<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
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<S>                                                   <C>
For the fiscal year ended December 31, 2000           Commission File Number 000-23734
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                              SCANVEC-AMIABLE, LTD.
            (Exact name of small business registrant in its charter)

                Israel                                              N/A
    (State or other jurisdiction of                          (I.R.S.  Employer
    incorporation or organization)                           Identification No.)

  International Plaza Two, Suite 625                             19113-1518
(Address of principal executive offices)                         (Zip code)

Registrant's telephone number: (610) 521-6300

Securities registered under Section 12(b) of the Exchange Act: None.

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

                 Ordinary Shares, Nominal Value $1.00 per share
                              (Title of each class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and 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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. /  /

Registrant's revenues for the fiscal year ended December 31, 2000 were
$17,171,000.



<PAGE>

The aggregate market value of the voting stock held by non-affiliates of the
Registrant based on the trading price of the Registrant's Ordinary Shares on
March 31, 2001 was $3,385,000.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of March 31, 2001 there were
6,770,000 Ordinary Shares outstanding.

Transitional Small Business Disclosures

                                 Yes______ No___X___


                     SCANVEC-AMIABLE, LTD. AND SUBSIDIARIES

                            FORM 10-KSB ANNUAL REPORT

                                      INDEX
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Part I                                                                                                       Page

     Item 1.      Description of Business........................................................................1

     Item 2.      Description of Properties......................................................................3

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

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

Part II

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

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

     Item 7.      Financial Statements...........................................................................8

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

Part III

     Item 9.      Directors, Executive Officers, Promoters and Control Persons; Compliance with
                    Section 16(a) of the Exchange Act ...........................................................9

     Item 10.     Executive Compensation.........................................................................9

     Item 11.     Security Ownership of Certain Beneficial Owners and Management.................................9

     Item 12.     Certain Relationships and Related Transactions.................................................9

     Item 13.     Exhibits and Reports on Form 8-K...............................................................9

Signatures
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<PAGE>
ITEM 1.  DESCRIPTION OF BUSINESS

General

Scanvec-Amiable, Ltd., formerly the ScanVec Co. (1990) Ltd., was organized as an
Israel corporation in 1990. The Company changed its name according to a
shareholders resolution at the Annual shareholders meeting held on July 20,
1999. The "Company" or "ScanVec" designs, manufactures, markets and supports
high-performance software for the sign making, printing and other
graphics-intensive industries. The Company's products for the sign making market
include its flagship design program FlexiSIGN as well as Inspire and CASmate.
The Company also offers the PhotoPRINT and AccuPrint products for the large
format color printing market, EnRoute for the routing and machining markets and
several other software packages for the woodworking, metalworking and textile
industries. The Company is a market leader in the industry and is believed to be
the largest supplier of design and production software to the sign making and
graphics-related markets, with more than 90,000 software products installed
worldwide. The Company's strategy is to strengthen its position by expanding its
current line of products to include additional innovative products that
compliment the existing line. To further this strategy, in December 1998 the
Company concluded a merger agreement with Amiable Technologies, Inc., a
privately held Pennsylvania corporation ("Amiable") which developed
engineering-based, easy-to-use Windows and Macintosh software applications for a
number of vertical markets, including the sign making, digital imaging and
engraving industries. Pursuant to the merger agreement, Amiable became a wholly
owned subsidiary of the Company and all of the shareholders of Amiable exchanged
their shares of Amiable for an aggregate of 2,341,985 of the Company's Ordinary
Shares. The aggregate market value of such shares on the closing of the
transaction was approximately $5.85 million. The Amiable transaction is
accounted for as a pooling of interests transaction.

Effective October 29, 1999, due to the Company's failure to meet certain
requirements of NASDAQ rules, the Company's Ordinary Shares were de-listed from
the NASDAQ Stock Market. Since that date, the securities of the Company have
been traded on the OTC Bulletin Board.

Following the merger agreement, on November 2, 1999, the Company's board of
directors made several strategic decisions. The first one was to focus the
current activities of the Company by moving several main departments (such as
finance, technical support and marketing) from the Company's Israeli location to
the Philadelphia offices. The second decision was to create a plan to combine
each of the two main sign making products - Inspire and Flexi - into one future
product based on the Flexi product. These two strategic decisions were
successfully implemented through the year 2000 and affected the Company's basic
structure.

From the Company's initial public offering in 1995 until late 2000, the Company
was a "foreign private issuer" as defined in the Securities Exchange Act of 1934
and, therefore, filed Form 20-F (in lieu of Form 10-KSB) with the Securities and
Exchange Commission on an annual basis. As a result of moving its headquarters
and management to Philadelphia, the Company is now deemed to be a domestic filer
under the SEC regulations effective with the end of the fiscal year 2000. The
Company does meet the requirements to be considered a Small Business filer under
the SEC regulations and will file Form 10-KSB as an annual report and Form
10-QSB on a quarterly basis.


<PAGE>

The Company utilizes independent distributors to market and sell its products
worldwide. There can be no assurance that these distributors will give a high
priority to the marketing of the Company's products or that they will continue
to carry the Company's products. The Company's results of operations could also
be materially adversely affected by changes in the financial position of a
distributor, which could occur rapidly, or by other changes in the distributor's
business or marketing strategy.

The Company employed one hundred twenty-five full-time employees at December 31,
2000.

Research and Development expenses, net were $4.414 million and $4.205 million
in the years of 2000 and 1999 respectively. These expenses are further discussed
in Item 6.

The Company does not believe that environmental matters have had a significant
effect on the Company's operations to date.

The Company manages its business on a basis of one reportable operational
segment. Please see Note 14:-Segments, Customer and Geographic Information for
data presented in accordance with SFAS 131 "Disclosures about Segments of an
Enterprise and Related Information", which is part of the Financial Statements
in Item 7 of this document.

In September, 2000, Scanvec Garment Systems (1995) Ltd., the Company's
subsidiary ("SGS"), acquired certain assets of, including the technology for an
inkjet plotter (patent pending) developed by Hasmark, Inc. ("Hasmark"). In
exchange for the assets and technology of Hasmark, Hasmark's shareholders
received approximately 26% of SGS's shares, cash payments of $99k and the right
to receive an aggregate of $240K in installment payments over 24 months. SGS
also assumed certain liabilities that approximated $153,000. Hasmark is also
entitled to receive a 4% royalty on any plotters sold by SGS contingent on a
patent being granted on the plotter. The plotter was still in a prototype status
and no sales revenue was recognized during the year 2000.


Industry Background

A variety of industries, including the sign making, graphic arts, textile,
woodworking and printing industries, can utilize computer technologies in the
design and production processes, including input and output devices, graphic
design software, optimization software and software which drives the output
devices and coordinates the production process. Many manufacturing companies in
these industries are small to medium-size businesses, which in the past may not
have been able to afford automated production devices. The Company believes that
several hundred thousand of these manufacturers exist worldwide. Through 2000,
the Company's products have primarily been directed to the sign making industry,
although the Company also has introduced products directed to other
graphics-intensive industries described below.


Sign Making

The professional sign making industry designs and manufactures the various types
of signs that businesses require, including window signs and awnings,
illuminated signs, building/store identification signs, interior office signs,
nameplates, decals, trade show stands, banners, advertising promotions and
prototypes, retail displays, exterior displays, monuments and roadway and safety
signs. Sign makers utilize a variety of materials in the making of signs, such
as vinyl, glass, metal, plastics, wood and ceramics.




<PAGE>


The sign making industry is often segmented according to the type and method of
sign production, including vinyl cutting (the most common type of sign making
and consequently the largest segment), screen printing (for mass-volume
production), large-format printing (for short-run applications, including
posters), engraving (for cutting or etching small two- or three-dimensional
signs from glass, metal, plastic, and wood), routing (for production of larger
three-dimensional signs from glass, metal, plastic, and wood), neon and others.
Sign makers are generally small to medium-sized businesses. However, the recent
introduction of technologically advanced, lower-cost hardware devices and
easy-to-use, powerful computers has enabled corporations and other institutions
to create signs in-house.

In addition to the sign maker's tradition vinyl cutting business, new
opportunities are emerging in large format printing services market. Both
ScanVec and manufacturers of large format printers are aggressively marketing
these capabilities to the sign making market. Large format printing enables the
sign maker to offer new services to existing clients and to expand into new
service areas such as point of purchase displays, exhibition graphics and
advertising posters. The Company positioned itself for growth in this segment by
including large format printing capabilities in its FlexiFamily and Inspire
products.

Computer technology has generally replaced the traditional hand production of
signs. The Company believes that computer-aided sign making, utilizing both
hardware and software, has been broadly implemented in the developed countries
of the world. The products used in this market include various computer hardware
devices, which are used in connection with both the design of signs (input
devices such as scanners, digitizing tablets and plotters) and the production of
signs (output devices such as engravers, routers and cutting devices), and
software products which are used to design sign layouts and graphic components
and to drive output devices.




<PAGE>


Computer-aided sign making requires the integration of these devices, to permit
a graphic design that is an image on a computer screen to be transformed into a
precisely cut and/or printed production item. CAS software permits the extensive
manipulation of design elements such as fonts, shapes, shadows and similar
items. It also enables the designer to generate instructions that will direct
cutting, plotting, printing, engraving or routing machinery to generate those
design elements on a variety of materials and drives the actual machinery that
produces the finished sign. Many output devices, which generally range in price
from $5,000 to $50,000, have CAS software integrated with them. In contrast,
open architecture software is compatible with other software packages, enabling
clear communication and creating easy transfers between products, as well as
with a variety of hardware input and output devices. This capability enables a
sign maker to participate in more than one segment of the industry without
purchasing additional software systems. The Company believes that PC-based, open
architecture systems can provide cost-efficient solutions compared to other
types of computer-aided and non-computer-aided devices.

In addition to sign making, several other graphics-intensive industries have
similar design and production requirements:


Graphic Arts

The graphic arts market worldwide is divided into several segments - independent
designers and graphic studios, advertising, in-house corporate graphics
departments and sign makers. Designers work with special purpose software to
design and manipulate images and graphic elements to produce a completed design
and they require another software solution to layout (prepare) and print the
image in large format. The Company's PhotoPRINT and AccuPrint products are
Raster Image Processors (RIPs) and print production software which are aimed at
this market.


Printing

Large format printing is employed in short run applications such as the
production of billboards and posters, in the proofing process of gravure
printing and as an alternative to the traditional chemical process of single
print picture enlarging. Large format printing is performed by machines designed
for specific technologies that cost between $5,000 and $150,000 and up to
$400,000 in the grand (very large) format machines. These machines require
specialized software to address problems raised by large image size, such as
memory and communications problems, color matching and color reproduction. In
addition, screen printing is used to print on a variety of products made from
plastic, fabrics and other materials. The screen printing process can utilize
precision design software to overcome common problems in the screen printing
process, such as positioning of color layers, the need to print base layers of
"natural" colors and the need to enhance colors.


Woodworking

The home and office woodwork industry can utilize advanced design and carving
tools to permit the carpenter or architect to design sophisticated and artistic
decorations for door frames, kitchen and closet doors, tables and other wooden
objects. While hand-made wood ornaments have always been valued, labor costs
have increased the prices of such products to levels that are not affordable by
most people. The Company believes that modern output devices, combined with
easy-to-use software, can facilitate these applications and make the manufacture
of these products more cost-efficient.

<PAGE>

Textile and Sewn Goods

This market includes the design, grading, marker making, nesting and cutting of
fabric, leather and other soft materials in a wide variety of applications. End
users include design houses, cutting and sewing plants, and upholstery
manufacturers for the furniture, automotive and aviation industries. This market
is divided into two main segments: garments and their related products and sewn
products. Sewn products include upholstery, automotive (interior, seats and air
bags), swimming pool covers, tents, bags and composite materials for the
aircraft industry. Schools, universities and other educational institutes are
also a target market for OptiTex products (which are described below), mainly as
an investment for future customers.


