Report on Form 10-KSB of
Astrocom Corporation for the year ended December 31, 2000

/s/ Ernst & Young LLP

Minneapolis, Minnesota
March 28, 2001

****