ITEM 2.  DESCRIPTION OF PROPERTY

The Company does not own any real property. The Company currently leases
approximately 21,454 square feet in Philadelphia, Pennsylvania at a monthly
rental of approximately $36,000. The space is utilized for the Company's
corporate offices. The lease is for an initial 59-month term, which began in
February, 1998. In addition the Company leases approximately 781 square meters
in Tel Aviv, Israel, at a monthly rental of approximately $16,000, which is
linked to the Israeli Consumer Price Index. This space is utilized for SGS'
corporate offices. The Company leases approximately 214 square meters in
Zaventem, Belgium, at a monthly rental of approximately $2,700. This lease is
for a period of nine years which began in September, 2000. This space is
utilized for sales and customer support of the Company's operations in Europe,
Africa and the Middle East.

The Company also leases office space in San Juan Capistrano, California;
Hamburg, Germany; and Beijing, China. The Company believes that its current
facilities are adequate for development and production operations as currently
conducted and are adequately covered by insurance. In the event that additional
facilities are required, the Company believes that it could obtain such
additional facilities without difficulty and at commercially reasonable prices.

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

The Company is not a party to any material litigation and is not aware of any
pending or threatened litigation that would have a material adverse effect on
the Company or its business.

The Company had, during 1999, been involved in several legal claims involving
two former Officers of the Company and two other parties involving customer
disputes. The Company had made a provision of $418,000 at December 31, 1999 for
probable losses based on the opinions of management and their legal advisors.
All of the legal claims were settled during 2000 for a total amount of $390,000.




<PAGE>

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

         The Company held its Annual General Meeting of Shareholders on October
12, 2000 in Tel Aviv, Israel. At the meeting, the following persons were elected
as directors of the Company: Mr. Benjamin Givli, Dr. Ramon Harel, Mr. Jim Chang,
Mr. Yuan Chang, Mr. Yu-Chung Chu, Mr. Yoav Harel, Mr. Avi Levi, Mr. Yoav
Dopplet, Mr. Garry Stock and Ms. Aliza Rotbard.

         The following matters were voted upon at the Annual General Meeting of
Shareholders:

                  1. The election of ten directors. 4,214,259 Ordinary Shares
         voted in favor of each nominee for directors and 316,000 Ordinary
         Shares voted against the election of each nominee.

                  2. The appointment of Kost, Forer & Gabay as the independent
         public accountants of the Company for the year ending December 31,
         2000. 4,815,259 Ordinary Shares voted in favor, zero Ordinary Shares
         voted against and 315,000 Ordinary Shares abstained.

                  3. Management's report on the business of the Company for the
         year ended December 31, 1999 and to approve the Company's Consolidated
         Balance Sheet at December 31, 1999 and the Consolidated Statement of
         Income for the year then ended. 4,815,259 Ordinary Shares voted in
         favor and 315,000 Ordinary Shares voted against.

                  4. The ratification of the terms of compensation of Dr. Ramon
         Harel, the current President and CEO of the Company. 3,798,559 Ordinary
         Shares voted in favor and 329,700 Ordinary Shares voted against.

                  5. Adoption of the 2000 Stock Option Plan by the Company.
         3,717,033 Ordinary Shares voted in favor and 16,700 Ordinary Shares
         voted against.


Item 5.  Market For Common Equity and Related Stockholder Matters.


         In October 1995, the Company consummated an initial public offering
(the "Public Offering") of 1,610,000 Ordinary Shares. At such time, the Ordinary
Shares were listed on the NASDAQ National Market ("NASDAQ"). Effective October
29, 1999, due to the Company's failure to meet certain requirements of NASDAQ
rules, the Company's Ordinary Shares were de-listed from the NASDAQ Stock
Market. After such date, the securities of the Company commenced trading on the
OTC Bulletin Board.

         The following table illustrates the high and low bid prices for the
Company's common equity for each quarter within the last two fiscal years. Such
information was extracted from a NASDAQ internet quotation service. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

<PAGE>


                                                            QTR
                 1999              HIGH         LOW        CLOSE
                 ----              ----         ---        -----

              Qtr 1                2.750       1.938       1.938

              Qtr 2                2.156       1.500       1.531

              Qtr 3                1.531       0.563       0.563

              Qtr 4                0.813       0.375       0.688

                                                            QTR
                 2000              HIGH         LOW        CLOSE
                 ----              ----         ---        -----
              Qtr 1                2.375       0.688       1.563

              Qtr 2                1.250       0.875       1.031

              Qtr 3                1.500       0.050       0.050

              Qtr 4                1.000       0.406       0.438




Ordinary Shares


         The Company's Ordinary Shares, each having a nominal value of NIS 1.00,
were listed on the NASDAQ National Market, under the symbol SVECF, from October
18, 1995 until October 29, 1999. The Ordinary Shares are not listed on any other
stock exchange and have not been publicly traded outside the United States.


         As of March 31, 2001, to the Company's best knowledge, there were
approximately 14 record holders of Ordinary Shares, one of which, Cede &
Company, is holding 1,734,000 of the 6,770,000 Ordinary Shares outstanding in
street name on behalf of an indeterminable number of holders.


         In March 1998, the Company was advised by the NASDAQ Stock Market, Inc.
that the Company's Ordinary Shares were not in compliance with certain of the
"maintenance requirements" which must be satisfied in order to maintain the
listing of the Company's Ordinary Shares on the NASDAQ National Market,
including the requirement regarding the market value of the public float. In
August 1998, the Company was advised by the NASDAQ Stock Market, Inc. that it
has been found to be in compliance with the "maintenance requirements" for
continued listing on the NASDAQ National Market. On June 1, 1999, the Company
was advised by the NASDAQ Stock Market, Inc. that the Company's Ordinary Shares
were not in compliance with certain of the "maintenance requirements" which must
be satisfied in order to maintain the listing of the Company's Ordinary Shares
on the NASDAQ National Market, including the requirement regarding the market
value of the public float. The Company was further advised that if the
maintenance requirements were not satisfied on or before August 31, 1999, the
Company's Ordinary Shares would be subject to immediate de-listing from the
NASDAQ National Market. Effective October 29, 1999, due to the Company's failure
to meet certain requirements of NASDAQ rules, the Company's Ordinary Shares were
de-listed from the NASDAQ Stock Market. Thereafter, the securities of the
Company commenced trading on the OTC Bulletin Board.

<PAGE>

Dividends


         The Company has not declared or paid any cash dividends in the last two
fiscal years. Under Israeli law, the declaration of any final annual cash
dividends requires shareholder approval; shareholders may reduce but not
increase the amount of a dividend from the amount proposed by the Board. Cash
dividends may be paid by an Israeli company only out of unconsolidated retained
earnings of the Company as determined for statutory purposes. Under current
Israeli foreign currency regulations, any dividends or other distributions paid
in respect of Ordinary Shares may be freely repatriated in non-Israeli
currencies at the rate of exchange prevailing at the time of conversion,
provided that Israeli income tax has been paid on (or withheld from) such
payments.



<PAGE>




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


                              Results of Operations


Sales. In 2000, total sales decreased approximately 1.2% to $17,171,000, from
$17,370,000 in 1999. Although overall Sales volume remained essentially the
same, sales to the traditional distribution channel decreased and were replaced
by sales to printer manufacturers ("OEMs") who sold the Company's software with
their printers. Sales to OEMs, in 2000, accounted for approximately 37% of
revenue while in 1999, sales to OEMs made up only 15% of revenue. This change in
sales distribution, we believe, is due to the end users' desire to purchase a
total solution, which includes hardware and software together rather than buying
them separately. The sales to OEMs are expected to remain at a similar pace for
2001.

Gross Margin. Cost of sales consists of component costs, logistics costs, wages
and benefits and overhead related to the production and assembly of the
Company's software products, as well as royalty payments to Israel's Office of
the Chief Scientist (the "OCS"), royalty payments to third parties and
amortization of capitalized software. Gross margin (i.e., gross profit as a
percentage of sales) can be affected by a number of factors, including sales
volume, product sales mix and overhead expenses.

The Company's gross profit increased to $13,171,000 for 2000, from a gross
profit of $11,196,000 in 1999. Gross profit as a percentage of sales increased
in 2000 to 76.7% from 63.94% in 1999. The increase in gross profit was primarily
due to a decrease in amortization of capitalized software. As a result of the
Company's decision to cease development of two separate product brands, the
Company took a charge of $ 2.5million for amortization of previously capitalized
software development costs in 1999. The amortization of the remaining
capitalized software was $200,000 in 2000. Royalty expenses increased during
2000 to partially offset the savings in amortization. This increase in Royalty
expense is correlated with the increase in sales to OEMs during 2000 discussed
above. There has not been any significant changes in the cost of any product
components.

Research and Development Expenses. Gross research and development expenses
consist primarily of wages and benefits, and, to a lesser extent, costs of
materials, depreciation and other costs. Net research and development expenses
reflect the deduction from gross research and development expenses of the
amounts related to (a) grants received from the OCS and (b) certain computer
software development expenses capitalized by the Company.

Gross research and development expenses decreased approximately 8.9% to
$4,492,000 in 2000 from $4,932,000 in 1999, due to the Company's decision to
cease development of two separate product brands which resulted in the reduction
of those employees involved in the development of the discontinued product
brands. During 1999, the Company didn't receive any OCS grants compared to
$78,000 received in 2000. Capitalization of computer software development
expenses amounted to $727,000 in 1999. No development expenses were capitalized
during 2000. As a result of the above-mentioned factors, net research and
development expenses increased by 4.9% from 1999. As a percentage of sales, net
research and development expenses increased to 25.7 % in 2000, compared to
approximately 24.2% of sales in 1999.

The Company maintains research and development activities in Philadelphia and
Beijing for the signmaking and printing products. The garment software products
are developed in Tel Aviv.


<PAGE>
Selling Expenses. Selling expenses consist primarily of costs related to
promotion, advertising and trade shows, wages and benefits (including sales
commissions), travel and related expenses and customer service, as well as
royalty payments to Israel's Fund for Encouraging Marketing Activities.

In 2000, selling expenses decreased by 26.9% to $4,566,000 from $6,244,000 in
1999. As a percentage of sales, selling expenses decreased to 26.6% in 2000,
compared to approximately 35.9% of sales in 1999. This decrease was a result of
cost savings realized from consolidating the sales and marketing staffs that
were previously in Tel Aviv, Philadelphia and California into one primary staff
located in Philadelphia. The Company continues to maintain sales personnel in
Europe to support the European market.

General and Administrative Expenses. General and administrative expenses consist
primarily of wages and benefits for administration, finance and general
management personnel, as well as office maintenance, legal and accounting fees
and other costs. General and administrative expenses decreased approximately
40.0% to $3,470,000 in 2000, from $5,783,000 in 1999; as a percentage of sales,
this represents approximately 20.2% in 2000, compared to 33.3% in 1999. The
decrease in general and administrative expenses was primarily attributable to
the reduction in : legal expenses- several legal claims pending in 1999 were
settled in 2000; bad debts expense - 1999 operations were charged with bad debts
expense for receivables that were written off whereas no bad debts were charged
against operations in 2000; rent expense- closing the office in California in
November, 1999 resulted in a reduction in rent expense that was primarily
realized by the Company in 2000; and personnel expenses - consolidating
operations resulted in a reduction of administrative staff and management
personnel.

Financial Income. Financial income consists of interest on short-term deposits
and income from exchange rate fluctuations, less interest on short term debt and
expenses from exchange rate fluctuations. Financial income resulted in a
negative or net expense of $3,000 in 2000 compared to a net expense of $20,000
in 1999. Interest contributed net income of $32,000 in 2000 compared to a net
expense of $5,000 in 1999. Exchange rate fluctuations in 2000 resulted in a net
expense of $35,000 compared to a net expense of $15,000 in 1999.

Taxes. The Company paid no taxes on income in 2000 as well as in 1999 due to the
existence of net operating loss carryforwards.

Net Income. As a result of the foregoing, net income for 2000 was $718,000
compared to a net loss of $5,056,000, in 1999. The $5,774,000 increase in income
from 1999 to 2000 was achieved despite both years having the same level of
sales. The decreases in Operating Expenses achieved in 2000 represent the
achievement of certain of the objectives of the merger between ScanVec and
Amiable which occurred during 1998.


                                      -2-
<PAGE>


Liquidity and Sources of Capital
--------------------------------

At December 31, 2000, the Company had $1,510,000 in cash and cash equivalents.

The Company has met its financial requirements primarily through cash provided
by operations which totaled $197,000 during 2000. Investing activities used
$376,000 of cash primarily for the purchase of computers and other office
equipment. Financing activities used $84,000 of cash for payments of obligations
under capital leases. Total cash and cash equivalents decreased during 2000 by
$263,000.

The ratio of current assets to current liabilities was 1.30 at the end of 2000
compared with 1.15 at the end of 1999. Current assets have increased to
$5,243,000 at the end of 2000 from $4,963,000 at the end of 1999 with the
increase due primarily to accounts receivable. It is not anticipated that the
collectibility of receivables has declined even though the total outstanding
value has increased.

The company has $303,000 in long-term notes and capital lease obligations. It is
anticipated that these debts will be adequately funded from operating cash flows
as the company currently has no available credit facility. The company intends
to generate adequate positive cashflow from operations in order to meet all of
its commitments and to pursue the establishment of a line of credit.


Inflation and Seasonality

The Company does not believe that inflation or seasonality has had a significant
effect on the company's operations to date.


Environmental Matters

The Company does not believe that environmental matters have had a significant
effect on the Company's operations to date.


                                      -3-
<PAGE>


                    SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES


                        CONSOLIDATED FINANCIAL STATEMENTS


                             AS OF DECEMBER 31, 2000


                            U.S. DOLLARS IN THOUSANDS







                                      INDEX


                                                                         Page
                                                                        ------

Report of Independent Auditors                                             2

Consolidated Balance Sheet                                               3 - 4

Consolidated Statements of Operations                                      5

Statements of Changes in Shareholders' Equity                              6

Consolidated Statements of Cash Flows                                    7 - 8

Notes to Consolidated Financial Statements                              9 - 29




                              - - - - - - - - - - -


<PAGE>

[GRAPHIC
OMITTED]  ERNST & YOUNG     o  Kost Forer & Gabbay      o  Phone: 972-3-6232525
                               3 Aminadav St.              Fax:   972-3-5622555
                               Tel-Aviv 67067, Israel




                         REPORT OF INDEPENDENT AUDITORS

                             To the Shareholders of

                              SCANVEC AMIABLE LTD.


          We have audited the accompanying consolidated balance sheet of Scanvec
Amiable Ltd. ("the Company") and its subsidiaries as of December 31, 2000, and
the related consolidated statements of operations, changes in shareholders'
equity and cash flows for each of the two years in the period ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.


          We conducted our 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 consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Scanvec Amiable Ltd. and its subsidiaries as of December 31, 2000
and the consolidated results of their operations and cash flows for each of the
two years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.

                                                /s/ Kost Forer & Gabbay
                                           --------------------------------
Tel-Aviv, Israel                                 KOST FORER & GABBAY
March 12, 2001                          A Member of Ernst & Young International


                                      -2-
<PAGE>



                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
U.S. dollars in thousands
<TABLE>
<CAPTION>


                                                                    December 31,
                                                                        2000
                                                                    ------------
<S>                                                                      <C>

      ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                          1,510
    Trade receivables, net (net of allowance for doubtful accounts
     of $647 and net of allowance for return account of $106 as of
     December 31, 2000)                                                2,882
    Related parties (Note 10)                                              -
    Other accounts receivable and prepaid expenses (Note 4)              510
    Inventories                                                          341
                                                                       -----

Total current assets                                                   5,243
                                                                       -----

SEVERANCE PAY FUND                                                       300
                                                                       -----


PROPERTY AND EQUIPMENT, NET (Note 5)                                     949
                                                                       -----

OTHER ASSETS, NET (Note 6)                                               610
                                                                       -----

Total assets                                                           7,102
                                                                       =====
</TABLE>




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

                                      -3-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)
                                                                    December 31,
                                                                        2000
                                                                    ------------
       LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Current maturities of capital lease obligations (Note 9)              88
    Trade payables                                                     1,331
    Accrued expenses (Note 7)                                          1,279
    Other accounts payable (Note 8)                                    1,340
                                                                      ------

Total current liabilities                                              4,038
                                                                      ------

LONG-TERM LIABILITIES
    Long-term note payable (Note 2d)                                     130
    Long-term capital leases obligations (Note 9)                        173
    Accrued severance pay                                                629
                                                                      ------

                                                                         932
                                                                      ------
CONTINGENT LIABILITIES AND COMMITMENTS (Note 11)

SHAREHOLDERS' EQUITY:
  Share capital (Note 12):
   Ordinary shares of NIS 1 par value:
   Authorized: 10,000,000 shares as of December 31, 2000;
     Issued and outstanding: 6,770,000 shares as of
     December 31, 2000                                                 1,523
  Additional paid-in capital                                           8,531
  Accumulated other comprehensive income                                  15
  Accumulated deficit                                                 (7,937)
                                                                      ------

Total shareholders' equity                                             2,132
                                                                      ------

Total liabilities and shareholders' equity                             7,102
                                                                      ======

  March 12, 2001            /s/ Dr. Ramon Harel       /s/ Gerald J. Kochanski
-----------------------   ----------------------     -------------------------
Date of approval of the       Dr. Ramon Harel           Gerald J. Kochanski
financial statements          President and          Chief Financial Officer and
                          Chief Executive Officer   Vice President of Operations

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


                                      -4-

<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
U.S. Dollars in thousands (except per share data)


                                                         Year ended December 31,
                                                         -----------------------
                                                           1999            2000
                                                          ------          ------
Revenues (Note 14):

Software licenses and other                               15,701         13,567
Royalties                                                  1,669          3,604
                                                          ------         ------

Total revenues                                            17,370         17,171
                                                          ------         ------

Cost of revenues                                           6,174          4,000
                                                          ------         ------

Gross profit                                              11,196         13,171
                                                          ------         ------

Research and development costs                             4,932          4,492
Less - royalty-bearing grants                                  -            (78)
                                                          ------         ------

                                                           4,932          4,414
Less - capitalization of computer software costs            (727)             -
                                                          ------         ------

Research and development costs, net                        4,205          4,414
                                                          ------         ------

Selling and marketing expenses, net (Note 15a)             6,244          4,566
General and administrative expenses                        5,783          3,470
                                                          ------         ------

                                                          12,027          8,036
                                                          ------         ------

Operating income (loss)                                   (5,036)           721
Financial expenses, net (Note 15b)                           (20)            (3)
                                                          ------         ------

Income (loss) before taxes on income                      (5,056)           718
                                                          ------         ------

Net income (loss)                                         (5,056)           718
                                                          ======         ======

Basic net earnings (loss) per share (Note 15c)             (0.75)          0.11
                                                          ======         ======

Diluted net earnings (loss) per share (Note 15c)           (0.75)          0.10
                                                          ======         ======




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


                                      -5-

<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)
<TABLE>
<CAPTION>
                                              Number                                         Accumulated
                                           of Ordinary                      Additional          other
                                              shares           Share         paid-in        comprehensive       Accumulated
                                           outstanding        capital        capital           income             deficit
                                         -----------------   -----------    -----------    ----------------    ---------------
<S>                                              <C>            <C>               <C>               <C>                <C>
Balance as of January 1, 1999                  6,770,000       1,523             8,397              67               (3,599)
Comprehensive loss:
  Net loss                                             -           -                 -               -               (5,056)
  Other comprehensive income:
  Foreign currency translation
  adjustments, net                                     -           -                 -               1                    -
                                         -----------------   -----------    -----------    ----------------    ---------------

  Total comprehensive loss


Balance as of December 31, 1999                6,770,000       1,523             8,397              68               (8,655)
Comprehensive loss:
  Net income                                           -           -                 -               -                  718
  Other comprehensive income:
  Foreign currency translation
    adjustments, net                                   -           -                 -             (53)                   -
  Unrealized gain from the issuance
    of shares in a subsidiary (1)                      -           -               134               -                    -
                                         -----------------   -----------    -----------    ----------------    ---------------
  Total comprehensive income


Balance as of December 31, 2000                6,770,000       1,523             8,531              15               (7,937)
                                         =================   ===========    ===========    ================    ===============
</TABLE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
                                                 Total              Total
                                             Comprehensive      shareholders'
                                             income (loss)          equity
                                            -----------------   ---------------

<S>                                                     <C>               <C>
Balance as of January 1, 1999                           -               6,388
Comprehensive loss:
  Net loss                                         (5,056)             (5,056)
  Other comprehensive income:
  Foreign currency translation
    adjustments, net                                    1                   1

                                            -----------------   ---------------
  Total comprehensive loss                         (5,055)
                                            =================

Balance as of December 31, 1999                         -               1,333
Comprehensive loss:
  Net income                                          718                 718
  Other comprehensive income:
  Foreign currency translation
    adjustments, net                                  (53)                (53)
  Unrealized gain from the issuance
    of shares in a subsidiary (1)                       -                 134
                                            -----------------   ---------------
  Total comprehensive income                          665
                                            =================

Balance as of December 31, 2000                                         2,132
                                                                ===============

</TABLE>
(1)  See Note 2d.

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

                                      -6-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. dollars in thousands
<TABLE>
<CAPTION>

                                                                                        Year ended December 31,
                                                                                  ------------------------------------
                                                                                       1999               2000
                                                                                  ---------------  -------------------

<S>                                                                                      <C>                <C>
Cash flows from operating activities:
-------------------------------------

    Net income (loss)                                                                 (5,056)             718
    Adjustments to reconcile net income (loss)
      to net cash provided by (used in) operating activities:

      Depreciation and amortization                                               (*   3,603              723
      Impairment of property and equipment                                         (*    300               40
      Loss (gain) on sale of property and equipment                                       (3)              16
      Decrease in accrued severance pay, net                                             (54)            (141)
      Decrease (increase) in trade receivables                                         1,589             (506)
      Decrease in receivables from related parties                                         -               28
      Decrease (increase) in other accounts receivable and
       prepaid expenses                                                             (*   895             (132)
      Decrease in inventories                                                             35              138
      Increase (decrease) in trade payables                                             (890)             545
      Increase (decrease) in accrued expenses                                            412           (1,087)
      Decrease in other accounts payable                                                (381)            (138)
                                                                                  ---------------  -------------------

Net cash provided by operating activities                                                450              204
                                                                                  ---------------  -------------------

Cash flows from investing activities:
-------------------------------------

    Proceeds from short-term bank deposits                                             1,500                -
    Proceeds from sale of property and equipment                                          60               60
    Purchase of property and equipment                                                  (310)            (337)
    Capitalization of computer software costs                                           (727)               -
    Payment for acquisition of Hasmark (1)                                                 -              (99)
                                                                                  ---------------  -------------------

Net cash provided by (used in) investing activities                                      523             (376)
                                                                                  ---------------  -------------------
</TABLE>

*)       Reclassified.


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

                                      -7-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. dollars in thousands
<TABLE>
<CAPTION>
                                                                                      Year ended December 31,
                                                                              ---------------------------------------
                                                                                    1999                  2000
                                                                              -----------------     -----------------
<S>                                                                                   <C>                   <C>
Cash flows from financing activities:
-------------------------------------

    Repayment of capital leases obligations                                          (72)                (84)
    Short-term bank credit, net                                                     (921)                  -
                                                                              -----------------     -----------------

Net cash used in financing activities                                               (993)                (84)
                                                                              -----------------     -----------------

Effect of exchange rate on cash and cash equivalents                              (*   1                  (7)
                                                                              -----------------     -----------------

Decrease in cash and cash equivalents                                                (19)               (263)
Cash and cash equivalents at the beginning of the year                             1,792               1,773
                                                                              -----------------     -----------------

Cash and cash equivalents at the end of the year                                   1,773               1,510
                                                                              =================     =================

Supplementary disclosure of cash flows activities:
--------------------------------------------------

    Cash paid during the year for:

      Interest                                                                        10                  21
                                                                              =================     =================

(1) Payment for acquisition of Hasmark

    Estimated fair value of assets acquired and liabilities assumed at the
acquisition date:
    Working capital deficiency (excluding cash and cash equivalents)                   -                (247)
    Long-term note payable                                                             -                (130)
    Technology                                                                         -                 610
                                                                              -----------------     -----------------
                                                                                       -                 233
    Less - amount acquired by issuance of shares                                       -                (134)
                                                                              -----------------     -----------------
                                                                                       -                  99
                                                                              =================     =================
Supplementary schedule of non-cash and financing activities:

    Capital lease obligations                                                          -                 254
                                                                              =================     =================
</TABLE>

*)       Reclassified.

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

                                      -8-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)


NOTE 1:- GENERAL

              a.  Scanvec Amiable Ltd. (the "Company" or "Scanvec Ltd.") is an
                  Israeli corporation.

                  The Company designs, manufactures, markets and supports a
                  family of high performance software products for the
                  signmaking ,graphic arts industries, and for the textile
                  industry. The principal markets of the Company and its
                  subsidiaries are in America (including U.S.A), Europe and the
                  Far East. As for major customers, see note 14c.

                  The Company sells its products through distributors and
                  resellers, both of whom are considered end users mainly to
                  the computer aided sign industry, and also receives fee for
                  modification of its existing software.

              b.  In 1999, the Company's board of directors decided to combine
                  each of the two main sign products into one and to focus the
                  current activities of the Company by moving several main
                  departments from the Company's Israeli location to the
                  Philadelphia offices.

              c.  Reliance on independent distributors:

                  The Company sells its products to a limited number of
                  independent distributors. The Company's results of operations
                  and cash position could be materially adversely affected by
                  changes in the financial position of a distributor, which
                  could occur rapidly, or by other changes in the distributor's
                  business or marketing strategy.

NOTE 2:- SUBSIDIARIES

              a.  In December 1998, Scanvec Ltd. merged with Amiable Inc. an
                  American Corporation and Scanvec GmbH a German corporation
                  whose businesses similar to those of the Company.

              b.  As to a subsidiary in Belgium (See Note 16b).

              c.  The Company has a wholly-owned subsidiary in the United
                  States, Scanvec Inc. Following the merger with Amiable Inc.
                  the Company decided to combine the operations of Scanvec Inc.
                  with the operations of Amiable Inc. The Company is engaged in
                  the marketing of the Company's software in the United States

              d.  The Company owns a 51.8% of a subsidiary in Israel, Scanvec
                  Garments Systems (1995) Ltd. ("S.G.S"), which its financial
                  statements are consolidated with the Company's financial
                  statements. S.G.S. is engaged in the development,
                  manufacturing, marketing and support of software products
                  designing, optimizing and the utilization of fabric and
                  ranking of measurements, mainly in the textile industry.

                                      -9-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

              e.  In September 2000, SGS acquired certain assets and assumed
                  certain liabilities of Hasmark Inc. ("Hasmark"). Hasmark
                  developed the OptiJet, a multi-noggle inkjet plotter. This
                  acquisition was in consideration of $99 in cash and 717 issued
                  shares of SGS valued at $187 per share. The total cost of the
                  acquisition amounted to $727. In addition, Hasmark will be
                  entitled to receive royalties of 4% of the total sales of this
                  plotter. The liabilities assumed include long-term note
                  payable to Hasmark shareholders totaling $240 to be paid over
                  the coming two years.

                  The acquisition was determined on the basis of the purchase
                  method of accounting.

                  The purchase price was determined based on the fair estimated
                  market value of the shares of SGS.

                  The Technology purchased, totaling $610 will be amortized on a
                  straight-line basis over a period of 5 years.

                  Pro forma information in accordance with APB-16 has not been
                  provided, due to imateriality.


NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States ("US GAAP").

              a.  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.

              b.  Financial statements in U.S. dollars:

                  1.  A majority of the revenues of the Company and each of its
                      subsidiaries on a stand-alone basis, except for one of the
                      subsidiaries (see 2 below), is made in United States
                      dollars ("dollars"). In addition, a substantial portion of
                      the Company and its subsidiaries' costs is incurred in
                      dollars. The Company's management believes that the dollar
                      is the primary currency of the economic environment in
                      which the Company and its subsidiaries operate. Thus, the
                      functional and reporting currency of the Company and its
                      subsidiaries is the dollar.

                      Transactions and balances denominated in dollars are
                      presented at their original amounts. Non-dollar
                      transactions and balances are recorded at the exchange
                      rate at the date of the transaction and remeasured to
                      dollars in accordance with Statement of Financial
                      Accounting Standards ("SFAS") No. 52 "Foreign currency
                      translation" of the Financial Accounting Standards Board
                      ("FASB"). All transaction gains and losses from
                      remeasurement of monetary balance sheet items denominated
                      in non-dollar currencies are reflected in the statements
                      of operations as financial income or expenses, as
                      appropriate.

                                      -10-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands


                  2.  The financial statements of Scanvec GmbH whose functional
                      currency is the D.M., have been translated into U.S.
                      dollars, in accordance with SFAS No. 52. All balance sheet
                      accounts have been translated using the exchange rates in
                      effect at the balance sheet date. Statement of operations
                      amounts have been translated using the average exchange
                      rate for the year. The resulting aggregate translation
                      adjustments are reported as a component of accumulated
                      other comprehensive income (loss) in shareholders' equity.

              c.  Principles of consolidation:

                  The consolidated financial statements include the accounts of
                  the Company and its subsidiaries. Intercompany transactions
                  and balances, including profits from intercompany sales not
                  yet realized outside the group, have been eliminated in
                  consolidation.

              d.  Cash equivalents:

                  Cash equivalents are short-term highly liquid investments that
                  are readily convertible to cash with original maturities of
                  three months or less.

              e.  Inventories:

                  Inventories that are composed of raw materials are stated at
                  the lower of cost or market value. Inventory write-offs are
                  provided to cover risks arising from slow-moving items or
                  technological obsolescence. Cost is determined by the
                  "first-in, first-out" method. As of December 31, 2000 the
                  Company has written off inventory in the amount of $20.

              f.  Property and equipment:

                  Property and equipment are stated at cost, net of accumulated
                  depreciation.

                  Depreciation is calculated using the straight-line method over
                  the estimated useful lives of the assets.

                  The annual depreciation rates are as follows:

                                                                  %
                                                      --------------------------
                  Computers and peripheral equipment           20 - 33
                  Motor vehicles                                  15
                  Office furniture and equipment                6 - 15
                  Leasehold improvements              Over the term of the lease

                  The Company and its subsidiaries periodically assess the
                  recoverability of the carrying amount of property and
                  equipment and provide for any possible impairment loss
                  based upon the difference between the carrying amount and
                  fair value of such assets in accordance with SFAS 121
                  "Accounting for the Impairement of long-lived Assets and
                  for long-lived Assets to be Disposed of". As of December
                  31, 1999 and 2000, an impairment losses of $300 and $40
                  have been identified, respectively.

                                      -11-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

              g.  Other assets:

                  Other assets are stated at amortized cost. Amortization is
                  calculated using the straight-line method over the estimated
                  useful lives, which are as follows:


                                                    Estimated useful life
                                                    ------------------------
                                                          (In years)

                  Software rights                             3
                  Acquired Technology                         5

                  The carrying value of other assets is periodically reviewed by
                  management, based on the expected future discounted operating
                  cash flows over the remaining amortization period, in
                  accordance with SFAS No. 121. Based on its most recent
                  analysis, management believes that no impairment of other
                  assets exists as of December 31, 2000.

              h.  Research and development costs:

                  Research and development costs, net of grants received, are
                  charged to expenses as incurred. Statement of Financial
                  Accounting Standards ("SFAS") No. 86, "Accounting for the
                  Costs of Computer Software to be Sold, Leased or Otherwise
                  Marketed", requires capitalization of certain software
                  development costs, subsequent to the establishment of
                  technological feasibility.

                  Based on the Company's product development process,
                  technological feasibility is established upon completion of a
                  working model. Costs incurred by the Company between
                  completion of the working model and the point at which the
                  product is ready for general release have been capitalized. In
                  2000, no capitalization costs were accrued.

                  Capitalized software costs are amortized by the greater of the
                  amount computed using the: (i) ratio that current gross
                  revenues from sales of the software bear to the total of
                  current and anticipated future gross revenues from sales of
                  that software or (ii) the straight-line method over the
                  estimated useful life of the product (generally three years).

                  The Company evaluates the unamortized capitalized computer
                  software costs at each balance sheet date on a product by
                  product basis by making a comparison to its estimated net
                  realizable value. If the amount of the unamortized capitalized
                  costs of a software product exceeds the net realizable value,
                  these assets will be written down by the excess amount. Based
                  on its most recent analysis, management believes that no
                  impairment of research and development costs exists as of
                  December 31, 2000. See Note 6.

                                      -12-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

              i.  Accounting for stock based compensation:

                  The Company follows Accounting Principles Board opinion No.
                  25, "Accounting for Stock Issues to Employees" ("APB 25") and
                  Interpretation No. 44 "Accounting for Certain Transactions
                  Involving Stock Compensation" ("FIN44") in accounting for its
                  employee stock options plans. Under APB 25, when the exercise
                  price of the Company's share options is less than the market
                  price of the underlying shares on the date of grant
                  compensation is recognized. The pro forma information required
                  by SFAS No. 123. "Accounting for Stock Based Compensation" is
                  provided in Note 12.

              j.  Revenue recognition:

                  In December 1999, the SEC issued Staff Accounting Bulletin No.
                  101 ("SAB 101") "Revenue Recognition in Financial Statements"
                  as amended in June 2000, which summarizes the Staff's views in
                  applying generally accepted accounting principles to revenue
                  recognition in financial statements. The Company adopted SAB
                  101 during the fourth quarter of 2000. The adoption did not
                  have a significant effect on the Company's consolidated
                  results of operations or financial position.

                  To date, the Company has derived its revenue from license fees
                  and sub-license fees for its products. The Company sells its
                  products primarily through its distributors and resellers,
                  both of whom are considered end users. The Company and its
                  subsidiaries are also entitled to royalties from Original
                  Equipment Manufacturers (OEM) upon the sub-licensing to end
                  users.

                  The Company accounts for software sales in accordance with
                  Statement of Position (SOP) 97-2, "Software Revenue
                  Recognition," as amended. Revenues from licensing software
                  products that do not require significant modification or
                  customization is recognized when persuasive evidence of an
                  agreement exists, delivery of the product has occurred, no
                  significant obligations with regard to implementation remain,
                  the fee is fixed or determinable and collectibility is
                  probable.

                  Revenues from sale of software products that require
                  customization are (usually not longer then 60 days)
                  recognized as non-recurring engineering service, when
                  customization is completed, delivery has occurred and all
                  other criteria of SOP 97-2 are met.

                  Royalties due from sub-licensing of the Company's software are
                  recognized when the related sales are performed. The Company
                  determines such sales by receiving confirmation of sales
                  subject to royalties from licensees.

                  The Company does not grant its customers a right of return.
                  However, in practice, in some cases, sales returns are
                  accepted. The Company's provision for returns is provided in
                  accordance with SFAS No. 48 "Revenue Recognition When Right of
                  Return Exists" based on the Company's past experience.

                                      -13-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands


              k.  Income taxes:

                  The Company and its subsidiaries accounts for income taxes in
                  accordance with Statement of Financial Accounting Standards
                  (SFAS) No. 109, "Accounting for Income Taxes". This statement
                  prescribes the use of the liability method, whereby deferred
                  tax asset and liability account balances are determined based
                  on differences between financial reporting and tax bases of
                  assets and liabilities and are measured using the enacted tax
                  rates and laws that will be in effect when the differences are
                  expected to reverse. The Company provides a valuation
                  allowance, if necessary, to reduce deferred tax assets to
                  their estimated realizable value.

              l.  Severance pay

                  The Company's liability for severance pay is calculated
                  pursuant to Israeli severance pay law based on the most recent
                  salary of the employees multiplied by the number of years of
                  employment as of the balance sheet date for all employees.
                  Employees are entitled to one month's salary for each year of
                  employment, or a portion thereof. The Company's liability is
                  fully provided by monthly deposits with severance pay funds,
                  insurance policies and by an accrual.

                  The deposited funds include profits accumulated up to the
                  balance sheet date. The deposited funds may be withdrawn only
                  upon the fulfillment of the obligation pursuant to Israeli
                  severance pay law or labor agreements.

                  Severance pay expenses for the years ended December 31, 1999
                  and 2000 were $175 and $288, respectively.

                  Amiable Inc. implemented a defined contribution retirement
                  plan for the benefit of eligible employees. The plan provides
                  for matching contributions by Amiable, up to a maximum of 30%
                  of 6% of the participating employees' compensation.

                  Retirement plan expenses for the years ended December 31, 1999
                  and 2000 were, $55, and $39, respectively.

                  The Company and its subsidiaries are not liable for pension
                  payments to their employees.

              m.  Royalty bearing grants:

                  Royalty bearing grants from the Government of Israel for
                  funding of approved research and development projects and for
                  encouraging marketing activities, are recognized at the time
                  the Company is entitled to such grants, on the basis of the
                  related costs incurred, and are recorded as a deduction from
                  research and development cost and from selling and marketing
                  expenses, respectively.


                                      -14-


<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands



              n.  Basic net earnings (loss) per share:

                  Basic net earnings (loss) per share is computed based on the
                  weighted average number of Ordinary shares outstanding during
                  each year. Diluted net earnings per share is computed based on
                  the weighted average number of Ordinary shares outstanding
                  during each year, plus dilutive potential Ordinary shares
                  considered outstanding during the year, in accordance with
                  FASB Statement No. 128, "Earnings Per Share".

                  All outstanding stock options, have been excluded from the
                  calculation of the diluted net loss per Ordinary share because
                  all such securities are anti-dilutive for 1999. The weighted
                  average number of shares related to the outstanding options
                  excluded from the calculations of diluted net loss per share
                  were 369,429 for the year ended December 31, 1999.

              o.  Advertising costs:

                  The Company expenses advertising costs as incurred.
                  Advertising expense for the years ended December 31, 1999 and
                  2000, were approximately $ 522 and $ 716, respectively.

              p.  Concentrations of credit risk:

                  Financial instruments that potentially subject the Company and
                  its subsidiaries to concentrations of credit risk consist
                  principally of cash and cash equivalents and trade
                  receivables.

                  a)  The majority of the Company's and its subsidiaries' cash
                      and cash equivalents is invested in dollar and dollar
                      linked instruments with major banks in Israel, and U.S.
                      Management believes that the financial institutions that
                      hold the Company's investments are financially sound and
                      accordingly, minimal credit risk exists with respect to
                      those investments.

                  b)  The Company and its subsidiaries trade receivables are
                      derived from sales to large and solid organizations
                      located mainly in the United States and Europe. The
                      Company performs ongoing credit evaluations of its
                      customers and to date has not experienced any material
                      losses. An allowance for doubtful accounts is determined
                      with respect to those amounts that the Company has
                      determined to be doubtful of collection.

                  The Company has no off-balance-sheet concentration of credit
                  risk such as foreign exchange contracts, option contracts or
                  other foreign hedging arrangements.

                                      -15-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands



              q.  Fair value of financial instruments:

                  The following methods and assumptions were used by the Company
                  and its subsidiaries in estimating its fair value disclosures
                  for financial instruments:

                  The carrying amount of cash and cash equivalents, trade
                  receivables and trade payables, reported in the balance sheet
                  approximates their fair value due to the short term maturity
                  of such instruments.

                  Long-term note payable and capital lease obligations reported
                  in the balance sheet are estimated by discounting the future
                  cash flows using current interest rates of payable and capital
                  lease of similar terms and maturities. The carry amount of the
                  long term payable and capital lease approximates its fair
                  value.

              r.  Impact of recently issued accounting standards:

                  In June 1998, the Financial Accounting Standards Board issued
                  Statement No. 133, "Accounting for Derivative Instruments and
                  Hedging Activities", as amended, which is required to be
                  adopted in years beginning after June 15, 2000. Because the
                  Company does not use derivatives, management does not
                  anticipate that the adoption of the new Statement will have an
                  effect on the consolidated earnings or the financial position
                  of the Company and its subsidiaries.

              s.  Certain amounts from prior years have been reclassified to
                  conform with current period presentation.

NOTE 4:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

                                                              December 31,
                                                                  2000
                                                              ------------

              Government authorities                               3
              Employees and payroll accruals                      52
              Prepaid expenses                                   320
              Other                                              135
                                                                 ---

                                                                 510
                                                                 ===

                                      -16-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands




NOTE 5:- PROPERTY AND EQUIPMENT

                                                                December 31,
                                                                    2000
                                                                ------------

              Cost:
                  Computers and peripheral equipment                2,983
                  Motor vehicles                                      158
                  Office furniture and equipment                    1,629
                  Leasehold improvements                              549
                                                                    -----

                                                                    5,319
                                                                    -----
              Accumulated depreciation:
                  Computers and peripheral equipment                2,449
                  Motor vehicles                                       67
                  Office furniture and equipment                    1,450
                  Leasehold improvements                              404
                                                                    -----

                                                                    4,370
                                                                    -----

              Depreciated cost                                        949
                                                                    =====

Depreciation expenses amounted to $ 1,047 and $ 513 for the years ended December
31, 1999 and 2000, respectively.

Property and equipment include leased equipment under capital leases, which are
mostly computers (see Note 9), for which the depreciated cost amounts to $211
and $69 as of December 31, 1999 and 2000, respectively.

In 1999 and 2000, the Company estimated the future cash flows expected to result
from the use of its property and equipment. Due to the fact that the future cash
flows were less than the carrying amount of these assets, the Company recognized
an impairment loss, in the amount of $300 and $40 as of December 31, 1999 and
2000, respectively, in accordance with SFAS No. 121.

                                      -17-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands


NOTE 6:- OTHER ASSETS

                                                                 December 31,
                                                                     2000
                                                                 ------------
              Capitalized computer software:
                  Cost                                              1,426
                  Less - accumulated amortization                   1,426
                                                                    -----

                                                                        -
                                                                    -----
              Software rights:
                  Cost                                                455
                  Less - accumulated amortization                     455
                                                                    -----

                                                                        -
                                                                    -----
              Acquired technology:
                  Cost                                                610
                  Less - accumulated amortization
                    (see also note 2e)                                  -
                                                                    -----

                                                                      610
                                                                    =====

Amortization expenses amounted to $2,556 and $ 210 for the year ended December
31, 1999 and 2000, respectively.

In 1999, the Company and its subsidiaries decided to combine the two main
products-the Inspire and the Flexi into one future product based on the Flexi
product. Therefore, the Company and its subsidiaries amortized its capitalized
computer software in 1999.


NOTE 7:- ACCRUED EXPENSES

                                                                December 31,
                                                                    2000
                                                                ------------

              Accrued royalties                                      934
              Legal expenses                                          54
              Other accrued expenses                                 291
                                                                   -----

                                                                   1,279
                                                                   =====

NOTE 8:- OTHER ACCOUNTS PAYABLE

             Employees and payroll accruals                          703
             Government authorities                                  539
             Others                                                   98
                                                                   -----

                                                                   1,340
                                                                   =====
                                      -18-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 9:- CAPITAL LEASE OBLIGATIONS

The Company and its subsidiaries lease under various capital lease agreements
computer and peripheral equipment with an option to purchase the computers and
peripheral equipment upon the expiration of the initial lease term for one U.S.
dollar.

              a.  Composition:
<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                       Linkage          interest        -----------------------------
                                                        terms             rate             1999             2000
                                                      -----------    ---------------    ------------    -------------
                                                                           %
                                                                     ---------------
                         <S>                              <C>              <C>               <C>             <C>
                    Capital obligations under            U.S.
                       leases                          dollars            9-13                91             261
                    Less - current maturities                                                 40              88
                                                                                        ------------    -------------

                                                                                              51             173
                                                                                        ============    =============
</TABLE>

              b.  Future minimum lease commitments for the year ended
                  December 31, are as follows:

                    2001                                                     108
                    2002                                                     100
                    2003                                                      55
                    2004                                                      25
                    2005 and thereafter                                       13
                                                                             ---

                                                                             301
                    Less-amount representing  interest                        40
                                                                             ---

                    Principal payments remaining on capital lease
                      obligations                                            261
                                                                             ===

NOTE 10:- TRANSACTIONS WITH RELATED PARTIES


                                                         Year ended December 31,
                                                         -----------------------
                                                          1999            2000
                                                          ----            ----

              a.  Transactions with shareholders:

                  Salaries and related benefits to
                    shareholders and their sons, who
                    are employed by the Company and
                    its subsidiaries                       643             332
                                                           ===             ===


                                      -19-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

              b.  In 1995, S.G.S. signed an employment agreement with its
                  minority shareholder as follows:

                  If the employee is dismissed for unreasonable cause in the
                  first three years or in the following two years, he is
                  entitled to compensation totaling $150 and $100,
                  respectively. If the employee resigns during the first two,
                  three, or five years of his employment, 10%, 5% or 2% of his
                  shares, respectively, will be transferred to the Company. As
                  of December 31, 2000 the employee was not dismissed or
                  resigned.


NOTE 11:-     CONTINGENT LIABILITIES AND COMMITMENTS

              a.  The Company and a subsidiary have entered into various
                  agreements with the Chief Scientist of the Government of
                  Israel.

                  The Company and the subsidiary have an obligation to pay
                  royalties at the rates of 3% - 5% of the sales of products
                  developed in the framework of the funded research and
                  development projects. The aggregate royalties payable are 100%
                  - 150% of the grant received, linked to the exchange rate of
                  the U.S. dollar.

                  As of December 31, 2000, the Company and its subsidiary have a
                  contingent obligation to pay royalties in the amount of
                  $2,896 on sales derived from successful research and
                  development projects.

                  The Company is obligated to repay the Government for the
                  grants received only to the extent that there are sales of the
                  funded product.

                  Royalties paid or accrued amounted to $255 and $124 and in
                  1999 and 2000, respectively.

              b.  The Company is required to pay royalties to the Fund for the
                  Encouragement of Marketing Activity at the rate of 3% with
                  respect to increase in export sales of products for which the
                  Company received participation for its marketing activities.

                  As of December 31, 2000, the Company has a contingent
                  obligation to pay royalties in the amount of $902.

                  Royalties paid or accrued amounted to $143 and $0 in 1999
                  and 2000, respectively.

                  The Company is obligated to repay the Government for the
                  grants received only to the extent that there is an increase
                  in export sales of the products funded.


                                      -20-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)


              c.  Commitments:

                  1.  The Company and S.G.S. lease an industrial building for
                      production and office use. Amiable Inc., Scanvec GmbH
                      and the Belgium subsidiary lease office space. Future
                      rental payments, which are either linked to the Israeli
                      Consumer Price Index (CPI) in effect at balance sheet
                      date, or which are payable in U.S. Dollars, under non
                      cancelable operating leases as of December 31, are as
                      follows:

                      2001                        646
                      2002                        485
                      2003                         30
                      2004                         30
                      2005 and thereafter         142
                                                -----

                                                1,333
                                                =====


                  2.  Rent expenses included in the statement of operations
                      amounted to $1,052 and $602 in 1999 and 2000,
                      respectively.


NOTE 12:-     SHARE CAPITAL


              a.  The Company's Ordinary shares are traded on the
                  Over-The-Counter market in the U.S.

              b.  The Ordinary shares entitle their holders to vote and
                  participate in meetings, as well as the right to a pro rata
                  share in the Company's profits and a right to a pro rata share
                  in the excess of assets over liabilities of the Company in the
                  event of liquidation.

              c.  Share Option Plan:

                  1.  In 1994, 1997, 1998 and 1999, the Board of Directors of
                      the Company adopted Share Option Plans pursuant to which
                      300,000, 150,000, 300,000 and 350,000 respectively,
                      Ordinary shares were reserved for issuance upon the
                      exercise of options to be granted to employees of the
                      Company and its subsidiaries. In October 2000, the Company
                      established share option plan, which ratified the 1999
                      plan.

                      The exercise price of these options may not be less than
                      100% of the market price of the Company's shares on the
                      date of grant.* Any options, which are cancelled or
                      forfeited before expiration become available for future
                      grants.

-------------
* 33% of the options is exercisable following one year of the date of grant
  and 33% for each subsequent year.

                                      -21-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)


                    Following are the details of such plans:
<TABLE>
<CAPTION>
                                                                Options outstanding
                                                     --------------------------------------------
                                                                                         Weighted
                                                                                          average
                                   Available           Number           Exercise         exercise
                                   for grant         of options          price             price
                                  -----------       -----------        ----------       ----------
                                                                             In U.S. dollars
                                                                      ----------------------------
 <S>                                  <C>              <C>              <C>                  <C>
Balance as of January 1,
  1999                              107,900           614,100           2.5-6.67             3.55
New option plan                     350,000                 -              -                 -
Options granted                    (470,000)          470,000         1.2 - 1.375            1.28
Options forfeited                   122,000          (122,000)           2.5-3               2.86
                                   ---------        -----------       ------------          ------
Balance as of
  December 31, 1999                 109,900           962,100           1.2-6.67             2.34
New option plan                           -                 -              -                 -
Options granted                    (100,000)          100,000              1                 1
Options forfeited                   496,000          (496,000)
                                   ---------        -----------       ------------          ------
Balance as of
   December 31, 2000                505,900           566,100            1-6.67              2.19
                                   =========        ===========       ============          ======
</TABLE>

The amount of options exercisable as of December 31, 1999 and 2000 was 369,429
and 318,769, respectively.

The weighted average exercise price of options exercisable as of December 31,
1999 and 2000 is $3.06 and, $2.84, respectively.

Weighted-average fair values and weighted average exercise prices of options
whose exercise price is equal or exceeds the market price of the shares at date
of grant are as follows:

<TABLE>
<CAPTION>
                                         For exercise prices on the date of grant that:
                              ---------------------------------------------------------------------
                                      Equal                   Exceed             Are less than
                                  market price             market price           market price
                              ----------------------   ---------------------- ---------------------
                                2000        1999        2000         1999       2000       1999
                              ----------  ----------  ----------  -----------  --------  ----------
   <S>                            <C>          <C>        <C>          <C>       <C>         <C>
Weighted average
  exercise prices                  1           -                       1.28                   -

Weighted average fair
  values on date of grant          0.96        -                       0.73                   -

</TABLE>
                                      -22-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

The options outstanding as of December 31, 2000, have been separated into ranges
of exercise price, as follows:

<TABLE>
<CAPTION>
                    Option          Weighted                                        Weighted
                 outstanding         average        Weighted                         average
                    as of           remaining       average                      exercise price
  Exercise       December 31,      contractual      exercise        Options         of option
    price            2000              life          price        exercisable      exercisable
-------------- -----------------  --------------  -------------  --------------  ----------------
                                     (years)
     <S>                 <C>            <C>            <C>                 <C>         <C>
   $ 6.67                30,000             2        $  6.67            30,000       $  6.67
   $ 3.63                20,000             2.5      $  3.63            20,000       $  3.63
   $ 3.00                57,500             1        $  3               37,502       $  3
   $ 2.75                37,600             2        $  2.75            37,600       $  2.75
   $ 2.63                30,000             3        $  2.63            30,000       $  2.63
   $ 2.50               100,000             3        $  2.5            100,000       $  2.5
   $ 1.375              191,000             4        $  1.375           63,667       $  1.375
   $ 1                  100,000             5        $  1                    -          -
                        -------                  -------------  --------------  ----------------

                        566,100                      $  2.19           318,769       $  2.84
                        =======                 =============  ==============  ================
</TABLE>

Pro forma information regarding net income (loss) and net earnings (loss) per
share is required by SFAS No. 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 Black & Scholes option pricing model with the following weighted-average
assumptions for 1999 and 2000, respectively: risk-free interest rates of 6% for
each year, dividend yields of 0% for each year, volatility factors of the
expected market price of the Company's common stock of 1.026 and 1.765, and
weighted-average expected life of the option of 5 years for each year.

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 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.

                                      -23-
<PAGE>
                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)


Pro forma information is as follows:
                                                                    Year ended
                                                                   December 31,
                                                                ----------------
                                                                 1999       2000
                                                                -------     ----

Net income (loss) as reported                                   (5,056)      718
                                                                ======      ====

Pro forma net income (loss)                                     (5,243)      605
                                                                ======      ====

Pro forma basic net earnings (loss) per share                   (0.77)      0.09
                                                                ======      ====

Pro forma diluted net earnings (loss)                           (0.77)      0.08
                                                                ======      ====

              e.  Dividends:

                  Dividends if any, will be paid in NIS. Dividends paid to
                  shareholders outside Israel will be converted to U.S. dollars
                  on the basis of the exchange rate prevailing at the date of
                  payment.


NOTE 13:- TAXES ON INCOME

              a.  Measurement of taxable income under the income Tax
                  (Inflationary Adjustments) Law, 1985:

                  Results for tax purposes are measured in terms of earnings in
                  NIS after certain adjustments for increases in the Israeli
                  CPI. As explained in Note 3b, the financial statements are
                  prepared in U.S. Dollars. The difference between the annual
                  change in the Israeli CPI and the NIS/U.S. dollar exchange
                  rate causes a further difference between taxable income and
                  the income before taxes shown in the financial statements. In
                  accordance with paragraph 9(f) of SFAS No. 109 the Company has
                  not provided deferred income taxes on the difference between
                  the functional currency and the tax bases of assets and
                  liabilities.

              b.  Tax benefits under the Law for the Encouragement of Capital
                  Investments, 1959, as amended ("the law"):

                  Five programs of the Company have been granted the status of
                  an "Approved Enterprise" under the law. According to the
                  provisions of the law, the Company has elected "alternative
                  benefits", waiver of grants in return for tax exemption, for
                  all five programs:

                  In 2000, the Company did not comply with the terms of
                  "Approved Enterprise" status and, therefore, is not entitled
                  to the abovementioned benefits.


                                      -24-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

              c.  Income tax reconciliation:

                  A reconciliation of the theoretical tax expense assuming all
                  income is taxed at the statutory rate and the actual tax
                  expense is as follows:

                                                                    Year ended
                                                                   December 31,
                                                                ----------------
                                                                  1999     2000
                                                                -------   ------

                  Theoretical tax benefit computed at
                    the statutory rate of 36%                   (1,820)     258
                  Tax exempt and reduced taxable
                    income of "Approved Enterprises"
                    during the benefit period                      378        -
                  Non-deductible expenses, net                     153      100
                  Carryforward losses for which
                    valuation allowances were provided             616     (150)
                  Effect of adjustment of the results
                    for tax purposes to the Consumer
                    Price Index and others                         673     (208)
                  Previous year's taxes                              -        -
                                                                ------     ----

                  Actual tax expenses                                -        -
                                                                ======     ====
                  Basic and diluted per share effect of tax
                  benefits attributable to an
                    "Approved Enterprise" status                  0.06        -
                                                                ======     ====

              d.  Income (loss) before income taxes
                    consisted of the following:

                                                                    Year ended
                                                                   December 31,
                                                                ----------------
                                                                  1999     2000
                                                                -------   ------

                  Domestic                                      (4,758)    (720)
                  Foreign                                         (298)   1,438
                                                                ------    -----

                                                                (5,056)     718
                                                                ======    =====


                                      -25-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

              e.  Deferred income taxes:

                  Deferred income tax balances consist
                  of the following:

                                                                    Year ended
                                                                   December 31,
                                                                      2000
                                                                ----------------

                  Net operating loss carryforward                    3,906
                  Reserves and allowance                               550
                                                                     ------

                  Gross deferred tax assets                          4,456
                  Accumulated amortization of computer
                    software costs and property and
                    equipment                                         (141)
                                                                     ------

                  Net deferred tax assets before
                    valuation allowance                              4,315
                  Valuation allowance                               (4,315)
                                                                     ------

                  Net deferred tax assets                                -
                                                                     ======

                  Due to a history of losses, the Company and its subsidiaries
                  have provided valuation allowances in respect of deferred tax
                  assets resulting from tax loss carryforwards and other
                  temporary differences; management currently believes that it
                  is more likely than not that the deferred taxes related to
                  these items will not be realized.

              f.  Available carryforward tax losses:

                  As of December 31, 2000, Amiable Inc. and Scanvec Inc. had
                  available carryforward tax losses of $753 expiring between
                  2015 and 2020. As of December 31, 2000, Scanvec Ltd. and
                  S.G.S. have available carryforward tax losses and deductions
                  of $9,510 and $60, respectively, which may be carried
                  forward and offset against taxable income in the future for an
                  indefinite period.


NOTE 14:- SEGMENTS, CUSTOMER AND GEOGRAPHIC INFORMATION

              a.  Segment information:

                  The Company manages its business on a basis of one reportable
                  operational segment. See Note 1 for a brief description of the
                  Company's business. Total revenues are attributed to
                  geographical areas based on location of the selling company.

                  This data is presented in accordance with SFAS 131
                  "Disclosures about Segments of an Enterprise and Related
                  Information", which the Company has adopted for all periods
                  presented.


                                      -26-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

                  The following presents total revenues and long-lived assets
                  for the years ended December 31, 1998, 1999 and 2000:

<TABLE>
<CAPTION>
                                                                          1999                     2000
                                                                 ------------------------ ------------------------
                                                                                Long-                     Long-
                                                                    Total       lived        Total        lived
                                                                  revenues      assets      revenues     assets
                                                                 ------------ ----------- ------------- ----------
<S>                                                                 <C>           <C>        <C>            <C>
                  America (Amiable Inc. and Scanvec Inc.)           9,616         453        12,332         509
                  Asia (Scanvec Ltd., S.G.S)                        7,115         729         4,241       1,031
                  Europe (Scanvec GmbH)                               639          15           598          19
                                                                   ------       -----        ------       -----

                                                                   17,370       1,197        17,171       1,559
                                                                   ======       =====        ======       =====
</TABLE>

              b.  Sales classified by geographical destinations of the end
                  customers:

                                                         Year ended December 31,
                                                         -----------------------
                                                          1999             2000
                                                         ------           ------

                  Israel                                   433               494
                  U.S.A.                                 6,667             5,746
                  Far East                               4,518             6,235
                  America (excluding U.S.A.)             1,005               775
                  Europe                                 4,021             3,214
                  Others                                   726               707
                                                        ------            ------
                                                        17,370            17,171
                                                        ======            ======

              c.  Major customer data as a percentage of total revenues:

                                                         Year ended December 31,
                                                         -----------------------
                                                          1999             2000
                                                         ------           ------
                                                                    %
                                                         -----------------------

                     Customer A                            12               16
                     Customer B                             4               12


                                      -27-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 15:- SELECTED STATEMENTS OF OPERATIONS DATA

              a.  Selling and marketing expenses, net:

                                                       Year ended December 31,
                                                     --------------------------
                                                        1999             2000
                                                     ---------        ---------

                  Total expenses                         6,244            4,566
                  Less - participation of the Fund
                    for the Encouragement of
                    Marketing Activities                     -                -
                                                     ---------        ---------

                                                         6,244            4,566
                                                     =========        =========

              b.  Financial expenses, net:

                  Income:
                    Interest on short-term deposits         46               60
                    Foreign currency translation
                      differences                           27               45
                                                     ---------        ---------

                                                            73              105
                                                     ---------        ---------
                  Expenses:
                    Foreign currency translation
                      differences                          (42)             (80)
                    Interest on short term debt            (51)             (28)
                                                     ---------        ---------

                                                           (93)            (108)
                                                     ---------        ---------

                                                           (20)              (3)
                                                     =========        =========

              c.  The following table sets forth the reconciliation of basic and
                  diluted net earnings (loss) per share:


                  Numerator
                  Net earnings (loss) available to
                    shareholders of Ordinary shares     (5,056)             718
                                                     =========        =========

                  Numerator for diluted net
                    earnings (loss) per share -
                    earnings available to
                    shareholders of Ordinary shares     (5,056)             718
                                                     =========        =========

                  Denominator
                  Weighted average number of
                    Ordinary shares (denominator
                    for basic net earnings (loss)
                    per share)                        6,770,000        6,770,000

                  Effect of securities:
                    Employee stock options                   -          697,082
                                                     ---------        ---------

                  Denominator for diluted net
                    earnings (loss) per share        6,770,000        7,467,082
                                                     =========        =========


                                      -28-
<PAGE>

                                       SCANVEC AMIABLE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 16:- SUBSEQUENT EVENTS

              a.  In January 2001, the Company established a subsidiary,
                  MagniVec, Inc., to carryout the development of an E-Commerce
                  web-site for sign markers, previously developed by the
                  Company. In February 2001, the Board of Directors decided to
                  cease Magnivec's operations.

              b.  During the fourth quarter of 2000, the Company established a
                  new subsidiary in Brussels, Belgium. During the first quarter
                  of 2001, the Company transferred the sales and customer
                  support function for the European, Middle Eastern and African
                  markets from Israel to Belgium.


                                      -29-


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

                None.

<PAGE>

Item 9.         Directors, Executive Officers and Control Persons; Compliance
                With Section 16(a) of the Exchange Act.
<TABLE>
<CAPTION>


Nominee                      Age                            Principal Occupation
-------                      ---                            --------------------

<S>                          <C>          <C>
Benjamin Givli               80            Mr.  Givli  currently  serves as the  Chairman  of the Board.
                                           From  April  1999 until July 1999 he served as the CEO of the
                                           Company  and  from  July  1999  until  February  2000 he also
                                           served  as  the  President  of the  Company.  Mr.  Givli  was
                                           Chairman of the Board of Laser  Industries Ltd. from December
                                           1989 until February 1998. He was Chief  Executive  Officer of
                                           Laser  Industries Ltd. from September 1992 through March 1994
                                           and from  March  1995 to  February  1998.  From 1987 to 1989,
                                           Mr.  Givli  was  the  active   chairman  of  Israel  Electric
                                           Corporation.  From  1970 to  1987,  he was  Chairman  of Koor
                                           Foods Ltd. and a member of the management of Koor  Industries
                                           Ltd.  From 1987 to February  1995, he was a director of Haifa
                                           Chemicals Ltd.

Dr. Ramon Harel              71            Dr. Harel  currently  serves as the  President and CEO of the
                                           Company  and has been a  director  of the  Company  since its
                                           inception  in 1990 and served as the  Chairman of the Company
                                           from 1990  through  the  middle  of 1998.  He served as Chief
                                           Executive  Officer  from 1995 to 1997 and as Chief  Financial
                                           Officer from  inception  to 1995.  Dr. Harel was the Director
                                           General of Israel's  Transport Ministry from 1969 to 1972 and
                                           served as Executive  Vice  President  of the Israel  Discount
                                           Bank from  1972 to 1975.  From  1978 to 1983,  Dr.  Harel was
                                           the Director  General of the Israel Airports  Authority.  Dr.
                                           Harel holds a Ph.D. in Economics from Harvard University.

Jim Chang                    41            Mr.  Chang was a director of the Company from  December  1998
                                           until July 2000,  but was  re-elected to the Board on October
                                           12, 2000.  Mr. Chang was  President of the Company from April
                                           1999 until July 1999.  Mr.  Chang was one of the  founders of
                                           Amiable  Technologies,  Inc. and served as its President from
                                           1988  until its  merger  with  ScanVec  Co.  (1990)  Ltd.  in
                                           December,  1998. He was a senior  software  engineer prior to
                                           1988  and  his  education  at  Marquette  University  was  in
                                           Computer Science.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


Nominee                      Age                            Principal Occupation
-------                      ---                            --------------------

<S>                          <C>          <C>
Yuan Chang                   38            Mr.  Chang  currently  serves  as  a  director  and  as  Vice
                                           President of  Engineering  of ScanVec Ltd. and was  appointed
                                           to such  positions in December 1998. Mr. Chang was one of the
                                           founders  of  Amiable  Technologies,  Inc.  and served as its
                                           Vice  President  from 1988 until its merger with  ScanVec Co.
                                           (1990) Ltd.  in December  1998.  Mr.  Chang  earned a B.S. in
                                           Electrical  Engineering  from  the  University  of  Texas  at
                                           Austin and a M.S. in Computer  Sciences and Computer Graphics
                                           from the University of Pennsylvania.

Yu-Chung Chu                 39            Mr. Chu has been a director  of the  Company  since  December
                                           1998.  He  served  as  the  Vice   President  of  Research  &
                                           Development  of the Company from December 1998 until November
                                           12,   1999.   He  was  one  of  the   founders   of   Amiable
                                           Technologies,  Inc.  and  served as its Vice  President  from
                                           1988  until its  merger  with  ScanVec  Co.  (1990)  Ltd.  in
                                           December,  1998. Mr. Chu holds a MS in Computer Science and a
                                           B.S.C.E.  from  Brown  University.   He  has  also  completed
                                           advanced  graduate  level  Computer  Science  courses  at the
                                           University of Pennsylvania.

Yoav Harel                   34            Mr. Harel has been a director of the Company  since  December
                                           1998.  Since June  1999,  Mr.  Harel has been  serving as the
                                           CEO of Info Gate Online Ltd.  Mr.  Harel  served as President
                                           of ScanVec  from  August 1997  through the end of 1998.  From
                                           October  1995 to August  1997,  Mr.  Harel served as the Vice
                                           President,  Sales and  Marketing  of ScanVec Co.  (1990) Ltd.
                                           From 1991 to 1995,  Mr. Harel held  several  positions in the
                                           Company,  including  Operations  Manager,  and  Marketing and
                                           Sales  Manager.  Mr.  Harel  holds a B.A.  degree in Computer
                                           Science and Business Management at the Open University.

Avi Levi                     46            Mr. Levy has been a director of the Company  since 1999.  Mr.
                                           Levy has been President and Chief  Executive  Officer of Ofer
                                           Brothers  Investments  Ltd.  since  1991 and has  been  Chief
                                           Financial  Officer of the Ofer Brothers  Group since 1982. He
                                           currently  serves  on the  Boards  of  Directors  of  several
                                           companies,  including Ofer Brothers  Investments  Ltd., Barak
                                           Cable Holdings Ltd.,  Misaf  Herziliya Ltd., Ofer Hotels Ltd.
                                           and Ashkelon Marina  Management  (1992) Ltd. Mr. Levy holds a
                                           B.A. in Economics  from Haifa  University.  He is a certified
                                           public accountant in Israel.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

Nominee                      Age                            Principal Occupation
-------                      ---                            --------------------
<S>                          <C>          <C>
Yoav Dopplet                 32            Mr.  Dopplet  has been a director  of the  Company  since the
                                           second quarter of 2000. Mr. Dopplet  currently  serves as the
                                           Vice President of business  development of the  technological
                                           division of the Ofer Brothers Group.  Since 1996, Mr. Dopplet
                                           has held various  positions in the Ofer  Brothers  Group such
                                           as Investment  Manager and assistant to the CFO. Mr.  Dopplet
                                           serves as a  Director  in several  enterprises  such as Tower
                                           Semiconductor,  IMI and Israel Chemicals R&D institution. Mr.
                                           Dopplet  holds a B.Sc.  in  industrial  management  from  the
                                           Technion  Institute  of  Technology  and  a  MBA  from  Haifa
                                           University.

Garry Stock                  57            Mr.  Stock has been an  independent  director  of the Company
                                           since  July  1996.   Since  1986,  he  has  been  a  business
                                           consultant  and is the  principal  of Garry  Stock Ltd.  From
                                           1978  to  1986,  Mr.  Stock  served  as the  Chief  Executive
                                           Officer of McIlwraith  Davey Industries Ltd., a listed public
                                           company  in  Australia.  Mr.  Stock  previously  worked  as a
                                           consultant  at  McKinsie  & Co.  Mr.  Stock  holds a B.A.  in
                                           Economics  from Monash  University  and an MBA from Melbourne
                                           University.

Aliza Rotbard             53               Ms. Rotbard has been an  independent  director of the Company
                                           since  August  1998.  Ms.  Rotbard  is the  founder  of DOORS
                                           Information  Systems,  Inc. and has been its Chief  Executive
                                           Officer since its  formation in the US in 1990.  From 1985 to
                                           1989,  she was  President  and  Chief  Executive  Officer  of
                                           Quality  Computers Ltd. From 1980 to 1985, Ms. Rotbard served
                                           as  Deputy   General   Manager,   Computer   Department   and
                                           Operations,  of the  Tel-Aviv  Stock  Exchange.  Ms.  Rotbard
                                           holds  a  BSc.  in   mathematics   and  physics  from  Hebrew
                                           University, Jerusalem.

Gerald J. Kochanski       47               Mr. Kochanski  currently serves as the CFO and Vice President
                                           of  Operations   of  the  Company.   He  has  been  the  Vice
                                           President  of  Operations  of the  Company  since  January 1,
                                           1999.  He  was  the  Chief  Financial  Officer  of  Marketing
                                           Technologies,  Inc.  from  1991 to 1998.  From  1988 to 1991,
                                           Mr.   Kochanski   was  the  U.S.   Corporate   Controller  of
                                           Gist-brocades   Food  Ingredients  Inc.  He  is  a  Certified
                                           Public   Accountant   and   holds  a  MBA   with  a   Finance
                                           concentration   and  a  B.S.  in   Accounting   from  LaSalle
                                           University in Philadelphia.

Ran Machtinger            55               Mr.  Machtinger  has served as  General  Manager of SGS since
                                           January  1999.  He  served  as Vice  President  for Sales and
                                           Marketing  of SGS  since  its  incorporation  in  1995  until
                                           January 1999.
</TABLE>

Dr. Ramon Harel and Mr. Yoav Harel are father and son.  Messrs. Jim Chang and
Yuan Chang are brothers.

Section 16(a) Beneficial Ownership Reporting Compliance

As the Company's status as a foreign private issuer only recently changed to
that of a domestic issuer that is subject to Section 16(a) of the Exchange Act,
none of the directors, officers or shareholders that beneficially own 10% or
more of the Company's capital stock have timely filed Forms 3 or 5 in 2001. The
Company will promptly advise these persons and entities that they are now
subject to the Section 16(a) reporting requirements as a result of the Company's
recent change in reporting status and encourage them to file Forms 3 and 5 for
2001 as promptly as possible and to file Forms 4 and 5 in accordance with
Section 16(a) in the future.

<PAGE>




Item 10. Executive Compensation.

               SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                     Annual Compensation                                   Awards                  Payouts
            (a)            (b)        ( c )             (d)           (e)          (f)          (g)            (h)         (I)
          Name and                                                   Other       Stock       Securities        LTIP         All
          Position         Year      Salary            Bonus      Compensation   Awards      Option/SAR       Payouts      Other
          --------         ----      ------            -----      ------------   ------      ----------       -------      -----

<S>                        <C>         <C>           <C>             <C>         <C>         <C>           <C>             <C>
Mr. Benjamin Givli         2000        $ 123,855     $      -        $    -
Chairman                   1999        $ 122,860     $      -        $    -
                           1998        $  58,513

Dr. Ramon Harel            2000        $ 118,384     $      -        $    -
President/CEO              1999        $       -     $      -        $    -
                           1998        $ 127,839

Mr. Yacha Sutton           2000        $  19,200     $      -        $    -
President/CEO              1999        $ 171,190     $      -        $    -
                           1998        $  88,596

Mr. Efi Lebel              2000        $ 180,400     $      -        $    -
President/CEO              1999        $  49,630     $      -        $    -
                           1998        $       -

Mr. Jim Chang              2000        $ 143,544     $      -        $    -
President                  1999        $  85,225     $      -        $    -
                           1998        $  81,596


Mr. Yuan Chang             2000        $ 114,423     $ 30,000        $    -
Vice President             1999        $ 103,846     $      -        $    -
                           1998        $  68,492


Mr. Yu-Chung Chu           2000        $       -     $      -        $    -
Vice President             1999        $  93,889     $      -        $    -
                           1998        $  64,728


Mr. Gerald Kochanski       2000        $ 107,308     $ 20,000        $    -
Vice President/CFO         1999        $  96,654     $      -        $    -
                           1998        $   8,308

</TABLE>


<PAGE>

Employment Agreement with Dr. Ramon Harel

On September 5, 2000, Scanvec Amiable, Inc. ("Amiable"), a wholly-owned
subsidiary of the Company, entered into an Employment Agreement with Dr. Ramon
Harel. The term of the agreement is from March 16, 2000 to December 31, 2000 and
specifies that Dr. Harel shall be employed as the President and CEO of Amiable.

Under the agreement, Dr. Harel is entitled to a base salary of $150,000 per
year. The Board of Directors has the discretion to grant Dr. Harel a performance
bonus in addition to his base salary.

The contract is terminable by either Dr. Harel or Amiable for any reason upon 60
days' notice. However, if Amiable terminates Dr. Harel without cause, it must
pay him his regular salary during the 60 day notice period and in addition pay
him severance equal to two months' salary if the termination occurs in 2000 or
severance equal to three months' salary if the termination occurs in 2001. If
Amiable dismisses Dr. Harel for committing an offense involving moral turpitude,
committing a serious breach of discipline, willfully damaging Amiable's property
or conveying information regarding Amiable or its customers to another, it will
not be obligated to pay him any severance.

Dr. Harel agrees that any invention, discover, idea or development or other work
that is the subject of copyrights during the term of his employment is the
property of the company.

Dr. Harel agrees not to disclose any information related to his work to any
third person, except in connection with the performance of his duties. He is
also prohibited from competing with the Company and soliciting its customers for
a period of 12 months following termination of his employment contract.

Employment Agreement with Gerald J. Kochanski

On October 26, 1999, Amiable Technologies, Inc., the successor to Amiable,
entered into an employment agreement with Gerald J. Kochanski for Mr. Kochanski
to serve as the Vice President of Operations of the company. The term of the
agreement commenced on September 1, 1999 and has no specified termination date.

Under the agreement, Mr. Kochanski is entitled to a base salary of $100,000. The
CEO has the discretion to grant Mr. Kochanski a performance bonus subject to the
approval of the Board of Directors.

The contract is terminable by either party upon 60 days' notice for any reason,
but must continue to pay him his regular salary during such 60 day period.
However, Amiable may terminate him without notice and further compensation for
committing an offense involving moral turpitude, committing a serious breach of
discipline, willfully damaging Amiable's property or conveying information
regarding Amiable or its customers to another, it will not be obligated to pay
him any severance.

Mr. Kochanski agrees that any invention, discover, idea or development or other
work that is the subject of copyrights during the term of his employment is the
property of the company.

Mr. Kochanski agrees not to disclose any information related to his work to any
third person, except in connection with the performance of his duties. He is
also prohibited from competing with the Company and soliciting its customers for
a period of 12 months following termination of his employment contract.

<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management


         The following table sets forth, as of March 31, 2001, the number of
Ordinary Shares beneficially owned by (a) all shareholders known to the Company
to own more than 5.0% of the Company's Ordinary Shares, (b) each director and
executive officer of the company, and (c) all directors and executive officers
of the Company as a group.


                                          Number of             Percent of
Name and Address                         Shares Owned           Shares (%)
----------------                         ------------           ----------
Jim Chang                                 1,171,000                17.3%
12 Runningbrook
Irvine, California
92620

Dr. Ramon Harel                           1,002,000                14.8%
11 Mechula Street
Ramat Efal, Israel

Yuan Chang                                585,500                   8.6%
824 Hunt Rd.
Newton Square, Pennsylvania
19073

Yu-Chung Chu                              585,500                   8.6%
770 Old Mill Drive
Media, Pennsylvania

Yozma Venture Capital Ltd.                1,206,284                17.8%
2 Hanamal Street
Haifa, Israel(1)

Benjamin Givli                            201,623                   3.0%

Tel Aviv, Israel(1)(2)

Yacha Sutton                              171,623                   2.5%
6 Oppenheimer Street
Tel Aviv, Israel(1)

Yoav Harel                                -0-                         0%
Atidim Industrial Park
Building no.1, Floor no.3
Tel Aviv, Israel


Avi Levi                                  -0-                         0%
Atidim Industrial Park
Building no.1, Floor no.3
Tel Aviv, Israel



<PAGE>

Yoav Dopplet                               -0-                        0%
Atidim Industrial Park
Building no.1, Floor no.3
Tel Aviv, Israel

Garry Stock                               20,000                     .3%
International Plaza Two
Suite 625
Philadelphia, PA 19113(2)

Aliza Rotbard                              -0-                       0%
International Plaza Two
Suite 625
Philadelphia, PA 19113

Gerald J. Kochanski                       10,000                     .1%
International Plaza Two
Suite 625
Philadelphia, PA 19113(2)

All directors and executive officers      3,575,623                52.8%
as a group (eleven persons)(2)



(1)   Yozma Venture Capital Ltd., Fertoza LLC (Whitehall Investment Co. and
      Abbey Investment Ltd., subsidiaries of Fertoza LLC, currently hold
      Fertoza's shares) and Messrs. Benjamin Givli and Yacha Sutton (together,
      the "Givli Group"), acquired their shares together from a former principal
      shareholder of the Company in June 1998. The members of the Givli Group
      have entered into an agreement which, among other things, provides that
      the parties will vote their Ordinary Shares together on all matters coming
      before the Company's shareholders.

(2)   Includes options which are exercisable within 60 days of March 31, 2001


<PAGE>

Item 12. Certain Relationships and Related Transactions.

The spouse of Jim Chang, a director of the Company, is employed as the Company's
sales manager for the China market.





<PAGE>
                                   SIGNATURES


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

                                          Scanvec-Amiable, Ltd.


                                          By:  /s/ Dr. Ramon Harel
                                               ---------------------------
                                               Dr. Ramon Harel
                                               Chief Executive Officer


                                               /s/ Gerald J. Kochanski
                                               ---------------------------
                                               Gerald J. Kochanski
                                               Chief Financial Officer


                                          By:  /s/ Jim Chang
                                               ---------------------------
                                               Jim Chang
                                               Director


                                          By:  /s/ Dr. Ramon Harel
                                               ---------------------------
                                               Dr. Ramon Harel on behalf of
                                               himself as Director and As
                                               attorney-in-fact for Aliza
                                               Rotbard, Yoav Harel, Benjamin S.
                                               Givli and Garry Stock, Directors


<PAGE>
                                   SIGNATURES


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


                                               /s/ Yuan Chang
                                               ---------------------------
                                               Yuan Chang, Director



<PAGE>

                                 EXHIBIT INDEX

Item 13(a)        Exhibits.
         3.1      Certificate of Incorporation
         3.2      Change of Name Certificate
         3.3      Memorandum of Association
         3.4      Articles of Association
         10.1     Employment Contract of Dr. Ramon Harel, President/CEO dated
                  September 5, 2000.
         10.2     Employment Contract of G.J. Kochanski, Vice President/CFO
                  dated October 26, 1999.
         10.3     Lease for Office of Scanvec Amiable Inc. (formerly Amiable
                  Technologies) with K/B FUND II Dated January 27, 1998.
         10.4     Asset Purchase Agreement between Hasmark, Inc., Ivan N.
                  Markowitz, Peter Hasiuk, Scanvec Garment Systems, Ltd. and
                  Scanvec Amiable, Ltd. dated September 1, 2000.
         10.5     Configurable Postscript Interpreter OEM License Agreement
                  between Scanvec Amiable Inc. (formerly Amiable Technologies
                  Inc.) and Adobe Systems Incorporated dated February 7,
                  1997.(1)
         10.6     Appendix No. 1 to the Adobe Agreement dated February 7,
                  1997.(1)
         10.7     Appendix No. 2 to the Adobe Agreement dated February 7,
                  1997.(1)
         10.8     Amendment No. 1, dated March 15, 1998, to Appendix No. 1 to
                  the Adobe Agreement.(1)
         10.9     Amendment No.2, dated March 15, 1999, to Appendix No. 1 to the
                  Adobe Agreement.(1)
         10.10    Letter extending Adobe agreement from February 7, 1999 to
                  February 7, 2000.
         10.11    Letter extending Adobe agreement from February 7, 2000 to
                  February 7, 2001.
         10.12    Letter extending Adobe agreement from February 7, 2001 to
                  February 7, 2002.
         10.13    Amendment No. 3, dated February 26, 2001, to Appendix No. 1 to
                  the Adobe Agreement.(1)
         10.14    Agreement to Develop OEM Products for ColorCAMM PC600 between
                  Scanvec Amiable Inc. (formerly Amiable Technologies Inc.) and
                  Roland DG Corporation dated May 14, 1999.(1)
         10.15    OEM Agreement with Great Computer Corporation and Scanvec
                  Amiable Inc. (formerly Amiable Technologies Inc.) dated March
                  10, 2000.(1)
         10.16    Distributor Agreement between Scanvec Amiable Inc (formerly
                  Amiable Technologies Inc.) and Mutoh Industries, Ltd. dated
                  June 15, 2000.(1)
         10.17    Agreement to Develop OEM Products between Scanvec Amiable Inc
                  (formerly Amiable Technologies Inc.) and Alps Electric Co.,
                  Ltd. dated March 31, 2000.(1)
         10.18    OEM Software Development and License Agreement between Hewlett
                  Packard Company and Scanvec Amiable Inc. dated March 1,
                  2000.(1)
         10.19    OEM Software Development and License Agreement between Hewlett
                  Packard Company and Scanvec Amiable Inc. dated September 1,
                  2000.(1)
         10.20    Agreement to Develop OEM Products between Scanvec Amiable Inc.
                  (formerly Amiable Technologies Inc.) and Mimaki Engineering
                  Co., Ltd. dated July 10, 1999 and Addendum #1 dated October
                  12, 2000.(1)
         10.21    Agreement to Develop OEM Products between Scanvec Amiable Inc,
                  (formerly Amiable Technologies Inc.) and Roland DG Corporation
                  dated April 20, 1998 with Addendums #1 and #2 dated April 3,
                  2000.(1)
         11.1     Statement regarding computation of earnings per share
         21.1     Subsidiaries of the registrant
         24.1     Form of Power of Attorney

-----------
(1)  Confidential treatment requested.  Portions of this exhibit have been
     omitted pursuant to a request for confidential treatment.



Item 13(b)        Reports on Form 8-K.

                  None.